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Teledata

Tele Data

Mobile Subscribers Yearwise comparision

Growing App Uptake: 3G drives demand

June 08, 2015

The expanding footprint of high speed 3G networks in the country has resulted in the increasing adoption of data services. This has further expanded the scope of 3G-led mobile value-added service (MVAS) applications, from traditional offerings related to astrology, bollywood and cricket, to customer-led applications for education, health care, governance, financial services and commerce. According to the Nokia Networks’ MBiT Index 2015 report on mobile broadband performance in India, there has been a 74 per cent increase in mobile data traffic, driven by 3G growth. In December 2014, 3G data consumption accounted for 52 per cent of the total data consumption, up from 42 per cent in January 2014. In September 2014, 3G consumption surpassed that of 2G across India, while the average 3G data usage increased to 688 MB per month in 2014, indicating a 29 per cent rise compared to 2013. Moreover, a 3G user was recorded as consuming 3.2 times more data on anaverage than a 2G user in 2014. The report also emphasises the increasing uptake of smartphones in the country, which is expected to drive data adoption and the demand for 3G services. At the end of 2014, India had more than 130 million 3G-capable devices.

With the rising smartphone use and higher data consumption, there is a growing demand for utility services in areas like entertainment, health care, education, commerce, governance and finance in the MVAS industry.

A look at key 3G-based applications across segments…

Entertainment

M-entertainment continues to be the largest contributor to MVAS revenues. The key offerings in this segment are caller tunes, subscription-based alerts like sports updates, and SMS-based contests, while social networking, instant messaging, gaming, and music streaming continue to dominate. Every month, more than 100 million applications are downloaded in India. Among paid applications, games are the most popular category at present, followed closely by instant messaging and music streaming. Popular free application cat-egories include social networking, news, photos and videos. Lifestyle applications that help people find restaurants, book movie tickets, and find friends are also gaining popularity. Chat or instant messaging is gaining traction among users, with about 90 per cent of smartphone owners using some kind of chat application.

Health care

Health care providers are leveraging mobile technology to deliver cost-effective health services, such as telemedicine, to users. Within the m-health segment, a number of operators offer patients one-way communication, that is, message-based question-and-answer services. An example of this is Vodafone India’s Ask a Doctor – Health@5 mobile application, which allows individuals to access basic information about disease management, common health care myths, and wellness. Users can also send questions to a panel of medical experts, who will answer them within 24 hours. All these services are offered at a cost of Rs 5 per day.

Apart from basic SMS-based services, the telecom industry offers users comprehensive health care services like teleconsultations, video consultations over 3G, the scheduling of appointments, triaging, and SMS prescription services. These are offered via partnerships between operators and health care providers. For instance, there are tie-ups between Aircel and Apollo Hospitals, Bharti Airtel and Fortis Hospitals and Idea Cellular and Apollo Hospitals.

Education

Popular m-education applications in India include educational tools and virtual classrooms based on games and simulation, which involve two-way video feeds between teachers and students. A large number of operators are offering m-education services, like Bharti Airtel, which offers subscribers easy access to a host of educational services like language courses, entrance exam preparation, and career counselling by established universities and qualified educators. These services are available in both voice and SMS formats and offer interactive learning in a customer’s native language.

A large number of operators have also partnered with educational institutes to help customers learn English through mobile phones. For example, in 2012-13, Vodafone India, in association with education solutions provider Pearson, launched its Hello to English service in Haryana and Uttar Pradesh. This enables people in remote and rural areas to use their mobile phones as a virtual classroom for learning basic English language skills and achieving a level of proficiency for business use. The virtual nature of the classroom eliminates the cost and time that would otherwise have been involved in travelling to a physical classroom. Aside from a Pearson textbook in the student’s local language as well as English, the course also includes self-study exercises and pre-recorded messages with instructors leading the learning process. Students interact with teachers in real time, talking to them on the phone and receiving tests via SMS to check their understanding. Teachers start and manage classes through an online platform and track student progress through SMS tests. Once they complete the course, students receive certificates that recognise their achievements, which they can use to gain employment.

Commerce

According to Deloitte, m-commerce in India has grown significantly in the past two to three years, with the value of mobile commerce-based transactions increasing from Rs 78 billion in 2013 to Rs 360 billion in 2014. A number of players have recorded a definite shift in channels from desktop to mobile. For instance, HDFC Securities expects the brokerage earned from transactions carried out through mobile phones to increase from the current rate of 2.5 per cent of the total revenues to 50 per cent in another two years’ time. At present, leading operators are offering subscribers mobile payment facilities in partnership with banks, which allow users to avail of services like cash deposits, withdrawals, remittances and utility payments. Popular m-commerce offerings include Bharti Airtel’s Airtel Money with Axis Bank, Vodafone India’s M-pesa with ICICI Bank, Aircel’s Mobile Money in collaboration with ICICI Bank, and Tata Teleservices Limited’s mRupee, also with ICICI Bank.

In addition to m-commerce, the growth in data usage is also providing a fillip to e-commerce. For example, Snapdeal currently records 60 per cent of its transactions on mobile phones, up from 18 per cent in March 2013. It expects this figure to reach 80 per cent within two years. Other players like Flipkart and Amazon have also reported that more than 50 per cent of their companies’ transactions take place via mobile phones. In addition, different industry reports indicate that the majority of internet users (over 57 per cent) in India access the internet from mobile phones. Going forward, the “mobile first” nature of India’s internet user base is expected to further promote mobile phones as the preferred commerce channel.

Governance

As an increasing majority of Indians are accessing the internet on their mobile phones, it is imperative to make government services available on these devices as well. Recognising the need for e-governance, state governments are taking the lead in providing citizen-led services through the web as well as through mobile phones.

For example, the Karnataka government launched the M-One app in December 2014, which can be used for paying property tax and utility bills, booking railway and bus tickets, filing income tax returns, and applying for m-passports and driving licences. Over 4,500 services like G2C, B2C and G2B can be availed of through the application, which is supported by smartphones that run on the Android and iOS platforms. Recently, the Haryana government also introduced seven e-services and software applications to provide graft-free administration to the people of the state. They can use these to gain access to common service centres, services on demand, e-stamps, Jeevan Pramaan Patra (for pensioners), the new state portal, Aadhaar-enabled biometric attendance system, chief minister window (for online complaint registration), mobile applications, and Aadhaar-linked birth registration. The Haryana government has launched these services as part of the Digital Haryana vision, under which the government aims to deliver citizen services through digital infrastructure like the web and mobile phones.

Challenges and the way forward

In this digital age, customers expect innovative services and a holistic user experience. However, at present, the industry is lacking in engaging content and applications in local languages. In order to monetise the MVAS market in rural areas, where the majority has mobile phones as their first point of internet access, it is important for operators to develop content in local languages. They must also develop multi-service MVAS offerings in areas like health care, education and governance.

The increasing smartphone user base, along with the large developer commun-ity and the potential for regional and localised applications, is likely to drive the growth of innovative 3G applications. According to Deloitte India’s TMT Predictions 2015 report, about 9 billion applications are expected to be downloaded in India in 2015, which is more than five times the number of applications downloaded in 2012 (1.56 billion), a compound annual growth rate of 75 per cent. The revenues from paid applications are estimated to exceed Rs 15 billion in 2015, up from Rs 9 billion in 2014.

Another factor aiding the application revolution in the country is the growing application developer culture and software development talent. At present, with around 300,000 application developers, India is already the second largest Android developer community in the world after the US. By the year 2017, India is expected to have the largest number of software developers.

 
 

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