Ramnath Subbu gives lots of stats on the Indian mobile market in this article.

Grant Thornton India, a leader in M&A and deal advisory, has pointed out in a study that while the total value of deals in India in 2005 was $18.2 billion the telecom sector accounted for a third of this, the above three large deals in the mobile telephony space accounting for $ 3.7 billion or 20 per cent in value terms of all deals during the year.

Subscriber base:

The subscriber base continues to grow aggressively and in end-2005 touched 75 million (48 million in end-2004).

Decreasing ARPUs:

Indian ARPUs are among the lowest in the world at around $9, the lowest being the Philippines at $7.2. To put things in context, average ARPUs are $40 in Australia, $42 in Korea and $10 in China.

Value-added services:

“Voice revenues account for around 85 per cent of traffic while data and value-added services constitute the rest. Henceforth, the proportion will keep increasing in favour of data and value-added services,” T. V. Ramachandran, Director General, COAI told The Hindu.

Pre-paid dominant:

Currently, pre-paid users account for 77-78 per cent of users. “By end-2009, this share is likely to go up to around 88 per cent. What may change during this period is the value of recharge coupons.

Fixed-line in trouble:

With a larger proportion of net new connections coming from mobile networks, and mobile operators offering `one nation, one tariff’ kind of long distance services, long distance traffic is likely to start migrating to mobile networks as well. This will undoubtedly put more pressure on fixed line businesses. The new telecom operators that offer both access (mobile and fixed) and long distance (Bharti, Reliance and Tatas) are advantaged since they end up carrying long distance traffic irrespective of whether it originates from their fixed or mobile networks.

The COAI expects monthly additions to be around 4 million and the subscriber base to go up to 125 million in 2006 and touch 200 million by December 2007.

“The next quantum jump in the industry will be the conversion of Access Deficit Charge (ADC), which is on a call-by-call basis, to a revenue share model,” said Mr. Ramachandran. The continuation of the ADC creates anomalies that can skew the market and disadvantage mobile operators.

The music industry is crying foul over the growing number of illegitimate downloads and under-reporting at various levels in the chain of content owners, aggregators, handset dealers and operators.

Highlighting the menace, Mr Vipul Pradhan, Chief Executive Officer, Phonographic Performance Ltd (PPL) — the licensing arm of the Indian music industry with 127 member companies, told Business Line, “Until now, the telecom industry has been legitimately paying for the music offered in the form of ringtones and caller tunes.

“But in recent months, piracy has crept into this business as well.

There is copyright violation with shops selling high-end phones with bundled content. Some of this content is illegal as neither permission is taken nor royalty paid.”

Mobile operators are however denying that piracy is happening at their end.

“There can be no way that any illegal downloads are happening from our servers as we keep an account for billing purposes. But there could be leaks at other levels in the chain,” said a Delhi-based operator.

Forward-lock:

Royalty is paid for the first download of ringtone, which is then passed on to other users free of cost. Mr Pradhan said, “Operators must device a method to lock forwarding on ringtones.”

Under-reporting:

Mr Pradhan said the quantum of music downloads is also being under-reported. Ringtone royalties are actually collected by companies known as aggregators such as Yahoo and Indiatimes. They convert songs into digital formats for playing on mobile phones and charge a fee. They give the royalties to the music companies and the performing rights society for distribution.

Piracy is also happening at the handset retailers’ end.

These retailers offer free ringtones bundled with the phone without paying any royalty. Similarly, some pre-loaded micro-chips have also entered the market.

Operators keep 50-60% of the mobile downloads revenue in India. Music in telecom is estimated to be a Rs 150-crore market in India.

The global ringtone market is forecast to grow to $5.2 billion in 2006, and ringtones now account for over 10 per cent of the $32.3-billion worldwide music market.

Source: The Hindu