95 million smartphones shipped in India during 2015—a hike of 32% from 41 million in 2013. Moreover, for the first time, smartphone sales in India is expected to outnumber feature phone. The latest report from Cisco titled “VNI Mobile Forecast 2015 -2020”, suggests that the number of Smartphone users in India grew to 239 million by the end of 2015 surpassing the USA for the first time ever. Mid-ranged high-end devices, as well as budget phones, led to the significant growth in the Indian smartphone market, with the famous South Korean leader, Samsung, taking the lead, according to Counterpoint.
It is no surprise that with more than a billion population, Indian mobile market is the hot target for smartphones. Let us examine how the exploded adoption of smartphones have influenced overall mobile data traffic in India.
When Alexander Graham Bell invented the telephone in the 19th century, little that he knew, that almost after a century, his invention would revolutionise the lives of the people. Fast forward to 1992, and IBM gifted us IBM Simon, the father of modern day smartphones. With time and because of an overwhelming population burst smartphone has become an integral part of everyone’s life. Every fist is seen clinching a smartphone in this new century, and a yet to be developed country, India is creating waves making large markets, likes of the US, feel jealous.
Nearly, 60% of the of total internet users in India have an access to the internet on their mobile phones. This has impacted traffic growth in the country, as the new report from Cisco reveals that Indian mobile data traffic totalled to 148.9 Petabytes per month in 2015, the equivalent of 37 million DVDs each month or 410 million text messages each second. This realistic figure is expected to reach a peak of 1.7 Exabytes per month by 2020. Furthermore, it is evident that ‘smart devices’ with 3G or 4G LTE networks are generating a considerable amount of mobile traffic. Cisco suggests that on an average, a smartphone generates 9x more mobile data traffic per month than a basic handset. This has reflected in the share of over data as well: In India, smartphones accounted for 23.9% of device connections in 2015, and 69.1% of the total mobile traffic.
What’s more interesting is the fact that, in 2015 mobile data traffic in India accounted for 11% of wireless and wireline traffic cumulatively, and the share is expected to swell to 34% by 2020. The spike in mobile-only data and smartphone usage can be traced back to the cheap availability of smartphones. 3 out of every 4 smartphones shipped in India were priced less than Rs.10,000 or $165. Further, with the onset of the streaming era, services like Netflix, Gaana, etc have a lucrative growing base of smartphone users to tap.
Despite, the screaming success portrayed by these magical figures, it’s interesting to note that Indian consumers are less loyal towards brands; they prefer a competitive mix of both price and rich features, that helps them to browse through services better.
Here are some of the top highlights from the consolidated Cisco report:
- Mobile traffic per user in India is expected to reach 1,704 megabytes per month by 2020—a huge leap from 185 megabytes per month in 2015, along with a CAGR of 56%.
- The average smartphone generated 430 megabytes of mobile data traffic per month in 2015, almost doubling up from 299 megabytes per month in 2014. This is expected to touch 2,082 (2 GB) megabytes by 2020.
- The average tablet generated 1,671 megabytes of mobile data traffic per month in 2015—a tiny but remarkable rise from 885 megabytes per month in 2014. This is expected to touch 4,457 megabytes per month by 2020, along with a CAGR of 22%.
- The average non-smartphone generated 49 megabytes per month in 2015; this is expected to touch 196 megabytes of mobile data traffic per month by 2020, along with a CAGR of 32%.
- Mobile video traffic in India will grow at 83% CAGR between 2015 and 2020.
- Video content will account for half of mobile data traffic in India by 2017, and the figure will surge up to 72% by 2020.
- From 48% in 2015 to mere 19% by 2020, the consumption of web and other data will be reduced significantly.
- India will have a record making 702 million smartphone users by 2020.
- The number of wearable devices in India will reach 4.1 million by 2020.
LTE Traffic Makes Up For A Majority Of The Connections
With the abundance of technology available to experience better, ‘smart’ devices including tablets are witnessing an increasing preference. Telecom players, including service providers and regulators, need to address the shift towards the LTE. Currently, growth in mobile traffic both in India and the rest of the world is led by LTE devices: CMR predicts that 4G-enabled smartphone sales in India will cross 50 million in 2016, while a Counterpoint study states that one in three smartphones shipped in India were LTE-enabled.
India’s 4G (LTE) data usage has surpassed all other types of network as the Cisco report says that the average 4G smartphone generated 1,256 MB of traffic per month in India in 2015, compared to 420 MB for non-4G smartphones. Smartphone users in India are going to be more data hungry as 4G smartphones are expected to generate 2,833 MB of traffic per month by 2020 compared to 1,502 MB for non-4G smartphones.
However, while comparing existing and projected connection speed, it’s clearly evident that India lags behind many other countries in terms of mobile network infrastructure. The global average mobile network connection speed, according to Cisco, clocked 2.0Mbps in 2015 and is expected to get a further boost to reach the 6.5 Mbps mark by 2020. Juxtaposing the global average mobile connection speed, the average mobile connection speed in India was 1,016 kbps in 2015 and is expected to increase 3.1 folds to 3,122 kbps by 2020. Hence, the Indian telecom providers must take on to the clue and work on adding adequate infrastructure by cutting down capital wherever possible.
There are more than 114.63 million mobile subscribers in India, who access 3G/4G networks to get their everyday tasks done through the web. 4G/LTE device shipments reached 5.7 million units in India during April-June 2015, recording a whopping 154% QoQ growth. These figures, clearly indicate that Indian consumers are increasingly moving to the ‘High-Speed’ Internet sector and the adoption of 3G/4G devices in India in 2016 would be all time high.
The colourful picture of booming Indian smartphone market gets its fair share of black from TRAI. London-based GSM Association (GSMA) warns that the reserve price of $1.7 billion per MHz for the 700Mhz (LTE) band is too high and might spike-up 4G tariff prices while discouraging more telecommunication companies from buying the 700Mhz spectrum which is crucial to 4G penetration in India. The 700 Mhz band, according to the TRAI (Telecommunication Regulatory Authority of India), is the key to LTE deployment in India. Due to its lower frequency, it provides wider coverage, which in turn reduces the number of required towers for setting up LTE networks—this could significantly help cut down capital expenditure involved.
What We Suggest
The majority of the Indian smartphone manufacturers must push more for the 4G enabled sub-$165 segment as the market is sensitive to pricing. However, CMR claims that the contribution of the sub-$100 segment is likely to increase as the shift from first-time feature phone users or first-time mobile phone users to the smartphone will remain strong compared to previous years. That, coupled with lower internet speeds could affect LTE growth, which is crucial to smartphone penetration in India. India’s Telecom regulators, TRAI and DoT (Department of Telecommunication) would need to step up their standards in both, wireless and wireline segments, to allow a value flow into the high-speed networks.