Sitting in a small room, 250 km from Pune in the heart of ruralMaharashtra, farmer Satish Jagtap swears by the daily price andweather updates that he gets from Nokia's new MajhaNokia service. Itsaves him time and money. But can he rely on those numbers? I trustthe brand. Nokia is the Hero Honda of mobile phones, reliable. Ibought their mobile phone because of this service.
A thousand kilometres away, Aircel is launching its mobileservices in Delhi. Sandip Das, CEO of parent Maxis Cellular, isclear about focus on service. Aircel's TV promo features Indiancricket captain Mahendra Singh Dhoni using his handset to do dealson Yahoo and MakeMyTrip. Dhoni never puts the handset to his ear.Offering reliable data services is how we will distinguish ourselvesfrom the pack, says Das.
Concurs D. Shivakumar, MD, Nokia India, which controls about 65per cent of the handsets market here. It does not matter if theservice does not make too much money, it helps me put my product inthe consumer's hand. Across India, the mobile revolution is passe bynow and is just a matter of tracking the millions. (By the time youwill be reading this, the number of mobile subscribers in India willhave crossed 400 million, making it the world's second-largestmarket.) But this very growth has put the fear of commoditisationinto the hearts of the players. They need a differentiator. Thatdifferentiator is services.
Sending an SMS to a special number or downloading callertunes.Accessing e-mail or Googling with your phone. All these are termedservices.
Voice will certainly remain the main revenue generator foroperators, who are expected to earn a total of Rs 1,50,000 crore in2008-09. Of this, services or non-voice revenues SMSes, datasubscriptions, caller ring-back tones et al will fetch only aroundRs 10,000 crore. Yet, services will be the driver by which handsetvendors and operators will try and rise to the top of a very cloudymixture.
Rural raga, urban pop
Nokia's MeraNokia (Majha Nokia in Marathi) is actually a NokiaLife Tools (NLT) application coded into the 2300 and 2323 handsetsbeing used in the pilot. Farmers and villagers pay around Rs 2 perday, every 10 days, for the latest on crop pricing, weather, farmingtips, among other things. All this is freely available on the netfor those with PCs and Internet access. For the farmers, the mobileis the PC.
Jagtap, a cereal farmer with a large landholding, explains thatpaying Rs 2 a day makes sense for him: It saves me the hassle ofmaking three, four, five phone calls that cost more, andoccasionally even a bus journey. The prices are accurate .... Buthaving health tips would be a nice touch.
Jawahar Kantilal, Nokia's Head for Emerging Market Services, isextremely bullish about these services. The urban population is wellrepresented in services, usually around the entertainment area, saysKantilal. The fastest growing market across India, Africa, China andAsia was in rural or non-urban areas and these subscribers neededunique services.
He says entertainment is not the first concern of the ruralconsumer. The rural user wants to know: can the device help him inhis livelihood?
That is what we aimed at, says Kantilal, who led the push forNLT. He says the Maharashtra pilot can be easily taken global,particularly in the next major growth area for mobility sub-SaharanAfrica. People want...the device to improve their quality of life,he says. And it isn't just in rural areas that services are takingoff. Ashok Thapa, a Delhi taxi-driver from Nepal who has spent thelast decade in India, wonders why the mobile phone can't be used forelections just like how they vote in the singing contests on TV. Aliftman in a commercial building shows off his latest Samsunghandset, which comes with the soundtrack of Aamir Khan's Ghajini.
The mobile phone has moved from being a simple communication toolto an all-round entertainment and information device thanks to suchservices. People will pay for a service which they find convenientand one that adds value to their device, says Anshul Gupta,Principal Research Analyst for Mobiles at Gartner.
