Opportunity calls | It’s the world on your cellphone

Opportunity calls | It’s the world on your cellphone
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First Published: Mon, Jul 20 2009. 10 19 PM IST

Illustration: Raajan / Mint
Illustration: Raajan / Mint
Updated: Mon, Jul 20 2009. 10 19 PM IST
Irfan Shafi Parray lives in Baramulla in Jammu and Kashmir, a region with hardly any shopping malls. So Parray uses his mobile phone to order his favourite things, with the help of a slew of payment options that he has downloaded on to his phone. “I use the ‘Mall on your Mobile’ from Ngpay—a phone mall service—to buy books from Landmark, chocolates from Brunettes, perfumes and saris,” says the civil engineer, who also uses mChek, a mobile payments and security application, to authorize credit card transactions and tops up mobile currency at OxiCash.
Illustration: Raajan / Mint
At the other end of the country, in Bangalore, Vikram Rai, a media entrepreneur, uses his cellphone to post feeds on his Twitter account and chat on Facebook using a mobile Internet application—Fring—that links mobile users to online social networking sites. “I check the weather and also use maps to navigate when I travel,” says Rai.
Ngpay is the mobile commerce service from start-up JiGrahak Mobility Solutions Pvt. Ltd, while mChek is from mobile payments and security company mChek India Payment Systems Pvt. Ltd. OxiCash, from Oxigen Services (India) Pvt. Ltd, is based on a cash-less service called OxiCash Wallet that any mobile phone user can register for by paying Re1. Subsequent payments (called OxiCash) from Rs50 onwards can be used to pay for all the services available at an Oxigen outlet.
Both Parray and Rai are part of a growing breed of Indian consumers who are using mobile phones to do more than just talk.
“Music and entertainment, mobile gaming, informational services, mobile TV and mobile banking and payments are my top five picks for what people would like to have on their phone,” says Sanjay Swamy, chief executive officer, mChek India Payment Systems.
In a June study by consumer electronics magazine Living Digital on mobile phone usage by Indian consumers, SMS, or short messaging service, emerged as the most popular application. However, at least half the respondents also used their mobile phones to listen to music, take pictures, surf the Internet and play games, while about one-fifth used location-based services and accessed social networking sites, or used mobile phones to make payments, search for information, try new software or read e-books and store files.
It is a trend that has been growing steadily for almost a year. In a 2008 study on the mobile value-added services (VAS) market, consulting firm PricewaterhouseCoopers had estimated that the VAS market in India would garner revenues of $2 billion (around Rs9,680 crore) by 2008-09, with SMS accounting for 44% of this and ring-back tones and other personalized applications accounting for one-fifth. By 2015, the VAS market is expected to generate revenues of Rs20,000 crore.
“At present, VAS contributes about 10% of overall revenues but it has the potential to grow substantially as new ways emerge to monetize such services,” says Rajat Mukarji, chief corporate affairs officer of mobile phone operator Idea Cellular Ltd. In Maharashtra, Idea has introduced TV on mobile phones, offering subscribers live broadcasts of events at select pilgrimage centres.
Typically, telecom companies have been the route through which new services reach the consumer. “The last-mile connectivity by which applications reach the consumer comes from the operator,” says Arvind Rao, chief executive officer and founder, OnMobile Global Ltd. OnMobile Global, whose portfolio primarily consists of personalized services, is the country’s only listed mobile value-added services company.
Mobile entertainment companies such as Hungama Mobile, a division of Virtual Marketing India Pvt. Ltd, also work with a slew of mobile phone service providers such as Bharti Airtel Ltd, Vodafone Essar Ltd and Bharat Sanchar Nigam Ltd (BSNL) to deliver content to consumers, besides having tie-ups with television channels and music companies for downloads.
A mobile future: Sanjay Swamy, CEO, mChek India Payment Systems. Hemant Mishra / Mint
As of now, the revenue sharing model for VAS is skewed in favour of cellphone operators. They take 60-80% of the revenues earned by mobile VAS firms in return for hosting their products, much higher than the 20-30% share operators earn in markets such as Japan and South Korea. “But now, with nearly 15% of mobile users in the country accessing the Internet on their phones, there is an opening in this walled garden,” says Anuj Kumar, executive director, South Asia, Affle India Pvt. Ltd, a mobile VAS company that offers a platform for mobile advertising called SMS 2.0.
