With telecom consumption shifting from voice in favour of data, telecom operators are gearing up to deliver the growing requirements of consumers through the new mantra of the digital economy – ‘Content’. Be it sports, news, music, or films, telecom players are fast integrating themselves to be a part of the burgeoning Indian media industry.
India reached a wireless telecom subscriber base of 1.18 billion in March 2018. The mobile phone has now become the primary mode of social networking, news and entertainment. With India being the second largest market for smartphones globally and with the increasing adoption of 3G and 4G, India is estimated to have 500 million internet users by June 2018 constituting to around 37% of the total population. India is still at a nascent stage of telecom penetration when compared to mature markets such as Japan, UK, South Korea and Netherlands where internet penetration stands at >90%. Further the average usage of content in India on mobile apps is around 200 minutes a day as shown in the buckets in the pie chart below. This consumption duration is still lower than consumption in various countries thus indicating that the Indian landscape has a significant opportunity ahead.
The next leg of high growth digital consumption, is likely to be brought about by telecom operators in rural areas and in the regional markets. By 2021, around 70% consumption is estimated to be in Hindi and other Indian regional languages. Further, India is expected to have over 700 million users from non-metro cities and the number of rural internet users would have overtaken urban users by 2021. With high penetration levels that the telecom operators offer, coupled with the ability to deliver hyper customized content in customer’s choice of language across urban and rural areas,telecom operators are in the driver’s seat to capture and engage the large the number of untapped potential Indian internet users.
Telecom companies will not only enable increased consumption but also bring out new customer segmentations. Three clear and distinct consumer segments may emerge – the mass consumers consuming TV (Free and Pay TV) and Free OTT, the tactical consumers consuming Pay TV and Pay OTT and finally a sizeable number of digital-only consumers. This segmentation is on the basis of consumers’ ability and willingness to pay for content, enabled by the digital micro-payments ecosystem. By 2020, the digital only subscribers segment could touch 4 million. This presents a great opportunity to the telecom operators.
With the high rise in consumption in digital media, the partnership between telecom operators and content providers is getting stronger than ever. We are witnessing a variety of partnerships between telecom operators and media companies in the market. A prime example of this would be the recently concluded high profile Vivo IPL 2018 that was offered to subscribers of Airtel and Jio on their platforms at no additional cost for viewing content. Vivo IPL was expected to have over 700 million watching the event. Telecom operators have also started inking exclusive content deals. Airtel and ALTBalaji joined hands to offer exclusive digital content in March 2018. Jio signed deals with Roy Kapur Films, Saavn, and has also acquired 24.92% stake in Bajali Telefilms and 5% equity stake in Eros International Plc. Vodafone India offers free subscriptions ofNetflixand Magzter to customers of its ‘RED’ plans and Idea Cellular has a partnership with Magzter to offer Idea users access to digital magazines and news. These offerings are further to an option of viewing TV content through their Apps.
There are a few trends that are catching up and will play a significant role in the near future. The interactivity feature is one such that enables the use of a second screen, typically the mobile phone, while viewing content on TV. Broadcasters such as Colors and Sony and OTT players such as Hotstar have implemented this thus far. Few other important trends worthwhile to note would be the advent of e-sports, which is presently nascent but is expected to grow fivefold in India over the next five years, and Edu-tainment which is expected to reach a market size of $5.7 billion by 2020. We have been seeing major shifts with the use of AR and VR too, currently in the nascent stage, but is expected to grow at 76% CAGR over the next five years.
A natural step forward from hereon for the telecom operators would be to dive into content creation which will aid engagement on their platforms and apps, thereby ensuring presence across the value chain from content creation, to distribution and consumption through the network.
Further, the telecom operators’ choice of markets will need to be strategic with a host of decisions on language of content and its genre. This accompanied with certain carefully thought out marketing and pricing strategies keeping in view the diversity of the Indian consumer base.
To conclude, India is at a cusp of a digital consumption breakout with exceptionally high levels of demand. Telecom operators are best placed to reap maximum benefits through this phenomenon by offering a 360°solution to consumers and by being present across the value chain.
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