Mobile Phones
Content
CHAPTER 1 MOBILE PHONES IN INDIA Mobile phones have urged India into a new, non-retractable mode of communication. As mobiles come to play an indispensable role in contemporary society, people in every stratum – from local vegetable vendors and milkmen, to students and business honchos – are seen to strap up the benefits of mobile communication in various aspects of their life ranging from business to personal. This new-fangled ‘culture’ that has altered society and its functioning in ways more than one, in a time-frame of just over a decade, has become a part and parcel of society, its spread also bolstered by the fact that mobiles provide a faster, more efficient and convenient mode of communication in a country which although suffering from low-quality infrastructure and communication network - is striving to catch up with the economic dynamism of developed countries. Mobile phones, which were introduced around a decade ago in 1995-1996 in India, are becoming the dominant means of accessing communication. At the end of 2005-2006, there were 90 million mobile subscribers in India in comparison to 50 million subscribers for landlines. The increase in mobile phones has been phenomenal in comparison with landlines since the introduction of mobiles in the country. The mobile-density (number of mobile phones per 100 inhabitants) in India will increase from 8.1 in 2005-2006 to 71 in 2015-2016. Consequently, the mobile subscriber base is projected to increase from 90 million in 2005-2006 to 433 million in 2010-2011 and nearly 900 million in 2015-2016. India is one of the fastest growing telecom networks in the world. This is due to its high population and fast rate of growth. Rural India is still inadequate in terms of connectivity for efficient telecommunication. India’s mobile phone industry is one of the fastest growing industries in the world. Mobile phones in India were formally launched in august 1995. For the first few years after the advent of mobile phones, monthly subscriptions were added to the tune of 0.05 to 0.1 million in India. Subsequently the subscriber base stood at 10.5 million in December 2002. The Indian mobile phone industry has entered a phase of boom due to many proactive measures taken by various licensors and regulators. Two Million mobiles subscribers were added every month in India from 2003 to 2005. The two other countries with more mobile phones then India are USA and China. The main technologies followed by India for mobile communication are global GSM and CDMA. GSM is the global system for mobile communication and CDMA is based on code division multiple access. Mobile tariffs are very low in India. Thirty two million mobile handsets were sold in India in the year 2005. Indian ring tones primarily comprise of music of Indian origin like Indian film songs and bhajans. Total revenue generated by the telecom service sector in 2004-2005 was 86,720 crore in India. This meant an increase of revenue by 21% from the previous year. India is the second largest mobile handset market in the world after China and is poised to become an even larger market with unit shipment of INR 208.4 million in 2016 at a compound annual growth rate (CAGR) of 11.8 per cent from 2010 to 2016. The mature Indian mobile consumers’ increasing preference for high-end handsets and the younger demographics’ desire to use mobile Web 2.0 technologies could see the market revenues soar from INR 255.91 billion in 2010 to INR 350.05 billion in 2016. With end users’ need for converged devices and original equipment manufacturers’ (OEMs’) accelerated adoption of open-source operating systems (OSs) such as Android and Symbian, the mobile handset-smartphone
combination is emerging as the future growth engine of the telecom industry. In 2011, the mobile market is likely to witness almost a three-fold increase in the number of participants. This is expected to result in a price war and a consequent squeezing of profit margins. In 2010, the decline in the average selling price (ASP) of mobiles by 11.3 per cent opened up possibilities of market consolidation. The intense competition is also compelling handset manufacturers to enhance the application ecosystem and invent products. While market entrants are likely to be daunted by the sheer numbers in the market, they will identify abundant opportunities in the rural and semi-rural market for the next three to four years. “For the mobile handset market, the rural market offers exciting prospects due to its significant uptake of feature phones,” “The rural and semirural markets accounted for 65 per cent of sales for most Indian manufacturers in FY2010.” In the case of smartphones, most existing global brands are concentrating on building application stores and improving service quality to offer an attractive value proposition and strengthen their market position. Entrants will be particularly focused on branding, as a smartphone is a high-involvement product and the brand is a vital purchase criterion. While smartphone consumers are also price conscious, it will not be possible for manufacturers to subsidise due to the operation of an open market rather than an operator-leveraged distribution model. Moreover, 70 per cent of the Indian population consumes only voice services, and mobile data services have not yet achieved large-scale popularity. However, this is set to change with the reduction of mobile Internet charges by telecom service providers and the introduction of 3G in India. The market is also witnessing the influx of a new class of affordable handsets, which are classified as ‘smartphone-like’ devices, with touch screens and other smartphone features. According to the analyst, in the next five years, the revenue share of smartphones in the mobile handset market is expected to rise steadily, as an increasing number of participants are targeting this space for higher margins. This trend is likely to persist, as numerous handset manufacturers are strategizing to deploy more smartphone models in their portfolio. In the smartphone market, applications will be a key differentiating factor. The mid-tier price bracket is likely to experience high uptake and hence, manufacturers should strategize on deploying more models in this category. HISTORY OF CELL PHONES IN INDIA A report of Cellular Operators Authority of India regarding the entry of cell phones into India is listed below. This shows the improvement in cell phone introduction over the years. 1992 – Telecommunication sector in India was liberalized to bridge the gap through government spending and to provide additional resources for the nation‘s telecom target. Private sector was allowed participation. 1993 – The telecom industry got an annual foreign investment Rs. 20.6 millions. 1994 – License for providing cell phone services was granted by the government of India for the metropolitan cities of Delhi, Mumbai, Kolkata and Chennai. Cell phone service became duopoly (i.e. not more than two cell phone operators could be licensed in each telecom circle) under a fixed license fee regime for 10 years. 1995 – 19 more telecom circles got mobile licences 1995 - (August) Kolkata became the first metro with a cell phone network. 1997- TRAI was set up.
