Telecom Sector’s Future Growth to Come from Mobile Operators


MUMBAI: In a recent study conducted by consulting firm Cosmos Strategy, revealed that the next leg of Nation’s growth potential to come from the Telecom and Retail Sector.

 The study reveals that the Telecom sector and Retail Sector in the country would witness a drastic growth in the coming years and it would expect to grow by 10 percent from the current de-growth of 10 percent by year 2025.

 Adopting differential Strategy is key to the sector's annual double-digit growth by 2025. Revenue growth to be driven by value creation through OTT apps which re-calibrate micro-financing & retail sector

Current under-penetration of micro-financing, lack of exciting options for micro-investments and extreme fragmentation of retail sector are all opportunities waiting to be innovated upon to create significant valuation through new services by the operators.

 The Indian wireless landscape has witnessed a tectonic shift in the last two years post the launch of Jio. After two decades of continuous revenue growth, the last two years have witnessed both revenue and profitability drop for the incumbent operators. As per TRAI data, industry revenues for 2016 was 280 thousand crores, which shrunk by 10% to 255 in 2017 – all this while usage of data services have grown five-fold, which requires substantial capital investment in creating capacity.

While explaining the sector’s future growth potential, Nilanjan Mukherjee, Managing Partner, Cosmos Strategy said, “Indian telephone companies now should re-define their business model – from being “access revenue” from voice and data usage only, operators should fundamentally re-look at their core strengths and based on today’s internet and smartphone reality, they should participate in a much larger spectrum of activities.”

“We must remember that for 80 percent Indian consumers, the smartphone is the only device through which they explore internet. This provides operators the ability to mine fabulous customer insights. Traditionally, operators had developed extremely sophisticated algorithms to measure and trigger growth of voice and data services to improve their revenues. But today, unlimited calls and fat data quotas have made such an activity redundant. So instead of ruing this, it will be useful to set up a very different customer insight program. The first possibility as the largest provider of internet services is to set up an AI-based customer insight engine. Privacy issues are being widely discussed but appropriate precautions can be put in place to ensure customer protection. Such a database alone has incredible potential – companies like Google and Facebook earn billions through such insight monetization”

 “The second area is a large customer base who is spending more and more through digital purchases from their smartphones. If you see some of the most exciting start-ups who have attracted huge valuation – say PayTm or Flipkart and witness their key product – mobile recharges and smartphones constitute almost half their revenue portfolio. One can never ignore the hunger, dexterity and single-minded focus of PayTm or Flipkart – but here is how the operator could have done it better. If the large operators had set-up a dedicated digital recharge platform and not allowed any outside service to sell their product they would now have a company valued several billion dollars. While today’s reality is purchase through the phone, tomorrow the same services will work on voice-activated platform like the Alexa’s of the world. It will be interesting to see if operators are keen to create such futuristic products on their own and not let the value creation to be externalized. Similarly, operators are well placed to upgrade customer smartphones through contextual insights-based offers (camera quality for selfie user, battery life for video user or large memory for heavy app users). They can even sweeten the deal by bundling their own voice and data services along with the phone,” he added. 


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