Mohammad Chowdhury
Mohammad Chowdhury
I offer unfettered insights into the world of Asia Pac and India telecom

Image: Shutterstock

In India, talk about Digital India and Smart Cities is quite the rage. But as with many transformational propositions, there is much hype but limited discussion about how will digital be seen and felt across the economy.

Understanding how digital will influence our economy is important, since digital is likely to enable much of the leap-frogging that India needs to do in order to catch up quicker with the world’s middle income economies. Here are a few examples below, which together pick up on four themes which underpin what digital means, namely Social media, Mobile, Analytics and Cloud (SMAC):

  • In Sales and Distribution, many parts of India are not served by good physical sales and distribution outlets and channels. Digital technologies which help companies connect their suppliers better by using analytics and cloud provide many options for businesses to reach customers over the web and mobile. This will help them both sell and deliver goods more efficiently.

    Relevant example: Flipkart, one of India’s most innovative eCommerce companies, is using analytics and cloud to organise its delivery chain better, and to connect electronic and physical channels in getting goods to the customer, cash on delivery.  Buying on Flipkart is conditioned by social media feeds about products and services.

  • In Retail, India lags in offering customers a truly engaging shopping experience, both in-store and off-site. Digital technologies such as analytics enable businesses to collect more and deeper information about a customer, including combining context from different sources to create a more enriched and insightful view. Mobile helps with data collection, and then helps the retailer connect more efficiently when the customer is on-site and when they are at home.

    Relevant example: Book My Show has made it easier to pick up tickets at venues and theatres without queuing, and the mobile application also enables the customer to view and choose entertainment options while at home or still at work.

  • In Healthcare and Learning, digital technologies which enable service providers to provide remote services (such as monitoring blood pressure via a monitor while the patient remains at home) will enable India to avoid billions of extra dollars in public infrastructure investment, while continuing to improve public attainment and welfare.

    Relevant example: BBC Janala is providing millions of Bangladeshis with customised English language learning over mobiles. This is substituting the need for expensive class attendance in often faraway towns at higher expense.

  • In Smart Cities, digital solutions will help police contain and reduce crime – through CCTV, video surveillance and other techniques which with predictive analytics will drive quicker action to where it is needed. Some solutions will use analytics and geo-positioning technology to give people up to the second transportation and traffic information. Yet more solutions will allow families to remain connected with each other through the day of moving about the city, and will enable people to control appliances and home and in the car from afar.

    Relevant example: Surat Municipal Corporation is connecting with citizens already on several fronts around public services, using social media to engage, as well as analytics.

    The above examples show exactly why definitions of digital are centred on Social, Mobile, Analytics and Cloud (SMAC):

  • Social: Customers, individuals or employees are using social media to express themselves and connect and exchange views, vote on each other’s choices and compare notes on all manner of things from work to school, from housing options to movies, and religious views to political opinions. Such social media are rapidly creating new platforms for expression and communication, giving businesses new opportunity to promote their products and engage, as well as protect the brand.
  • Mobile: Connected mobile devices can now connect people and things almost anywhere and anytime. This makes the customer a 24/7 phenomenon, reachable at any time and who can transact at any moment, infinitely broadening the opportunity as well as the threat from competition. With access to applications which reside on the cloud, almost every mobile device with internet access today has access to a huge amount of computing power.
  • Analytics: Behind the scenes, there is enough firepower now to analyse almost anything that generate data – not just in terms of patterns of usage and consumption, but also to predict relevance and behaviour based on collecting wider, more contextual data – often referred to as “Big” data.  Big data has not really scaled yet, but it is only a matter of a few years till it does.
  • Cloud: All of the above is now supported by huge and globally available computing power and storage capacity, meaning that individuals, enterprises, governments and connected things can all benefit from immediate access to a vast pool of technology.

The role of the mobile industry will be key, because almost all digital impacts will involve the flow of data and communications, between people and machines. There are some 5 billion mobile connections today, and the GSMA predicts there will be some 26 billion connected people and devices by the mid 2020s. Referred to as the “internet of things” or IoT, the mobile industry has an opportunity today to be at the centre of the connected world which goes well beyond people and into “things” everywhere. As the IoT takes off, communications technology will pervade more and more industries, through technologies such as Machine to Machine (M2M), enabling the sorts of digital transformation illustrated in the few examples above.

It is not just connectedness that matters, that is having a “dumb pipe”. No, it is actually the nature of connectedness that will be fundamental to how much impact can be created through digital. In tomorrow’s world, customers will be asking:

How robust is security when my information is going across all sorts of networks?

What is my latency for viewing video while the page uploads or the app updates?

Is my network coverage consistent enough to connect anywhere as we move around?

Is my network sufficiently integrated with GPS information so that I can isolate locations accurately and quickly?

Does my network provide adequate coverage today to connect non-mobile technologies, at high speed and with high quality?

Whoever coined the phrase “dumb pipe” did a disservice to the mobile industry, one it has been trying to shake off for a decade now. The above questions demand that in the digital world, networks and their operators have to be extremely intelligent (not dumb), capable of providing connectivity fit for the need. There is significant value in being able to do this, and it is up to operators to go out into the market and acquire the skills and capabilities to be able to tap this.

