As smartphone shipments gain a critical mass in the country, closer partnerships between vendors, service providers and content developers may be the forward for the telecom industry, say industry analysts. No single entity or group would be able to manage and grow alone in the ever-expanding market, they say.

According to CyberMedia Research, the total 3G phone shipments touched 1.5 crore last year (till November). Twenty-six vendors launched over 224 models contributing 8.9 per cent of the total mobile device shipments in the country. However, in value terms they contributed to more than 25 per cent.

“With the share of 3G phones increasing in the market, the stage is set for customers to experience the benefits of the services. However, right now the user experience on 3G networks is constrained due to network quality issues,” says Naveen Mishra, lead analyst, telecom practices of CyberMedia Research.

“Over the past few years, cricket, gaming, movie clips and music downloads have ruled online and mobile content. Going forward, it is very important for the three-part ecosystem of device vendors, content companies and telecom service providers to invest in creating attractive and relevant content packages for the growing segment of 3G device and smartphone users. The industry also needs to focus on improving the overall user experience by making faster and lighter applications. These measures are expected to help grow data consumption in the country and lead to improvement in Telco ARPUs (average revenue per user).”

Telcos started announcing services such as mobile banking, mobile payments and mobile health over two years ago. However, its full-fledged implementation is yet to happen. It seems to be more of a chicken and egg story. The partners duly shift the blame on the other parties or regulatory pressures.

For example, in the case of mobile payments, mobile gateway providers, telcos and retail merchants have to work together to make the service available to consumers. Telecom service providers and gateway companies complain that merchants are not ready to adapt to the mobile channel. Merchants counter by stating that there are not many users of the service. Customers are yet to see the benefits. The services may fully see the light of day only by the middle this year, says Cheenu Seshadri, chief strategy officer of SSTL, the promoter of the MTS brand. Telcos were ready over two years ago but the market was not conducive then. 3G services have gained traction only during 2011 and hence the delay.

Shaily Shah, research analyst at Gartner says: “Only value-added services including data and internet hosting will improve revenue prospects of telcos. In most mature telecom markets, these value-added services have helped companies to boost their revenue when income growth from voice becomes stagnant. The market is moving more toward non-traditional avenues (apart from voice).”