The way the mobile story in India (and in the rest of the emerging world) is panning out makes for a good case study on how great businesses happen over a period of time, and people of the present generation are lucky to witness the same.
The first step in any business is to offer value to users without looking for returns. This is exactly what the network operators provided all through this decade when mobile phones first started taking common place. The biggest names are those that have taken the most subscribers. The revenue per user was poor, but that did not matter as the operators went on customer acquisition by offering ridiculously low prices (Indian call charges are among the lowest in the world) and sometimes even freebies like free SMS and free call to specific phone numbers.
We are well en route to the next stage in business – that of making real money. Earlier, WATblog had reported that the mobile VAS is predicted to skyrocket to reach over Rs.16500 crore by 2010.
Now, research by Juniper shows that mobile internet ad spending could be well quadrupling from the current day $500 million to shoot over $2 billion annually by 2014. This is of course, the worldwide figures, but a major chunk of that growth is expected from India and China.
Increase in internet ad spending shall not directly impact the revenues of the mobile network operators, but is an indication of how ubiquitous mobile internet is going to be in the near future, and this definitely is cash cow segment.
Does this mean that the growth is going to peak soon? Definitely not, if we consider the numbers in perspective. $2 billion in worldwide figures five years away is insignificant compared to the $13.9 billion worldwide ad revenues from Internet for the second quarter of 2009 alone. And that leaves a lot of optimism for the second half of the next decade!
