I just got back from a 6 week long business trip in Bangalore, India. I got myself an AirTel card the day that I arrived and got down to doing some work at our ThoughtWorks Bangalore Office. If you go down to India - you cannot miss it - there really is a pitched battle being fought by carriers in almost all of the major towns and cities across India. The winner at this point undoubtedly is the Indian wireless consumer.
Telecom service providers in the United States face an enormous battle. In wireless, the days of double-digit market growth in the America’s is over, leaving competitors to fight for one another’s customers - government regulations that allow subscribers to shift their numbers make this an almost existential problem. Not surprisingly, share prices in the sector have tumbled from their highs in 2000, but even today’s depressed prices are hard to justify without much-improved margins.
In India however, the feverish competition between carriers has not had an adverse effect on bottomlines. The reason for this is simple - The top 3 carriers in the country are connecting 1M NEW* subscribers a month. This I would imagine helps them to continue with their primary focus which is to protect and increase their turf. They are not interested in focusing on the Value Added Service part of their offerings to increase their user base - they can barely complete the paper work to get their new customers signed up every month - this is a good problem to have if you are an Asian Carrier but if you’re a start-up in India trying to get a deal with the carriers to increase your customer base and widen your distribution channel - I have 2 words for you - Wake Up!
A recent report by In-Stat found the following:
* The total number of new subscribers in 2004-2009 is expected to be 777.7 million worldwide.
* While China continues to lead the world in overall subscriber growth, the percentage growth leaders continue to be found in other parts of Asia, particularly the Southern Asia region that includes India. Nearly two-thirds of all new wireless users will be in Asia.
* European subscriber growth will continue to slow, and will stall in Scandinavia and Western Europe.
* Japan’s rapid transition to 3G accounts for a great deal of the WCDMA growth in the short term.
This is a trend we will be seeing in the near future - though it seems like a grey cloud over many Indian wireless startups, there is a silver lining which basically indicates that value added services are HOT in developed markets while still in their infancy in developing regions (most notably India).
Mobile startups in India should focus their product offerings to be globally relevant in the near term while developing more relevant content for different regions this will allow Indian startups to attract an international audience that is willing to pay today while the carriers focus on their turf war which will settle just like it did in the US in the next 3-4 yrs.
* this was mentioned to me during a chat with an official from one of the leading carriers in India.
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