A mature ecosystem including network, devices, and content drives pan-India 3G data growth by 85 percent year-on-year. Aggressive 3G network expansion in existing circles and new launches by operators have been instrumental in increasing traffic. Following the trends of other circle categories, 3G contributed more than 50 percent of traffic in Category-C circles. 3G monthly data usage per user crossed 750 MB, which is close to data usage witnessed in some of the mature markets.

Driven by declining prices, 3G device base grew 2.4 times in 2015, addressing the earlier constraint of low device penetration. Upcoming 4G network launches supported by evolving device ecosystem have the potential to boost traffic in the coming year. Video and social networking together contributes 60 percent of traffic; communication apps are most used in terms of time spent.

India Mobile Data Trends

3G continued to drive growth in total data traffic carried over mobile networks at a pan-India level in 2015. Contribution of 3G in total traffic increased from 52 percent in December 2014 to 64 percent in December 2015.

  • Overall traffic grew at 50 percent in 2015, due to surge in 3G data. 3G traffic grew at 85 percent while 2G traffic grew at 12 percent.
  • New 3G launches as well as 3G network expansion in existing circles resulted in increased adoption, especially beyond metros and Tier-I cities.
  • 2G grew at 12 percent in 2015 compared to 41 percent in 2014, driven by migration of high-end 2G data users to 3G in metros and Category-A circles
  • However, 2G still has potential to drive Internet adoption in Category-B and C circles in the short to medium term.
  • Mobile data traffic is expected to grow further as operators launch LTE networks while continuing to invest in strengthening 3G networks.
  • It is expected that data traffic growth will be boosted in coming years by the auction of additional spectrum, an increase in smartphone penetration and the development of the content ecosystem.
  • 3G traffic in India is still significantly lower than 3G+4G traffic in developed countries such as Japan, Korea, and the U.S., representing significant future potential for data growth.

Monthly Circle-Wise Snapshot (Jan-Dec 2015)

 

 

In 2015, 3G traffic outpaced 2G across all circles for the first time - Category-B and C had the highest 3G traffic growth.

  • 3G traffic grew at 56 percent, contributing to 65 percent of total traffic while 2G traffic started declining in metro circles in 2015.
  • Contribution of metro circles to total traffic in India reduced from 20 percent in 2014 to 17 percent in 2015.
  • 3G traffic grew at 55 percent, contributing to 60 percent of total traffic in Category-A circles in 2015; 2G traffic growth stabilized.
  • Contribution of Category-A circles to total traffic in India reduced from 43 percent in 2014 to 42 percent in 2015.
  • Category-B circles showed the highest growth in 3G traffic, growing at 79 percent in 2015; 3G contributed to 59 percent of total traffic in 2015.
  • 2G traffic continued to grow at 18 percent year-on-year.
  • Contribution of Category-B circles in total traffic in India increased from 30 percent in 2014 to 31 percent in 2015.
  • 3G traffic in Category-C circles grew at 64 percent, the second-highest growth rate after Category-B circles; 3G contributed to 54 percent of total traffic in 2015.
  • 2G traffic continued to grow at 26 percent year-on-year.
  • Contribution of Category-C circles in total traffic in India increased from 7 percent in 2014 to 10 percent in 2015.

Monthly Average Data Usage per User

Data users profit from high-speed networks and consume higher volumes of data.

    • 3G data usage in India is in line with global benchmarks of 800 MB - 1 GB of 3G data as seen in other developing and developed markets.
    • The average 3G data usage per user continues to increase due to better device capabilities and availability of relevant content.
    • 2G data usage grew at 2 percent year-on-year due to migration of high-end data users to 3G and adoption of 2G data services among users with low usage.

2G and 3G Data User Adoption in 2015

  • 3G user base grew at 69 percent year-on-year while 2G data user base grew at 10 percent year-on-year in 2015.
  • There is still significant growth potential for 2G and 3G Internet adoption in the coming year.

Data usage per user still has significant growth potential with launch of 4G

Globally, after launch of LTE networks, operators have witnessed average data usage of an LTE user to be up to four times of average data usage of a 3G user.

2015 Devices Trend

Declining device prices continue to drive growth in 3G device base.

  • 3G device penetration reached 32 percent in 2015 driven by increased affordability of smartphones.
  • Entry-level price for a 3G handset dropped from USD 50 to USD 40 during the last year. Further, seven out of top 15 most-used 3G devices (17 percent of device base) are priced below USD 110.
  • Share of 3G devices having 3G connections is only 38 percent in 2015, implying a significant growth opportunity for operators' 3G users within an evolved handset base.
  • Further, 3G 900 MHz ecosystem is rapidly evolving with over 70 percent of 3G devices supporting 900 MHz band.

Strong growth in 3G device penetration across circles represents significant potential of 3G user-adoption in the coming year.

  • 3G device penetration continued to increase across circles with 19 out of 22 circles now having greater than 20 percent device penetration.
  • Mumbai (58 percent) has the highest 3G device penetration. Other circles, which have more than 50 percent device penetration, include Delhi, Kerala, and Punjab.
  • One in every two mobile subscribers in metros has a 3G-capable device.

Better device throughput capabilities present an opportunity for DC-HSPA.

Increasing device penetration in circles and development of ecosystem across multiple bands have potential to drive future adoption of 3G in India.

