Telecom industry to benefit from e-commerce boom: survey

Priyanka Pani Mumbai | Updated on August 21, 2014 Published on August 21, 2014

Indian e-commerce companies will be able to drive the next phase of growth for the telecom companies wherein they would be able to generate additional revenue of Rs 48,000 crore and EBIDTA of Rs 17,400 crore over the next three years, according to a study.

A joint study conducted by Google India and A T Kearney said with over 155 million mobile Internet users at present, India will see a major mobile explosion as the Internet user base will more than double to 480 million by 2017. It is estimated that in next three years, smartphone penetration will grow six times to touch 385 million people and the number of users who transact online will grow to 160 million.

The study says data consumption on mobile phones will triple, and consumers will buy five times as much content.

Nikolai Dobberstein, a Partner at AT Kearney, said, “Indian telcos are poised to leapfrog directly into a digital play since the shift from data to digital will happen much faster in India, as more digital content and services are adopted by users. By FY17, the Indian telecom industry is expected to reach $35 billion in revenues, with data revenues growing at over 70 per cent annually till then and with new digital VAS streams emerging and growing exponentially. Indian telcos may have had varying degrees of success with digital content and services in the past, but the outlook for these services, as well as digital customer engagement, which can unlock massive opportunity in e-stores and e-care, is extremely positive.”

The study also looked into consumer lifestyle needs and telcos’ internal digitisation capabilities to compile a list of four priority areas that could unlock billions of dollars of cumulative value for telcos. These are e-store and e-care, media content and services, mobile business apps for SMEs and mobile payment.

Rajan Anandan, VP and Managing Director of sales and operations, Google India said, “Indian telcos have the opportunity to significantly expand the pie by catering to unmet demand in online music, video and online recharges.”

The study outlines that by 2017, data and paid content consumption will double organically to 470 MB data per user per month and $1.6 in content revenue per year. Global markets have seen similar shifts as they matured from voice to messaging and from data to digital. Markets such as Japan and Korea have taken up to 10 years to move from data to digital, but India is poised to leapfrog as the country has already embraced the Internet, as seen by the massive adoption of social networking and the recent e-commerce boom.

Published on August 21, 2014
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