1998 – Annual foreign investment in telecom stood at Rs. 17,756.4 millions. 1999- FDI inflow into telecom sector fell by almost 90 per cent to Rs. 2126.7 millions. 1999 – Tariff rebalancing exercise got initiated. 1999 (March) - National Telecom Policy was announced. 2000 (June) - FDI inflow dropped further down to Rs. 918 millions. 2000 (Jan) - Amendment of TRAI Act. India‘s subscriber base for telephone services continued to maintain its general growth. There was an increase in the growth rate of both mobile as well as fixed telephone subscribers. During April 2005, 1.44 millions mobile subscribers were added raising the total number of mobile subscribers to around 53.65 millions. The number of wireless subscribers grew to 97 per cent from 75.94 million at the end of December 2005 to 149.5 million subscribers at the end of December 2006 according to TRAI in Delhi. The large growth in mobile subscribers in India has attracted foreign companies to invest in mobile services in the country. A recent relaxation of government rules allows foreign companies to hold up to 74 per cent stake in mobile services operations. Multinational wireless equipment makers like Nokia, Sony Ericson and Motorola have set up manufacturing facilities in India. A large government owned service provider, BSNL, has started insisting that its suppliers manufacture a part of their products locally. The Indian government is keen on promoting local manufacturing in India as it finds that the business process outsourcing and software outsourcing boom in the country has not brought benefits to semi skilled workers. Data from Wireless World Forum‘s Indian Mobile Market 2006‘ Statistical Hand Book reveals that mobile ownership had crossed 100 million in 2007 as the largest middle class in the world‘ took up ownership. With 124.6 million forecast mobile owners in 2007, India ranked third in the world behind only China and USA. The number of cell phone subscribers has been growing from year to year and it is making explosive growth. Table 1: Cell Phone Subscribers in India Year 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Number of Subscribers 7,94,234 10,70,603 11,99,578 31,07,449 35,77,095 64,30,814 1,26,87,637 2,61,54,405 4,10,25,940 6,91,93,321
2007 2008
12,14,31,166 22,18,36,758
Source: Cellular Operators Authority of India (COAI) India’s mobile market displays widespread diversity; geographically, socially and economically. Popularity of cell phones is mounting at break-neck speed as, already a part and parcel of urban cities; mobiles are fast breaking into the more conservative rural areas due to benefits like low-cost equipment, promotional network schemes and independence from detailed physical infrastructural support – apart from the general plusses of speed and convenience. According to a survey by leading telecommunications magazine, Voice and Data, 45 million people owned cell phones in India compared with 44 million people who had land lines, making mobile phones the devices for India’s common man and fixed phone lines those for the rich. Besides the rural population, mobile phones have come to assume significant importance in urban societies with various age groups using mobiles in their own ways to suit their individual needs. While lower-end workers such as milkmen and vegetable vendors make use of the cell to organize their hectic work schedules, students are seen to use them to enhance their social lives. Several parents insist on equipping their children with mobile phones for their safety, while several political parties have started a form of mobile phone campaigning for wider reach in society. Mobile messaging has become the latest fad for teenagers in a society where “dating still does not get widespread parental approval” (PSFK, 2005), while offhand records such as ‘SMS world record for 182689 messages in a month’ are being established by Indians with enthusiasm (iPiPi, 2006). Calling this India’s new ‘lad culture’, BBC (2006) describes India’s new breed of ‘metrocentric lads’ as a wellearning, fashion-conscious guy with “his finger closely on the pulse and the latest mobile phone in his palm. It is the personification of the new, metro-centric India." In the mobile handsets market dominated by a near 100 per cent 'Total Awareness'of multinational brands Nokia and Samsung, Indian consumers lapped up mobile phones with advanced features at affordable prices from new and emerging brands, reveals a Mobile Handsets Usage And Satisfaction Study 2011 of over 4,425 respondents conducted by CyberMedia Research (CMR). Easy availability and a promise of efficient after-sales support became the other key motivators for end users to show increasing preference for new and emerging brands. The India mobile handsets market has witnessed a huge influx of mobile handset brands during 2009 and 2010 which saw launches by a number of emerging mobile handset players for the mass market as well as niche segments in both urban and rural areas. At last count, well over 200 mobile handset brands were available at retail outlets across the country, according to CyberMedia Research (CMR). New and emerging brands provide attractive features like QWERTY keypads, MP3 players, long battery backup, dual or triple SIM card slots, add-on memory card slots, elegant looks, style and finish at
competitive prices, thus giving established brands a run for their money. There has been a paradigm shift in the mobile handsets market with a strong uptake in shipments of 'value for money', competitively priced models by a large proportion of Indian consumers. Traditionally, India has been a price sensitive market, and CMR's research has reinforced this trend for mobile handsets. India is the second largest mobile handset market in the world after China and is poised to become an even larger market with unit shipment of INR 208.4 million in 2016 at a compound annual growth rate (CAGR) of 11.8 per cent from 2010 to 2016. The mature Indian mobile consumers’ increasing preference for high-end handsets and the younger demographics’ desire to use mobile Web 2.0 technologies could see the market revenues soar from INR 255.91 billion in 2010 to INR 350.05 billion in 2016. With end users’ need for converged devices and original equipment manufacturers’ (OEMs’) accelerated adoption of open-source operating systems (OSs) such as Android and Symbian, the mobile handset-smartphone combination is emerging as the future growth engine of the telecom industry. In 2011, the mobile market is likely to witness almost a three-fold increase in the number of participants. This is expected to result in a price war and a consequent squeezing of profit margins. In 2010, the decline in the average selling price (ASP) of mobiles by 11.3 per cent opened up possibilities of market consolidation. The intense competition is also compelling handset manufacturers to enhance the application ecosystem and invent products. While market entrants are likely to be daunted by the sheer numbers in the market, they will identify abundant opportunities in the rural and semi-rural market for the next three to four years. “For the mobile handset market, the rural market offers exciting prospects due to its significant uptake of feature phones,” says the analyst of this research. “The rural and semi-rural markets accounted for 65 per cent of sales for most Indian manufacturers in FY2010.” In the case of smartphones, most existing global brands are concentrating on building application stores and improving service quality to offer an attractive value proposition and strengthen their market position. Entrants will be particularly focused on branding, as a smartphone is a high-involvement