Tuesday, January 18, 2011

The Future of Telecom

Mobile phones will be tools for wholesome entertainment as well as commerce in the near future India is a unique market with the largest number of operators in the world, 15, servicing 700 mn mobile phone connections with lowest mobile tariffs globally. With the upcoming 3G services, value added services (VAS) are expected to drive conspicuous consumption. Service providers are relying heavily on VAS such as high speed data applications and mobile entertainment options including 'TV everywhere'.
In the recent years, the Indian telecom industry has witnessed phenomenal growth. The last year, in fact, has been one of the most exciting years for the industry with the 3G auctions and MNP being launched. A conducive business environment, favorable policies, and political stability have spurred the growth of this sector (notwithstanding the telecom ministry woes). The number of people using mobile handsets currently to access the web is 5-10 times more than those using a PC. As the telecom revenues continue to grow aggressively, telecom service providers are now beginning to make all endeavors to enhance their profitability amid dropping ARPUs, low tarrifs and cut-throat competition.
The introduction of 3G and WiMax technologies along with Mobile Number Portability (MNP) will be game changers in the Indian market. As per Trai estimates, India will have 19 mn WiMax subscribers by 2012 and nearly half of current mobile users as 3G subscribers. In the near future, we will see powerful devices backed by huge databases of applications helping consumers (individuals/businesses or both) benefit from mobile broadband that will offer mobile computing experiences beyond imagination.
With the launch of 3G services by the private operators, post the successful conclusion of 3G auctions by the government, incumbent operators are spending huge sums of money to get their networks 3G ready. There are going to be exciting times ahead, though it remains to be seen how 3G will impact both enterprises and retail customers when all the service providers initiate 3G services next year. However, one cannot ignore the power of mass entertainment medium that a mobile is soon going to become.
In the 3G age, the services will be provided under 4 core areas of access, video, applications, and gaming. Mobile phones will become a one-stop-shop for your daily needs. It will be used as a gateway to Internet access, passkey for high security commercial transactions, and an entertainment and information keeper. M-commerce, m-banking, m-trading, m-wallet, location based offers and mobile TV, have become the most talked about trends in the industry today. For enterprises, big or small, smarter devices combined with third generation wireless networks and an increased demand for workforce mobility will make business applications more attractive and popular.
The last few months have seen the market for tablet devices warm up with several vendors launching smarter products to garner market share and mindshare. The market has seen traction since the launch of Apple's revolutionary iPad device. The much sleeker tablet allows surfing the net, sharing documents, reading e-books, exchanging emails and nearly all multimedia functions such as listening to music, watching videos, and making calls. In the future, 1 device (essentially mobile phone and/or tablet) will be taking care of all the daily chores. It will act as a credit card for the daily purchases, cash for online bill payment, and a bank for the banking needs.

With the newer and faster technologies coming on the horizon, the access technologies such as screen size becoming smaller, advanced and more efficient, gone are the days when a large sized screen was needed to access the Internet and download favorite entertainment content. Now customers have a plethora of options to choose from that is, mobile phones, tablet PCs, and netbooks, etc, for accessing the worldwide web and their favorite content (mobile entertainment content such as audio, video, etc).
Mobile entertainment services have come a long way with the operators today delivering huge gamut of services such as streaming audio and video, interesting multi-player games, and the hugely popular mobile gambling across high speed 2.5G networks on advanced handsets. According to a Portio Research report estimates, mobile entertainment services (including mobile music, mobile games, and mobile video services) would generate worldwide revenues of $47.2 bn by end of 2013.
Gartner predicts that more than 4.5 bn apps will be downloaded in 2010 across all platforms, generating $6.8 bn of sales. It estimates that this will increase to 21.6 bn downloads and $29.5 bn of revenues by 2013. However, another interesting trend would be that a quarter of these mobile app revenues will come from advertising in free apps, rather than paid downloads.
Leading Indian operators have launched their own version of app stores in the still nascent app market, just like the global telecom majors such as Nokia and Apple. This enables them to gain a small yet significant share of consumer's wallet. However, in India where the propensity to buy depends on the value addition that the app brings, future will see apps being sold as part of bundled package with handsets, and cost recovered by running ads within it. The mobile ad market in India is already estimated at $25 mn and predicted to be in vicinity of $100 mn in the next 2 years.
Now the next question arises that what kind of app will be most popular in the future? The emergence of mobile TV and mobile commerce applications would be seen as the single most important event in the future of telecom industry.
The broadcast industry is undergoing one of biggest transformations in its history. Over the next few years or may be less, the entire television industry will make the transition from analog broadcast to digital services. This will be a major leap ahead for the entire broadcast industry. Slowly and steadily consumers have started streaming shows, news and movies from the web not just to their television sets and laptops, but also to their smartphones and iPads.
Mobile TV will change the paradigms of mobile entertainment. Television will no longer be limited to households, and each individual will carry his own personal entertainment in his pocket. The day is not far when the mobile TV will become ubiquitous and revenues will be earned through personalized ads, thanks to the personal data (even likes, preferences, and needs) of the consumers available with the service provider. In the next couple of years, India will have more than 200 mn mobile TV users primarily because of anywhere, anytime entertainment capability.

The recently announced tablets with phone capabilities and 5 inch and 4.8 inch screen sizes by Dell and Acer, respectively suddenly mark the reappearance of a large enough personal screen to enjoy TV and video content. Given the propensity of Indian innovators to bring down price points on mobile phone advances, the widespread availability of such devices will be possible really soon.
Bandwidth is the other scarce resource in a mobile environment. With the new 3G networks coming up, this problem will be more or less solved. The only question is how soon the operators will deploy the additional spectrum for data services.
Mobile commerce or m-commerce-the conduct of business transactions over the Internet enabled wireless devices-is the other huge trend slowly becoming a dominant force in the business and society. M-commerce is one of the fastest growing mobile applications in recent history. M-commerce has become such a popular concept that a number of sub applications have been developed around the concept such as m-banking, m-trading, m-wallet among many. The enabling feature such as anytime, anywhere banking/payment flexibility, and ease of use have made it one of the most downloaded apps across the world.

Like every enabling technology, m-commerce is also not without issues. Information sharing especially in today's cybercriminal world is fraught with risks. Identity thefts are as common as mobiles today. Personal information such as credit card information location, personal details, and location details can easily be misused. Many countries strictly regulate the collection and use of personal data by business entities and government departments.
There is no doubt that m-commerce is the future of banking and all m-commerce applications have a very promising future. However, there are several limitations an m-commerce user faces. Small screens on wireless devices, limited processing power, modest memory, low speed data transmission, non-ubiquitous coverage, unproven security, and scarce bandwidth are some of them. We know by experience that many of these limitations are expected to diminish, if not being eliminated, over time.
With the upcoming 3G networks bestowed with higher security, higher speeds, higher capacity, and intelligent infrastructures, m-commerce applications will be unqualified success. With improved wireless security and privacy through data encryption and user education, m-commerce will become the most dominant method of doing business transactions.
The future of telecom will be to enable the applications and technologies developed by Independent Software Vendors (ISVs) or Telecom Service Providers (TSPs) to vastly improve our standard of living. Telecom will become the springboard to the future creation and expansion for an information society. Telecom will play a huge role in the society and will spur innovation, entrepreneurship, and growth.source

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