It is time to draw stumps on 2014 and enjoy the holidays. For those of us who have a fascination for cricket, like me, the break provides an opportunity to switch off from the daily grind of telecom and think about the upcoming cricket World Cup. Let’s imagine for a moment that the Telecom Regulatory Authority of India (TRAI) is suspended for a day and the job of the industry watchdog is given to the ICC panel of cricket umpires. What would be their verdict on a telecom user’s day-to-day experience?

You scampered out of the building to maintain a weak call signal, but the call dropped by the time you stepped out.

Umpire’s verdict: RUN OUT

You are in your car, driving through Mumbai, and your email freezes as your phone keeps toggling between 3G and EDGE.

Umpire’s verdict: TIMED OUT

You become so fatigued swiping the screen of your smartphone for weeks that you permanently injure your left forefinger. You have to go to a physio and downgrade to a basic text/voice phone before making any more calls.

Umpire’s verdict: Out, RETIRED HURT

During a kite-flying competition, an enthusiastic participant wraps his strings around a telecom tower and pulls all the equipment down.

Umpire’s verdict: Out, HIT WICKET

The four bars of signal on your phone rapidly slip to none as a truck carrying lead pipes stops in front of you at the traffic lights, blocking the line of sight to the nearest radio base station.

Umpire’s verdict: Out, OBSTRUCTING THE FIELD

You craftily try to use your wife’s phone as a Wi-Fi hotspot as your own data bill is too high, and both phones crash at once.

Umpire’s verdict: Out, HANDLED THE BALL, subject to a “hotspot” review

You again craftily use your wife’s phone as a hotspot, but she catches you in the act and swiftly dismisses you to go use your own balance.

Umpire’s verdict: Out, LBW. Umpire warns that you have reached the limit of two spouse handset transgressions for the week

The network signal is so fast that you don’t actually see the page load up when you click… err, yes, wishful thinking on this one!

Umpire’s verdict: Out BOWLED and OVER

You are so engrossed in the discussion as you pace about during a conference call that you unwittingly wander out of office, down the stairs, into the underground car park, out of network range, and get disconnected.

Umpire’s verdict: Out, STUMPED

There is a special ultra high speed 5G network trial going on at Delhi airport, but you fall asleep and completely miss out.

Umpire’s verdict: CAUGHT (napping)

You decide to have a New Year’s Day conference call with your team, but the call drops when the 11th person joins due to lack of system capacity.

Umpire’s verdict: INNINGS FORFEITED

You thought you’d topped up enough balance to last the day, but by afternoon, your phone isn’t connecting and you miss a number of important calls.

Umpire’s verdict: Lose the game due to a DUCKWORTH-LEWIS MISCALCULATION

Since you are the boss and nobody says anything to you, you start wearing a helmet during long phone calls.

Umpire’s verdict: You are worried about EMF RADIATION exposure

In this convergent world, we are getting up to telephonic activities that go well beyond the traditional scope of basic communication. If he observes us for a day, how would Sanjay Manjrekar and his crew at Star Sports commentate on what we do?

You jump into the car and drive to the DLF Cyber City mall to buy the latest Burberry iPhone cover, just before the store runs out of stock.

Commentary: Oh that was a superb COVER DRIVE, and well timed too

Wife and husband have a tussle over who will use the iPad during a fog-delayed journey to Delhi.

Commentary: What an amazing display of SHORT-ARMED JABS and PULLS as we cruise over the Himalayas

You use your phablet to adeptly bat away a mosquito that’s been buzzing around your ears while you try to have an afternoon snooze.

Commentary: A blistering SQUARE CUT

You use your phablet to bat away a mosquito that’s bothering you, but it’s too late as you’ve been bitten thrice already.

Commentary: An attempted LATE CUT, trifle too late unfortunately

You are driving across town in your car to visit your girlfriend and talk to her on the way without using a hands-free kit.

Shot: He tries the ON DRIVE with a dash of risk without the hands-free, but sublimely wristy gear change

You use your handset to brush biscuit crumbs off your lap following afternoon tea.

Commentary: LEG GLANCE for a single

You call your wife at 3 pm to let her know that you’ll be late for evening drinks.


You forget to call your wife to let her know that you’ll miss drinks altogether, and text her at 10 pm to offer an unconditional apology.


After almost four years, I am calling time on India and moving out of Mumbai this year end. Thank you for reading my posts over the past few years–I am happy to say normal telecom services will continue in 2015, but expect a more international twist with delivery from offshore locations!

Here’s wishing you a Happy New Year and a prosperous 2015!

(Tweet me @mtchowdhury)

Photo: Dinuka Liyanawatte / Reuters

Photo: Dinuka Liyanawatte / Reuters

After completing immigration at Colombo International Arrivals, the officer will hand you back your passport along with a welcome pack consisting of a Sri Lanka tourist guide and a free prepaid SIM card.  In touch with this serendipitous island’s welcoming feel, the SIM card signals the promise of a telecom sector that must be vibrant, innovative and growing.

