India to drive APAC mobile Internet

Country's emerging 3G networks will become major contributor to region's mobile data services, but heavy competition will drive revenue down for operators, says ABI Research.

Despite its nascent 3G networks, India will become a major contributor to Asia-Pacific's mobile Internet traffic by 2015, based on a new report which noted that the intense competition in the country will drive down operator revenues.

In a report late Friday, ABI Research said that come 2015, annual data consumption in the Asia-Pacific region will be at a forecast 2,400 petabytes, close behind North America, which is predicted at 3,100 petabytes.

Asia-Pacific's mobile Internet is estimated to make up 23 percent of global data traffic. However, its revenue will make up only 14.5 percent of global revenue to form US$80 billion, according to the report.

ABI Research attributed the difference between high data consumption and low revenue to India's emerging 3G networks. The country's 3G spectrum auction ended this May and local reports noted that state-owned BSN (Bharat Sanchar Nigam) and MTN (Mahanagar Telephone Nigam) launched their 3G services last year, while Tata Docomo was the first private operator to live its service when it rolled out its 3G services during the Deepavali holiday on Friday.

Competition for 3G subscribers in the country is expected to be "intense", said ABI Research research practice director Neil Strother in the report.

"With Tata's plan to open 4,000 3G retail outlets and the other private operators to launch by next year, it will be a buyer's market where consumers demand faster speeds, larger download volume, and lower price," he added.

The growth rate of mobile Internet service revenue will lag behind the growth of 3G data traffic volume, said the research firm. Global revenue is expected to increase at a compound annual rate of 15.7 percent, to surpass US$198 billion by 2015. In comparison, 3G data traffic will expand at a CAGR (compound annual growth rate) of 47 percent to surpass 10 exabytes during the same period.

Last month, research firm Pearl Research noted that India is expected to see the most mobile subscribers until 2015, as users start to adopt 3G and mobile services.