product and the brand is a vital purchase criterion. While smartphone consumers are also price conscious, it will not be possible for manufacturers to subsidise due to the operation of an open market rather than an operator-leveraged distribution model. Moreover, 70 per cent of the Indian population consumes only voice services, and mobile data services have not yet achieved large-scale popularity. However, this is set to change with the reduction of mobile Internet charges by telecom service providers and the introduction of 3G in India. The market is also witnessing the influx of a new class of affordable handsets, which are classified as ‘smartphone-like’ devices, with touch screens and other smartphone features. In the next five years, the revenue share of smartphones in the mobile handset market is expected to rise steadily, as an increasing number of participants are targeting this space for higher margins,” notes the analyst. “This trend is likely to persist, as numerous handset manufacturers are strategizing to deploy more smartphone models in their portfolio.” In the smartphone market, applications will be a key differentiating factor. The mid-tier price bracket is likely to experience high uptake and hence, manufacturers should strategize on deploying more models in this category. Despite the worldwide economic slowdown, the smartphone market registered a modest growth rate of 16.4
percent during 2008-2009. In 2010, smartphone shipments grew at an impressive rate and were the growth driver for the rebound in 2010’s total handset shipments. The worldwide handset market witnessed a year-on-year growth of 12.2 percent during 2009-2010, primarily driven by 76.5 percent y-o-y growth in smartphone shipments during the same period. Smartphones accounted for 23.1 percent of worldwide handset shipments during 2010. This share is expected to approach 40 percent by end-2015.
Table 2:The 6 Cs of the Mobile Phones: Connection Convenience Charisma Companionship Care Culture
for communication and accessibility brings efficiency, especially our daily lives reflects identity and empowers individuals helps to have fun provides safety and care for others creates a culture of its own
Connection: Mobile phones have made all of us connected. This connection among individuals is always on and anywhere, which naturally implies a convenience in communication and improved accessibility. These features support various aspects of our daily routines, planning and organization of variety of activities regardless of which society we live in. Mobile phone is tool connecting a group of people, making the communication within groups more efficient and easier. Among friends, family members, work partners, fellow mates, the cellular can be used to get information transferred more quickly and more efficiently, which help to improve the relations and social connection. People feel more and more connected in conducting various tasks. Since mobile phones are now Internet enabled, users have been able to access the information easily. Not just getting simple information by text or voice messages, but connecting to the email account or news allows people to access content-rich information. Even though the connection costs money, it is very convenient when especially people need to check specific information like movies, traffic or checking important emails on the “go”. Convenience: The use of mobile phones has brought convenience in daily life in many ways. To mention an example, which is very common in many countries, consider the partnership of mobile network operators with local transport agencies where the subscribers are provided with a service to pay bus or train fares using their mobile phones. To give a more substantial example, mobile banking also falls in this category as people do not have to waste time on visiting a bank and wait in a queue. Another frequently cited contribution of mobile phones involves better time management and micro-planning of our daily activities both for personal and business uses. In addition, there is a growing replacement of mobile services with those convenience apparatuses
such as the alarm clock, radio, organizer, news, camera, calculator, and games, all of which people are happy to utilize. Collecting these in one device is making more convenient to all users. Charisma: In a general sense, many youngsters agree that having a mobile phone is not only an easy access to friends and families, games and information, but is also a way of defining yourself and relaxing. Mobile phones are a way to express one’s personality and independence. Mobile phone also allows being creative and relating to one’s identity. Being able to choose the tune, the screen picture, to take pictures, and upload them on a computer is not only a way of entertainment, but is also a big part of who you are. Discussing mobile phones and newest updates and releases has also become a somewhat ‘cool’ topic among the high school students. For them, talking about the gadget provides another way of making friends. Indeed, some personal stories suggest that pupils’ friends think of them as more cool simply because they are good with mobile phones and they showed their mastery in using the gadget. It is also the way of communicating one’s interests to friends. Through certain activities and competitions new friendships are created as well the feeling of solidarity among that community is maintained. This effect of mobile phones is well noticeable in the initiatives to make pupils compete on the basis of answering questions and sending text messages. Clearly, the ardour and the sense of competition that comes with it provide the kind of shared feeling of solidarity that maintains friendships and fosters team spirit among youth. Mobile culture has played a big role in defining the freedom and liberation of both the young and old in India. In a relatively more developed society ‘Mobile revolution’ has brought about a re-definition of the lines of privacy and social status. In the UK society, these lines are seen more clearly among adolescents and students. According to the Mobile Youth Surveyxlix, although a majority of teenagers were not seen to look down on a mate who did not own a mobile, a prominent 26% of 11-17 year-olds said they would feel “unwanted if a whole day went by when my mobile phone did not ring” Companionship: As mobile phones are becoming an essential accessories that we carry everywhere and as mobile applications aiming the amuse the users are increasing, the mobile phones are becoming a friend keeping us a company when we are bored, nervous or simply need to pass time. Mobile Entertainment in its various forms are providing many people with opportunity to pass enjoyable time by themselves or with a group. Especially due to fact that users of mobile phones are being young people, enjoying leisure time using mobile phones by playing games, listening to music, watching movies and taking photos have become an essential part of their life. With the further development of digital and wireless technologies, mobile phones are becoming audio and video terminals, which is also known as the Fifth Medium. Playing games using mobile phones has taken place all around the world. A study indicates that mobile phone games can amuse people in certain tedious occasions, such as when waiting for the bus, on the train, waiting for people “when on a date” and during travelling, etc. The freedom of time and place, and the pleasurable company mobile phones bring to people is somehow changing the traditional idea of entertainment. Su-do-ku, the crossword game that used to be played on the paper can now be sent to a mobile phone.
