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India 2015
Contents
1
Executive summary
1.1
Second largest mobile market in Asia, but a long way from saturation
1.2
The rise of new ecosystem players is redefining the mobile industry in India
1.3
11
14
2.1
15
2.2
16
2.3
23
30
3.1
31
3.2
34
3.3
36
3.4
38
40
4.1
41
4.2
47
4.3
50
Executive Summary
The mobile industry in India has scaled dramatically over recent
years to become one of the countrys biggest success stories.
With over half a billion mobile subscribers, the Indian market is
already the second largest in the world. Technology migration
is under way and accelerating, with more than 40% of mobile
connections forecast to be running over mobile broadband
networks by 2020.
India is already the third-largest smartphone market
in the world. There were 185 million smartphone
connections as of mid-2015, and a further half a
billion new connections will be added by 2020. The
sheer scale of this market is attracting both local and
international manufacturers, with a number of the latter
looking to shift handset manufacturing to India. A local
smartphone manufacturing ecosystem focussed on
producing low-cost but high-specification smartphones
will play a vital role in meeting the needs of local
consumers.
The Indian mobile market is unique from a global
perspective, with 12 active mobile operators. It is by
some distance the most competitive market in Asia
Pacific. Voice pricing is already low by international
standards. Although data traffic is growing strongly,
operators are handicapped in their efforts to monetise
this by the high cost of spectrum and the limited
amount of spectrum allocated for mobile services.
| Executive Summary
Executive Summary |
MOBILE ECONOMY
INDIA
Unique subscribers and SIM connections
CONNECTIONS*
2014
453m
*Excluding M2M
2014
734m
944m
2020
1.3bn
Smartphones
42% 690m
2014
11%
149m
2020
2014
2020
2020
2015
INR1.8
lakh crore
INR2.5
lakh crore
2014-20
6%
CAGR
INR119,205
2014-20
CRORE
Delivering digital
inclusion to the still
unconnected populations
Delivering financial
inclusion to the
unbanked populations
Delivering innovative
new service and apps
Mobile internet
penetration 22% in 2014,
44% in 2020
Number of M2M
connections to reach
25m by 2020
2014
INR7.7
lakh crore
2014
6.1%
GDP
Public funding
2020
INR14
lakh crore
2.2m JOBS
2014
INR88,000 CRORE
2020
INR122,000 CRORE
Mobile ecosystem contribution to public
funding before spectrum proceeds
3m JOBS
2014
2020
Indian mobile
market overview
98%
92%
76%
51%
46%
38%
India
Asia Pacific
Subscriber penetration
Global
Connection penetration
2. Total unique users who have subscribed to mobile services at the end of the period.
3. Total unique SIM cards (or phone numbers, where SIM cards are not used), excluding cellular M2M, that have been registered on the mobile network at the end of the period.
57%
54%
33%
21%
250
2010
406
295
2011
453
506
562
619
660
697
734
323
2012
Unique
subscribers (M)
2013
2014
2015
2016
Subscriber penetration
India
2017
2018
2019
2020
Subscriber penetration
Asia Pacific
0%
1%
2%
4G
39%
3G
59%
2G
99%
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
98%
53%
47%
2%
2010
2020
Smartphone connections
10
5,000
12
4,000
China
Thailand
Myanmar
Taiwan
Australia
Nepal
Korea, South
Cambodia
New Zealand
Vietnam
Hong Kong
Sri Lanka
Philippines
Singapore
Japan
2,000
1,000
Bangladesh
3,000
Malaysia
Number of operators
India
Pakistan
Indonesia
4. HHI: A commonly accepted measure of market concentration, represented on a scale of 0 (evenly distributed competition) to 10,000 (no competition)
11
17%
50
45
40
$ billion
35
11%
30
25
10%
8%
20
7%
15
6%
6%
5%
10
5%
4%
3%
2010
2011
2012
Recurring revenue
12
2013
2014
2015
2016
Non-recurring revenue
2017
2018
2019
2020
5. Assessing the case for in-country mobile consolidation in emerging markets, GSMA, 2015
13
The Indian mobile industry has come a long way since the first mobile call
was made in 1995 from mobile phone ownership being viewed as a luxury
to becoming a utility. The Indian mobile industry is already helping to
deliver a growing and innovative mobile ecosystem, which is transforming
not only how people communicate but increasingly how they do business.
