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Posts Tagged ‘India’

  • Mobile in India – Jumping Ahead to the Future

    30th November 09

    Posted by Ben Malbon

    Posted in business models, mobile

    Jointly authored by Anjali Ramachandran (Made By Many, London), Chandrashekhar L (BBH India), & Ben Malbon (BBH Labs).

    Source: Flickr, Dipanker Dutta (cc) http://j.mp/5eiDFA

    Source: Flickr, Dipanker Dutta (cc) http://j.mp/5eiDFA

    Brands in India are still struggling with advertising on the internet, even as mobile services steadily explore new territory.

    Both mobile and the internet comprise what is popularly known as ‘digital’, yet unlike in Western markets such as the UK or the US, the former is much more powerful and prevalent than the latter. The reason for this is primarily the drop in the cost of mobile usage over recent years, versus the increasing cost of broadband usage. As this blogger says:

    “What the Indian telcos should do is adopt a model that was instrumental in driving mobile usage in India. Drop the price points so that even the average person (living on Rs. 100 per day), would find Internet usage compelling, useful, and not frustrating. If they were to adopt a mass usage policy and not price their broadband products based on margins, I believe that in 5 years, India could have at least 100 million broadband users (via DSL, cable modem, Mobile 3G, wiMax, etc.).”

    The mobile industry in India is witnessing rapid changes, with voice and messaging charges dropping drastically. Tata Docomo started the concept of “pay per second” not too long ago, which was replicated within a fortnight by all other major players like Vodafone, Reliance and Airtel. Less than a week ago, Reliance (the largest CDMA player) introduced the option of choosing between 1 paise per sms (a measly 0.02 cents) or 1 rupee for unlimited SMS per day (2 cents per day).

    The interesting paradox is that while basic call and text charges have dropped to unbelievably low prices, GPRS costs have yet to come down. Therefore, the trend suggests that the evolved value-added services (VAS) will definitely grow at a much lower pace, as those costs aren’t coming down as steeply: accessing services on the phone still costs a lot in India, even though phone tariffs are amongst the lowest in the world.

    As more and more people in the country jump on the mobile phone bandwagon, from small villages to large metros, innovation is growing apace. Consider, for example, the new business deal between DirecPay, a bank-neutral payment aggregator service from Times of Money (part of the Times Group, India’s largest media conglomerate) and PayMate, a wireless transactions company. The deal will provide an extended mobile payment facility to merchants who sign up, and with the current rate of penetration of the mobile device in the country at 35% (the number of GSM users alone is at 335.5 million currently), it is likely to bring even more consumers into the considered set of e-commerce users, as Avijit Nanda, the President of Times of Money says.

    Mobile phones in India are also extremely powerful social and commercial tools. Nokia handsets are the instruments of choice of the majority of the population in the country (the company owns about 65% of the market share).

    Where educational iPhone apps are less than 1000 in number (737 in November 2008) and certainly not as popular as gaming and entertainment apps in the Western world, in South Asia, Nokia has understood the market and is investing in Mera Nokia, a tool that provides farmers with useful crop-related information, Nokia Life, which offers agriculture, education and entertainment service apps specifically targeted at the market in smaller urban and rural areas, Nokia Tej, a mobile order management system, and Nokia Point and Find, a context-aware service that recognizes objects through barcodes and GPS. (Nokia has embarked on the last two as part of the Progress Project, in partnership with Lonely Planet). Airtel (another popular Indian mobile operator) and Thomson Reuters also offer services similar to Mera Nokia.

    Source: Flickr, Kiwanja (cc) http://j.mp/7RNCLV

    Source: Flickr, Kiwanja (cc) http://j.mp/7RNCLV

    If the market offers a completely different set of challenges, the only way to counter them is to understand how to leverage the instrument that is clearly succeeding. We imagine something along the lines of the Blyk model would work well here: where advertisers subsidize the cost of mobile usage via targeted advertisements. It may even be possible to build a two-tiered offering like Spotify has for it’s Premium and regular (free) offerings. What Hugo Barra, a Product Manager at Google says is particularly resonant in this respect:

    “People will not want to pay for services that they can get for free, and the services will be free because there is a massive opportunity for advertisers erotik film izle to come onto the mobile platform. This is still untapped. Thanks to the proliferation of location information, specific advertising, and I mean non-intrusive advertising can easily come onto the mobile.”

    Another opportunity that can be tapped into is the growth of social networks in the country. India is now only behind the US in Twitter usage, and it is 5th in the world in Facebook usage. An interesting model would be to explore a hybrid that combines the extensive usage of mobiles and social networking.

    The big players are already realizing the opportunities for promoting social networking services. For instance, Aircel Telecom launched the biggest advertising burst in the telecom category (before Tata Docomo) by showcasing Facebook on mobile while Airtel has launched a campaign of 4 TVCs promoting the use of Twitter. Here is some of the creative from those two campaigns:

    YouTube Preview Image YouTube Preview Image

    According to a 2009 Trendspotting report, online ad spend is only 3% of the total ad spend in India, compared to 8-20% in developed markets.  But advertisers are evolving in their use of the online medium by going beyond banner and keyword advertising to creating campaigns that leverage social networks and connectivity, while the use of the mobile phone for advertising is still very rudimentary (mostly used for text-based promotional offers). The increasing use of the internet and especially social networks on the mobile would automatically mean that the online advertising approach gets extended to the small mobile screen as well: 63 million Indians already access internet on mobile as compared to 45 million on the PC (Source: IRS and TRAI estimates).

    What’s fascinating – and perhaps instructive – for those involved with making sense of all this in Western markets such as Europe and North America, is how telcos and marketers in India seem to simply be jumping over some of the phases and issues the typical North American marketer might face. Despite the fact that in many ways the technologies at their disposal are less sophisticated than in Western markets, they seem further ahead in terms of mobile utility, mobile commerce & micro-payments, and in many cases more adventurous as far as advertiser-funded mobile platforms are concerned.

    We have much to learn.