Mobile Data to boost telecom growth

NEW DELHI: According to Gartner, cellular data services will account for 20.5 percent of total cellular service revenues in 2008, equivalent to Rs 14800 crore. Overall, India's mobile services market will grow by a compound annual rate of 28.3 percent during the next five years, to touch revenues of Rs 718 billion in 2008.

Announcing this on the 2nd day of the Gartner Summit India 2004, the research group advised cellular operators that to achieve higher ARPUs through data applications, will require a change in mindset. It advises that if they are to succeed in working with users and other players they should develop compelling value propositions for consumers and enterprises.

Last year (2003), wireless data services accounted for just 5.4 percent of cellular service revenues in India, and most of this comprised of revenue from SMS traffic. India's Unified License regime has given an impetus to growth. Regulatory constraints are being eased in response to unrelenting market pressures, creating ideal conditions for a dramatic new phase of growth, investment and consolidation.

Given the attrition of voice ARPUs as operators target low use market segments, operators need to re-focus on cost control and margin enhancements. As operators look towards mobile data services to improve business profitability, they will need to evolve to higher speed, higher capacity networks for both voice and data services. Gartner believes that there will be a gradual move towards UMTS platforms starting in 2006. This will be complemented by a move by CDMA carriers to roll out CDMA2000 1xEV-DV platforms. And this has to be supported by mobile devices at attractive price points to help mobile data uptake.

Geoff Johnson, VP & Research Director, Gartner, said: "A more positive outlook for IT, telecommunications and networking in 2004 has caused many enterprises and suppliers to review their stringent cost-cutting approaches of recent years and begin to focus on gearing for growth again. Business-level initiatives must drive this new agenda but networks, particularly mobile will be key to delivery of the benefits that IT can achieve."

Kobita Desai, Principal Analyst, Telecom, Gartner India, said, "Indian cellular operators are realizing that voice-only services are not generating adequate revenues and are exploring ways to offer more value-added services to increase the average revenue per user (ARPU). Edge networks will pave the way for UMTS deployments, supporting both data and voice streaming with great efficiency by optimal use of spectrum. E-mail is the driving application for most mobile workers and as it becomes more pervasive, e-mail is also becoming more comprehensive. The market has to be supported by devices that not only have sufficient screen for viewing but, the input mechanism must allow users to respond in an optimal manner."