India-Bharat divide and enablers in personal data revolution

India is the fastest growing big economy in the world right now and among many enablers and outcomes, internet revolution, or to say more specifically, ‘personal internet revolution’ is an intricate mix of reality and hype.

With two-third of the Indian population below the age of 35 years and more than half of it belonging to the Millenials (born between 1980-2000); smart-phone tusnami backed personal internet revolution could never have been possible without this big chunk. The mobile internet users in India are estimated to be more than 350 million by end of June.

But among these generalist claims and macro statistics, the intricate mix of hype and reality on the ground is quite easily ignored. This mix and its immense quantum in terms of differences, is what will drive the future of data revolution, which has been ignored as suited for the present hoopla on the subject. This intricate mix, which many may call a divide between India and Bharat (for various social and commercial subjects), is however, not a destructive force or a warning for future. It is rather a huge opportunity, waiting to be exploited and rode upon with success, if only, we accept and appreciate this divide. What else would you call a situation where the phenomenal growth has been rendered without even appropriately involving a huge chunk of population(Tier-3 and below have less than 30% of mobile internet users). The personal data revolution is not a nation’s or service provider’s success story, as yet. It is an astonishing but very limited outcome of narrow commercial business plans, meant to pluck the low hanging fruits only.

Majority of online traffic, heavy social media engagement (videos, video chats etc) and online commerce is still limited to top metros and tier-1 cities. The usage adoption in tier-III cities and below has been fast but with interesting riders in terms of adoption, usage and upgrade. This means that the personal data revolution achieved so far is encouraging but constrained and the next wave of revolution will have to come from smaller cities, towns and villages. Are service providers ready to tap these markets?

Below are some basic differences in the consumer profile and consumption patterns in geographical areas which have not been perfected by the data revolution champions. Without understanding these in detail, the ‘personal data revolution’ can never be extended to the huge chunk which is still waiting for that precious network signal without the need of exchanging their precious fortune.

Following insights among others, were particularly interesting to understand the profile and consumption patterns of the internet aspirants of ‘Bharat’s Millenials’ -

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• Smart phone/Tablet is the next big purchase for majority of the feature phone owners, for the sole reason of being able to browse data
• Smartphones have made inroads but not as conspicuously as in bigger cities, with balanced mix of local budget brands like intex and Lava, cheaper Chinese handsets and mid to upper brands like Micromax and Samsung
• For majority of data users, current data expense is between 100-200 Rs. In some cases this is more than monthly voice/sms expense.
• 2G is predominantly used for internet consumption, for the sole reason of it being cheaper than 3G
• Users are brand agnostic and switch internet and voice service providers based on value offered(based on temporary promotional offers). Dual sim phones have helped this trend.
• Social (WhatsApp, FB, Chat) is the major traffic generator, while Travel/commuting is catching up
• Almost 80% of respondents were dissatisfied with the 2G performance in terms of speed and also questioned value for money against 3G (Approx 1 GB plan for 3G is 250 Rs and for 2G is 175 Rs)
• Only reason to not switch to 3G in spite of inconvenience and dissatisfaction over 2G services, is cost
• An alarming trend that came out was that just like their metro-cities and Tier-2 cities counter-parts, Smartphones are becoming an addiction with majority accepting to check the phone the first thing in the morning and the last thing in the night. Many accepted to have developed a habit to sleep at night while checking phone, as compulsion.
• In order to restrict the cost of data consumption, following methods are widely adopted –
• Visiting college and school libraries, shopping malls etc where WiFi is available
• Almost always try to share app between friends through tools like Xender and Appshare  rather than downloading
• Avoid downloading heavy apps to save data
• Avoid updating apps in spite of reminders till it is unusable, often ditch the app if is not considered worth of spending data to update
• For almost half the users, data consumption is sporadic, by keeping the data turned off and switching on only when intended to use(chat, check facebook, check/send an email etc)

                      

 
      There are various insights that can be drawn from the above results but clearly only two factors drive data consumption in the smaller cities and towns – Cost and internet speed.

It is incorrect to assume that the customers are agnostic about the performance of the service just because they continue to use it. They are constrained by the pocket size and the marginal value offered by the service for every extra rupee spent. In many case the experience with 3G services had not been so significantly different from the experience these customers have had with 2G services, so they have developed a mindset that there is no actual difference between the two and hence continue to use 2G despite having ability to pay for 3G services. This is a technical and infrastructural issue where the service provider is unable to provide the premium experience despite charging higher amount.

‘Bharat’ is eagerly waiting for the Service providers to take cognizance of the ability and revenue strength of this segment, it is the providers who have to respond to this opportunity, but not with slight tweaking in their services designed for the metro-customers but design services keeping in mind the user profiles and consumption habits of its inhabitants.

  Jio with its aggressive plans in terms of costs and services has all the elements to woo this segment and if it can deliver superior services with lesser cost, they will embrace it wholeheartedly. However, hard companies may try, this segment remains a brand agnostic one and better value offering will always win.

Jio’s aggressive stance will surely influence and drive others to look at their pricing and product strategies and quite possibly reduce their own offering prices, if not match it with Jio. In either case, entry of Jio into the segment will, inadvertently, as part of its aggressive competitive tactic, address the issues ‘Bharat’ customers have been having and as a positive outcome will contribute to the next wave of personal data revolution.