It is almost a decade since mobile telephony commenced in India – and it has been an eventful period. Call rates have nosedived and the tariff structure has turned on its head. And from a restrictive duopoly we now have four or more operators per circle. More calls, more customers, more operators, more services—and narrower margins. In such a scenario, telcos have been compelled to take a re-look at their revenue streams and while voice is still where the money is, a discernible shift to data services has already taken place. Accordingly, the phenomenon has seen the birth of several application service providers (ASPS) specializing in providing Internet-to-mobile solutions. Mediating between content providers, this B2C players are playing a determining role in popularizing data services.

Chirag Patel, head honcho of Net4Nuts, the Ahmedabad-based mobile messaging solutions company, says: “Mobile operators today are facing falling average revenue per user (ARPU) because of voice service price wars and these markets need a movement to data services to increase business opportunities. While telcos are experiencing significant growth, they are also facing fierce competition as tariffs are lowered to win more customers. The subsequent churn is reducing profit margins despite the increase in customer retention is now a vital ingredient in successful network. The way out is to offer more added value services (AVS) in the form of data”.

Most telcos agree that data services are going to be important revenue stream in the days to come. Sukanta Dey, chief marketing and commercial officer for Idea Cellular, says: “Globally data contributes 7-20 per cent to the revenue of telcos. The same trend will follow in India, where we will see a major upswing in data revenue in the next 12 months.” F.B. Cardoso, CEO of BPL Mobile, agrees. ”In the current scenario AVS (non-voice/data services) do not contribute much to service revenue. With voice revenues coming under pressure worldwide, operators are increasingly focusing on new applications other than voice to generate revenues. As a result, non-voice revenue is going to contribute more than 15-20 per cent of the total service revenue in the days to come.”

As of now, however, the Indian Cellular services market is primarily driven by voice tariff, with data services accounting for a minuscule 2-4 per cent. Peer-to-peer SMS service forms the bulk of these data services have been launched by all national operators, Hutch vice –president (corporate marketing) Harit Nagpal believes that the share between voice and data traffic is unlikely to change significantly, at least for the next year. “ Of course data service as a revenue stream is going on grow multifold—video downstreaming, picture downloading, Bollywood clippings, etc. These services will take a much greater space than the current SMS service, which only consists of 150 characters. Accordingly, the data pie will go up in overall mobile revenues.”

While the industry is bullish on data as a revenue stream, a look at the forms of data services available and the shape of the things to come reveals that the future of data services lies in the integration of various applications into the subscriber’s business and work requirements, as well as entertainment demand. Atanu Mandal, MD and CEO of Cellnext Solutions Limited , the mobile Internet solutions and services company of the Escorts group, says: “ Data services will also driven by the mobile workforce, which is the hallmark of several sectors. The main drivers of data services include sales executives, people in multilevel marketing, field technicians, delivery staff, and workers in the areas of healthcare, retail, manufacturing, etc.” Pankaj Sharma, DGM (marketing) of Essar Cellular, says: ”The success of data service also depends on how efficiently we are able to establish and market MMS. I forecast 4-5 per cent contribution to total revenue by data services by the third year of their launch.”

The contribution of middle ware companies to the enhancement of data as a revenue driver is also going to be critical. Says Patel, “ASPs in India are more than ready to face the data service challenge. We at Net4Nuts, for instance, gained global credibility with our first offering, AVTAAR, which enables delivery of personalized data over a host of devices like a browser, mobile handset, PDA, or fax. In keeping with the demand for data services we are now offering comprehensive messaging solutions. For instance we have e-sms, which is a marriage of the killer application of the internet, that is, e-mail, to the killer application of the mobile handset , that is, SMS. Accordingly, subscribers of telcos can send e-mail in the form of an SMS or SMS in the form of an e-mail. We are also providing the facility of sending SMS and e-mail in multiple languages. Besides, we have g-sms, which is a group messaging facility and can take the form of one-to-one, one-to-many, and many-to-many. We also have a bulletin board service that enables business and commercial outlets to keep in touch with target customers.”

For ASPS, creating end-to-end solutions for enterprises has largely meant focusing on the messaging domain and delivering messages to the mobile. Atul Saran, country manager for EFI, which recently acquired unified messaging pioneer Unimobile Electronics, says: “Our Unimobile platform allows complete management of all mobile services and delivers messages to mobile users on their mobile devices through the Unimobile Intelligent Network. Industry segments that we have had successes in include the financial segment, travel/airline segment, media (print and television), and hi-tech, with horizontal applications including field service, corporate communications, sales force automation, marketing campaigns, etc.”

Moreover, in the coming days, the mobile workforce is expected to expand and almost all industrial and corporate segments are likely to swell the ranks of this army. “This workforce has a critical need to access data while on the move. Fortunately, with the advent of GPRS networks in the country, enterprises are now evaluating how they can have smarter mobile devices with more data management capabilities. Limitations of space and content are in the process of being addressed,” says R. Ravi, CTO of Air2Web.

The advent of more and more sophisticated versions of the existing GSM technology, plus altogether new technology, is also enabling telcos to provide greater clarity and congestion-free network conductive to a greater data flow. Says Sharma, “Technologies like GPRS and EDGE also enable customers to send and receive data at a faster speeds. In India operators are already moving to GPRS and EDGE networks in place, customers will be using their mobile more often as a computer in order to download pictures and mails and browsing through sites. In addition, enhanced productivity by sales force automation on mobile phones, video clippings, and downloadable games are all on the anvil. The future of mobile telephony will also see m-commerce using payment gateways. In a nutshell, the mobile handset will complement the computer, ensuring more data usage”

Describing the benefits of the EDGE technology, Sharma adds that GSM operators will be able to deliver third-generation mobile multimedia services using existing network frequencies, bandwidth, carrier structure, and cell planning process. GPRS facilitates several new applications that have not previously been available over GSM networks due to the limitations of speed of circuit switching (9.6 kbps) and message length on SMS (150-160 Characters). “GPRS will fully enable Internet applications you are accustomed to using on your desktop, from web browsing to chatting over the mobile network,” Ravi Explains.

In fact, data applications are expected to go one step further. Says Cardoso, “Data will not be restricted to internet content but will also extend to some vertical segments like telemetry and telematics. Telemetry solutions include services like remote meter reading and measurement, while telematics solutions would include services like automatic remote vehicle tracking (ARVT).”

Clearly, mobile telephony today is not what it started out to be and the future is going to be even more exciting. The only rider : can telcos generate volumes to sustain all these next-generation offerings, many of which are already available?