Deloitte India TMT Predictions 2014
31 January 2014
MIM and SMS to be direct competitors, M2M Communication to rise, and non-Cricket sports to gain momentum
New Delhi, 31 January 2014: The number of smartphone users in urban India will cross 104 million in 2014 compared with 51 million users in 2013, according to the 4th edition of Deloitte’s predictions for the technology, media and telecommunications (TMT) in India in 2014. Further, smartphone users are expected to drive the highest video consumption on mobile. The report adds that consumers are increasingly becoming screen agnostic, and are viewing video content on their smartphones both inside and outside the home.
“In 2014, mobile video is likely to be the preferred service over other mobile value added services,” says PN Sudarshan, Senior Director, Deloitte in India. “We anticipate 50-60 percent of all the mobile data consumption in India to be driven by video over next 2-3 years.” With improved networks and connectivity, users will increasingly consume higher resolution video. While pre-downloaded and side-loaded form of video will continue to be a major part of the overall video consumption on mobile, Deloitte envisages emergence of innovative business models in mobile video streaming/time-restricted download space in 2014.
Instant messaging (MIM) services on mobile phones may win the battle for volume in 2014, but short messaging service (SMS) will be victorious in revenue terms. Deloitte predicts that in 2014, MIMs will be more than twice the volume of messages sent via a SMS. However, despite the burgeoning volumes of MIMs, we expect SMS to generate more than $100 billion globally in 2014, equivalent to approximately 50 times the total revenues from all MIM services. This might be slightly different in India as operators have reduced low cost SMS plans due to regulatory changes; resulting in subscribers using other means to communicate.
Local language content will be crucial in 2014. Deloitte predicts that India would witness a surge in the development of local language applications and localization of content, as any incremental increase in mobile data and internet subscriber base would be achieved among the section of the population whose digital accessibility is limited by language constraints. Additionally, Deloitte predicts that regional print industry will continue to surge primarily driven by factors such as under penetration in regional markets, rise in regional ad-rates and sustained pressure on English print advertising by digital media.
Some of the other highlights and details of this year’s TMT predictions to impact the marketplace in 2014 include:
• Mobility and e-Commerce: Driving innovations in payments and cash displacement: Lack of the right kind of payment or cashless transaction mechanism is holding back segments ranging from e-commerce to more inclusive banking services like remittances. A few key innovations would lead the way in 2014 to usher in change in this space. Innovations would be witnessed in Mobile POS, alternate solutions for cash on delivery and technology that would considerably reduce transaction failures.
• Rise of Machine to Machine communication: Deloitte predicts that a sizeable number among the approximately 350 million Internet-enabled but unconnected devices in India would be connected to the web. With technology providers coming up with more applications that would facilitate smart connectivity among devices and standardization of communications protocols, there is a strong case for the development of a large set of interconnected machine clusters that would be marketed as integrated electronic lifestyle solutions.
• Multichannel Enterprise Applications: Bring Your Own Device (BYOD) and multichannel customer facing applications would be the two most important drivers for enterprises to adopt a completely new range of applications. These will pose significant challenges to organizations in areas like security, inter-operability and data/device management. We could witness a significant number of local application vendors who would provide innovative solutions for security, process and workflow management, multichannel CRM and mobile enablement.
Media and Entertainment
• Distribution Networks: The digital leap: Deloitte predicts that the digital TV distribution space – both Digital Cable and Direct-to-Home (DTH) would find ample room for growth given the catalyzing effect of digitization and the headroom for growth provided by non-TV households in the country. Digital Cable is expected to gain more out of the densely populated areas with adequate cable infrastructure while DTH is expected to gain more in sparsely populated areas with minimal cable infrastructure.
• Social Media: The urge to connect: Social media would continue to grow as a favored platform for targeted advertising as its adoption surges, driven by increasing mobile usage and higher penetration of smartphones and a young population.
• Sports: Winds of change: Though Cricket still reigns supreme in the country, new non-Cricket sports properties are expected to emerge and gain popularity in the country. Driven by the success of IPL, other sports such as Hockey, Badminton and Football have also leveraged the model to build similar properties, which are being lapped-up by broadcasters and sponsors alike. Further, the popularity of such sports is expected to continue to witness an upswing.
• Phablets are not a phad: In 2014 shipments of phablets, smartphones with 5.0-6.9 inch screens, will represent a quarter of smartphones sold. After initial rapid consumer success, 2014 may mark a ‘peak phablet’ year, as only a (sizeable) minority of smartphones users will want to handle such a large device. Two thirds of phablets in 2014 will be less than 5.1 inches, just meeting the definition, and less than 10 percent are likely to be 6 inches or larger.
• Emergence of Mobile Video: Deloitte envisages emergence of innovative business models in mobile video streaming/time-restricted download space in 2014. Telecom companies will alter their position from high cost dumb pipes to affordable smart networks that will support third party video service providers as well as help developing video consumption habits among customers.
• ‘Ruggedised’ Data Devices: Reinventing the business case for mobile field force: The Indian market for rugged devices would double in size in 2014, driven primarily by new device introductions by manufacturers targeting business and government users. Multiple new smartphones / phablets are likely to be launched in “semi-rugged” device category, blurring the demarcation between consumer and rugged devices.
About the Deloitte TMT Predictions
The TMT Predictions are based on worldwide research supported by in-depth interviews and input from Deloitte member firm clients, Deloitte alumni, industry analysts, leading TMT executives, and thousands of Deloitte member firm TMT practitioners across its global network. The focus of Predictions varies from year-to –year, but one theme appears constant: the impact of TMT on our behavior steadily deepens.
Notes to the editor for reference purposes only:
This press release has been given by Deloitte Touche Tohmatsu India Private Limited
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms.
Deloitte in India herein refers to Deloitte Touche Tohmatsu India private Limited