Care: Care using mobile phones is becoming an important contribution especially for families. In India, anxious parents provide children with cells, so they can keep tabs on them. They can monitor their activities and remind them not to stay out too late. According to the Mobile Youth Life Report, most parents “feel that mobile phones can help keep children safe when they are away from home. If they lose their money, help is only a phone call away”. A mobile phone serves as a safety mechanism for adults when they know they are in a crisis, like a missed bus, stolen property or getting lost. Mobile phones also find extensive usage for purposes of instant texting and keeping contact with aged family members who may find it hard to use wireless telephony. According to Mobile Life Report, 80% adolescents (89% girls and 72% boys) feel safer with a mobile phone when out and about, shopping, socializing or traveling to and from their school or college. Apart from supporting safety within families, the mobile phones can help for caring larger groups, especially in the times of disasters or emergencies. In 2003 when SARS was widespread in China, the government used SMS to transfer updated information related to the infection situation in each city and relevant news, enabling the public informed quickly. The use of cell phones and SMS was also considered most important ever, as it enabled people to get contact with friends, family, colleagues during that special period when making people meet face-to-face was not quite possible. Culture: Many people would agree that a mobile phone is not only a gadget for connected and convenient life, but also a medium greatly influence life and generating new culture and behavior. Especially for teenagers, mobile phone plays a role as a tool for producing and disseminating their peer culture, and expressing their identity. Many teenagers think mobile phones as necessity and they have their own way to communicate like unique grammar and expression in text messages. Mobile phones are also acknowledged by a majority of teenagers that it is creating a new way of interactions with their parents. More than half of 11-17 year-olds say their parents give them more freedom because they have a mobile phone (59%) and are allowed to stay out later as a result (53%), according to the Mobile Youth Life Report. Contribution of Mobile Phones to Society:
1. Informative Society: Mobile phones have enabled users to access required
information easily. In any society, information is considered an important social resource. Instant access to emails, communicating documents back-and-forth, pictures and music, watching broadcasts and surfing the Internet prove themselves as the primary social resources through which mobile phones are producing benefits for all. After subscribing to news, weather forecast and stock information, etc., mobile users can regularly access the information subscribed from the cell phones. Instead of receiving information passively on traditional media, WAP enabled cellular phones allow subscribers to get customized and relevant information instantly. Due to its succinctness but definiteness and efficiency, SMS can diffuse information much quicker than traditional media, such as publishing and broadcasting. Mobile phones also played roles of great importance in the instance of tragedies of India like the 2004 Mumbai deluge and 2005 tsunami through enhanced direct access to politicians and institutions. They
are also playing a part in social causes such as spreading awareness on AIDS, in which India reports the second highest numbers after South Africa. Four mobile AIDS games have been launched by e-learning company ZMQ software systems in collaboration with Delhi State AIDS Control Society. Help lines are also seen to operate through mobile phones proving their cost advantage due to low-cost schemes in India. 2. Connected Society: Global Knowledge reports an increasing reliance on mobile phones by women to achieve a balance between careers and homes. In aiding the females, India expects an influx of baby cell phones with harmless radiation, sending an automatic SMS and e-mail in the event of their child crossing the defined boundaries. Mobiles can also be used to avail exam transcripts, hence making the process efficient for children. These two examples clearly indicate how mobile phones can help keeping connected to your social network as well as carrying out other duties both for grown-ups and the children. 3. Culturally Innovative Society: Although designed as a communication device with many functionalities, the mobile phone can be very instrumental indirectly influencing certain other activities in our lives and creating new set of trends. This influence may change from designing new short-cuts in the language, to improving language skills; from adopting new ways of socialisation via mobile phone games to even digitising certain aspects of rituals and religious practices. Mobile phones can also serve as indirect mechanisms promoting learning new skills and interests. Besides practicalities that texting save time and money, in India, there has been a notable improvements in the use of English (although spellings are most often incorrect). According to this research, some people interviewed have also noted an increasing interest in technology due to existence and widespread use of mobile phones. Mobile Internet game applications are also considered as a new mode of group networking in the society through connecting more than one player together in the same game to accelerate their communication. The players can be friends but could also be unknown strangers. However modern the technologies of mobile phones be, they can relate to many aspects of our cultural and social life including religious practices and rituals. In India, for xample, the mobile phone can suit well to the popular prayer-and-ritualbased culture. Global Knowledge talks about SMS prayers and requests to light candles in church, while iPiPi reports a project on TV channel Sadhana where a panel of 40 gurus (holy teachers) receive up to 20,000 messages a day. 4. Participative Society: Mobile communication has shown its power for collective activity as well as on individual life. Mobile phones can prevent isolating members of the society from social connection and empower ordinary citizens via convenience for connecting to others and availability of information. The mobile phones can make individuals active in participating to certain programs on TV by simply voting. At other times, mobile phones can be a political instrument promoting democratic participation and organization of political activities. In India too, “Mobile phones particularly are increasingly being used as the mode of expression of political, ideological and social rights. Users experienced for the first time the broadcast of a political campaign in 2005 by a political party over mobile phones on the eve of elections. Some people naturally accepted sending
