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  • The world of mobile Internet for investors

    Article by Rajeev Thakkar in Live Mint, July 14, 2014

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    With e-commerce attaining mega scale, the longer term trends in mobile telephony and Internet access promise to be interesting.

    The world of mobile Internet for investorsNewspapers may see an increasing proportion of readership coming online as compared to the print medium. Photo: Priyanka Parashar/Mint

    In investing, it pays to separate the signal from the noise. At a time when the media is full of budget-related hype, it may be rewarding to look at some of the longer term trends out there. One such trend is in the mobile telephony and Internet access space. Let us look at some of the facts and try to gain some perspective from them.

    • Incumbent mobile phone companies are looking at 2G and 3G data as the next drivers for revenue generation.
    • Reliance Jio Infocomm Ltd has announced a Rs.70,000 crore investment plan for 4G Internet services.
    • Google Inc. has announced the launch of smartphones called Android One in partnership with manufacturers where the cost will be less than Rs.6,000.
    • Prime Minister Narendra Modi has plans to create a broadband highway.
    • Rajan Anandan of Google India mentioned that Flipkart sells more electronics than all the Croma stores pan-India put together.
    • A journalist with a business daily when questioned about the shrinking stock market pages in the daily replied to me, "Who checks stock prices in the newspapers anyway?"
    • IRCTC, or Indian Railway Catering and Tourism Corporation Ltd, is the biggest e-commerce site in the Asia-Pacific region. It transacted revenue of Rs.9,498 crore in 2011-12 and the number of tickets sold that year were 1.16 billion. The numbers would have only grown since then.
    • This blog post itself will appear online. The readership of this post will depend upon whether it is interesting enough to spark sharing and comments on social media. It will not appear in print at all.
    • The Web is no longer about English. One can use a variety of Indian languages on sites and apps like Facebook, Twitter and Whatsapp.
    These facts have serious implications for investors. One has to just look at what has happened in the Western world to understand the implications.

    • Media will see dramatic changes. Newspapers may see an increasing proportion of readership coming online as compared to the print medium.
    • Advertising will change dramatically. Job ads could move to job portals, ditto with matrimonial ads. Classifieds could move to sites such as Olx, Quikr and others. Newspapers will have to learn to live with lower print advertising.
    • FM radio could be under threat. The new radio is an app on the phone which streams customized music, and not an FM channel. We already have plenty of these—Savnn and Hungama being examples.
    • With set-top boxes providing recording facility, live television viewing could get restricted to news and sports categories. Television serials and movies will increasingly get recorded and viewed later. A corollary is that ads will be skipped and not watched. People may also stream these programmes over the Internet rather than watch it through the cable or DTH provider.
    • The big battle between kirana and traditional shops on one end and modern, organized retailers at the other end will get more intense with the entry of a third segment, namely e-commerce players.
    • Credit and debit card usage and business volumes of logistics companies will see a huge upswing.

    So, stay tuned for interesting times!

    The original article could be seen here.

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