With the Indian online market set to explode, telecom companies stand to generate an additional revenue of $8 billion and EBITDA of $2.9 billion over the next three years, a joint study by Google and AT Kearney has forecast. Also Read - Online market shakes up physical format in India's retail space
India will witness a major mobile explosion with over 155 million mobile Internet users today, which will more than double to 480 million by 2017, the study, released here Thursday said. During that period, the smartphone penetration will grow six times to touch 385 million, users making online transactions will grow to 160 million, data consumption on mobile phones will triple and consumers would buy five times more content, the study said. “Indian telcos are poised to leapfrom directly into a digital play since the shift from data to digital will happen much faster in India, as more digital content and services are adopted by users. Within three years, Indian telcos revenue is expected to reach $35 billion, with data revenues growing at over 70 percent annually till then, and new digital VAS streams emerging and growing exponentially,” said Nikolai Dobberstein, of AT Kearney, one of the authors of the study. Also Read - Online shoppers to surge from 25 million to 40 million by 2016
The four top priority areas that could unlock huge revenues for the Indian telcos are E-store and E-care, with online recharges for prepaid mobile phones accounting for more than one-third of all recharge value, Media Content and Services to create more than $6 billion in additional data and content revenues. There is also Mobile Business Apps for SMEs with a potential of $1 billion revenues and M-Payments enabled e-stores, paid content and app transactions which would create additional revenue streams for the Indian telcos. Google India Vice-President and MD for sales and operations Rajan Anandan said that according to their market research, 73 percent of mobile data consumers would be willing to spend more time online if more entertainment content like online music and videos were available in an engaging format.
Besides, 70 percent Internet users were willing to try out online recharges if they were convenient compared to the traditional channels. “We believe, Indian telcos have a great opportunity to proactively create tremendous value by driving a digital strategy aligned with consumer needs,” Anandan pointed out. According to the study, by 2017, data and paid content consumption will double organically to 470 MB data per user per month and $1.6 in content revenue per year, in tune with global markets which witnessed similar shifts as they matured from voice to messaging and from data to digital.