<div>If there is one sector in India that is showing tremendous growth as well as potential, it’s definitely telecom. Being recognised as one of the most lucrative sectors globally the Indian telecom sector has not only shown signs of profitability but also contributed significantly to the nation’s economy<br /><br />India is today, one of the largest telecom markets in the world, with an addition of more than 950 million subscribers. Telecom sector has continued to emerge as the prime engine of the economic growth, with $39 billion annual revenue contributing to nearly 3 per cent of the Indian GDP. Over the last one-decade Indian telecommunication sector has undergone a major transformation through significant policy reforms, particularly under NTP 1999. Driven by various policy initiatives, the Indian telecom sector has achieved a phenomenal growth during the last few years and is poised to take a big leap in the future.<br /> <br />The sector, despite its challenges more recently, has grown at a pace of 7 per cent CAGR since FY09. Interestingly, 142+ million new subscribers have been added just in the last 24 months. Interesting thing to know is that no other market globally is growing at this pace.<br /><br /><strong>Key Trends</strong><br /><strong>Decreasing Profitability and Average Revenue Per User</strong>: Saturation of pre-paid subscriber base in metros, tier -1,2 cities has reduced operator subscriber growth at the same time the extreme tariff competition and increased customer service cost is affecting the bottom line of operators. While the growth is visible, the low ARPUs of the industry are a major cause of concern. ARPU in US is $46.5, UK is $32 and China is $8.3, India’s ARPU is one of the lowest at $1.9.<br /> <br /><strong>Shifting of Focus from Voice To Data:</strong> Growing MVAS market to augment shift from voice to data. MVAS is already a $5-billion market in India and is growing at 20 per cent annually. Proliferation of smart devices due to increased adoption and lowered costs is enhancing mobile data consumption<br /> <br /><strong>Changing Regulatory Environment:</strong> Telecom Equipment Manufacturing Policy and National Telecom Policy arefocused on long term growth and to promote a business friendly environment. The new policies are foreseeing increasing penetration of telecom services in rural area from current level of around 39 to 70 per cent by 2017 and 100 per cent by the year 2020.<br /><br />The recruitment trend in the telecom sector further confirms that this is the right time to become a part of this booming sector. According to a recent study by Price water house Coopers (PwC), the telecom sector will provide about 2,800,000 direct jobs and around 7,000,000 indirect jobs by end of 2013<br /> <br /><strong>Biggest Drivers<br /></strong>The three biggest drivers to change the dynamics of the industry are smartphones, tablets and mobility. With the rapid proliferation of smartphone, mobile data is fast catching up in the industry. There are 28 million smart phones in India. Smartphones will account for 25 per cent of all phone shipments by 2015 in India. It is estimated that 50 per cent of music revenue in India already comes from mobiles. Nearly 60 per cent of the connected population in India access internet via mobile networks only. Accordingly, mobile data is expected to contribute 15-20% of non-voice revenues for the mobile operators by 2015.<br /> <br />Tablets, is another emerging category in India. It is expected that Tablet shipments will overtake PC shipments in India by 2015. In CY2012, 3.1 million new tablets were shipped in the country. This is expected to increase to 6 million this year. Unlike PC markets, Tablet vendors are using retail channels extensively to push sales. Companies like Apple has increased its India focus significantly by leveraging the distribution model, loans and EMI schemes.<br /> <br />As the mobile ecosystem in growing, Enterprise Mobility market in India is on the rise as well. Enterprise class deployments have already happened in verticals such as manufacturing, BFSI, education, logistics & transportation. Enterprise mobility market is expected to reach US$950+ million by 2015. Players like Samsung, HCL and Apple have increased their focus on the B2B space and many new players are looking at this opportunity.<br /><br /><em>(</em><strong>Praveen Bhadada is Director, Market Expansion, Zinnov Management Consulting)</strong></div>
