Video consumption makes up more than half of India's mobile data traffic

11 February 2019 Consultancy.in

Consistent with trends across the globe, the technology, media and telecommunications (TMT) sector in India is expected to grow rapidly in the near future, according to a new report from global professional services firm Deloitte. Monthly mobile traffic in India will reach 5.5 exabytes by 2021. 

A report from global management consultancy Boston Consulting Group from 2017 predicted that the number of online users in India is expected to surpass 850 million across urban and rural areas by as early as 2025, which represents more than half of the country’s substantial population.

Alongside an overall trend of digitalisation, the growth in the number of online users is expected to be fuelled by the remarkably low prices of mobile data being supplied by Reliance Jio. Most of the country’s population is spread out in rural areas, and the dip in costs has made the online domain more accessible for this substantial chunk of the population.

Share of digital channels in fixed deposit investments

Growth in the number of online users is expected to drive growth in other sectors that are dependent on the digital domain. One such sector is the country’s media & entertainment industry, which will reportedly reach a value of nearly $35 billion by 2021 on the back of an increase in OTT consumption

Digital advertising is another sector that is expected to achieve unprecedented growth over the next few years, primarily due to the expansion of the online customer base. In its new report on forecasts for the TMT sector, Deloitte has offered analysis on the various aspects of the economy that the digitalisation is expected to bring about.

Deloitte’s TMT report from last year revealed that the balance of urban and rural consumption of online content was shifting towards the latter, which was driving digital advertising revenues up as well. The report also offered analysis on the largest contributors to viewership in the country, the largest of which was the Indian Premier League.

The rise of video consumption

This year’s report reveals a continuation of these trends. The estimated online video audience in India for last year reached a size of 350 million, a figure that is expected to grow rapidly over the next two years to reach as many as 500 million users by 2020. 

The overall increase is accompanied by a further shift from urban to rural particularly in TV penetration. As of 2017, 87% of all urban households had direct television access, while the same figure for rural households stands at 52%. In absolute terms, however, rural households are likely to exceed urban households, given that the overall rural population is higher.

A similar story of growth can be narrated for the overall levels of mobile data traffic in India in the recent past, which have been growing at exponential rates. Where the monthly mobile data traffic in 2016 was 0.1 exabytes, the figure had jumped to 1 exabyte by 2017 and 1.5 exabytes by 2018.

Mobile data traffic in India

By the end of this year, the monthly traffic is expected to reach as high as 2.8 exabytes. Deloitte also offers predictions for beyond this year, placing the levels of traffic at 3.6 exabytes for 2020 and 5.5 exabytes for 2021. Most of this traffic is accounted for by video consumption.

As per the report, video consumption constituted 53% of all mobile data consumption in 2017, and is expected to grow to 75% of all consumption by 2021. Similar claims have been made by BCG recently, attributing this growth to over the top video consumption in the country. 

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Urban transport remains the primary area of investment in Smart Cities

08 April 2019 Consultancy.in

Examining the progress in the government of India’s Smart Cities Mission, global professional services firm Deloitte has revealed that the majority of funding for the scheme is being drawn from the central government, while the investments are focused primarily in the urban transport sector.

The Smart Cities Mission was launched by the Indian government in 2015, with an estimated project value of approximately $14 billion. The scheme aims at developing a number of urban financial centres across India, each of which is endowed with the latest in Information Communication Technology.

By definition, all functions within a smart city are carried out in the digital sphere. According to the World Bank, a smart city is a technology-intensive city that has sensors installed everywhere and offers highly efficient public services using information gathered in real time by thousands of interconnected devices.”Key components of a smart city

Deloitte breaks the characterisation of a smart city down into six primary components. The first is smart governance, which entails the migration of the entire state infrastructure and citizen services to the online domain, facilitated by the presence of a strong IT infrastructure

The second component described by the Big Four accounting and advisory firm is smart living, which includes state-of-the-art facilities for sewage & sanitation, water supply, electricity, housing and a number of other aspects of daily life. These constitute the core infrastructure of a smart city.

In addition, a smart city consists of smart people, which means a comprehensive education programme and an abundance of cultural activities. Smart mobility is another key aspect of a smart city, which not only includes a solid walking infrastructure, but also ICT-based transport and traffic control.Overview of Smart Cities Mission progress

The last two components, as per Deloitte are smart environment and smart economy. The latter ensures that most residents of a smart city have access to employment opportunities, while the former entails the absence of pollution, green architecture, and a reliance on renewable energy.

Building on these components, the scheme has integrated an increasing number of ctiies within this programme, starting with 60 in 2016 and 30 in 2017. By June last year, the North Eastern city of Shillong was shortlisted to be the 100th smart city in the country.

Once a city is selected to be a part of the Smart Cities programme, Deloitte identifies three types of development that are conducted in the urban centres. The first comes under the bracket of Redevelopment Projects, which include replacements of various aspects of the current built environment. Investments in 99 cities by sector

The second comes under the broad ambit of Retrofitting Projects, which entails the addition of new infrastructural development in order to facilitate greater connectivity in the city. Thridly, the firm identifies Greenfield Projects, which include the introduction of smart solutions in “previously vacant areas.”

While the majority of the investment in the Smart Cities Mission is drawn from the central government, Deloitte’s analysis reveals that the smart mobility component is drawing the most funding, followed by area development and economic development. Energy, ICT solutions and housing follow as the next biggest priorities.