Researchers have been able to prove a “multiplier effect” from mobile access for more than ten years. In 2005 it was estimated that a 10% increase in mobile penetration led to a rise of 0.6% GDP in low-income countries. A World Bank study from 2009 found that a 10% increase in internet penetration results in a growth of more than 1,3% in the GDP for developing nations.
India is heading in the right direction. As with the rest of the world, India has seen a huge increase in phone usage as costs and accessibility have decreased. The country has jumped ahead of many older technologies and embraced the latest gadgets.
In India, it’s not uncommon to see homes without electricity . However, they do have mobile phones. India is at a critical point in terms of its growth as an internet-using country.
Smartphones in India
Smartphones and mobile phones account for the majority of the Indian market. Less than 3% are landlines, and 89% are wireless broadband connections.
In addition, the government has made progress in creating an environment that allows a growing number of mobile phones to be made locally.
You may assume that a “smartphone,” as defined by the industry, is a phone with 3G or even 4G capabilities. This is not the case. Smartphones are any phones with a touchscreen and internet access. The phones that do not support high-speed internet access are called ” feature phone“.
Global System for Mobile Association/UBS/TRAI/Idea Cellular
The figure above shows that the majority of smartphones in India at the end of 2016 did not support 3G or 4G. Nearly 75% of all mobile devices are feature phones and not suitable for high-speed Internet access.
India needs smartphones with 3G/4G capabilities that are affordable and have decent speeds, as well as cheaper data plans.
Cheap phones and expensive connections
India’s telecom industry may soon undergo a major change in terms of data now that Mumbai’s Reliance JIO, owned by Mukesh Ambani – the country’s wealthiest man – has officially entered the market.
Reliance Jio, the regulator, and existing telecom companies have been in a verbal war over this entry. Incumbent providers initially refused to provide Reliance JIO with the necessary “points” of interconnect – locations for traffic exchange between networks.
Reliance Jio is the new player. Reuters
incumbent companies and newly launched companies both agree on one point: they oppose the current high tax on telecommunication services that includes voice and data.
Taxes will still make the bill too expensive for Indian customers who are price-sensitive. The problem is grave and could derail Digital India’s strategy.
Hope for the Future
The market has made smartphones more affordable. In the coming years, the majority of smartphones manufactured in India will have 3G and 4G capabilities.
India’s linguistic diversity (the nation’s constitution recognizes 22 different languages) is causing problems with content on mobile phones. IndusOS is the second most popular mobile operating system in India. It shows how the market is innovating by offering content in multiple languages via its “App Bazar”.
Recent attempts to reduce voice and data charges are encouraging. A government that is struggling to deal with a large budget deficit will not willingly give up tax revenues.
It is not the high taxes on telecom services nor the policy uncertainty or blatant nepotism which has plagued this sector in recent times that will get more Indians online.
A sickly telecom industry is bad for the country and its citizens. The market has been driving the telecom sector in the right direction, but now the government needs to step in and help.