Indian mobile services market to reach INR671B by 2015

India’s mobile services market in India is set to reach INR671 billion by 2015, when it will account for about a third (31 percent) of overall wireless revenue.

These are the estimates of technology adviser Analysys Mason and the Internet and Mobile Association of India (IAMAI).

The estimates were published in a report which predicts the Indian mobile VAS industry to grow rapidly in the next two years. This process has already been set in motion as evident from increases to data access speeds, smartphone and feature phone penetration, and the maturity of the content.

The report’s key findings include:

Carriers are focusing on non-voice services to drive revenue growth as voice services become commoditized. During the next five years, services will increase by 48 percent.

Mobile data will emerge as the next ‘killer application’, accounting for 32 percent of total incremental wireless revenue – primarily driven by the latent demand for connectivity, which wireline broadband has been unable to address because of availability issues.

Mobile commerce will represent an INR20 billion revenue opportunity by 2015.

Utility services that can provide a solution to issues around access to information, opportunity and infrastructure (for example, healthcare, education and agricultural/husbandry advice) can add significant value – particularly those in rural areas.

Mobile video has been promoted as the key differentiator on 3G networks, but the limited amount of allocated spectrum (5MHz) and associated capacity constraints will limit video-based services in specific segments and geographies.

India’s Minister of State Communications and IT, Sachin Pilot, has promised that the government will make efforts to put the industry on an equitable and sustainable growth path. In his speech at the launch event, the Minster suggested that service providers should provide locally relevant services in local languages to ensure success.

However, carriers are under tremendous pressure from competition, says Kunal Bajaj, Head of Analysys Mason’s India office and lead author of the report. “Recent trends in the sector indicate that now is the right time for them to increase their focus on services to find new opportunities for differentiation and earnings.”