Alas, no.

In November, on a visit to Colombo, where I met several telecom CEOs and the sector regulatory authority, I realised that this small but sophisticated emerging market punches well below its weight. This is despite Sri Lanka having knowledgeable and hungry customers, businesses crying out for better communications, operators with talented staff and a handful of highly experienced CEOs.

The lethargy in the market is due to market structure—with the industry being crowded with too many operators—and partly because of under-priced services. India is not alone in South Asia in having a need for better telecom sector policy, but in India there is hope because it still offers another few years of raw growth opportunity. In Sri Lanka the structural problems need addressing.
Here is a snapshot of my two-day hypothesis on Sri Lanka and how it compares to the India perspective:

1. The mobile market is not big enough for five players over the long term

  • With over 100 percent penetration and a stable population of only 20 million, Sri Lanka’s telecom market is saturated and offers little prospect for growth, except in data. With not enough profit available for today’s five players, the result is market stagnation, underinvestment and a lack of exciting new services for customers and businesses.
  • From 2008 onwards, India saw something similar with 8-12 players per circle fighting in the market for new customers. From 2011, we then suffered a lack of investment, as the industry became too laden with debt and investor uncertainty following the 3G auctions and the Supreme Court cancellation of licenses in 2012.
  • For these countries, and Bangladesh too, sector overcrowding results from the lack of more thoughtful competition and licensing policy in the first place. Bangladesh has six operators, and arguably, should only have four. In all these markets, now that players are already in, it is M&A which will have to correct for market structure, which is why getting the M&A conditions right is so important.

2. Voice tariff rates are too low to support short-term profitability
In Sri Lanka, voice tariffs are too low to justify more investment in better quality services to customers, possibly the only way to differentiate voice services is to try and drive higher tariffs and more profitability. South Asia is a region beset with the lowest voice tariffs in the world. India has successfully managed to raise voice tariffs around 20-30 percent in the past two years without seeing any major fall in usage. It is less likely this will happen in Sri Lanka because the largest players might prefer to see low tariffs continue for a while to force consolidation.

3. There is too much pressure on data, which is already priced too low
Given the situation in voice, data is already burdened with having to be Sri Lanka’s saviour. However, data tariffs in Sri Lanka are among the lowest in the world too. With a data boom likely to hit soon as smartphones reach sub $40, this spells potential disaster for operators if data transmission costs sky rocket, while revenue grows only slowly.

As the data story develops, both India and Sri Lanka are seeing the emergence of alternative network strategies involving 3G, 4G, fibre and WiFi. Whilst voice strategy has been quite homogeneous, we should expect data strategies to differ significantly as each operator has different spectrum, different network partners and some also have fixed assets such as fiber. Sri Lankan operators do not experience the acute shortage of spectrum that Indian operators have to deal with. However, both countries lack a clear spectrum roadmap, and this doesn’t help investors’ ability to plan ahead.

4. Sri Lanka’s customers and economy stand to lose out in the long term
In Sri Lanka, a five-player market means smaller operators will always struggle to scale and the larger ones are likely to keep waiting for consolidation before they invest. This dynamic has created a stalemate in the industry. As a result, growth and competitiveness in Sri Lankan IT, technology, media and other industries touched by communications (eg health, finance, education) will be impacted and this will hamper economic growth, possibly resulting also in government revenue stagnation.

Even with poor policies, India can muddle back to superior growth rates in telecom due to the voice and data growth left in a large market. Renewed GDP growth may drive even more demand. But Sri Lanka doesn’t have these advantages to fall back on right now. So it has to grasp stagnation decisively through policies to kick-start growth in a saturated market. The government has to act through announcing a new sector vision and policy, take measures to encourage operator consolidation, drive infrastructure sharing harder and other measures to cut capital investment needs and encourage new services growth.  A return to dynamism in telecoms could also start playing a supporting role in Sri Lanka’s desire to be a technology and innovation hub too.

Right after taking power, Prime Minister Narendra Modi’s administration quickly raised the prominence of Smart Cities, announcing an ambitious vision to create a better quality of urban life by harnessing digital technologies. Whilst policy makers grapple with how realistic this vision is, many of us are already “smart” urbanistas, using applications and services to make our lives easier, more fun, informed, and connected.

But which is India’s smartest metropolis by use of city apps today?

I decided to find out by surfing on Google Play Store from my smart phone and looking at the number of apps (which include the city’s name in the title) available for download. I then looked at how many downloads there have been of the most popular app. A simple approach, Android-based only, and indicative rather than precise. I looked at 10 Indian cities, and, for interest, 10 global ones. Mumbai, Delhi and Bangalore were obvious choices, as is Kolkata given its mega-city status. I opted for Hyderabad and Pune, given both have strong connections to technology, and Ahemdabad given its status as the capital of forward-looking Gujarat, home to many of India’s smart city ambitions. I then selected some wild cards in Chandigarh and Lucknow, and Agra as it has such a strong tourism pull.

And the India winner is… Mumbai!  Noted below are the scores for the top 8 from my India analysis, and the top 8 globally.


