Even with a predicted mobile user base of 815 million for 2014, it may be a gloomy year for the mobile services market in India, according to Gartner’s research which expects a quickly sinking voice average revenue per user (ARPU). In other words, while more people will access mobile services, the amount each user spends on voice or text will see a steep decline.
Going by the report, mobile connections will increase by 8 percent this year, even though revenue from mobile services will stay at $19.2 billion. The last mentioned figure sounds familiar because it was the same number telecom companies were attempting to tackle in 2013 and will continue to wrestle with in 2014.
And again, if the revenue generated through mobile data services does not increase in the face of decreasing earnings from text and voice services, network operators will have more to worry about. It could lead to India contributing to 12 percent of mobile connections, but just 2 percent of mobile services revenue worldwide.
OTT (over-the-top) voice services such as WhatsApp, Hike, SnapChat and Facebook Messenger are becoming more and more popular among consumers, further ruining their appetites for voice or SMS. Gartner’s Neha Gupta says that the increasing consumption of data services is still not enough to fully compensate for the drop in voice ARPU.
Also read: Mobile services market in India to touch 1.2 trillion INR
There are two major steps telecom companies can take to avoid the inevitable losses in revenue per user. It can package its data into small, affordable bundles and try not to manipulate people like Airtel (and probably other providers we’re not subscribers of) does. As it is, brands give budget conscious users plenty of reason to mistrust such deals.
Take for example Airtel’s WhatsApp pack costing Rs 49 for 200MB of use. A user signs up for it, switches on data for WhatsApp and turns it off later only to see their main account balance reduced when they had already paid for the WhatsApp bundle. What has happened here is other apps have used data to get auto-updated in the background and suddenly, the WhatsApp offer looks like a scam.
This brings us directly to the second point which involves customer loyalty, something that can be gained only after operators win their users’ trust by making sure they understand packaged mobile services properly. If telecom companies decide to work in this direction, perhaps the projected 815 mobile user base will also help them run a properly profitable business.