India: Short Term Evolution

It’s budget day in the Indian parliament today, and telecoms watchers are waiting to see what in the way of taxation, or incentivisation of the industry comes out in the wash. InMobi CEO Naveen Tiwari called for progressive changes in the Business Standard last week. After the upheavals of the last 12 months with the cancelling of 122 licenses across a number of operators, and endless debate on licensing new spectrum, the government needs to act decisively to return confidence to the sector.

As Mr Tiwari points out, emphasis needs to be placed on development of the mobile infrastructure, with sensible allocations of spectrum to allow HSPA and LTE technologies to work to their full potential. He also calls for regulations and policies around mobile payments to be fast tracked, and more encouragement for mobile entrepreneurs to start up new businesses.

Hear hear.

The Telecom Regulatory Authority of India has submitted it’s spectrum policy recommendations for cabinet approval by 28th March. Let’s hope it goes through so the operators can clearly see the way forward for their network infrastructure plans. Rumour has it that Airtel are switching on their ZTE supplied LTE network in Kolkata next week, India’s first, bring it on!

Vodafone have become the first company in the Indian market to offer developers a 70% revenue share for apps and services billed across their network. Actually the small print says 60% until your app is so successful it pulls in Rs 1Crore (10million or $200,000), then you get 70%. However, this is revolutionary in a country where millions of people use USSD services for everything from downloading music, through ordering more gas and water, to banking with Barclays. Everyone of these services involves 70% of the transaction fee going to the operator, and 30% to the service provider. I’ve been talking to a couple of USSD gateway providers, and the combination of independent payments systems and the mobile web is going to enormously improve what they can offer their mobile customers.

Hopefully Vodafone’s unilateral action will stimulate the other operators to follow suit before it’s too late and Google & Microsoft eat their lunch. Online payments in general are a huge barrier to commerce here, the mobile networks have a great opportunity to change this. But Indian businesses and consumers alike are very cost conscious and won’t countenance greedy fees.

Now I am a permanent resident of India, I see more and more evolution in the mobile space that vindicates my decision to come and work here. In some ways there is a long way to go, and in others, I genuinely expect Indian companies to lead the world in some areas of mobile very soon. If the government can get themselves out of the way of progress, by the end of this year, it will be the most innovative and largest mobile market in the world.

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