To be sure, change is afoot. Hungama is exploring new avenues of bringing content to consumers, such as embedding movies on the mobile by working with handset manufacturers. “We are also looking at a movie store front, where consumers can directly download movies on to their handsets, as well as on-demand services such as live download of TV shows,” says Neeraj Roy, managing director and chief executive officer, Hungama.
Two primary factors are driving this trend. First, as mobile devices come with increased memory—for instance, the Nokia N97 released in May comes with 32GB of primary storage—there is more space to embed games, movies, music and utility applications on the handset itself. “Even a year ago, a developer had to work within a limit of, say, half an MB (1,024MB makes one GB) for a mobile application. Now that limitation does not exist,” says Ankur Srivastava, chief executive, MobiMonster 2.0, a New Delhi-based start-up that has built a series of mobile applications, including a language translator, flight scheduling services information provider and SMS timer.
Second, as Internet connectivity on the mobile increases with India moving closer to a 3G (third generation mobile services) environment, the ability to stream content directly on to the handset will see a spurt in new offerings, though experts say consumers will have to wait for some time for full-service television on the mobile.
“Mobile TV is very dependent on 3G networks being deployed. So, while it sounds exciting, it probably is several years away,” cautions mChek’s Swamy.
Device manufacturers are responding to this shift by reaching out directly to consumers with retail options of their own. In May, Nokia India Pvt. Ltd unveiled the Ovi Store, an online Internet store where users can download applications such as NDTV Active, India Today widget and CNBC widget to access news, Smart Yoga and FitCal on fitness modules, besides applications for sports news and mobile games from Krishcricket.com, and specific widgets for weather update alerts, searches and flight schedule information.
Last-mile connectivity: Arvind Rao, CEO, OnMobile Global.
Other device manufacturers, such as Apple Inc. with its App Store and Sony Ericsson Mobile Communications AB with its PlayNow Arena services, also offer a range of applications that users can selectively download for use on their handsets directly.
“We have been on the App Store since July 2008 and users from 105 countries have downloaded our application till now,” says Apoorva Ruparel, co-founder and vice-president, marketing, AirMe Inc. , a start-up which has developed a mobile application that allows users to instantly upload their pictures on social networking sites such as Flickr.com, Facebook.com, Photobucket.com, Picasa.google.com and Twitter.com.
It is traffic such as this that device manufacturers hope will help break the stranglehold of telecom companies on the VAS market. “The Ovi store has transformed the go-to-market strategy,” says Kenny Mathers, head of developer relations, Forum Nokia, Apac. Forum Nokia is a platform launched by Nokia to support developers who work on mobile technology and applications. For example, VAS developers such as MobiMonster build applications for Nokia devices that are then hosted on Ovi Store.
Industry watchers, however, reckon that it will take time for this shift to actually take place. “From a carrier perspective, with a teledensity of 37% and 450 million users today, the focus for the next two-three years will be greater customer acquisition as we inch up to 750 million mobile subscribers,” says Roy of Hungama, who adds that the Indian mobile market will grow on two parallel tracks, with one segment focusing on VAS directly reaching consumers, while telecom companies focus on new connections. “We must remember that in parts of India, a customer is delighted that he can just talk.”
To straddle these two worlds, content providers such as Hungama will offer subscription-based services that will be billed through the operator where, for instance, consumers can download unlimited music for a monthly fee of Rs149.
Alongside innovative pricing, mobile advertising is also expected to provide a fillip to the growth of the VAS market. “In 2008, the mobile advertising segment was valued at Rs50 crore, and in 2009, it is expected to reach Rs60-70 crore,” says Vinod Thadani, regional mobile director, GroupM Interaction, India and South Asia. Clearly, just talk is out—the mobile handset will now entertain, inform and define your leisure time as well.
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First Published: Mon, Jul 20 2009. 10 19 PM IST
More Topics: Mobile phone | Technology | Ngpay | mChek | OxiCash |