votes and messages to opinion polls through SMS. The participation of individuals is also extended to various entertainment events, too. In India, the popularity of cell phones is also manifested with the example of famous TV series “Indian Idol”, which received a “more than 55 million votes via SMS” making a total of Rs 16.5 (Rupees) despite the cost of each message being a high Rs 3. 5. Converging Society: Mobile Phones are also contributing to the creation of more equal society. Via communications and other economical and social benefits, some societies witnessing a convergence in terms of bridging digital divide, especially for geographically dispersed countries such as Brazil and India, and in terms of sharing information and other benefits. Empowering the individuals via confirming their identities, improving participation via better information dissemination and increasing social connections between different segments of the society are also those contributions of mobile phones that create equalities of opportunities and distribution of wealth. "In India, mobile phones are now for ordinary people and fixed-line phones are for the rich. We used to think it was the other way round." This can be mainly attributed to the fact that some parts of India are yet to come under fixed line telecom coverage. Since fixedlines require extensive physical infrastructure that could often take years due to red tape, mobile phones have turned out to become the fastest and most convenient ways of maintaining communication networks. Already used widespread in the urban locales, mobile phones are seeing surprisingly quick adoption in the noneducated, rural pockets of India too. This could be attributed to a surprising link with Indian mythology that talks about gods communicating with one another through telepathy. “People in the rural areas, who never had access to or the understanding of traditional "telephony" are totally comfortable with the cell phone because they know something like that from mythology – telepathy. Mobile phones bridge the digital-divide by providing weather and railway data to smaller, poorly-connected towns and villages of India. “The demand for regionalized local content is increasing” lxxxiv and being very useful in those parts of the country where implementations have taken place already. Several companies such as Bharti, Spice Telecom and Reliance have now started a service called ‘Voice SMS’ to cater to the needs of the illiteratein India. Leading equipment manufacturer Nokia has launched ‘Mera Nokia’ with Hindi keyboard to cater to the non-English speaking belt in rural India, seeing the general ease with which rural India has been adopting the technology. SMS have reduced the expenditure and made the process of sending greetings convenient and affordable on festivals and other occasions
combination is emerging as the future growth engine of the telecom industry. In 2011, the mobile market is likely to witness almost a three-fold increase in the number of participants. This is expected to result in a price war and a consequent squeezing of profit margins. In 2010, the decline in the average selling price (ASP) of mobiles by 11.3 per cent opened up possibilities of market consolidation. The intense competition is also compelling handset manufacturers to enhance the application ecosystem and invent products. While market entrants are likely to be daunted by the sheer numbers in the market, they will identify abundant opportunities in the rural and semi-rural market for the next three to four years. “For the mobile handset market, the rural market offers exciting prospects due to its significant uptake of feature phones,” “The rural and semirural markets accounted for 65 per cent of sales for most Indian manufacturers in FY2010.” In the case of smartphones, most existing global brands are concentrating on building application stores and improving service quality to offer an attractive value proposition and strengthen their market position. Entrants will be particularly focused on branding, as a smartphone is a high-involvement product and the brand is a vital purchase criterion. While smartphone consumers are also price conscious, it will not be possible for manufacturers to subsidise due to the operation of an open market rather than an operator-leveraged distribution model. Moreover, 70 per cent of the Indian population consumes only voice services, and mobile data services have not yet achieved large-scale popularity. However, this is set to change with the reduction of mobile Internet charges by telecom service providers and the introduction of 3G in India. The market is also witnessing the influx of a new class of affordable handsets, which are classified as ‘smartphone-like’ devices, with touch screens and other smartphone features. According to the analyst, in the next five years, the revenue share of smartphones in the mobile handset market is expected to rise steadily, as an increasing number of participants are targeting this space for higher margins. This trend is likely to persist, as numerous handset manufacturers are strategizing to deploy more smartphone models in their portfolio. In the smartphone market, applications will be a key differentiating factor. The mid-tier price bracket is likely to experience high uptake and hence, manufacturers should strategize on deploying more models in this category. HISTORY OF CELL PHONES IN INDIA A report of Cellular Operators Authority of India regarding the entry of cell phones into India is listed below. This shows the improvement in cell phone introduction over the years. 1992 – Telecommunication sector in India was liberalized to bridge the gap through government spending and to provide additional resources for the nation‘s telecom target. Private sector was allowed participation. 1993 – The telecom industry got an annual foreign investment Rs. 20.6 millions. 1994 – License for providing cell phone services was granted by the government of India for the metropolitan cities of Delhi, Mumbai, Kolkata and Chennai. Cell phone service became duopoly (i.e. not more than two cell phone operators could be licensed in each telecom circle) under a fixed license fee regime for 10 years. 1995 – 19 more telecom circles got mobile licences 1995 - (August) Kolkata became the first metro with a cell phone network. 1997- TRAI was set up.