Here are a few key observations:
1.    On Google Play Store there are no less than 225 applications available which include the word “Mumbai” in the title.

2.    The number 1 rated app for Mumbai, a bus timetable, has had 1 million downloads.  Equivalent to over 5% of the population, this is impressive.

3.    On a trawl through major cities of the world, including New York and London, I found not one has more downloads than Mumbai.  With 187 apps, Dubai has less apps on offer than Mumbai or Delhi.

4.    Mumbai’s figures confirm how the city’s mobile users have more in common with a European city than the rest of India.

5.    While major Indian cities are on par with more developed countries, other regional cities lag behind: Dhaka, Karachi and Yangon combined have only as many apps as Pune.

6.    Despite the numbers, Indian city apps are generally logistics-based, relating to bus times and train times. By contrast, World city apps seem to be more qualitative, focusing on tourist advice and travel services. By contrast, World city apps are more qualitative, focusing on tourist advice and travel services. Trip Advisor city guides dominate downloads in many cities, which is interesting.

Of course there is much more to a smart city than apps. In fact, apps indicate more about the smartness of its citizens, than the city itself. What it takes for a city to be smart relates much more to the fixed and mobile telecoms infrastructure, the overlaying information infrastructure, and the collaboration between private sector and public agencies. How likely it is that Indian cities can emerge as smarter cities is something I will write about shortly.

This country has for centuries lived with a stark division between the haves and the have-nots. Access to telecom has been no exception, though the line of division has shifted: whilst almost all of us have the ability to access basic voice services today, most are still without easy access to the internet. The 900 million mobile-haves of India are still chiefly data-have-nots. In a world where economic advantage and social connectivity requires data access, the have-nots stand to lose. They are in danger of falling foul of what is commonly referred to as the digital divide.

Cometh the need, cometh a smart phone revolution which promises to wipe away much of the digital division that stands shakily before us. Smart phones are set to become the new tool for democratisation. Much has already been achieved: the price point of smart phones has dropped dramatically from around INR 10,000 a couple of years’ ago for a reasonable smart phone to around INR 5,000 today, and high-speed networks are available in more places than before, and most importantly, people are beginning to use services.  A few more developments are being seen too:

  • The INR 2,500 smart phone is coming.  Neighbouring Bangladesh already retails such keenly priced handsets, fully 3G capable, Chinese manufactured and locally assembled.  Do not think that the Indian handset market has hit its price point low – there is still quite some way to go.
  • eCommerce for buying phones.  High-end phones are usually purchased in stores but amazingly, mid-segment smart phone buyers have recently taken to the internet for buying phones.  This is surprising given the general lack of interest in eCommerce from spenders who do not have ubiquitous internet access or payment methods.  Players such as Xiaomi are offering phones in India online for a much lower price than shop retail, cutting out expensive middlemen and agents, and providing what the Indian consumer wants: features and capability.  So our value conscious buyers suddenly don’t see the internet as an obstacle to ignore but as an enabler to get involved with.
  • 2G is the new 3G: Most rural parts of India have not seen 3G rolled out as yet.  But in some areas, 2G phones continue to sell well, with new models better equipped with browsing compression technology that lets them operate pretty well on data.  Given that 3G (or 4G) will not cover rural areas thoroughly for years to come, there is a prospect of the emergence of the smart 2G phone which can provide an acceptable user experience on data.  The ultimate contradiction in terms: the 2G smart phone!
  • Easier surfing for basic phones: When it comes to democratisation of internet access in developing countries, Google are evidently not ready to relax having announced Android One recently.  This week came the announcement of a new browsing and search feature designed to work fast on basic phones by cutting out alot of the data-heavy detail that the standard Google search incorporates.
  • What’sApp is driving high speed data demand because of video: Have you done it yet?  Sharing video clips with friends and family over WhatsApp?  Many of us seem to have discovered this trick, having given up with email with heavy attachments, and avoiding the perils of too much sharing if we use Facebook or other social media.  In India, What’sApp is already chipping away at SMS usage but it is now giving operators the headache of consuming more network bandwidth than an instant messaging service normally would.
  • The emergence of mGovernance services for making public services more accessible and transparent:  The Municipality of Surat has launched a mobile-accessible portal which allows citizens to access various public services (such as information, bill payment) through their handset.  This is just one example of a mushrooming of public services being made available through mobile, spanning from utility bill payment to reporting potholes in roads.  mGovernance, once it matures, will be the arena where mobile-enabled democratisation really takes off.  Give it five years of mushrooming, and then another three to five years of scaling of a few services which will really have the potential of changing people’s daily lives.


The result: as much as 20% of all data usage is now generated from India’s rural areas, where data is picking up, and a city such as Mumbai now has a higher level of data penetration than many European cities.


India’s democratisation project continues.  After the spinning wheel, the railway and the printing press, the smart phone is the latest tool which will help it take the next bold steps.

(A note of thanks is due to Abhinav Jha for his contributions to this post).