  • 28 percent of 3G devices support peak data throughput of 42 Mbps in 2015 as compared to 5 percent of devices in 2014.
  • Proportion of DC-HSPA-capable devices has increased across circle categories. Share of DC-HSPA devices in 3G device base in metros and Category-A, B, and C circles stands at 37, 30, 21, and 26 percent respectively.
  • Operators may choose to deploy DC-HSPA using 2×5 MHz of 2100 MHz to provide LTE-like experience, especially in Category-B and C circles in short to medium term.

LTE Device Ecosystem Continues to Develop across LTE Bands in India.

Forty-seven million LTE-capable devices representing 5 percent of total subscribers in India.

  • The sharp decline in price is driven by new launches at lower price points by domestic and international device manufacturers.
  • As a result, LTE device penetration witnessed significant increase over previous year across circles especially in metros (10 percent) and Category-A circles (6 percent)
  • Eight out of top 15 most-used LTE devices (46 percent of device base) are priced below USD 150.
  • Further, five of the top 15 devices have been launched in the second half of 2015 and already contribute 18 percent of LTE device base.

LTE Band Ecosystem

Aggressive evolution of device ecosystem, supported by decline in prices, present significant growth opportunity for operators as they launch and expand LTE networks in coming years.

  • LTE-capable devices support four LTE bands on an average.
  • Ninety-seven percent of LTE devices are 1800 MHz-compatible while 83 percent of LTE devices support 2300 MHz; only 51 percent of LTE devices support 850 MHz.
  • Device ecosystem for LTE 700 MHz is currently at a nascent stage with only 16 percent of LTE devices supporting the band. However, it has been evolving rapidly.

Data Consumption Patterns

Video drives traffic on mobile while social networking and communication drive user-adoption and engagement.

  • Consumption of video and audio content and use of social networking and communication applications are driving the data traffic both on 2G and 3G networks
  • Data-consumption patterns in India are different from those in developed markets where usage of high bandwidth applications such as video happens primarily over Wi-Fi networks.

Video and Audio. Entertainment-based video content is the key driver of traffic. The supply side is currently dominated by YouTube and operator-based offerings but a number of media houses and independent content providers have also started offering D2C apps, share of which is expected to pick up with 4G.

  • Consumption of entertainment content (film, TV, and music videos) drives around 90 percent of video traffic.
  • Education content comprising video-based tutorials and health content are also gaining traction.
  • Video on mobile can be accessed through three channels - WAP sites, operator's portal, or D2C apps.
  • The first two channels drive consumption of short-format (1-3 minutes) content while the third channel drives consumption of long-format content.
  • Short-format content is consumed over both 2G and 3G but long-format content is primarily consumed over 3G only.

Social Networking. Consumption is driven by high levels of user engagement clubbed with increasing adoption across technologies including 2G and 3G.

  • Favorable demographics in India has made it one of the largest social networking markets globally.
  • Driven by high levels of user engagement and high penetration within the mobile internet base, Facebook is one of the key drivers of data traffic.
  • Technology is less of a barrier for adoption of social networking compared to other categories like video and audio. A large share of Facebook users is on 2G network, especially outside metro circles
  • Increasingly, users are relying on social networks to consume daily news and information and breaking news. For some of the emerging news portals, over 50 percent traffic is sourced from social networking sites.

Going forward, the role of 3G and 4G will be relevant as adoption of video-based content with features such as auto-play and video-based ad formats will increase.

Communication. Instant messaging (IM) adoption, driven by high smartphone penetration as well as very high levels of user engagement, is driving traffic. Communication apps are evolving to a platform-based approach that enables the app to be used for multiple purposes, including gaming, advertising, payments, and providing customer service to businesses

  • Increasing smartphone penetration is driving shift from SMS to IM services
  • Currently, adoption of IM apps is much higher than VoIP and video calling.
  • Users in the age group 15-35 years have 20 percent higher usage compared to other users.
  • Average usage in India is in line with global benchmarks of 18 minutes, 11 per day spent by an average user on WhatsApp.
  • Increasingly multimedia content such as pictures and video-sharing within IM apps is further driving their share of traffic.

Others including browsing, search and news and information content.

Mobile contributes around 60 percent of the news and information content consumed currently and this is expected to grow exponentially in the coming years.

Mobile growth will be driven by semi-urban/rural population, which will drive consumption and the ecosystem around vernacular content.

Going Forward

Strong growth in data traffic is expected with increasing adoption of 3G services, aggressive LTE launches, and increasing data consumption.

  • A maturing and affordable 3G device ecosystem across circle categories supported by an aggressive push by operators on expansion will drive 3G service adoption.
  • With evolving device support for 3G carrier aggregation, operators could potentially offer DC-HSPA as a substitute for LTE in some circles in the short term.
  • The LTE device ecosystem is evolving at a rapid pace across bands, which provides a launching pad for operators as they continue to roll-out LTE commercial services in the coming year.
  • Video content will continue to drive data consumption on-the-go and throughputs offered by LTE will increase the share of long-format video content through D2C apps.
  • Communication and social networking content will be instrumental in adoption of data services and increasing availability of multimedia content on such apps will drive traffic.
  • The ecosystem around vernacular content is expected to improve as the mobile Internet penetration goes deeper into semi-urban/rural India.

 

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