India’s mobile services market to grow 8% to Rs 1.2 trillion in 2013: Gartner

Telecom Lead Asia: India’s mobile services market is expected to grow 8 percent to Rs 1.2 trillion in 2013 from Rs 1.1 trillion in 2012.

Gartner says mobile connections will grow to 770 million in 2013, up 11 percent from 712 million connections in 2012.

The mobile market in India will continue to face challenges if average revenue per unit (ARPU) does not grow significantly.

If the prevailing conditions do not change in the Indian telecom market, India will account for 12 percent worldwide mobile connections, but 2 percent of worldwide mobile services revenue (in constant USD) in 2013.

Indian telecom operators’ major challenges include: growing their profit margin in the face of intense competition and competing with over the top service providers, such as Facebook and WhatsApp.

As mobile voice services continue to get commoditized in the country with the increased use of voice over IP (VoIP) and the probable termination of national roaming charges, mobile broadband is the area of opportunity for operators.

Shalini Verma, principal research analyst at Gartner, said: “India has a phenomenal pent up demand for mobile broadband and local mobile apps that solve everyday problems for consumers. Smaller mobile broadband plans using a sachet-style usage pattern appeal to Indian consumers.”

Rural expansion of mobile services will come at a cost. In India, innovation in utility apps that help bring efficiencies in a consumer’s life will bring in sustained revenue and will be relatively more difficult to replicate by new entrants.

Gartner suggests that though social and video apps are doing extremely well in India, it is time to look beyond these and deliver apps that can have a sustained business model. Operators need to insert themselves into the value chain of these new apps and services.

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