Balika Vadhu? Information Services Mobile Farmer
There could be problems for Mobile TV, because the rules aroundthis are very fuzzy
Several rival technologies exist and one is even being piloted inDelhi (DVB-H)
Other systems where you can download and watch TV clips have hadlimited popularity
Broadcasters would also want a piece of the pie and make moneyoff mobile TV
You can get everything from cricket scores to Bollywood gossip torandom jokes with all these services costing between Rs 10-50 amonth
These will be incremental revenues for all the operators andeasily accessible by users, particularly the tech-savvy ones
The problem is that most of this information is available freefor the users who know how to use the mobile Internet
Agricultural services may not be high-tech but can potentially bea big device sales driver
Farmers will get info on agricultural prices, local weather infobased on their location
This service will also allow agri scientists to get crucialmessages across to farmers on weather systems or practices
These services can be bundled with other services such as healthtips, education (English learning) and entertainment (ringtones,videos, etc.)
Serve or Die
But how many and what types of services can the present mobiletechnology both handset and network support? Services are beingenabled increasingly by more and more powerful processors onboardmobile devices. While numbers from Gartner classify only around 10per cent of the 1.2 billion handsets sold in 2008 as smartphones ,Shivakumar believes that there are no more dumb phones . When peoplesay that the mobile is a computer, it is. It is a computer, acamera, an alarm, everything.... These are immensely capabledevices.
Service provider Idea Cellular sees psychographics insubscribers. There are three psychographics under which you canclassify all mobile users productivity, convenience and safety,argues Rajat Mukerji, Corporate Director, Idea. We have backedNokia's service because we feel that that it is the second aspect,convenience, which will be the big selling point in rural India infuture. And once that is established, people will see that mobilesare productive also as they can enhance livelihood.
The Differentiator
The rush to get into services cannot be explained by the need tomake money, says Gupta, but to increase sales of core offerings.According to Simon Beresford-Wylie, CEO, Nokia-Siemens Networks, thebusiness of pipes , i.e., plain vanilla products, will exceed $1.2trillion (Rs 60 lakh crore) this year globally. The current estimateof $100 billion (Rs 5 lakh crore) in mobile services annually is adrop in this ocean but it is not a number to be scoffed at,particularly since India is expected to lead the servicesrevolution.
Services are helping push sales at Nokia. Obviously, saysShivakumar when asked about increasing handset sales. Thedifferentiator I can offer on my N-series devices will be NGagegaming, on XpressMusic phones will be Comes With Music (CWM) and onlow-end rural handsets it will be NLT. The service is what will makepeople buy my device. The same applies for operators, as exempliedby Aircel. I don't feel that there can ever be a onesize-fits-allapproach to services, says Das. I do not think that is what Nokia,other operators or third-party players are doing. We have been verysuccessful with data services in Malaysia and almost a third of ourrevenues are from services and in India we want to play a role theretoo.
Mera Nokia is not unique; similar services are offered byoperator Airtel and news agency Thomson Reuters. Airtel runs it in adeal with a fertiliser company, while Reuters Market Light alreadyhas 100,000 subscribers in Maharashtra and Punjab. But thiscompetition highlights the problem in services. Every stakeholder isfighting for a share of the pie.
Cost conundrum
Hugo Barra, Group Product Manager, Google Mobile, believes thatit will be a healthy ecosystem where everyone will co-exist.Operators, vendors and service providers will need to work together.
There is no point having services for free, like we do, if itcosts a lot to access them over a network like it does in India. Henotes that in most parts of the world, cheap access plans havepowered data usage from mobile devices, and says that India, too,needs to move to such a regime. In the US, the inflection point fordata usage came in 2007, when unlimited data access plans tumbled to$5 a month (in India fully unrestricted data plans cost Rs 499 withmost carriers).
Barra brings up the biggest bugbear of mobile services: theservices that have done well until now have been low-data ones. EvenNLT is a service offered over SMS rather than the Internet. Typicaldata charges on mobile networks are 10 paise for 10 kilobytes, so itcould cost Rs 40 to download the typical four megabyte MP3 musicfile.
But operators have not cut rates: according to them, it has lessto do with fleecing the customer and more with the network itself.The fact is that today voice still accounts for 90 per cent ofrevenues and subscribers are being added at a fantastic pace and youcan't refuse to take on a subscriber. So, in order to ensure voicequality we have to keep data access limited, says a spokesperson forone of India's largest mobile operators.