1998 – Annual foreign investment in telecom stood at Rs. 17,756.4 millions. 1999- FDI inflow into telecom sector fell by almost 90 per cent to Rs. 2126.7 millions. 1999 – Tariff rebalancing exercise got initiated. 1999 (March) - National Telecom Policy was announced. 2000 (June) - FDI inflow dropped further down to Rs. 918 millions. 2000 (Jan) - Amendment of TRAI Act. India‘s subscriber base for telephone services continued to maintain its general growth. There was an increase in the growth rate of both mobile as well as fixed telephone subscribers. During April 2005, 1.44 millions mobile subscribers were added raising the total number of mobile subscribers to around 53.65 millions. The number of wireless subscribers grew to 97 per cent from 75.94 million at the end of December 2005 to 149.5 million subscribers at the end of December 2006 according to TRAI in Delhi. The large growth in mobile subscribers in India has attracted foreign companies to invest in mobile services in the country. A recent relaxation of government rules allows foreign companies to hold up to 74 per cent stake in mobile services operations. Multinational wireless equipment makers like Nokia, Sony Ericson and Motorola have set up manufacturing facilities in India. A large government owned service provider, BSNL, has started insisting that its suppliers manufacture a part of their products locally. The Indian government is keen on promoting local manufacturing in India as it finds that the business process outsourcing and software outsourcing boom in the country has not brought benefits to semi skilled workers. Data from Wireless World Forum‘s Indian Mobile Market 2006‘ Statistical Hand Book reveals that mobile ownership had crossed 100 million in 2007 as the largest middle class in the world‘ took up ownership. With 124.6 million forecast mobile owners in 2007, India ranked third in the world behind only China and USA. The number of cell phone subscribers has been growing from year to year and it is making explosive growth. Table 1: Cell Phone Subscribers in India Year 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Number of Subscribers 7,94,234 10,70,603 11,99,578 31,07,449 35,77,095 64,30,814 1,26,87,637 2,61,54,405 4,10,25,940 6,91,93,321
2007 2008
12,14,31,166 22,18,36,758
Source: Cellular Operators Authority of India (COAI) India’s mobile market displays widespread diversity; geographically, socially and economically. Popularity of cell phones is mounting at break-neck speed as, already a part and parcel of urban cities; mobiles are fast breaking into the more conservative rural areas due to benefits like low-cost equipment, promotional network schemes and independence from detailed physical infrastructural support – apart from the general plusses of speed and convenience. According to a survey by leading telecommunications magazine, Voice and Data, 45 million people owned cell phones in India compared with 44 million people who had land lines, making mobile phones the devices for India’s common man and fixed phone lines those for the rich. Besides the rural population, mobile phones have come to assume significant importance in urban societies with various age groups using mobiles in their own ways to suit their individual needs. While lower-end workers such as milkmen and vegetable vendors make use of the cell to organize their hectic work schedules, students are seen to use them to enhance their social lives. Several parents insist on equipping their children with mobile phones for their safety, while several political parties have started a form of mobile phone campaigning for wider reach in society. Mobile messaging has become the latest fad for teenagers in a society where “dating still does not get widespread parental approval” (PSFK, 2005), while offhand records such as ‘SMS world record for 182689 messages in a month’ are being established by Indians with enthusiasm (iPiPi, 2006). Calling this India’s new ‘lad culture’, BBC (2006) describes India’s new breed of ‘metrocentric lads’ as a wellearning, fashion-conscious guy with “his finger closely on the pulse and the latest mobile phone in his palm. It is the personification of the new, metro-centric India." In the mobile handsets market dominated by a near 100 per cent 'Total Awareness'of multinational brands Nokia and Samsung, Indian consumers lapped up mobile phones with advanced features at affordable prices from new and emerging brands, reveals a Mobile Handsets Usage And Satisfaction Study 2011 of over 4,425 respondents conducted by CyberMedia Research (CMR). Easy availability and a promise of efficient after-sales support became the other key motivators for end users to show increasing preference for new and emerging brands. The India mobile handsets market has witnessed a huge influx of mobile handset brands during 2009 and 2010 which saw launches by a number of emerging mobile handset players for the mass market as well as niche segments in both urban and rural areas. At last count, well over 200 mobile handset brands were available at retail outlets across the country, according to CyberMedia Research (CMR). New and emerging brands provide attractive features like QWERTY keypads, MP3 players, long battery backup, dual or triple SIM card slots, add-on memory card slots, elegant looks, style and finish at
competitive prices, thus giving established brands a run for their money. There has been a paradigm shift in the mobile handsets market with a strong uptake in shipments of 'value for money', competitively priced models by a large proportion of Indian consumers. Traditionally, India has been a price sensitive market, and CMR's research has reinforced this trend for mobile handsets. India is the second largest mobile handset market in the world after China and is poised to become an even larger market with unit shipment of INR 208.4 million in 2016 at a compound annual growth rate (CAGR) of 11.8 per cent from 2010 to 2016. The mature Indian mobile consumers’ increasing preference for high-end handsets and the younger demographics’ desire to use mobile Web 2.0 technologies could see the market revenues soar from INR 255.91 billion in 2010 to INR 350.05 billion in 2016. With end users’ need for converged devices and original equipment manufacturers’ (OEMs’) accelerated adoption of open-source operating systems (OSs) such as Android and Symbian, the mobile handset-smartphone combination is emerging as the future growth engine of the telecom industry. In 2011, the mobile market is likely to witness almost a three-fold increase in the number of participants. This is expected to result in a price war and a consequent squeezing of profit margins. In 2010, the decline in the average selling price (ASP) of mobiles by 11.3 per cent opened up possibilities of market consolidation. The intense competition is also compelling handset manufacturers to enhance the application ecosystem and invent products. While market entrants are likely to be daunted by the sheer numbers in the market, they will identify abundant opportunities in the rural and semi-rural market for the next three to four years. “For the mobile handset market, the rural market offers exciting prospects due to its significant uptake of feature phones,” says the analyst of this research. “The rural and semi-rural markets accounted for 65 per cent of sales for most Indian manufacturers in FY2010.” In the case of smartphones, most existing global brands are concentrating on building application stores and improving service quality to offer an attractive value proposition and strengthen their market position. Entrants will be particularly focused on branding, as a smartphone is a high-involvement product and the brand is a vital purchase criterion. While smartphone consumers are also price conscious, it will not be possible for manufacturers to subsidise due to the operation of an open market rather than an operator-leveraged distribution model. Moreover, 70 per cent of the Indian population consumes only voice services, and mobile data services have not yet achieved large-scale popularity. However, this is set to change with the reduction of mobile Internet charges by telecom service providers and the introduction of 3G in India. The market is also witnessing the influx of a new class of affordable handsets, which are classified as ‘smartphone-like’ devices, with touch screens and other smartphone features. In the next five years, the revenue share of smartphones in the mobile handset market is expected to rise steadily, as an increasing number of participants are targeting this space for higher margins,” notes the analyst. “This trend is likely to persist, as numerous handset manufacturers are strategizing to deploy more smartphone models in their portfolio.” In the smartphone market, applications will be a key differentiating factor. The mid-tier price bracket is likely to experience high uptake and hence, manufacturers should strategize on deploying more models in this category. Despite the worldwide economic slowdown, the smartphone market registered a modest growth rate of 16.4
percent during 2008-2009. In 2010, smartphone shipments grew at an impressive rate and were the growth driver for the rebound in 2010’s total handset shipments. The worldwide handset market witnessed a year-on-year growth of 12.2 percent during 2009-2010, primarily driven by 76.5 percent y-o-y growth in smartphone shipments during the same period. Smartphones accounted for 23.1 percent of worldwide handset shipments during 2010. This share is expected to approach 40 percent by end-2015.
