Monday December 29, 10:22 AM

Source: Indian Express Finance

Choice will be the new ringtone

Year 2009 will be another big year for telecom. The government and telecom bodies in India are talking about adding another 100 million subscribers. India will continue to be the fastest growing telecom country. We will however see technology changes, we will see choice and we will see convenience in 2009. Let s look at what the year will bring for the government, the consumer and the players in the telecom ecosystem. For a start, we will see new technology in the form of 3G. This will benefit the government in terms of auction revenue; it will help the operator offer innovative services; it will help the handset brands to drive upgradation from current 2G base. For the consumers, it will give an added advantage in terms of speed, clicking through to the Net, entertainment as a result of 3G. The challenge for the operator will be to provide services at the right value, while the challenge for the handset brands is to provide a right value 3 G handset. Next, we will see choice. We have current operators and there are new operators. The government has already capitalised the money from the first come first served basis of allocating 2G spectrum. New subscribers into telecom will have a choice from more than 15 operators. Nowhere in the world is there space for more than 5 or 6 operators. The bad news for the eco-system is a price war in the eco-system, resulting in lower call rates, lower ARPUs while the good news for the consumer is dropping tariff and service charges. The tough question is whether increased competition resulting in lower call rates will fuel higher minutes of talk time? We will know by end 2009! The challenge to tap the 2009 growth will be rural. Firms will need to build a strong collaborative network in order to win in rural. There is an old Asian saying, You need to divide before you learn to multiply, meaning that the telecom ecosystem will need to learn to share before benefitting in 2009! The government can do a lot to spur rural growth. They can deploy money towards infrastructure, they can waive the taxes in rural areas and doing this will help the government spur rural growth. Finally we will see choice as a result of government regulation. We will have mobile number portability which means you can retain the same number and change the service provider/ operator. This will mean enormous choice for consumers but it is also a lot of pressure on the operators to build differentiation by providing tangible proof of differences between networks. Operators who cannot provide that proof will resort to promotions and goodies to keep high value consumers thereby starting niche subsidy in India. India telecom sector is one of the world s most competitive sectors. It is also the world s most promising opportunity in 2009. Western and Chinese telecom firms will try and get a piece of the action be it in the operator space, or in the handset space or in the accessories space. Some will pay the wrong sum of money to enter this immensely competitive market. In an immensely competitive market, firms will need to choose where they want to focus. You cannot have a catch all agenda where you do a bit of this and a bit of that. Many telecom firms will learn that from India in 2009. The biggest winner in 2009 will be the consumer, followed by the government. The writer is MD, Nokia India