24X7 entertainment
Video and music on demand is the new mantra. Viewing of new movies over a cable or broadband network, music streaming at affordable costs and all this at the whim of the consumer was one of the most visible trends in 2007.
IOL Broadband has already launched India's first IP-based on-demand television service. IOL Broadband also delivers interactive gaming, video conferencing, an 'e-education' channel and live financial data from the Bombay Stock Exchange.
Besides, with IPTV offering from players like MTNL, Bharti and Reliance, the 'on-demand' entertainment is singing a tune that's music to the ears of most people. Distribution of video-on-demand through cable and broadband networks emerged as a $1.1 billion business this year globally.
Industry experts estimate it will grow 35 per cent annually into a $5 billion business by 2012, taking market share away from DVD retailers. Service providers, like cable, satellite and direct to home players have recognised this shift.
Nevertheless, CDs and DVDs from the likes of Moser Baer at Rs 27 and 34 (less than the prices of pirated ones) in 2007 saw the floodgates of entertainment open up for the masses. Add to this, the five million songs that are now legally available for downloads from the likes of Saregama.
Mobile mania
Indians love to talk. And, these days, they can talk to their hearts' content by paying very little: calls are getting ever cheaper, entry-level mobile handsets sell for under Rs 800, and bundled offers (talk-time and handset) mean you can be connected for next to nothing.
Meanwhile, playing the high volumes game is a threat to operators' margins. Already, the average revenue per user for GSM services is falling (from Rs 316 in December 2006 to Rs 298 in March 2007) and although CDMA ARPU is increasing (from Rs 196 to Rs 202 over the same period), it is still lower than the GSM figure.
It doesn't help, either, that pre-paid customers comprise over 85 per cent of the total cellular subscriber base and account for an overwhelming 96 to 97 per cent of all incremental additions. Typically, prepaid customers run-up lower bills and are a floating population with high churn levels.
The churn will only increase, as will competition, now that TRAI has set up a panel to work out the details for number portability (by which a subscriber can retain his mobile number even if he changes the service provider) implementation.
The government expects telcos to reach the 500-million customer mark (wireless and fixed) by 2010. However, only one in five Indians has a phone. This teledensity (around 22 per cent) comes from an almost 50 per cent penetration in the urban areas and a mere 2 per cent in rural belts.
The potential for expansion in India, then, is immense. And that's precisely what Indian telcos are working on. They are investing billions of dollars -- an estimated $20 billion over the next two years -- to upgrade their networks, add towers, and build their subscriber base.
Telcos are also turning to value-added services. They are betting big on music -- next to SMS, it is the biggest money spinner under VAS. Caller ring back tones or CRBTs, for instance, have a 15-25 per cent market share, followed by ringtones with around 15-20 per cent, while the remaining can be attributed to full song downloads. And mobile data revenues are expected to increase from 7 per cent of the total operator service revenues to approximately 20 per cent by 2009.
The introduction of advanced wireless services like 3G will drive the industry further and may, in turn, increase the subscriber base as well. Already, there are about 1 million subscribers who own 3G handsets, constituting a ready "installed base".
Betting on Wimax too
Wimax is poised to be the next big thing in the world of wireless communication. 3G proponents would, however, differ with this statement.
Nevertheless, with heavy investments in the advanced forms of communication, companies such as VSNL, Bharat Sanchar Nigam Ltd and Mahanagar Telecom Nigam Ltd, Bharti Airtel and even smaller firms like Microsense, jumped on the wireless bandwagon and have started offering fixed WiMAX networks as pilots.
WiMax, is an IEEE 802.16 technology that supports both fixed-nomadic WiMAX WBA (802.11d) as well as mobile WiMAX WBA (802.16e). In India, however, it is fixed WiMax that is doing the rounds.
In simple terms, it is a technology which though tested on fixed lines, will have the mobility option as well, so that the services can be upgraded as and when the infrastructure would allow.
It currently operates in the 3.3-3.4 gigahertz frequency band. Final spectrum allocation has to be done by the government (as is the case with 3G).
Code Division Multiple Access operators like Reliance Communications, too, are offering CDMA Evolution-Data Optimised (EV-DO) or its nextGen 2.5-2.75G wireless networks for hi-speed data and voice access. Even equipment manufacturers like Nortel, Alcatel, Nokia and Motorola are mulling the launch of these services.
'India Broadband Wireless and WiMAX Market Analysis and Forecasts' by UK-based business information provider, Report Buyer, estimates there will be up to 21 million WiMAX subscribers in India by 2014.
Gaming gains ground
The Indian gaming industry emerged in a big way during 2007, right from reduction in prices, introduction of better gaming solutions to more innovative means to lure the gamers. "The market was driven mainly by large players in the industry," explains Rajesh Jain of KPMG.
The Indian gaming segment , comprising mobile, computer and console games and development, which touched Rs 192 crore (Rs 1.92 billion) in 2006, is likely to cross Rs 1,700 crore (Rs 17 billion) by 2010, according to Nasscom.
Microsoft reached out to the gamers by introducing Xbox 360 Elite, an upgraded version of its famous Xbox 360, which was launched in September last year. Its rival in the market, Sony also launched its PlayStation3 in India with the latest blu-ray formatted optical disc drive. Prices however, were slashed soon after, to penetrate further into the market.
The launch of dedicated gaming spaces along with introduction of easy-pay schemes, like pre-paid cards, also came into the forefront during the year. Zapak, which already has 10 gameplexes (dedicated cyber cafes that promote online gaming), will more than double the number in 2008. Sify will use its gamedormes to further the gaming cause.