Follow me @mtchowdhury



India’s telecom industry hit a first last week when Google selected this market for the worldwide launch of Android One, the new mass market smart phone manufactured in three versions by Micromax, Karbonn and Spice. Given that both Google and Apple usually choose the US for global launches, this is a great distinction for India. The internet giant chose wisely: India is one of the world’s largest and fastest growing smart phone markets, expecting to ship 80 million units this year alone. Within this 80m, the segment that Android One attracts at a INR 7,000 price tag will be significant, and so a decent share of that could result in anywhere between 2m to 5m units in a year. No market on earth betters that sort of volume potential today.

Priced at around INR 7,000, Android One targets the volume sweet spot in India by positioning it to drive a wedge between the low and mid-tier smart phone segments.  The device has been priced comfortably below the INR 10,000+ segment which remains a stretch for SEC C or D Indians who desire a smart phone experience, yet at the same same time it is priced higher than entry-level feature phones many of which have been tried and may not be chosen again when it is time to replace them. My team’s recent survey of consumer value ( shows that over 50% of users of basic phones today plan to spend between INR 3,000 to 10,000 on their next phone, and this goes further to indicate that the Indian consumer’s aspiration for more is fighting with her/his unending desire for value through feature-richness. If aspiration wins and the buyer believes Android One delivers more, then we can expect the device to outperform in gaining market share.

Android One runs on the KitKat 4.4 operating system which incorporates features such as an ability to store You Tube videos to be watched offline, automatic updates of apps and security features directly managed by Google onto the phone, as well as compression technology to go lighter on data consumption when browsing. These features create a phone that is likely to offer competition to higher priced models offered by other, established smart phone manufacturers. There is already talk of Android One threatening the market position of smart phone leaders Samsung or Apple, though I believe this is premature, given the space between their premium models and this one.  Rather, the Android One entry emphasises the question about whether the top-end leaders should be trying to move into this price segment as well. The sense is that Samsung will try, but Apple will continue its focus on the top-end, on tablets and in bolstering its apps and music ecosystem.

The compression technology in-built to the phone is a real plus. A mobile operator some years ago launched a project to install “Opera mini” compression browsing onto live handsets. However, the project to upgrade existing phones “over the air” proved to be more complex than expected, and the venture petered out within a few months. Better to install compression ability in the factory, which is what will happen with Android One. It will be interesting to see if operators are enthusiastic about this feature.

The facility to be able to watch YouTube videos offline targets new data users who are cost-conscious about data usage costs. A user can download a YouTube video over a WiFi connection and then watch it later with data switched off, meaning that streaming costs are avoided and also that the quality of picture is better. Too many users have been underwhelmed by slow video (due to poor 3G-connectivity and congestion) and high costs as data keeps purring away in the background.

What remains to be seen is if the Android One phone is able to guide the user to switch off auto updates on apps, so that data packages are used up more slowly, and whether it does live up to the promise of “smart switching” between WiFi and mobile networks, something that my Android phone features, but in my case, never seems to actually work. We also need to see whether the three manufacturers can properly differentiate their phones from each other beyond simply aesthetics.

To woo India’s value-obsessed buyer, Android has to offer simplicity, quality and ease of use to our millions of mid-low tier phone users. YouTube could become a “killer app” if film clips and cricket can be watched easily offline. If so, then Android One could not only play in the volume sweet spot, but could actually capture a better than par market share of it.

Follow me @mtchowdhury

smar_phoneLast year I blogged about Asia’s final frontier in telecom. This week I had the privilege of visiting Yangon and meeting some of the movers and shakers of the telecom industry in Myanmar. Since last year, the ambitious and recently reformist ASEAN republic has licensed two international operators, Telenor of Norway and Ooredoo of Qatar, to build out mobile networks, as well as entered into agreements with other investors to put money and know-how into developing the industry.

Myanmar is the 73rd country I have worked in, and from what I saw this week, it promises to be one of the most illuminating. The country’s senior policymakers, as a group, are quietly shaping the emergence of an economy which was largely forgotten by the rest of the world until a decade ago, evidently with a sharp appreciation for what needs to be done to keep growth on track. What is Myanmar doing right in telecom, and what can we learn in India from this?

