Carrier billing in India2015 market report by Fortumo

Photo Author: Tfeayush

Carrier billing in India 2

IntroductionThis market report gives an overview of the carrier billing landscape in India. India is the fastest growing smartphone market in the world where less than 20% of people have access to bank-based payments (credit and debit card billing).

The data in the market report has been gathered from various public sources as well as Fortumo’s internal spending data from web payments done on desktop devices, smartphones, tablets and feature phones.

For digital content merchants, using alternative payment methods such as carrier billing is inevitable in India as most users do not have the ability to pay for content otherwise.

Credit cardpenetration

4.2% 22%Debit cardpenetration

70.3%Mobile phone

penetration

18%Smartphone

penetration

18.9%Mobile internet

penetration

Population: 1237 million

Median age: 27 years

Smartphone market growth rank: #1(2015 estimate)

GDP per capita: INR 3.89 lakhs ($5855)(IMF 2014 estimate)

Digital gaming spend: INR 952 crores ($143.2 million)(2014 estimate)

India

Traffic sourceof completed payments

Browser languageof paying users

Carrier billing in India 3

User spending behavior

A majority of digital content merchants are increasingly adapting their pricing to match the income and spending behavior in India. This means the average revenue per user remains lower than in Western markets but is compensated by a significant growth in the amount of people who can make payments. A similar trend is expected to continue in the future as the percentage of the population in India using carrier billing continues to grow.

Based on data from January 1st, 2015 to June 30th, 2015.

Even though smartphone penetration in India is quickly growing, feature phones still account for a majority of online content consumption. This means digital merchants should also make sure their services are feature phone friendly and work on slow data connections. 80% of India's people live in rural areas while data connections are best in urban areas - this means that payments made without the user being connected to the internet should be supported as well (and are available via carrier billing).

India is a mobile-first market with over 80% of payments for digital content coming from mobile devices.

INR 86.9 ($1.3)

INR 60.8 ($0.91)

INR 216.46 ($3.24)

INR 50.8 ($0.76)

INR 35.4 ($0.53)

INR 87.5 ($1.31)

Monthly ARPPU* Average transaction sizePlatform

Web

Android

Windows Phone

* - ARPPU stands for average revenue per paying user, not to be confused with ARPU (average revenue per user). ARPPU is calculated by dividing the total money spent by users with the number of unique users who made payments.

Mobile devices: 88.7%(smartphones & feature phones)

Desktop devices: 8.6%

Tablets 2.7%

English: 95.4%

Others: 4.6%

Carrier billing in India 4

Carrier profilesThe telecommunications market in India is regulated by TRAI. Visit their homepage for more statistics and legislative information about carrier billing and the telecommunications sector in India.

CarrierConnected to Fortumo?

Active connections

Max transaction size

Spending limit

Payment types available

Bharti Airtel

Vodafone

Idea Cellular

Reliance Communications

Aircel

BSNL

Tata DoCoMo

Others (MTNL, MTS, Uninor, HFCL, Videocon)

Yes

Yes

Yes

No

Yes

No

No

No

221M

176M

165M

106M

62M

55M

47M

49M

INR 500 ($7.8)

INR 500 ($7.8)

INR 500 ($7.8)

INR 500 ($7.8)

N/A

N/A

N/A

N/A

INR 5000 ($75) in 30 days

INR 5000 ($75) in 30 days

INR 5000 ($75) in 30 days

INR 5000 ($75) in 30 days

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

One-off payments, assisted subscription

One-off payments, assisted subscription

One-off payments, assisted subscription

One-off payments, assisted subscription

Carrier billing in India 5

Indian digital ecosystemIf you’re looking to enter the Indian market, it is useful to know who else is operating here. Whether you’re looking for a smartphone preload partner, a game publisher to distribute your apps or payment solutions, here is a brief overview of the biggest companies in the digital ecosystem.

Smartphone manufacturers

Game developers

Digital streaming companies

Alternative payment providers

Industry organizations

Micromax

Lava Mobile

Intex

Karbonn

Spice Mobile

Octro

Games2Win

Disney India

Nazara

Moonfrog

Hitwicket

Gaana

Box TV

Ditto TV

Tensports

NextGen TV

Sony Liv

Saavn

Star India

PayTM

Mobikwik

airtel Money

Vodafone mPesa

Oxigen

CC Avenue

Citrus Pay

NASSCOM

IAMAI

Carrier billing in India 6

Customer loyaltyBelow is an overview of how paying customer loyalty spanned out across 6 months in 2015 (March to August) for web-based services. 100,000 paying users on the first month is used as a placeholder while all of the other data shows real payment behavior of end-users in India.

A major cause for churn in India is the popularity of prepaid SIM cards, which are used by 95.6% of mobile device owners. Merchants often fail to take into account that the average amount of money on a prepaid SIM card in India is less than INR 50 ($0.76) while average transaction sizes with carrier billing are around between INR 35.4 ($0.53) and INR 87.5 ($1.31).

charging users incrementally, in smaller amounts for the same service (e.g. in addition to selling 1-month access passes for $5, selling 1-day access for $0.4 ensures lower-income users are able to access paid content as well)

notifying users who have failed to make a payment about cheaper payment options (e.g. if a user has attempted to buy a $5 access pass, letting them know that their payment has failed and they should instead try to purchase a 1-day access pass)

User retention during the first month of usage in India is the key to success: if churn can be minimized during this period, churn drops significantly. A user who remains loyal for 6 months brings in on average 3 times more money per month compared to a user who stops using the service after their first month.

In order to reduce churn for these prepaid users, two features should be applied for online services:

Churn rate & amount of paying users remaining Average monthly ARPPU Revenue

March

April

May

June

July

August

100,000

85.4% (14,600)

61% (5694)

48.6% (2926)

42.8% (1674)

35% (1088)

INR 86.9 ($1.3)

INR 226.5 ($3.4)

INR 194.5 ($2.9)

INR 190.1 ($2.8)

INR 217 ($3.3)

INR 263 ($3.9)

INR 86.9 lakhs ($130,000)

INR 32.9 lakhs ($49,640)

INR 10.9 lakhs ($16,512)

INR 5.4 lakhs ($8192)

INR 3.6 lakhs ($5524)

INR 2.8 lakhs ($4243)

INR 1.42 crores ($214,111)

Additional reading

Carrier billing in Asia: free market report by Fortumo

Infographic: carrier billing spending behaviour & platform preferences in emerging markets

Fortumo’s Emerging Markets Payment Index, Q2 2015

bd@fortumo.comhttps://twitter.com/fortumohttps://facebook.com/fortumo

Fortumo allows any merchant to set up payment processing for web and mobile services, games or apps. Users with a mobile phone are then able to make one-click payments using Fortumo without the need for a credit card: payments are charged to their mobile operator bill instead. Fortumo supports payments in more than 90 countries through 350 mobile operators. Founded in 2007, Fortumo has offices in Estonia, San Francisco, Beijing, Delhi, Mumbai, Singapore and London and is backed by Intel Capital and Greycroft Partners. Get started with mobile payments at https://fortumo.com.

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