The Indian online market is about to explode, and telcos will be able to pursue an unprecedented array of large digital opportunities to drive the next phase of growth. Telecom companies can generate additional cumulative revenues of USD 8 billion and EBITDA of USD 2.9 billion over the next three years, according to a joint study by Google and A T Kearney.
 
With over 155 million mobile Internet users today in the country, India will see a major mobile explosion, as the Internet user base will more than double to 480 million by 2017. It is estimated that in next three years, smartphone penetration will grow six times to reach 385 million people and the number of users who transact online will grow to 160 million.

The study outlines that data consumption on mobile phones will triple, and consumers will be buying five times as much content. This transformation will happen at an unprecedented pace, and can unlock a world of value-creating opportunities for Telcos.
 
Nikolai Dobberstein, a partner at A T Kearney, and one of the authors of the report, said, "Indian Telcos are poised to leapfrog directly into a digital play, since the shift from data to digital will happen much faster in India, as more digital content and services are adopted by users. By FY17, the Indian telecom industry is expected to reach USD 35 billion in revenues, with data revenues growing at over 70% per year till then and new digital VAS streams emerging and growing exponentially. Indian telcos may have had varying degrees of success with digital content and services in the past, but the outlook for these services, as well as digital customer engagement, which can unlock massive opportunity in e-stores and e-care, is extremely positive."

Rajan Anandan, vice president and managing director of sales and operations, Google India said, "Indian Telcos have the opportunity to significantly expand the pie by catering to unmet demand, in online music, video and online recharges. As per our market research, 73% of mobile data consumers would be willing to spend more time online if more entertainment content were available in an engaging format. Similarly, 70% of Internet users have not yet tried online recharges but are willing to try because of the inconvenience they face with traditional channels. We believe, Indian telcos have a great opportunity to proactively create tremendous value by driving a digital strategy aligned with consumer needs."
 
The study outlines that by 2017, data and paid content consumption will double organically to 470 MB data per user per month and USD 1.6 in content revenue per year. Global markets have seen similar shifts as they matured from voice to messaging and from data to digital. Markets like Japan and Korea have taken up to 10 years to move from data to digital, but India is poised to leapfrog as the country has already embraced the Internet, as seen by the massive adoption of social networking and the recent e-commerce boom.