Introduction – Mobile Broadband

As the Indian economy grows and mobile services mature, we are looking at a gradual shift from “voice consumption” to “data consumption”. Consumers are increasingly looking at using mobile services to fulfill business and entertainment needs rather than just traditional voice communication requirements. The need to know and be heard is the biggest driver for mobile broadband. So what exactly is mobile broadband? While there doesn’t seem to be a set definition, a simple way of describing it could be the provision of end to end downlink data rates of 500kbps and above while providing full mobility to the consumer. Thus, the two key elements of mobile broadband are “High Speed” and “High Mobility” which leads us to some very interesting usage applications. This article takes a look at some of these applications, the underlying drivers and future prospects.

Why the hype – Is it really going to impact lives?

Why the enormous hype surrounding mobile broadband. Is it going to change the way people live their lives and conduct business? Industry analysts certainly seem to think so. An estimated 149 (TRAI) Million mobile customers today are capable of accessing internet through their handsets and this population is only growing. The advent of 3G services has further accelerated this growth and will continue to do so well into the next decade. What it means is that consumers are no longer constrained by their location and service providers now have 24x7 access to their customers. Add a booming enterprise sector and a young demographic of Indian consumers and it is clear that mobile data consumption is all set to explode. Key domains such as entertainment, education, health, banking and governance are set to change with the advent of mobile broadband. Some of the services that are likely to see traction with both urban and rural consumers are:

Entertainment – Digital music and video downloads and streaming, mobile gaming and social networking

Education – Mobile classrooms, student and farmer counseling, news content and ebooks

Health – Telemedicine, remote diagnostics and prescriptions

Banking and commerce – Mobile banking and e commerce applications

Governance – Access to public utilities and services

Apart from the above, enterprise applications, location based services and video calling would also add to a very comprehensive portfolio worth several billion dollars to the Indian economy. Mobile broadband is therefore going to have a very deep impact on the Indian economic landscape in the next few years.

So what will drive mobile broadband usage in India?

We have so far seen that a constantly increasing stream of consumers and applications means that the adoption of mobile broadband is a foregone conclusion. But as with other emerging technologies and trends, its ultimate success will lie in the ability to permeate the lifestyle of its users in the same way as mobile voice communication has done today. To achieve this, it is essential to create an environment which is conducive for both the supply and demand side players. The broad features of such an environment could be:

 Provision of access to both urban and rural consumers at affordable price points

 Availability of widespread content customized to local tastes

 Creating interoperability in the network infrastructure

 Building a large and diverse eco system of operators, equipment vendors, content creators and distributors

 Strong regulations to foster competition

 Enabling economies of scale through widespread adoption

 Creating a more equitable distribution of VAS and content revenues between the service provider and content developer and distributor

Achieving this environment is only possible through a concerted and collaborative effort from all the stakeholders in the ecosystem today namely the service providers or network operators, the equipment manufacturers, the device manufacturers, the content creators and distributors and of course the end customers.

To attract consumers, service providers and equipment manufacturers need to drive down cost of installation and operations through newer and more efficient technologies while device manufacturers must bring down the cost of handsets to affordable levels. A large and dynamic target population would in turn incentivize content providers to bring out more diverse and better applications at sufficiently low price points thus setting in motion a self sustaining value chain.

Challenges ahead

It isn’t all a hunky dory state of affairs though. There are some serious challenges to the large scale adoption of mobile broadband in India. If not addressed, these challenges could hamper growth and have a deep impact on the industry. Some of these challenges are:

 Sluggish growth in rural telecom penetration

 Economics of servicing the lowest ARPU market in the world

 High cost of user devices

 Low data access speeds through current technologies like GPRS, EDGE and CDMA

 Limited user applications beyond the entertainment space

 Service reliability and infrastructure issues

Even with the huge growth in subscriber volumes data usage has remained fairly flat in India. This is primarily attributed to the high cost of broadband enabled handsets and the lack of content apart from entertainment and cricket. Diversity in culture and language is also seen as a current inhibitor to mobile broadband propagation. However, the increase in data access speeds through 3G rollout followed by LTE and WimAX led technologies, lowering of 3G enabled handset price and development of newer channels of content monetization is expected to go a long way in tiding over the current challenges. In fact, service providers are already looking at building new business models around mobile broadband utility in conjunction with other stakeholders and partners.

Future perspective

Technology is forever in a state of change and mobile broadband will be no different. Already service providers have rolled out 3G services leading to a glut of low cost 3G enabled devices and a whole host of new content. The highly competitive telecom industry in India will ensure that providing low cost of services will remain the prime business driver in years to come. The advent of LTE and WiMAX technologies in the next 3-4 years will further incentivize consumers to hook onto the mobile broadband bandwagon. The industry is also likely to see several new entrants in the content and applications space vying for a share of the market. The stakes are huge with potential revenues for stakeholders estimated at over 1000 Billion INR by 2015 according to telecom analysts. The impact on other industries would be exponentially higher. These numbers simply indicate that mobile broadband is going to dominate the communications space in the coming decade and will therefore drive innovation and growth not only for the telecom industry but the Indian economy as a whole.