  • A unified vision for growth: There is unanimity in different quarters of Government in expressing what Myanmar’s telecom sector has to do to enable economic growth and social inclusion. In India, partly due to having the complexity of state versus union, the debate around what telecom’s role has not always been so straightforward. In particular, there has been a hot debate around whether the sector should be a source of growth, or a source of funds for the Government budget. This battle has never been resolved satisfactorily and until revenue takes a back seat, the industry will remain at crossroads as to whether it is a goose that lays golden eggs, or a golden rainbow that shows us a path to faster industrial growth.
  • A policy and regulatory framework that remains simple: I am impressed by how simply policy makers and strategists in Myanmar can articulate the policy framework. Granted, Myanmar is in the early days of liberalisation and the real policy challenges will only emerge in a few years’ time. By contrast in India, 20 years after liberalisation, the industry’s policies appear confused and inconsistent.  Anybody looking afresh at the current spectrum allocations in India would struggle to understand the rationale for why players have the present mix of 800MHz, 900 MHz, 1800 MHz and 2100 MHz spectrum, in different quantities by circle.Part of the complexity comes from having circle-circle allocations. The situation today is also the result of incremental steps to allocate spectrum over many years without the benefit of a long term spectrum plan. This incrementalism has in the past been driven by anecdotal and expedient interventions to balance out one unfair outcome with a corresponding compensation. In total this has resulted in a messy outcome. I saw the same in Egypt, another country where telecom regulation was intensely deal-based and lacked long-term strategy. In recent years the Indian regulatory authorities have tried to iron out some of these complexities, but it will take a generation of licensing to finish the job, and we still lack a long-term spectrum plan for India that shows how the industry will attain the spectrum it will need to meet demand.
  • A single market: India being such a vast sub-continent, it is never going to be a single market. By contrast, Myanmar is a market of 50+ million people, regulated as one with a single regulatory framework and single licensing nationally, with spectrum allocations which are in line with this. There is also, from a market point of view, a single language group across the population. Whilst India does not simulate this, there is merit in considering how certain sub-markets could be encouraged to be more national/sector-wide. The biggest opportunity lies in data services. Local developers in India struggle to find the market big enough to write apps for, and would see more potential if they could do business with the industry together rather than each operator one by one. And if there is more innovation to encourage multiple vernaculars to access common services (eg. through voice commands) then India’s many geographies might be more easily looked at as a whole market.
  • Reasonable pricing: So far, Myanmar has not seen a major price war for voice services. It is extremely early days, with only one of the newly licensed operators having launched so far, and therefore its not yet seeing the dynamics of a three-player market yet. 3-player markets are notoriously known for leading to much more drastic price changes than duopolies. But the signals suggest we will not see a mad cap price war in Myanmar in the near future, and this bodes well for ensuring a reasonable balance between protecting consumer choice, value and rights, as well as encouraging prosperity for an industry that will need to invest significant sums to build infrastructure. In India, the operators have been bankrupted through high spectrum charges and low operating margins (and a lack of spectrum), resulting in a slower build out than could be expected in rural areas, and worse quality of service in urban.

Of course there is perhaps more that Myanmar can learn from India’s experience, too.  For starters, India is the one emerging market in telecoms that has seen the most innovation when it comes to marketing – both pricing for services as well as analytics to drive better customer segmentation and targeting. No other country can boast a better handle of micro-segmenting customers and targeting them with offers. And India can claim to be the country that invented “sachet pricing” for telecom, borrowing shampoo pricing techniques to bring the option for consumers to buy their telecoms services in tiny chunks at a time.

Myanmar has probably more to observe in India than vice versa, but it would do no harm for our policy makers to see what’s happening over in Nay Pi Daw from time to time, to remind themselves of the days when life was simple and the plan was clear.

I have just flown around the world in 16 days: Delhi to Delhi via London, New York, Toronto, Montreal, LA, Brisbane and Singapore. While I had trouble keeping up with my time zones, I had little problem staying up to date with email or social media and that too, at no additional cost.

What I picked up from my extensive travel was the widespread availability of publicly accessible WiFi services, most of it funded through revenue models, which means you get some form of access for free. Most shopping malls in Singapore, almost every airport terminal in all the cities mentioned above, the Qantas flight from LA to Brisbane, and a number of coffee shops as well as department stores in Brisbane and London–all offer WiFi access for free.  Chinatown in Singapore is WiFi-enabled too, including the outdoor areas and streets in a square-kilometre block–in a model funded by the local businesses’ association.

In most of these cases, there are distinct business models which provide an opportunity for the WiFi provider to make money indirectly from the usage:

  • Paid for advertising onto the user’s tablet or handset
  • Prompts to the user’s handset which will trigger purchases (mainly in shopping malls and stores)
  • Collection of the user’s demographic and location information which will be sold later for direct marketing

Using most of these free services is easy as it takes less than a minute to log in and start surfing. For me, the key draw was that as an international roaming traveller, I could defray significant mobile data roaming costs by using these services. I was also saved from the hassle of buying a local SIM card everywhere I went to. Most importantly, my precious time was saved. I was also able to save on making some international voice calls by using internet-enabled services such as Google Hangouts to conduct video calls instead of making a public-switched voice call paying a roaming tariff.

It is time we see public WiFi scale in India.  Data usage is on the rise and smartphones are becoming far more prevalent. Yet, at the same time, the user experience on 3G is still patchy, especially in crowded spots.  Provided the WiFi revenue models are carefully worked out in each instance, nobody needs to lose money by providing the service for free. Where the free-to-air revenue model doesn’t work, the services can remain paid for. In coffee shops, for example.

Operators need not think they’ll lose out on data or roaming revenue:

  • A lot of WiFi-connected usage results in consumption (eg video calls, YouTube) which would not have happened on a mobile data service–so the substitution of mobile data usage is relatively modest
  • For roaming users. Mobile data is more than often switched off these days, and so again, there is arguably limited substitution of actual mobile data usage due to using WiFi

From a cost point of view, operators may of course benefit. During heavy data sessions, moving to WiFi will help reduce transmission cost compared to supporting such sessions over the mobile radio network.