Table 2:The 6 Cs of the Mobile Phones: Connection Convenience Charisma Companionship Care Culture
for communication and accessibility brings efficiency, especially our daily lives reflects identity and empowers individuals helps to have fun provides safety and care for others creates a culture of its own
Connection: Mobile phones have made all of us connected. This connection among individuals is always on and anywhere, which naturally implies a convenience in communication and improved accessibility. These features support various aspects of our daily routines, planning and organization of variety of activities regardless of which society we live in. Mobile phone is tool connecting a group of people, making the communication within groups more efficient and easier. Among friends, family members, work partners, fellow mates, the cellular can be used to get information transferred more quickly and more efficiently, which help to improve the relations and social connection. People feel more and more connected in conducting various tasks. Since mobile phones are now Internet enabled, users have been able to access the information easily. Not just getting simple information by text or voice messages, but connecting to the email account or news allows people to access content-rich information. Even though the connection costs money, it is very convenient when especially people need to check specific information like movies, traffic or checking important emails on the “go”. Convenience: The use of mobile phones has brought convenience in daily life in many ways. To mention an example, which is very common in many countries, consider the partnership of mobile network operators with local transport agencies where the subscribers are provided with a service to pay bus or train fares using their mobile phones. To give a more substantial example, mobile banking also falls in this category as people do not have to waste time on visiting a bank and wait in a queue. Another frequently cited contribution of mobile phones involves better time management and micro-planning of our daily activities both for personal and business uses. In addition, there is a growing replacement of mobile services with those convenience apparatuses
such as the alarm clock, radio, organizer, news, camera, calculator, and games, all of which people are happy to utilize. Collecting these in one device is making more convenient to all users. Charisma: In a general sense, many youngsters agree that having a mobile phone is not only an easy access to friends and families, games and information, but is also a way of defining yourself and relaxing. Mobile phones are a way to express one’s personality and independence. Mobile phone also allows being creative and relating to one’s identity. Being able to choose the tune, the screen picture, to take pictures, and upload them on a computer is not only a way of entertainment, but is also a big part of who you are. Discussing mobile phones and newest updates and releases has also become a somewhat ‘cool’ topic among the high school students. For them, talking about the gadget provides another way of making friends. Indeed, some personal stories suggest that pupils’ friends think of them as more cool simply because they are good with mobile phones and they showed their mastery in using the gadget. It is also the way of communicating one’s interests to friends. Through certain activities and competitions new friendships are created as well the feeling of solidarity among that community is maintained. This effect of mobile phones is well noticeable in the initiatives to make pupils compete on the basis of answering questions and sending text messages. Clearly, the ardour and the sense of competition that comes with it provide the kind of shared feeling of solidarity that maintains friendships and fosters team spirit among youth. Mobile culture has played a big role in defining the freedom and liberation of both the young and old in India. In a relatively more developed society ‘Mobile revolution’ has brought about a re-definition of the lines of privacy and social status. In the UK society, these lines are seen more clearly among adolescents and students. According to the Mobile Youth Surveyxlix, although a majority of teenagers were not seen to look down on a mate who did not own a mobile, a prominent 26% of 11-17 year-olds said they would feel “unwanted if a whole day went by when my mobile phone did not ring” Companionship: As mobile phones are becoming an essential accessories that we carry everywhere and as mobile applications aiming the amuse the users are increasing, the mobile phones are becoming a friend keeping us a company when we are bored, nervous or simply need to pass time. Mobile Entertainment in its various forms are providing many people with opportunity to pass enjoyable time by themselves or with a group. Especially due to fact that users of mobile phones are being young people, enjoying leisure time using mobile phones by playing games, listening to music, watching movies and taking photos have become an essential part of their life. With the further development of digital and wireless technologies, mobile phones are becoming audio and video terminals, which is also known as the Fifth Medium. Playing games using mobile phones has taken place all around the world. A study indicates that mobile phone games can amuse people in certain tedious occasions, such as when waiting for the bus, on the train, waiting for people “when on a date” and during travelling, etc. The freedom of time and place, and the pleasurable company mobile phones bring to people is somehow changing the traditional idea of entertainment. Su-do-ku, the crossword game that used to be played on the paper can now be sent to a mobile phone.
