In 5 years 4G has become mainstream across India indicating the digital appetite of the nation.

The recently announced Nokia MBiT 2022 report exhibits several insights showcasing how the appetite for BWA (mobile broadband) services is growing evenly across India.

India has always been considered the nation of villages as two-thirds of the population resides in the rural part of the country.  But from consumption economy perspective, the market priority has always been urban.  This has over the years caused an imbalance where every new product or service is made available to the urban cities and then trickles to the rural areas.  Consequentially, while in urban areas people have several options to choose from for a product or a service, the rural population is yet deprived of even one to buy or hire.

Fortunately, the spread of mobile services, especially the broadband wireless access (BWA) or simply mobile broadband (4G) has seen nearly uniform spread across the country.  As per the recent Nokia MBiT 2022 report, the 4G data traffic has grown at a CAGR of 53% between 2017-2021.  This has resulted in India having 742 million 4G subscribers towards the end of 2021, as against 432 million in 2018.  Across the telecom circle categories, the 4G payload contribution as a percentage of total data payload has been 98-99% of the total traffic across these telecom circles.

The two important trends to note in the MBiT 2022 report indicating the ‘mainstreamisation’ of the 4G services are: –

1. 4G payload in the range of 98-99% of the total mobile data payload.
2. 4G payload y-o-y change in the range of 26-36% across the telecom circles.

What is noteworthy is that the y-o-y growth in 4G payload has been the highest (36%) in the category C circles which comprises of Bihar (including Jharkhand), Himachal Pradesh, Jammu & Kashmir (including Ladakh), Northeast and Odisha.  Now this is a eureka moment to see maximum growth coming from states/union territories which are considered smaller and ‘non-essential’ telecom markets from business opportunity perspective.

This trend is very encouraging for the industry at a time when we all realise that affordability of a smartphone is a major impediment in switch from a featurephone to a smartphone in such states/union territories hence impairing growth of the smartphone market as well as paving way for what Mr Mukesh Ambani stated ‘2G Mukt’ India.  Even with this growth, it’s a fact that all mobile subscribers will never become 4G subscribers and 2G network is here to stay for time more than anticipated.  But seeing maximum growth from these regions is a healthy indicator which will further reduce the base of 2G subscribers across the country.

This ubiquitous expansion of 4G subscribers across India has several implications for the digital ecosystem, significant among them being the following: –

• The growth for smartphone devices is going to come from these markets, primarily for new smartphone users.  These circles become important from brands like Itel, Lava, Tecno, Realme and Redmi to focus on.
• The growth is a steppingstone for other smart devices like Smart TV, etc., however, there would be a need for a 4G router to create WiFi zones in homes connecting these devices.  The penetration of fibre as well as other fixed broadband services is still very low in these areas.  Though it has changed in the past few years, very few households will go for a fixed broadband and preference would remain towards a cellular broadband for connectivity.
• The regional content need will further increase.  Among the content formats, video will take precedence than others resulting in extended hyperlocal content creation.
• The regional content consumption will open avenues for hyperlocal advertising and with models like offline-online integration like JioMart, there is huge opportunity to go for digital advertising in such areas.

While all this is very heartening to see, the flip side is the rising cost of mobile services as operators are in the persistent process of improving the financial health as well as the jittery supply chain of smartphones which is making costs unpredictable making it equally challenging to offer something sustainable for the entry level.

4G service provisioning has reached its peak and there isn’t much of opportunity now left to add subscribers with the present ecosystem.  Going by the trend of technology evolution, India is due for 5G and of late we are seeing some positive movements making 5G wax in India soon.  But the challenge of getting all the mobile subscribers on a broadband data service will continue to remain difficult one to solve.  However, even with this phenomenal growth, digital in India has arrived leading to 4Cs of connectivity, communication, content, and commerce.  After, we experienced something like covid-19, another C has been added to it of contingency.

If we just trace this growth of 4G in India and expect 5G to grow much faster than this provided the ecosystem jumpstarts, we might see similar growth being achieved in 3-4 years which means even if India is presumably late on 5G map, it will catch up very fast, like the 5G itself.  That’s good news to end this note on!

This analysis is based on the study of Nokia MBiT 2022 report.  The note is dedicated to my dear friend Prashanth K, who was a veteran at Nokia, and we would connect always around Nokia MBiT report.  Sadly, we lost Prashanth to covid-19.