With ever decreasing prices of smartphones, India is one of the few countries where smartphone shipments still continue to grow. With continued growth in smartphone shipments, data usage is on the rise. According to a new Ericsson Mobility report, data usage in India is bound to grow 15 times between 2015 and 2021 while mobile subscriptions would grow to 1.32 billion by 2021. Data traffic per active smartphone is expected to increase five-fold from 1.4 GB per month in 2015 to 7 GB per month by 2021.
A huge part of this growth in data usage is predicted to come from music and video. As of date, 50% of Internet users stream music or watch short video clips every week. Despite music and video being the two most popular activities for the vast majority of internet users, WhatsApp is the most used app, followed by Google Search and Youtube. Whatsapp being the most used app shows that with the transition from the open web to smartphones, more and more of user activity is being captured within closed walls of apps.
Data now plays the most central role in determining a user’s satisfaction with a telecom operator and his satisfaction in using a smartphone. To this extent, WCDMA/HSPA networks would cover around 90% of India by 2021, while LTE networks are predicted to cover 45% of India’s population from the current 15%. With the rapid growth in the shipment of LTE smartphones in India and the impending launch of Reliance Jio, LTE coverage might become a bigger priority and might be more spread out than the 45% predicted in the report.
The age group between 16-34 are the most likely to be internet users. One out of three internet users in India use internet daily, thanks to the proliferation of social networks like Facebook. India’s primarily young demographic has a great role to play in rapid data uptake. India continues to lead in customer additions with Indian telecom operators having added 21 million customers in the past quarter. While the number is bigger than any other country, it’s important to note here that the vast majority of Indians are low ARPU prepaid customers. Also, the proliferation of dual SIM smartphones means that churn is high amongst operators and people constantly keep buying new SIM cards for the sake of offers. So a substantial customer additions doesn’t mean substantial revenue.
The report also states that starting this year, 2G subscriptions in India would be on a decline. The decline would primarily be because of declining smartphone prices and increasing 3G and 4G connectivity. Approximately 890 million subscribers would be using smartphones by 2021. Considering that currently smartphone penetration is below 30%, this is a huge opportunity for manufacturers worldwide to tap in, however with constantly declining ASPs, there’s not much profit to be made.