Care: Care using mobile phones is becoming an important contribution especially for families. In India, anxious parents provide children with cells, so they can keep tabs on them. They can monitor their activities and remind them not to stay out too late. According to the Mobile Youth Life Report, most parents “feel that mobile phones can help keep children safe when they are away from home. If they lose their money, help is only a phone call away”. A mobile phone serves as a safety mechanism for adults when they know they are in a crisis, like a missed bus, stolen property or getting lost. Mobile phones also find extensive usage for purposes of instant texting and keeping contact with aged family members who may find it hard to use wireless telephony. According to Mobile Life Report, 80% adolescents (89% girls and 72% boys) feel safer with a mobile phone when out and about, shopping, socializing or traveling to and from their school or college. Apart from supporting safety within families, the mobile phones can help for caring larger groups, especially in the times of disasters or emergencies. In 2003 when SARS was widespread in China, the government used SMS to transfer updated information related to the infection situation in each city and relevant news, enabling the public informed quickly. The use of cell phones and SMS was also considered most important ever, as it enabled people to get contact with friends, family, colleagues during that special period when making people meet face-to-face was not quite possible. Culture: Many people would agree that a mobile phone is not only a gadget for connected and convenient life, but also a medium greatly influence life and generating new culture and behavior. Especially for teenagers, mobile phone plays a role as a tool for producing and disseminating their peer culture, and expressing their identity. Many teenagers think mobile phones as necessity and they have their own way to communicate like unique grammar and expression in text messages. Mobile phones are also acknowledged by a majority of teenagers that it is creating a new way of interactions with their parents. More than half of 11-17 year-olds say their parents give them more freedom because they have a mobile phone (59%) and are allowed to stay out later as a result (53%), according to the Mobile Youth Life Report. Contribution of Mobile Phones to Society:
1. Informative Society: Mobile phones have enabled users to access required
information easily. In any society, information is considered an important social resource. Instant access to emails, communicating documents back-and-forth, pictures and music, watching broadcasts and surfing the Internet prove themselves as the primary social resources through which mobile phones are producing benefits for all. After subscribing to news, weather forecast and stock information, etc., mobile users can regularly access the information subscribed from the cell phones. Instead of receiving information passively on traditional media, WAP enabled cellular phones allow subscribers to get customized and relevant information instantly. Due to its succinctness but definiteness and efficiency, SMS can diffuse information much quicker than traditional media, such as publishing and broadcasting. Mobile phones also played roles of great importance in the instance of tragedies of India like the 2004 Mumbai deluge and 2005 tsunami through enhanced direct access to politicians and institutions. They
are also playing a part in social causes such as spreading awareness on AIDS, in which India reports the second highest numbers after South Africa. Four mobile AIDS games have been launched by e-learning company ZMQ software systems in collaboration with Delhi State AIDS Control Society. Help lines are also seen to operate through mobile phones proving their cost advantage due to low-cost schemes in India. 2. Connected Society: Global Knowledge reports an increasing reliance on mobile phones by women to achieve a balance between careers and homes. In aiding the females, India expects an influx of baby cell phones with harmless radiation, sending an automatic SMS and e-mail in the event of their child crossing the defined boundaries. Mobiles can also be used to avail exam transcripts, hence making the process efficient for children. These two examples clearly indicate how mobile phones can help keeping connected to your social network as well as carrying out other duties both for grown-ups and the children. 3. Culturally Innovative Society: Although designed as a communication device with many functionalities, the mobile phone can be very instrumental indirectly influencing certain other activities in our lives and creating new set of trends. This influence may change from designing new short-cuts in the language, to improving language skills; from adopting new ways of socialisation via mobile phone games to even digitising certain aspects of rituals and religious practices. Mobile phones can also serve as indirect mechanisms promoting learning new skills and interests. Besides practicalities that texting save time and money, in India, there has been a notable improvements in the use of English (although spellings are most often incorrect). According to this research, some people interviewed have also noted an increasing interest in technology due to existence and widespread use of mobile phones. Mobile Internet game applications are also considered as a new mode of group networking in the society through connecting more than one player together in the same game to accelerate their communication. The players can be friends but could also be unknown strangers. However modern the technologies of mobile phones be, they can relate to many aspects of our cultural and social life including religious practices and rituals. In India, for xample, the mobile phone can suit well to the popular prayer-and-ritualbased culture. Global Knowledge talks about SMS prayers and requests to light candles in church, while iPiPi reports a project on TV channel Sadhana where a panel of 40 gurus (holy teachers) receive up to 20,000 messages a day. 4. Participative Society: Mobile communication has shown its power for collective activity as well as on individual life. Mobile phones can prevent isolating members of the society from social connection and empower ordinary citizens via convenience for connecting to others and availability of information. The mobile phones can make individuals active in participating to certain programs on TV by simply voting. At other times, mobile phones can be a political instrument promoting democratic participation and organization of political activities. In India too, “Mobile phones particularly are increasingly being used as the mode of expression of political, ideological and social rights. Users experienced for the first time the broadcast of a political campaign in 2005 by a political party over mobile phones on the eve of elections. Some people naturally accepted sending
votes and messages to opinion polls through SMS. The participation of individuals is also extended to various entertainment events, too. In India, the popularity of cell phones is also manifested with the example of famous TV series “Indian Idol”, which received a “more than 55 million votes via SMS” making a total of Rs 16.5 (Rupees) despite the cost of each message being a high Rs 3. 5. Converging Society: Mobile Phones are also contributing to the creation of more equal society. Via communications and other economical and social benefits, some societies witnessing a convergence in terms of bridging digital divide, especially for geographically dispersed countries such as Brazil and India, and in terms of sharing information and other benefits. Empowering the individuals via confirming their identities, improving participation via better information dissemination and increasing social connections between different segments of the society are also those contributions of mobile phones that create equalities of opportunities and distribution of wealth. "In India, mobile phones are now for ordinary people and fixed-line phones are for the rich. We used to think it was the other way round." This can be mainly attributed to the fact that some parts of India are yet to come under fixed line telecom coverage. Since fixedlines require extensive physical infrastructure that could often take years due to red tape, mobile phones have turned out to become the fastest and most convenient ways of maintaining communication networks. Already used widespread in the urban locales, mobile phones are seeing surprisingly quick adoption in the noneducated, rural pockets of India too. This could be attributed to a surprising link with Indian mythology that talks about gods communicating with one another through telepathy. “People in the rural areas, who never had access to or the understanding of traditional "telephony" are totally comfortable with the cell phone because they know something like that from mythology – telepathy. Mobile phones bridge the digital-divide by providing weather and railway data to smaller, poorly-connected towns and villages of India. “The demand for regionalized local content is increasing” lxxxiv and being very useful in those parts of the country where implementations have taken place already. Several companies such as Bharti, Spice Telecom and Reliance have now started a service called ‘Voice SMS’ to cater to the needs of the illiteratein India. Leading equipment manufacturer Nokia has launched ‘Mera Nokia’ with Hindi keyboard to cater to the non-English speaking belt in rural India, seeing the general ease with which rural India has been adopting the technology. SMS have reduced the expenditure and made the process of sending greetings convenient and affordable on festivals and other occasions
