Mobile services spends may hit $21.4 bn in 2015: Gartner

New Delhi: Spending in India on mobile services, driven primarily by data services, is likely to reach $21.4 billion in 2015, said a new report by researcher Gartner Inc. on Wednesday.

While mobile connections in the country are expected to grow to 880 million by the year end, an increase of 5% from 837 million connections in 2014, data services are projected to grow by 15% to reach $6.5 million in the same time period.

“A large chunk of this growth will be driven by the increasing use of cellular services on data-centric devices, such as tablets and notebooks, through either embedded cellular modems or USB sticks,” said the report.

The key growth accelerators of increasing mobile services spending include newer and faster networks, a rising number of users, and availability of increasingly affordable smartphones.

Increasing online video consumption is another driver in pushing data services spending.

“Spending on data services will also be heavily driven by mobile apps, particularly mobile video apps,” the report said. “Apps and content are driving traffic volume as people increasingly chat to friends and family, watch videos on the move, and listen to streamed music.”

“In India, the rise in spending on data-only connections will be driven by two user scenarios—first, to complement their fixed broadband connectivity, so they can use their larger-screen data-centric devices on the go. In other use cases, data-only connections will be the way for consumers to access broadband connectivity because of a lack of fixed networks,” said Neha Gupta, a senior research analyst at Gartner. “Mobile data provides a substantial revenue opportunity in India.”

With increasing competition in the mobile apps market, app developers are also starting to “sharpen their focus” on marketing and transparency of their apps, in order to retain customers.

“Although affluent people and traditional early adopters are the leading users of new technologies and devices, younger, less wealthy people make greater use of mobile apps,” the report said. “Young people’s greater acceptance of apps and mobile content will require app developers to adjust their techniques to address the differences between user groups.”

“The future will be tough for Communication Service Providers (CSPs) and mobile app developers who decide not to upgrade the user experiences they deliver on their services and products. The winners will be those providers best able to satisfy consumers’ demand for high data use, while maintaining their margins,” the report added.

Gupta said that in order to retain and increase their customer numbers, CSPs will need to focus on creating new pricing, with a focus on data access, such as shared plans, in addition to refining the services they already provide, with a focus on creating a richer, more immersive and more personalized experience for users.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.