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Telcos gear up for new uses of mobile phones in years ahead

Telcos gear up for new uses of mobile phones in years ahead
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First Published: Thu, May 21 2009. 12 04 AM IST

 Far-reaching ideas: Daroga Prasad (centre), a resident of Olhanpur village of Chhapra district, Bihar, talks on the phone. As mobile service providers push deeper into rural India, voice messaging is
Far-reaching ideas: Daroga Prasad (centre), a resident of Olhanpur village of Chhapra district, Bihar, talks on the phone. As mobile service providers push deeper into rural India, voice messaging is
Updated: Thu, May 21 2009. 12 04 AM IST
New Delhi: In the high-decibel spread of mobile phone use in India, the strong and silent adoption of what are called smart phones—that allow consumers to check email and browse the Internet—has largely gone unnoticed.
Far-reaching ideas: Daroga Prasad (centre), a resident of Olhanpur village of Chhapra district, Bihar, talks on the phone. As mobile service providers push deeper into rural India, voice messaging is likely to get a boost. Madhu Kapparath / Mint
In a more price-sensitive segment, slowly yet surely, farmers are beginning to access weather forecasts and crop prices on their mobile phones through text messages, mostly on inexpensive phones.
Elsewhere, in India’s cities, the young are adept at downloading games and ringtones, and are leading the use of voice messages.
All such offerings, clubbed together under value-added services, or VAS, account for just 9% of revenues at mobile phone service providers, resulting in little management attention at these firms in spending marketing dollars to promote them.
But as the number of mobile phone customers in India top 400 million and the market for cellphone services saturates in India’s big cities, phone firms are readying to change tack. An auction of spectrum and licences later this year for so-called third generation, or 3G, phone services, which deliver data at speeds significantly higher that what is possible on today’s mobile phones, is also expected to increase data consumption on mobile phones.
“The next big move is going to see us shift from voice only to voice plus data,” says Lloyd Mathias, chief marketing officer at Tata Teleservices Ltd, India’s sixth largest phone firm by wireless customers.
VAS revenues in advanced markets such as Europe are at 25%, indicating that there’s a lot of room for phone firms to grow with such offerings in India. The confidence of firms such as Tata Teleservices stems from what they have seen happen so far this century and four laws that dominate the electronics and technology landscape.
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The all-familiar Moore’s law predicts that processing power of a microchip doubles every 18 months. Closely behind it is Guilders law that talks about bandwidth availability tripling every 12 months; Kryder’s law, which states storage density doubles every 12 months and Metcalfe’s law, which says that the value of the network is proportional to the square of the nodes or points in a network that connect to each other.
Such advancements, together with customer needs that can be translated into revenues, have resulted in three devices—telephone, television and computer—converging, giving rise to a whole host of applications.
For instance, customers can now watch television on souped-up phones in markets such as Hong Kong and Japan, while cable companies in the West now provide telephone services as part of a bundle, and Internet access providers have powered a host of services such as free telephone calls that are advertising supported.
In India, providers see the smart phone business and applications around them growing briskly in the next few years. Researcher BDA Connect Pvt. Ltd says there were 9.7 million smart phones in India as of end-2008.
At Tata Teleservices, 20-25% of prepaid users have traded their handsets for smartphones to take advantage of services such as social networking. “The challenge for us is to bring all these applications in an easy-to-use format for the user,” says Mathias.
Then there are mobile payment options such as Bharti Airtel Ltd’s m-Chek and entertainment options such as Airtel Live that have slowly started getting customers. M-Chek allows customers to make mobile payments while Airtel Live has services such as cricket scores, news updates, horoscopes and so on.
As users start using more such applications on their phones, a key challenge lies in getting the services to run glitch-free, according to Bharti Airtel. “It’s all about getting software to run intelligently on these devices,” says Jai Menon, director customer service and technology at the firm, India’s largest phone firm by customers.
For instance, says Menon, in the past year user-generated content has thrown up a big challenge for companies. He points to how the challenge for companies such as his is to allow users to store and share content inexpensively. To this end, Bharti Airtel decided to work in 2006 with technology partners, mostly individuals, through what it calls a service development platform that would allow the company to present personalized applications to its customers. One result: Airtel Live, an entertainment platform.
But it’s also simple services such as messaging that hold significant potential. Vineet Taneja, marketing director at Nokia India, for instance, says there is a lot of scope to tie in all messaging options from instant messaging to social networking sites into a single easy-to-use interface. He anticipates them gaining popularity in the next six months.
Nokia, which has so far made strides in providing education and entertainment services on its phones, most through its Ovi-branded platform, sees music, messages and navigation services as key growth areas in the future.
As mobile service providers push deeper into rural India, voice messaging is likely to receive a boost. “Voice as a medium will be one of the most powerful user interface as we move into rural India,” says Bharti Airtel’s Menon.
Last May, Bharti Airtel launched Iffco Kisan Sanchar Ltd, a joint venture with Indian Farmers Fertiliser Cooperative Ltd, a fertilizer company. The phone firm provides cheap mobile handsets, often under Rs1,000 each, bundled with a mobile connection. Farmers get access to a unique VAS platform that gives them access to free daily voice messages on market prices for their produce, farming techniques, weather forecasts, dairy farming, animal husbandry, rural health initiatives and fertilizer availability. The service is offered across large farming states that include Uttar Pradesh, Punjab and Haryana.
Holding back voice messaging has been an absence of coordination among service providers. As a result, phone users can send voice messages only if they share the same provider. But operators see that changing soon.
For all the promise mobile applications hold, operators realize there are some that won’t work in the Indian market. While navigation maps form a significant business for Nokia globally (it paid $8.1 billion, or Rs38,637 crore, to buy Navteq), the company doesn’t see it being a big business here. Nokia’s Taneja refers to the adoption of maps as a “habit-making exercise” and says Indians are not used to using maps.
Graphics by Ahmed Raza Khan / Mint
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First Published: Thu, May 21 2009. 12 04 AM IST