Mobile data revenue to contribute more than 20 per cent by 2008: Gartner

Our Corporate Bureau
26 August 2004

Mumbai: According to Gartner, cellular data services will account for 20.5 per cent of total cellular service revenues in 2008, equivalent to Rs147.6 billion. Overall, India's mobile services market will grow by a compound annual rate of 28.3 per cent during the next five years, to touch revenues of Rs718 billion in 2008. Announcing this during the Gartner Summit India 2004, Gartner also advised cellular operators that to achieve higher ARPUs through data applications will require a change in mindset if they are to succeed in working with users and other players to develop compelling value propositions for consumers and enterprises.

Last year (2003) wireless data services accounted for just 5.4 per cent of cellular service revenues in India, and most of this comprised revenue from SMS traffic. India's unified license regime has given an impetus to growth. Regulatory constraints are being eased in response to unrelenting market pressures, creating ideal conditions for a dramatic new phase of growth, investment and consolidation.

Given the attrition of voice ARPUs as operators target low-use market segments, operators need to refocus on cost control and margin enhancements. As operators look towards mobile data services to improve business profitability, they will need to evolve to higher speed, higher capacity networks for both voice and data services.

Gartner believes that there will be a gradual move towards UMTS platforms starting in 2006, complemented by a move by CDMA carriers to roll out cdma2000 1xEV-DV platforms. This has to be supported by mobile devices at attractive price points to help mobile data uptake.

Geoff Johnson, vice president and research director, Gartner, said, "A more positive outlook for IT, telecommunications and networking in 2004 has caused many enterprises and suppliers to review their stringent cost-cutting approaches of recent years and begin to focus on gearing for growth again. Business-level initiatives must drive this new agenda but networks, particularly mobile will be key to delivery of the benefits that IT can achieve."

Kobita Desai, principal analyst, telecom, Gartner India, said "Indian cellular operators are realising that voice-only services are not generating adequate revenues and are exploring ways to offer more value-added services to increase the average revenue per user (ARPU).