The India government has recognised the potential of digital technologies
to address some of the socio-economic challenges in the country with
the launch of its Digital India initiative. This looks to empower 1 billion
subscribers by providing Internet access to all and make broadband a
utility for every citizen. The lack of alternative (fixed line) infrastructure in
the country means that mobile technology will play a central role in the
realisation of the Digital India initiative.
14
DIGITAL
EMP
OW
ER
ME
NT
Digital
identity
Participative
governance through
mobiles
Financial
inclusion
Local
content
RE
TU
UC
TR
High-speed
mobile
broadband
Public cloud
infrastructure
three
vision areas
Digital
locker
Secure cyber
space
Integrated government
departments
Digital
literacy
Mobile enabled
realtime e-Gov
services
Geographic
information
systems
Cashless financial
transactions
ND
MA
E
N- D
GOV
ERNMENT & SERVICES O
Nine pillars
IT for jobs
Ongoing and new
schemes
Broadband
Highways
Public Internet
Access Programme
Ongoing programme
eKranti
Universal Access to
Mobile connectivity
Ongoing programme to
be revamped with new
elements
Ongoing programme
Electronics
Manufacturing
Existing structures
inadequate
e-Governance
Critical for
transformation
Early harvest
programmes
To be completed
within a year
15
6. Bridging the gender gap: Barriers to mobile access and usage in low- and middle-income countries, GSMA, 2015
16
The GSMA launched its Digital Inclusion programme in April 2014 to help expand mobile connectivity and to
increase mobile internet adoption by addressing the key barriers to mobile internet access, both in India and
across the world:
Network infrastructure and policy: increasing network coverage to currently unserved areas.
Affordability and taxation: the combination of low incomes, cost of devices, charging fees, and data plan
payments creates an affordability barrier to accessing the mobile internet. This issue is compounded by
government taxes and fees, such as airtime and handset taxes.
Digital literacy and local content: Illiteracy, digital illiteracy and lack of internet awareness are challenges to
mobile internet adoption. The availability of content that is both in the local language and locally relevant can
play a vital role in the adoption of the mobile internet.
44%
592
336
279
227
7%
85
2010
123
2011
160
2012
2013
Mobile internet
connections (millions)
2014
2015
2020
Mobile internet
penetration
17
18
19
20
21
22
Smartphone era
Voice
calls
Social
media
Mobile
commerce
Big
data
Internet of
Things
App
economy
SMS
Digital
societies
Multimedia
messages
Sharing
economy
IP messaging
1995
1998
2000
2002
2009/10
2012
2015
First
mobile
call
First
Indian
ringtone
First
phone
with Hindi
menu
First
camera
phone
First 3G
launch
First 4G
launch
Government
launches M2M
roadmap
23
JAPAN
RUSSIA
7%
US
13%
AUSTRALIA
15%
20%
FRANCE
20%
CHINA
33%
14. Internet and Mobile Association of India (IAMAI), CRISIL, Gartner, PwC analysis and industry experts
15. Kleiner Perkins Caufield and Byers (KPCB)
24
14%
BRAZIL
17%
UK
GERMANY
20%
India
41%
16. Growth of Internet Users in India and its Impact on our life, data.gov.in
25
25
18
13
2010
2011
2012
2013
2014
5
2015
2016
2017
2018
2019
2020
Indonesia
South Korea
India
Japan
China
Asia Pacific
3
10
3
9
3
25
11
30
69
336
96
440
2014
26
2020
27
Utilities: NextDrop
NextDrop provides water supply alerts to residents in the twin towns of
Hubli-Dharwad in Bangalore, using a simple Android app. With the support
of the Bangalore Water Supply and Sewerage Board and GSMA Mobile for
Development Utilities funding, this system has been deployed across 40% of
Bangalore. NextDrop is already providing more than 75,000 people in HubliDharwad with timely and reliable information about their water supply.
