Monopoly of Operators holding back GPRS growth and Mobile Application development in India

‘I am providing Mobile Games for download completely free of cost on my site – would I face resistance from you as an operator?’ was a question directed at Mr. Harit Nagpal (Marketing Director, Hutch) by a representative of HovR at yesterday’s edition of Mobile Monday (Mumbai).

The answer was a blunt – YES.

Mr Nagpal added that if Hutch was ultimately losing possible revenue then of course they would definitely ban a user from downloading free content. Mr. Anil Pande (Product Development, Reliance Communications) agreed and dutifully nodded.

Arvind Rao (CEO, OnMobile) was in complete support of the operators too – since they spend such a large amount of money on licensing and infrastructure.

There was even a funny analogy which was brought up about the Railways investing a massive amount of money in infrastructure and therefore they can charge a consumer as much as they want for a Churchgate – Virar ticket! Is that really true?

Personally I feel, Local Search is going to drive Mobile ‘data’ usage in the coming few years and with it would open up the massive opportunity of Search based Mobile Advertising. But ultimately these services (Like Google, Guruji, OnYoMo, JustDial, Burrp) would make money and not the operators – so would the operators ban these services too?

Operators make a considerable amount of money from Ringtone and Wallpaper downloads, they do not promote GPRS usage because they know that – Ringtones and Wallpaper can all be downloaded for free via the net. The amount the operators would make for GPRS usage would be peanuts as compared to a Rs 25 ringtone download.

How long will all this continue? A maximum of another 2 years? India’s GSM base should hit 300 million by then and then it would take just one operator to open up and the others would be forced to follow suit?
Perhaps GPRS rates would be hiked to some enormous levels!

These are some figures of GPRS usage from the May edition of MoMo (Mumbai):

121.4 million GSM users.
50-60 million of these 121.4 million GSM users have data capable phones.
10-15 million of these users actually know what is GPRS and have at some point used their phone to access data.
2-3 million of these have used it more than once and use it predominantly to download wallpapers, ringtones etc.
0.2 million of these use GPRS to regularly access Email and other services on their mobiles and can be termed as active users of GPRS.

The IAMAI report on mobile in India, did not include a single statistic on GPRS usage.

While there are apps which allow free Emailing facilities on your phone –

BPL still manages to command clients who pay more than 200 Rs/month for this service!

Well shifting focus to the scope of Mobile Advertising – A lot of innovative methods of non-intrusive ad serving methods are being worked on.

OnMobile is working on a rather interesting feature – Voice Ads on Caller back tunes! We’ll try to get more details on that soon.

Another cool bit of Mobile Advertising work by OnMobile was combat marketing – when a user was downloading a monophonic ringtone, they gave him the option of downloading the poly-phonic one. Of course at a higher cost! But it worked a lot (40-50% success rate I think).

Well Mobile Advertising definitely has huge potential, be it via GPRS, Voice, SMS, VAS etc and we will definitely be tracking the evolution at WATblog.

Please feel free to share your views with us.

Related Articles:

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Google Introduces adsense For Mobile Websites

Online Advertising to increase by 970% in India in 3 years time! How?!

Operators recognising massive Mobile Advertising potential

2 Responses to “Monopoly of Operators holding back GPRS growth and Mobile Application development in India”

  1. Mahesh
    July 17, 2007 at 6:36 am #

    Ekalavya,

    Title is very very catching i liked it and Its true.

    GPRS is costly but volume of subscribers will be minimum as compared to SMS. Ringtone and Wallpapers will be minimum hit because as a first time mobile buyers he will download ringtones, wallpapers etc. As the day passes the downloading will decline due to VAS.

    As i have seen while commuting from my dwelling to office i have seen @ least 3 people exchanging mobile content either IRDA or Bluetooth. User will also download from PC using Blouetooth.

    Sometimes User type them self by going to composure in mobile and copying ring tone content from friends mobile.

    How about RingTones+Ads and Decent ads below of wallpaper and let all subscribers to download free content.

  2. Sanjay
    July 17, 2007 at 9:17 am #

    I think the operator monopoly is not going to last forever. As an analogy how can the ISP control what you browse or download on web as long as you are paying for the Data usage.

    Similarly the operators should provide unlimited data plans or at least 500 Mb plans for fixed cost to users. To me its a sound advice considering their falling ARPU.

    This has worked in US & Europe where Mobile data usage has helped in increasing the revenues.

    Its interesting in India as I know many users who have experienced the Internet or Web first time from the Mobile Phone. My estimate is (based on our rural population) that there would be many more who would have access to Mobile Web than they have access to PC.

    So, its in the operators interest to keep the data pipe open and also not overcharge it.

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