I have one additional theory which is that mobile operators may actually benefit when roamers jump onto public WiFi services, which is that the possibility of saving on mobile data roaming will dissuade users out of the laziness from buying a local SIM card to make voice calls. This is exactly what happened to me in the past two weeks: In the US, Canada and Singapore, I didn’t bother with local SIM cards, and will probably end up with a significantly larger voice roaming bill as a result. This specific business case would be worthy of a case study for mobile operators.

My sense is that the time is right for public WiFi to scale up in India–and that this has the opportunity to be another building block to encouraging truly higher levels of data usage in public places, alongside 3G and if rapid, then before the onset of 4G.


Image: Shutterstock

The mobile services industry in India is growing only in single-digit figures, but the market for smartphones grew by a whopping 300 percent last year. What’s more, it is set to double in 2014. However, even as the market grows at a fast rate, the price points are falling equally fast. This tension between rapid growth and quick commoditisation has created an aggressive battle for survival among India’s handset players. Established players are being shaken out, and some emerging ones too can expect to be taken out of the market in the years to come. In India, only the players who offer rich phone features at superior value for money are likely to survive with a chunky market share.

Here are five reasons why the Indian smartphone market offers heady growth, but only to those who are nimble enough to keep giving the consumers what they are looking for:

1. India is one of the world’s fastest-growing handset markets
While only 10 percent of India’s 700 million-plus mobile phone users were using smartphones at the start of 2013, the figure shot up exponentially to 29 percent by Q1 2014.  The number of such devices shipped in India rose from 16 million in 2012 to over 40 million in 2013. It is expected to cross 80 million this year. For a few years to come, Indians will provide one of the biggest opportunities for handset players to make a lot of money.

2. Indian price points are low, but rich phone features drive sales
Smartphones in India have become very affordable. Almost 80 percent of the units sold during early 2014 were priced at below Rs 12,000 (ie sub $200). However, it would be wrong to conclude that Indians are “cheap” smartphone buyers. In India, it is not ‘low price’ which helps a phone sell, but the features which are available on a limited budget.

Most buyers preferring a relatively cheaper smartphone are seeking specific features which include a flashlight to illuminate in the dark, puddle-infested alleys at night, a good speaker phone so that family or friends can listen to music together, and a good camera. Indians are constantly seeking functionality and are intrinsically value-driven, not price-driven.

3. Mobiles are the most aspirational consumer product in India
Mobiles are far more affordable than other desirable products such as cars or homes. Yet, mobile features are varied enough so that individuals can fashion a purchase according to their own preferences. More than half of Indians in SEC C (lower-middle class) are willing to spend more than Rs 10,000 on their next mobile phone. Micromax uses Wolverine star Hugh Jackman to publicise its latest models, while others employ actors Ranbir Kapoor or Priyanka Chopra. Mobile operators live in the hope that such aspirations will also result in higher usage of network – i.e. data-friendly features will result in greater adoption of mobile data services. A survey conducted by my team last year found that lower middle-class Indians without satellite TVs in areas such as Assam use mobiles to watch Bollywood clips and cricket highlights–a dream come true for mobile operators.

4. Traditional players are giving way to new ones
While the smartphone category peaks, the best known global players are struggling to capture a fair share of the growth. Nokia’s once dominant share of the Indian handset market a few years ago dwarfs its current smartphone share, mainly due to a pre-Microsoft strategy to focus on feature phones and basic handsets. Apple’s smartphone market share in India is also dropping, but this is because it offers a niche, high-end product whose relative weight in an emerging mass market is mathematically destined to shrink. Samsung has bucked this trend because of having a differentiated range of reasonably-priced smartphones, as well as offering dual-SIM models which are popular in India. Samsung’s market share in India increased from 26 percent in Q1 2013 to 35 percent in Q1 2014.

Players unheard of some years ago are now emerging.  Karbonn, a relatively new Indian player, is catching up with Micromax, and new Chinese players such as Xiaomi and Gionee which launched here recently are hoping to get a grip on segments where their sub Rs 5,000 smartphone devices may take off.

5. Indian players do assemble, but don’t innovate or manufacture components
Chinese handset manufacturers are likely to do better in the long-term than Indians because they have more control over the models they produce. More product development, component design and manufacturing takes place in China compared to India’s handset players, who principally concentrate on basic assembly only and are dependent on overseas suppliers for components.

Indian players have recently tried entering new markets (such as Russia), but one wonders how well they will fare in consumer segments beyond the most price-sensitive low-end buyers. If Indian handset players want to become more innovative, there is plenty of scope for home-grown innovation.  For example, energy use and battery life are key here, given the paucity of consistent network coverage (our phones spend a lot of the day searching for the optimal signal) and the lack of power supply in many rural areas. Also, as mobile commerce takes off in India, phones which make it easier to buy and sell products through less key strokes and which facilitate features such as money transfer are bound to do well in emerging markets such as in Africa or Asia.

