In the past 5 fiscals, mobile data (data accessed through mobile phones, data cards/dongles) consumption in India has grown at a superfast 24 times.
The number is expected to multiply four-fold in the next five years through fiscal 2022, with data subscribers expected to double beyond 900 million and penetration reaching 80% from 40% at present, according to Mumbai-based, CRISIL Research.
The faster penetration would be supported by a continued drop in tariffs given the intense fight for the all-crucial market leadership. That would mean telcos will have to increasingly sweat per-subscriber usage to bolster incremental revenues.
India’s mobile data usage per subscriber rose 20 times to around 1.3 GB per month between fiscal 2013- 2017 on faster adoption of 3G and 4G services. Free data offered by Reliance Jio, and a sharp ~40% fall in tariffs in fiscal 2017 were the growth propellants.
CRISIL Research sees India’s per subscriber usage at 2.3 GB per user by 2022, or closer to the trend in many evolved data markets, and stabilise thereafter. A larger chunk of the new subscribers over next 5 years would be from rural India, and their relatively lower data usage would impact the industry’s average data usage adversely. More importantly, existing subscribers may also not crank up usage sharply after fiscal 2022 as Wi-Fi usage improves sharply. A similar trend was seen in China where mobile data usage per user stagnated between 2012 and 2014, coinciding with rapid expansion of Wi-Fi infrastructure.
Globally, nearly 60% of data used on mobile phones is offloaded to Wi-Fi as it is significantly cheaper and faster than mobile data.
Prasad Koparkar, Senior Director, CRISIL Research, said that “The cost of offering services on Wi-Fi is just a fifth of mobile, and speeds are significantly faster, too. We expect a sharp increase in Wi-Fi hotspots over the next 3-5 years, which can be a drag on mobile data growth once penetration growth plateaus.”
Despite continuous drop, mobile tariffs are expected to remain 80% costlier than Wi-Fi, said the market research firm.