Wait for 3G, Sir-ji!
Until now, services that have done well have usually beenindependent of the requirement for a data network. Caller ring backtones (CRBT) and SMS updates do not clog the network. However,Vineet Taneja, Head of Marketing, Nokia, is betting big that 3Gnetworks will give services a fillip, none more so than Nokia's CWM.The idea is simple: the cost of music is built into the handset andusers can choose the music they wish to download. But the servicewill require a decent download experience, and that means 3G. Iguess that if such a service comes along, Nokia will be and istalking to operators so as to enhance the download experience, saysthe spokesman for an operator.
Taneja has his hands full launching a whole host of otherservices, those that will integrate the mobile even more thoroughlyinto people's lives. However, there have been some hiccups. Nokia,which acquired maps provider NAVTEQ in 2007, offers free navigationfor a few months with its high-end devices but has not been able tolaunch a paid service for navigation or for its games platform, N-Gage.
Taneja admits there have been issues of pricing and distribution.You have to understand that one cannot just have one system inIndia. Many of the kids who will use N-Gage may not have creditcards, so to buy the licence we would like them to walk into mobileoutlets and buy the game over the counter. With navigation we haveto figure out pricing as well as get more comprehensive maps. ButTaneja did admit that something big was around the corner. I stillfeel that navigation and location services can be a major driver inIndia, he says.
Not all of Nokia's competitors have a strong services-led ploy:The No. 2 in the Indian market, Samsung Mobile, believes thatdevices will still be sold on the strength of their features. SunilDutt, Managing Director, Samsung Mobile India, points out that untildata costs come down and reliability improves, India may not be astrong services market. We have moved into offering services inmature markets such as Korea and the US. I still believe that Indianconsumers want their devices to have top-class features. I am notruling out services, I just do not think the time is right just yet.
Pied Piper's plight
That is an opinion echoed by Google's Barra. People will not wantto pay for services that they can get for free, and the serviceswill be free because there is a massive opportunity for advertisersto come onto the mobile platform. This is still untapped, thanks tothe proliferation of location information, specific advertising, andI mean non-intrusive advertising can easily come onto the mobile.The mobile will also lead to a whole host of unique services. We areabout to roll-out a voice-activated mobile search.
But the real reason Nokia is getting into services is not aboutmaking consumers lives easier or earning incremental revenue. Nokiahas pushed into services in a big way across the world with its Ovi(Finnish for Door ) platform, and the amount Nokia can suffer whencompetitors launch services globally is highlighted in its massiveerosion of smartphone market-share as competitors launch new,services-heavy devices. Apple's success in the smartphone space injust three years it has grabbed an eight per cent share almostentirely at Nokia's cost rides on its Application Store, whichsells, you guessed it, services.
The stand-alone product era is over. The new game is product plusservices. The devices will be the rock on which we will build oursolutions, says Nokia's Shivakumar.
The Music Is Free
Where Are You?
Mummy! Pizza!
Users will be able to download unlimited music tracks directlyfrom their phone for 'free'
The price of the music rights would be included in the price ofthe handset
Consumers could also buy music tracks at mobile retail outletsfor
Rs 5-25 per song
Users could listen to music on demand by dialling a specialnumber
'Digital Rights Management' might be an issue
Devices already come with maps and navigation; applications pre-installed but maps will get more accurate
NAVTEQ is launching maps for 50 Indian cities shortly from theeight cities currently covered
Maps and navigation will not only help lost drivers, but alsooffer advertisers new avenues to reach to consumers
The maps will be free, but navigation services will cost Rs 50-250 a month
Imagine calling a number saying 'Pizza' and the device tellingyou where the closest pizza parlours are. It is coming soon,courtesy Google
You can also use your handset to access your e-mail for free
You could also stream videos live to the Internet from yourmobile device or watch them on services such as YouTube
But data plans aren't cheap at Rs 299-999 per month
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