Tech, media to grow in India

18 March 2011

MUMBAI: The technology, media and telecoms industries in India are set for rapid growth going forward, with "untapped" categories like smartphones holding considerable promise.

Deloitte, the consultancy, estimated that the rate of "teledensity", or the number of phones in a given area, stands at approximately 128% in metropolitan centres, measured against just 26% in rural regions.

Jolyon Barker, global leader of Deloitte's technology, media and telecoms (TMT) practice, thus suggested substantial possibilities exist in the Indian countryside.

"With most of the population living in villages in India, there is huge opportunity for TMT sector bring services such as healthcare, education, entertainment, banking and finance to the rural doorsteps," said Barker.

Elsewhere, the company forecast that 50% of computing devices sold worldwide in 2011 will be smartphones, tablets and non-PC netbooks.

However, Deloitte reported 80% of India's nascent smartphone market is essentially "untapped", primarily because a need exists for cheaper handsets and more affordable data packages.

Mobile value-added services, like gaming, music downloads and apps, are worth $2.7bn (€1.9bn; £1.7bn) at present, reaching a potential $10.7bn in 2015, aided by uptake from less developed outlets.

"Today the penetration of mobile phones in urban areas is already 100% while in rural areas it is only 23%," Sandip Biswas, director, Deloitte India, told the Business Standard.

"Non-voice revenues currently constitute about 10% of revenues of Indian telecom operators. A comparison with other countries indicates an (international) average of 23%, providing large scope for growth (in India)."

Turning to traditional media, TV adspend was predicted to expand by between 12% and 14% this year, and the medium retains its premier position, helped by the rising popularity of satellite and cable.

Print media should remain "steady", but channels ranging from radio to social networks are in line to witness hardening demand among brand owners.

Overall, the entertainment market is expected to generate $24bn a year in 2014, boosted by categories such as animation and gaming.

The telecoms segment may also be impacted by the recent roll out of mobile number portability (MNP), as churn levels rise from 4% to around 5% per month.

"The operators offering 3G services would have an edge with the introduction of MNP as not all operators have won the auctioned 3G spectrum," the company's study said.

Information technology and business process outsourcing is set to deliver $71.7bn in 2011, or 5.8% of Indian GDP, while software and services could come in at $47bn.

The increasing digitisation of sectors like healthcare, education and banking will stimulate further growth in the future, Deloitte argued.

Data sourced from Business Standard/Deloitte; additional content by Warc staff