Study says mobile content ready to explode in India

Boston Analytics says market size is 100 million cell phone subscribers and growing at rate of 50 percent a year, making India the next big mobile market

Boston Analytics, a market research firm, all but said to U.S. mobile application developers and other content providers, "Pack your bags and move east," but to India, not to the east coast.

The reason, according to the report released on Tuesday called "A Study of the MVAS (mobile value added services) Market in India," is that India has 100 million cell phone subscribers plus a growth rate pegged at 50 percent a year, and a highly favorable regulatory climate that makes the country potentially a huge market for mobile content.

In addition to favorable legislation and a decline in tariffs, the commoditization of mobile phones has grown along with a growing middle class that has discretionary income to spend.

The Boston Analytics report is predicting a 50 percent compounded annual growth rate in the MVAS industry for the next two years.

While there are plenty of U.S. and European mobile companies in India today, the next growth area will be in content delivery, according to Rashid Bilimoria, CEO and co-founder of Boston Analytics.

What users will want is mobile Internet access, location-based services, gaming, banking, and mobile e-commerce.

"Mobile telephone has reached the rural areas, but in India, banking is not there yet, and mobile is the perfect solution to serve this unserved market," said Bilamoria.

However, while outsourcing and offshoring to companies thousands of miles away has put India on the high-tech map, Bilimoria says mobile application developers need to be on the scene.

"If you are going to be in the content provision space then, being local is surely important because with 20 regional dialects and five sets of languages, you need to be sure the content is localized, especially for e-commerce," said Bilamoria.

The market appears ready to explode, says Bilimoria, but there are still a few issues that must be resolved.

"There needs to be more IP (intellectual property) protection. You don't have that, and it is hard to make money without it," said Bilimoria.

After that, there is also work to be done on the technology side. Wireless is still not up to current 3G performance standards required for data intensive m-commerce applications.

On the plus side, said Bilimoria, culturally India is open to foreign business opportunities, and the people are more than willing to use foreign services.

However, it remains to be seen whether U.S.-based mobile developers, a tight-knit group of smaller companies, will be willing to take the chance and set up shop more than 8,300 miles away.