Dot matrix printers survive
Even as we move on to the fourth generation of printing devices, dot matrix printers continue to be around and in all probability will be in 2008 too.
These first generation printers, used primarily for bulk bill & invoice printing, label & barcode printing, spreadsheet printing, point of sales & ticketing, still score the lowest cost per page (less than 5 paisa/page) that is hard to beat.
Other reasons like, extremely affordable cost, rugged and acceptable print quality in text has the consumers asking for dot matrix printers. According to AMI Research, dot matrix printers continue to enjoy a 29 per cent share in the small- and medium business segment in India.
Social networking picks up
Websites such as Facebook, YouTube, Orkut and Second Life, have probably had the maximum media coverage in 2007. These social networking sites primarily came to prominence not because of their networking functionality, but because they provide many users their first foray into the world of personal publishing. Just how many Indians have created a Facebook page, who would never dream of starting a blog?
Although Indian networks are yet to strike gold, names like Fropper, Big Adda (from Reliance), Yaari, Desimartini and the likes continue to survive in India.
Orkut, which has close to 3 million subscribers from India, is probably the single most popular social site. The question that would probably be answered in 2008 is in how many of these social networks would the user remain active in?
Going green
Globally, Green was the colour and the most popular theme in 2007 wherein corporates took steps to cut down on energy consumption and move to green technology. India generated 3.3 lakh tonnes of e-waste in 2007. It is expected that this will touch 4.7 lakh tonnes by 2011. While much needs to be done some Indian firms did take a few steps in this direction.
A recent study by Manufacturers' Association for Information Technology (MAIT) and GTZ on e-waste said that 94 per cent of the organisations studied did not have any policy on disposal of obsolete IT products/e-waste.
Wipro became the first Indian company to introduce a range of restriction of hazardous substances-compliant (RoHS) laptops and desktops. The range of desktops and laptops that Wipro's personal computing division will be launching will adhere to the European Union's RoHS rules that prohibit the use of substances such as lead, mercury, cadmium and hexavalent chromium.
Wipro topped Greenpeace ranking in a report called Guide to Greener Electronics. The company scored 5.3 points out of 10 whereas HCL, came second with 1.7 points.
Security threats
Driven by financial gain and enabled by easy access to malicious codes, the bad guys are in full swing. Researchers at McAfee's Avert Labs predict that by the end of 2007, they'll track more than 360,000 pieces of unique malware.A staggering 60 per cent increase from last year. Avert Labs estimate that the total number of malware tracked will reach 550,000 by 2008.
India is not far behind. Kartik Shahani, director, sales, McAfee says, "Bots, Rootkits and malware had there presence. But 2007 saw a spurt of activity in phishing. This is significant as in 2006 phishing was rare. The other surprising element in 2007 was no major hacking attack took place.
Every year there is one major attack but 2007 did not see anything major happening." Shahani feels that this trend shows that hackers are no more interested in bringing down systems but are now focusing on generating financial gains.
The Anti Phishing Working Group (APWG), an industry and law enforcement association, stated that while phishing incidents have come down, major attacks against well known banking brands have increased. Financial Services industry continues to be the most targeted industry sector with 91.3 per cent of all attacks in the month of September 2007.
India, with 3.39 per cent, also figured up in the top 10 countries hosting malicious code in the form of either a phishing-based keylogger or a Trojan downloader which downloads a keylogger. phishing-based Trojan allows redirecting end-users network traffic to a location where it was not intended to go to. All of these must be installed with the intention of compromising information which could lead to identify theft or other credentials being taken with criminal intent.
Most-awaited launches
Apple iPhone: The most awaited handset iPhone was finally launched by Apple Computers in June this year. Its popularity can be gauged from the number of units sold. In the first three months 1.4 million units were sold in the US.
At present, the phone is available in US and in some of the European countries like UK, France and Germany. In India, people have been unlocking it illegally and using it. However, software upgrades from Apple could render them useless.
Microsoft Vista: After much delay, five years of work and final twicking Microsoft finally launched Vista operating system in January this year. The product in four editions is available in 18 languages, including Hindi. The price of Windows Vista Home Basic is the same as Windows XP Home (around Rs 3,800).
Unified approach to work
How many times did you lose a business opportunity because you were not available when the prospect called? Chances are that most companies might never find out.
A recent study by Insignia Research for Siemens Communications reports that an average 1,000-employee enterprise, for instance, could lose around Rs 50 crore (Rs 500 million) a year -- solely as a result of being unable to communicate and collaborate with others in real time. With large-size IT companies, having an employee base in excess of 40,000 people, losses could well be in the range of Rs 2,000 crore (Rs 20 billion) annually.
The Siemens study further states that enterprises are wasting roughly Rs 1,35,000 per person, each year, in business travel expenses. If you factor in travel and communication expenses, the data shows an annual impact of a little over Rs 500,000 per employee, irrespective of the enterprise size. In India, analysts estimate that the costs can run to around Rs 2,50,000-300,000 per employee.
Is there a way out of the situation? Integrate all your communication platforms. Unified Communications or UC, as it's known in the industry, promises to do just that. Analysts tout that UC will transform business communications the world over as fundamentally as e-mail did in the 1990s.
It will shorten deployment time, reduce costs, leading to increased revenues and enhanced productivity. In India, companies that are testing and implementing UC solutions include not just the high-tech IT and BPO firms, but also banks or public service facilities like airports.
Among the early adopters include, Mumbai International Airport, FMCG goods company Marico, IT major Wipro, South Indian Bank, aluminium major BALCO and business houses like Godrej to name a few.
Additional reporting with Priyanka Joshi, Shivani Shinde and Ishita Russell