28
29
30
126,000
1.00%
30,000
0.23%
Infrastructure
providers
Network
operators
36,000
37,000
0.28%
0.29%
Handset
manufacturers
Distributors and
retailers
22,000
0.17%
Content, applications
and other services
31
4.70
7.71
3.7%
1.24
1.26
0.50
6.1%
0.4%
1.0%
1.0%
Related
industries
Mobile
operators
Direct
32
Indirect
Productivity
Total
33
17. IAMAI, ICRIER (2015) recently estimated that 75,000 app development jobs existed in India in 2014. We have not verified the robustness of that figure. The estimate presented here of 150,000 jobs includes, in
addition to application development jobs, other jobs directly supported by the mobile content and services segment such as admin, research, media and advertisement jobs.
34
1,900
4,000
Other economic
sectors
Total
1,900
300
Mobile ecosystem
(formal sector)
Formal
employment
in the mobile
ecosystem
Mobile ecosystem
(informal sector)
151,000
67,000
Operators
46,000
Handset manufacturing
33,000
12,000
Infrastructure
35
18. Regulatory fees in the form of the universal service obligation, licence fees and spectrum fees.
19. Note that the total amount of spectrum payments required for the licencing of 900 MHz and 1800 MHz spectrum auctioned in 2014 is higher, at over INR61,000 crore in total. The figure attributed to 2014 above is
only a fraction of the overall figure and reflects the actual cash payment required from Indian operators in the year, with the remainder of the total cost required in subsequent years.
36
19,000
107,000
31,000
57,000
General taxation
General
taxation
41%
36%
Corporation tax
22%
Handset VAT
1%
Total
Note: Spectrum payments reflect actual cash payment required from Indian operators in 2014,
with over INR61,000 crore required in total.
20. There is a one-off upfront payment; operators then have the option of paying the balance in 10 annual instalments, after a two-year payment moratorium
37
38
Outlook to 2020
8.2%
6.1%
7.7
2014
8.6
2015
9.7
2016
10.7
2017
11.8
2018
12.8
2019
14.0
2020
Percentage of GDP
contribution
39
Regulatory enablers
for Digital India
40
2 x 45 MHz
2 x 20 MHz
2 x 60 MHz
2 x 25 MHz
100 MHz
Spectrum allocated
in India for mobile
services
2 x 75 MHz
2 x 70 MHz
50 MHz
Spectrum internationally
identified for mobile
services but not yet
allocated in India
41
700/800
850/900
1800
2100
2300
2500
2x33.1
2x44.9
2x23.6
1x40
1x12.7
2x34.8
2x74.8
2x60
South Korea
2x35
2x20 &
2x50**
2x60
Philippines
2x45
2x75
2x35
Indonesia
2x46
2x75
2x50**
Cambodia
2x40.4
2x75
2x60
2x30 &
2x35***
2x60
2x60
2x45.8
2x75
2x60
India
Turkey
Taiwan
2x30*
2x45
Vietnam
Best practice
Average
1x57
2x20
1x95
1x30
Planned
2x70 & 1x50
Below average
42
43
44
45
46
47
21. Economic Impact of stricter EMF limits on the Rollout of Mobile Broadband Networks in Poland and Italy, GSMA, 2014
48
22. Digital inclusion and mobile sector taxation 2015, GSMA, 2015
23. Source: Universal Service Obligation Fund (USOF), Department of Telecommunications
49
50
51
52