Mobile Broadband Penetration in India Stands At 4.9%: Smartphones May Bring About A Change [REPORT]

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With mobile subscriptions set to exceed 7 billion and overtake the total world population in 2014, it is expected that mobile broadband usage will soon reduce the dependence on fixed broadband for accessing the internet. Cell phones have lately become integrated with our daily lives as people are increasingly using their cell phones for everything from talking and sending text messages to shopping for goods and services, booking restaurant tables, etc. Internet via mobile opened up many new opportunities that may well serve as a bridge between the connected and the unconnected. Mobile broadband subscriptions overtook fixed broadband subscriptions in 2008 and rapidly increasing with a growth rate of 30% per year. It is expected, that by the end of 2013, there will be 2.1 billion mobile subscriptions, equivalent to one third of the total global stock of mobile cellular subscriptions.

New Divide

Mobile users will soon no longer be physically constrained by location, mobile phones have replaced the need to physically attend banks, post offices, and act as a gateway to money and communication services, as well as the online world of content bringing books, education and work to mobile phone users, whenever they want, wherever they want! However the World Economic Forum (2013) notes a lack of progress in bridging the “digital divide” that has emerged recently. Internet penetration isn’t very high in remote areas and in emerging markets. In low-income communities, a mobile phone subscription is shared between two or more people.

In emerging markets such as India, where a large population of people are first time users of technology, smartphone penetration stands at a mere 18%. According to the State of The Broadband 2013 report released by the United Nations Broadband commission, India is at the 106th position in the world in terms of mobile broadband penetration. Of the total population, only 4.9 percent users have access to mobile broadband services, leaving India behind countries such as Libya, Lithuania and Saudi Arabia. Although, the growth is significant when compared to last year’s 1.9%, India has failed to move up the rankings due to better performance by other countries. China ranks at 75th position with a penetration of 17.2%. In 2012, sales of smartphones out-paced the sales of feature phones for the first time, indicating the increasing adoption of smart devices in most markets.

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We believe it is going to take a few years before LTE becomes viable in India in terms of availability of a wide range of affordable devices . LTE network CAPEX per Mbps and OPEX per MB also need to come down, and that will take some time: Manu Khera, VP, Mobile Broadband at Reliance Communications

There are numerous challenges that need to be overcome in order to provide internet access to all citizens across the length and breadth of the country. Some of the many challenges, as pointed out by Mr. Manu Khera were:

  • Affordability: India has a per capita monthly income of $100. The average Indian finds it difficult to invest in a broadband access device and pay monthly broadband access charges that are in line with the more developed countries, thereby limiting companies’ ability to invest in new technology.
  • Coverage in Rural Area: Coverage in rural areas is still very difficult due to lack of regular power supply, human population and broadband access devices. PC/Smartphone penetration is still very low to ensure viability of investment.

Mobile Broadband Can Be A Game-Changer

Smartphone subscriptions worldwide are estimated to exceed 4 billion by 2018, which currently stands at 1.5 billion. The smartphone industry is presently shipping 700 million smartphones a year, with around 40% of handsets shipped in 2012 being smartphones. By 2018, mobile broadband subscription is projected to reach 7 billion. 4G subscriptions are expected to grow ten-fold, from 88 million in 2012 to 864 million by 2017. In China, 75% of all internet users now access the internet via a mobile device, exceeding the proportion of users accessing the internet via a fixed connection (71%) for the first time in 2012.

Mobile Broadband Bridges the Gap: Fixed Broadband and Mobile Subscriptions, 2009-2018Figure: Mobile Broadband Bridges the Gap: Fixed Broadband and Mobile Subscriptions, 2009-2018

Source: Ericsson Mobility Report, June 2013.

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India is one of the first countries to launch LTE (Long-Term Evolution), which will accelerate service delivery in sectors ranging from health to public infrastructure and will drive significant structural shift in consumer behavior over the next few years, given that nearly 200 operators in 75 countries may offer LTE services by the end of 2013.

Low-cost offerings by local smart devices vendors are rapidly bridging this gap with entry-level smart devices. These smart devices are soon gaining popularity among Indian consumers and are expected to increase smart devices penetration in the country, thereby paving the way for mobile broadband.

Source: Broadband Commission, Telecoms

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