India at the spotlight
India’s booming mobile landscape has been recognized as one of the main forces of mobile industry worldwide according to the latest Ericsson Mobility Report. Due to it’s big population and it’s late start, mobile economy has recently started to flourish, and the numbers are impressive.
As the report shows, only in the first quarter of 2017, India added 43 million mobile subscriptions, almost 20 million more than those in China and almost 5x than those of Africa. India’s new subscriptions were about 40% of total mobile subscription worldwide. As for the near future analysts remain optimistic, estimating that they will increase by 4 percent per year, exceeding 1.4 billion in 2022.
Towards to mobile broadband
GSM remained the dominant technology in 2016, accounting for over 70 percent of total mobile subscriptions. However, the number of GSM subscriptions has decreased since 2015 to be surpassed by WCDMA/HSPA in 2020, which will account for around 40 percent of subscriptions by the end of that year. On the other hand, LTE and WCDMA/HSPA technologies are together expected to represent 85 percent of all Indian subscriptions by 2022.
Deployment of mobile broadband networks and smartphone adoption are recognized as the driving force. In 2017, smartphone subscriptions in India are expected to represent around 30 percent of all mobile subscriptions. By 2022, this number is expected to reach over 60 percent. By this time, smartphone subscriptions are set to reach 890 million, and data traffic per smartphone to reach almost 11GB per month, almost triple than this of 2016. Analysts expect that key driver will be the increased smartphone penetration in rural areas.
Consumer loyalty and connectivity
One very interesting note of the report is the fact that mobile broadband experience in India is five times more effective in driving loyalty than tariff structure and pricing. “Studies have shown that improving network quality also increases the perceived value for money – without the need of lowering tariffs” analysts add. Also, mobile broadband experience is also twice as important as voice experience in India, as smartphone and mobile broadband users are younger and care less about voice service than mobile data.
Another interesting aspect of consumer’s behavior is also noted at the report. For the Indian smartphone user, loyalty to an operator and active preference of the same operator are not necessarily the same. Loyalty refers to the recommendation, preference and intention to stay with operators. Connectivity issues such as lack of coverage, voice call drops, and poor quality video calls have an impact on loyalty and the user’s intention to stay with the mobile service operator. Those who face a high number of issues (11 or more per week) are roughly two times more likely to contemplate switching operators compared with those who do not. Smartphone users are more likely to stay with their current operator than feature phone users, due to the perceived cost, time, difficulty or inconvenience involved in switching. A lack of customer defection does not necessarily indicate loyalty. As new apps continue to emerge and usage behavior evolves, network performance will play a more important role in determining smartphone users’ loyalty towards their operators in the future.
Operators on the other hand, can consider meeting the expectations of smartphone users to not only drive recommendation, but also to encourage active preference.
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