A recent report highlights a broad trend of which businesses are already aware: the mobile internet, or “m-net”, is growing much quicker than fixed internet, presenting a new set of challenges and opportunities for businesses, surfers and regulators. Mary Meeker, a partner at the venture capital firm Kleiner Perkins Caulfield & Byers, is an iconic analyst of online trends. Her latest report presents startling numbers. Over 10 per cent of May 2012 global internet traffic was mobile, up from one per cent in December 2009. M-net revenues have risen at a cumulative annual growth rate of over 150 per cent between 2008 and 2011. The revenue mix is very different. Apps or application software contribute 71 per cent of m-net revenue, while 29 per cent is from advertising. In contrast, advertisements contribute over 90 per cent of fixed internet revenue. Hardware manufacturers like Intel and Cisco are moving to the m-net by developing new chips and routers. Microsoft’s Windows 8 platform aims squarely at tablets and smartphones. Google, Facebook and Twitter are reconfiguring their mobile-ready offerings, and adjusting revenue projections. Over 15 per cent of search queries are now mobile; Twitter’s m-net revenues often exceed its fixed net revenues; and well over half of Facebook’s traffic is mobile. Average revenue per user (ARPU) on m-net is lower than fixed internet ARPU, but is growing much faster. There’s a huge upside potential. Mobile broadband penetration (3G and 4G) is still low; less than one in six mobile subscribers uses a smartphone. Tablet penetration is even lower. There are many other unexplored opportunities, since m-commerce and m-banking are both in relative infancy.
A re-imagination of mobile devices, content creation and content consumption is occurring at a rapid pace. Ubiquitous mobile broadband penetration could transform healthcare, education, law enforcement and banking or credit cards. It is easy to walk through a mall while checking for the online prices of all items. It is easy to transfer cash via mobile, or to use mobile credit to pay for a wide range of services. In many cases, it is safer and cheaper as well as more convenient.
India could be a global leader in this transformative process. It has a huge domestic market and a large pool of developers with the requisite skill sets. There are just 13.4 million fixed broadband lines in India. So, a very high proportion of India’s 120 million surfers are exclusively mobile. India’s m-net traffic already exceeds fixed internet traffic. Mobile broadband and smartphone penetration is low but growing fast, with 40 million 3G connections and 4G barely launched. A proliferation of cheap tablets and smartphones allied to affordable data plans is a big driver. Migrant workers use mobile phones to informally transfer money. Telecom service providers are now formally in this space. The Ministry of Rural Development’s 90 million kisan credit cards and 120 million employment cards are tied to mobile numbers, not bank accounts. The big fly in the ointment is the spectrum mess, which has put a big question mark over affordable and speedy 3G and 4G roll-outs. Nor does the telecom regulator seem to recognise the need to enable easy access to value-added services and apps. The playing field is not level in this area — an independent app developer is at the mercy of telecom service providers. It’s up to the regulators to remove these crippling bottlenecks, if India’s m-net is to grow to its full potential.
