According to Morgan Stanley, driven by declining handset prices and increasing smartphone penetration, data subscribers in India are likely to reach 519 million by 2018 witnessing compound average growth rate of 25 per cent each year. Meanwhile, data usage per subscriber is likely to reach 750 MB by 2018.
Further, the financial services company claims that over the last two years, smartphone prices in the country have declined from $200 to $50. Morgan Stanley also expects the number of internet users in India to reach 330 million by 2016.
The organisation identifies increasing demand for data as the next wave of growth for the Indian telecom industry. It expects data contribution to more than double to 23 per cent of the operators? overall revenues (as against 10 per cent currently) in the next two years. Morgan Stanley underlines that data growth will be driven by operator strategy of lower average revenue per MB (ARMB) for higher data usage offerings. For example, in January 2013, a 3G pack offering 2GB of data usage cost Rs 750 or Re 0.38 ARMB, but currently it costs Rs 450 or Re 0.23 AMRB.
Further, data growth will be driven by an evolving 3G and 4G ecosystem and more spectrum availability with the operators. Morgan Stanley claims that voice and data rates are the lowest for Indian operators as compared to Asian counterparts and the difference between voice rate per minute and data rate per MB is not significant. Therefore, the risk of data cannibalising voice is very low. The financial services company concludes that several case studies on over-the-top applications like WhatsApp and Skype indicates exponential rise in data volumes despite compression.
