Digital Transformation of India

Later this month, I will be traveling to India to meet with customers and connect with our Cisco Service Provider engineering teams. I always look forward to my trips to India. Each time I return, I find myself in awe of the pace of technology adoption in India, in general, and in particular, the rate of smartphone adoption. The numbers are truly staggering. In 2016, the number of smartphones in India grew 50%, reaching over 359 million. If you want to see how pervasive mobility is disrupting traditional business models, look no further than India as a case study.

Urbanization, advances in technology, and fundamental regulatory transformations are paving the way for greater economic advantage and increased consumerization for the people of India. Mobile phones are ubiquitous, there is a booming content and entertainment industry, and India is at an inflection point for countrywide digitization. We like to use words like revolution, transformation, and disruption when talking about technology adoption. India is experiencing all of this – at breakneck speed – and it is not slowing down anytime soon. Though heavily influenced by layers of policy, local markets, and history, there is no doubt that India is a market that presents tremendous opportunity for video, mobility, and digitization, for those that are agile, invested, and have the right mobile strategy.

Mobile First

In 2016 alone, 119 million smartphones were added to the mobile network in India and mobile data plans are now providing speeds that rival those of some of the best carriers in the U.S.  Reliance Jio, an Indian mobile network operator, made headlines a few months ago when they announced the launch of their 4G network across India, free to consumers for the first few months. As you can imagine, this caused major market disruptions for both consumers and Jio’s competitors. Consumers flocked to Reliance Jio; a record-breaking 100 million new subscribers added in the first 170 days. And Jio is not done yet… Matthew Oomen, President of Network, Global Strategy and Service Development, is committed to extending the Reliance Jio and Cisco partnership to achieve double the current subscriber capacity over the next 6-8 months. This comes as Jio also announced that it doubled download speeds across the 4G network . The average download speed on Jio’s network is a screaming 16.5 Mbps. This is a win for Jio, a win for Cisco, and a win for millions of consumers in India who now have reliable and affordable mobile IP connectivity.

Beyond Bollywood

So what does one do with a smartphone and a great data plan? Watch video, of course.  Entertainment is big business. Video will account for half of India’s mobile data traffic by the end of 2017, and will make up 75% of India’s mobile data traffic by 2021. Consumer attitudes are changing and demand for high quality, relevant content is growing. Currently, there are more content providers in India than anywhere in the world, and demand for high quality, diverse, user-centric content is growing at unprecedented pace. India is still a very long way from market saturation, and competition for subscribers is fierce. Netflix launched in India in January 2016, and there are currently 25 other OTT providers serving this market. Often, OTT applications are bundled into the mobile carrier’s premium data packages, providing an uptick in ARPU for the service provider. The flood of providers into the market is setting the stage for a competitive OTT war and more carrier and content provider partnerships. It is worth mentioning that this market is also currently battling rampant content piracy. Bad news for pirates, DRM is the new black, and Cisco is working in partnership with multiple DRM companies and Service Providers to protect content and ultimately, revenue for the industry.

Cable Digitization: Under Construction

Indian cable providers are in process of transformation as well. The government of India laid out a strategy starting in 2011 to convert all cable television networks in the country from analog to digital in four phases, starting with major metropolitan areas. Moving to digital creates a paradigm shift for Indian cable operators; digital video takes up less frequency space in the spectrum, opens up the opportunity for two-way communication, and creates capacity to add more channels, and higher quality video. The plan was to have the entire country moved to digital by 2014, but delays, litigation and cost overruns have pushed the deadline back considerably. While digitization is ongoing, the push for digital cable has already created more options for premium channels, and is driving incredible growth in digital advertising.

An Eye to the Sky: DTH

Cisco is currently in a dominant position across the Pay TV spectrum – we count three of the top four DTH providers in India as our customers. As the cable conversion continues, we’re seeing that 30% of customers converting from analog are becoming DTH customers. While cable still dominates the pay TV market in India with 70% of subscribers, DTH has a growing number of new subscribers and a higher ARPU.

India is at an inflection point for countrywide digitization and transformation which will forever change how and where Indian consumers access content, creating opportunities for innovation in this rapidly evolving ecosystem. Cisco has been in this market since the beginning of this revolution. Together, with our Indian customers, we will continue to co-innovate to offer consumers high quality experiences in this exciting and dynamic landscape.