Mobile Applications in India: Challenges and Opportunities

Author: Chandu Sohoni
Founder-Director of Eterno-Infotech
Commenting on the emerging markets and use of cellphones, Bill Gates once said, “PC is the phone and phone is the PC.” In the same conference, Craig Mundie, Microsoft Chief Research Officer continued, “People in those rural environments are already buying computers. They happen to call them cell phones.”

India boasts of 400 million (40 crore) mobile phone subscribers. Does that mean that many computing devices with Internet connectivity? Certainly not. The fact remains that most of the Indian mobile phones are used just to make and receive calls.

There are many challenges in making the mobile phone being used Internet enabled computing device. The biggest challenge is, of course, the phone language. We will keep the language problem aside for now and focus on the problems faced by English knowing mobile phone users.

If we leave out the miniscule percentage of users with BlackBerry, iPhone, or an N97 kind of device, the majority of the Indian users face serious problems in using their phone to access Internet like services.

Problems Faced by English knowing Mobile Application Users
The first problem is data connectivity; it is far too expensive, slow, and unreliable. The problem starts with simple things like Internet or GPRS settings on the phone. They just don’t work in spite of many calls to the operator care centers. If you get the data connection work, you would still find it expensive at 15 paise per 10 kb for the slow and unreliable connection that you get.

The second problem is the prevalent complete mistrust about the mobile operator’s Value Added Services (VAS) offerings. At a recent Mobile VAS conference, the VAS head of one of the major telecom operators admitted that all the operators have abused their subscribers. If you subscribe to a service you find that unsubscribing is very difficult. You click on something out of curiosity only to find that money has been deducted from your account. In such an environment, it has become very difficult for a subscriber to try new services.
There is of course the problem of awareness of existence of mobile applications and services. Most of the users are unaware that there is a decently powered Internet browser in their phone; and in the case of Nokia phones, the browser starts automatically on a long press of zero button. Currently, the operators are too busy acquiring new customers with one paisa and half paisa calling plans to bother about spreading the awareness of Internet like value added services. Once the subscriber numbers start to plateau off and unlimited calling plans are in place, the operators will have no option but to start promoting data services to improve their ARPU (Average Revenue Per User).

The good news is that, in spite of these challenges, the mobile data services usage is increasing by more than 100 percent year-on-year. This kind of YoY growth has become possible due to the fact that the prices of GPRS or data enabled phones are falling very rapidly. Today one can buy a phone with good-sized color screen and GPRS for as low as Rs. 2,000. Mobile operators are also waking up to data services usage.

GPRS data tariff is also being lowered. Recently, BSNL announced a 1 paisa per kilo byte plan for their newly launched 3G services. The imminent launch of 3G services in India will surely take us towards more and more Internet like services being offered through mobile phones. Of course, there is a fear that 3G might be used mainly for voice and also only as a means to circumvent the spectrum scarcity that exists in current 2G networks.

Opportunity in Enabling Non-English Mobile Data Services
The bigger challenge to mass adoption of mobile phones is obviously the language barrier, which has created the infamous ‘digital divide’ in India where English language literacy is pegged at 8-10 percent. With the mobile penetration at about 400 million, it is safe to assume that we have already covered the 100 million English knowing population. The challenge is to get the remaining 300 million users that lack English knowledge use the mobile data services. The newer subscriber additions which are happening at 8-10 million per month are mostly coming from small towns and rural markets where knowledge of English is far less.

Now certain phones in India are available with localized menu language. But it is still a challenge with uncommon Hindi words like ‘kunjipatal sakriya’ being used for ‘keypad active’. We believe that phone localization is a step in the right direction to improve mobile non-voice usage; however the menu language needs to be easier to understand.
There is enough evidence to show that language localization drives mass market adoption. TV channels like Star Plus and MTV began their stint in India with mainly English programs. Now they have switched completely from ‘Bold n Beautiful’ to ‘saas n bahu’ and from ‘Billboard top charts’ to ‘Bollywood top charts’. It is needless to say that the viewership of these channels has gone up manifolds. Only two English newspapers figure in the top 25 dailies in India; and they are at the 11th and 23rd positions respectively. As per the Indian Readership Survey (IRS 2009), Dainik Jagran, a Hindi daily, leads with a readership of 545 million readers. The Times of India, with all its editions put together, is at the 11th position and Hindustan Times is at the 23rd. Obviously local language and local content play a major role.

Problems Faced by Indian Mobile Application Developers
Diversity of Handsets
Unlike most of the western countries where telecom operators offer the handsets bundled with calling plans, in India we have the freedom of choosing our own handset. This means that there is a vast variety of handsets that exist in the network. For an application developer this means a lot of investment in testing the application or service across hundreds of handset models, as one needs to develop applications for all major mobile application development platforms like Symbian, J2ME, Blackberry, Brew, and iPhone. One can see this problem as an opportunity and we, at Eterno, see it as a way of creating entry barrier by developing our applications and launch services for all the popular handsets right from low-end J2ME all the way to iPhone.

Operator Revenue Share
Another problem faced by the application developers in India is the revenue share demanded by telecom operators. Typically operators take anywhere between 60 to 90 percent of end user generated revenue, and this leaves very little for the application developers. Apparently this has hindered the development of mobile applications to a great extent. Of course, the large subscriber bases in India do make up for the low revenue share percentage to some extent.

To conclude, we view the Indian mobile application market as a big opportunity rather than a challenge. There are still the hurdles of ease of use, awareness, slow speed of connections, and pricing that need to be overcome for mass adoption of mobile data services. Most importantly, locally relevant content in local languages will be the key to grow the mobile data services market in India.
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