Two shakeouts: one now, and the other that is threatening to come
Over the next few years, we can expect two waves of market shakeout as far as smartphones are concerned. The first is happening already: traditional handset players are being shaken out of market leadership by new players who cater better to the needs of value-seeking low-budget Indian consumers. The second shakeout is threatening to happen: The substitution of Indian handsets by more innovative and feature-savvy Chinese ones. This need not happen if Prime Minister Narendra Modi’s promise to support manufacturing and beef up Indian technology and innovation bears fruit anytime soon.


Image: Shutterstock

TRAI (Telecom Regulatory Authority of India) has announced the much-awaited spectrum sharing guidelines this week.

TRAI has said that two companies can share spectrum between themselves if both of them hold spectrum in one particular band in a particular service area, if the spectrum is acquired through auction or the companies have paid the market determined rate for the airwave.

“All access spectrum i.e. spectrum in the bands of 800/900/1800/2100/ 2300/2500 MHz will be sharable provided that both the licensees are having spectrum in the same band,” TRAI said in its recommendation on Guidelines on Spectrum Sharing.

Operators involved in spectrum sharing will need to pay a higher spectrum usage charge, elevated by an additional 0.5% of revenue.  Whether this means operators will gain overall in terms of their profitability depends on whether they can take around 0.25% out of their cost base as a result of spectrum sharing (assuming a 50% operating margin).  On the face of it, once the transition phase to sharing is over, it seems at a high level that this could be done.

DoT is now due to examine the TRAI guidelines before confirming the policy to be adopted.

Spectrum sharing is likely to:

  • Help operators with too little spectrum in a circle to satisfy demand
  • Enable less congestion and better quality of service
  • Reduce the need to buy more spectrum in existing circles
  • Provide an alternative to more capex in-circle from increasing site density


Spectrum sharing is not likely to:

  • Spectrum sharing does not:Mean that operators can avoid spectrum purchase to enter new circles
  • Favour smaller players with fragmented spectrum holdings as they may find it hard to find sharing partners
  • Help operators with limited spectrum and limited market share, who wish to partner with a more established operator in the same circle
  • Help with specific geographic black spots as the formula applies to the whole circle


Spectrum sharing should not be expected to result in huge reductions in industry debt which currently stands at around INR 250,000 Crore (USD 40bn).  This is because it doesn’t help avoid future spectrum purchase for renewals, or defray any of the cost of entering new service areas.

Rather, it provides the potential to reduce in-circle capital expenditure to improve network coverage through building more base stations.  Even for this, I would expect additional transition costs in the first few years as operators undertake network engineering to link theirs to others’.  This may or may not be offset by cost savings in the near term.

It is possible that the guidelines will favours operators of a similar size, where each party offers the other a similar benefit from sharing.  It is unlikely that an operator will share spectrum with one who has a significant spectrum disadvantage in the same circle.  Therefore, it may be the case that sharing will take off between operators with similar problems and spectrum endowments.

Some have said that the new guidelines on spectrum sharing will help consolidation, but so far I do not see an obvious reason why, although it might polarise smaller players further into a need to exit or be bought out.

Mohammad Chowdhury
Mohammad Chowdhury is a Telecoms adviser. Until recently he was Telecom, Media and Technology Industry Leader at PwC India where he was s senior Partner and a member of the global executive team. He moved to India in 2011 following senior roles in Vodafone, IBM and previously PwC where he started his career on the graduate scheme for economists. From London, Mohammad ran Vodafone Group strategy across emerging markets, and from Cairo served on Vodafone Egypt's executive team just before the Arab Spring. At IBM, he set up the corporation's first telecom solution centre in Bangalore, and at PwC directed the firm's account at the World Bank in Washington, D.C., and the firm's telecoms privatisation work in Eastern Europe, Middle East and Africa. Mohammad served as an adviser to telecom sector reform in Saudi Arabia, Zimbabwe, Ethiopia, Slovakia, Poland and Slovenia. He is quoted regularly by the Financial Times, Wall Street Journal, BBC, TV-18 and NDTV.

Mohammad has worked in 76 countries, lived in 7 and speaks 6 languages. He has a BA in Politics, Philosophy and Economics from Oxford University, an MPhil in Economics from Cambridge University, and strategy training from Harvard Business School. He was born in London, has family origins in Bangladesh, and is married with two sons. Mohammad will move from Mumbai to take up a new role in the PwC global network in 2015.
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February 22, 2015 07:35 am by Mohammad
Thanks Rohit, very relevant and interesting points. The concept of network slicing is certainly a subject that needs to be better understood in context of future spectrum requirements for the IoT world. Thanks for reading!
February 12, 2015 10:37 am by Rohit Agarwal
As usual its an interesting article Mohammad. The 5G network that is being envisioned is expected to provide the same. The operators will have a chance to create Network Slices and provide the services based on the usage requirements. SDN & NFV will further enable the operators to provide servic...
January 08, 2015 19:32 pm by Mohammad Chowdhury
December 31, 2014 06:34 am by Ritesh
Best of luck Mohammad. And wish you a very joyful and prosperous 2015. .
November 22, 2014 17:15 pm by OnePlus One Launches Exclusively On Amazon India
[...] pointed out by Forbes earlier during the year, the Indian smartphone market is growing by almost 300% every [...]