Mobile telephony, consumers and FMCG in India

It’s common knowledge that the market for mobile telephony in India is booming — service providers are signing on more and more subscribers, handset sales show no signs of slowing down, category penetration is rampant, category advertising threatens to overtake every conceivable media. What’s harder to gauge, though, is the precise nature of the impact that mobile telephony brands are having on the end consumer. More consumers should logically mean everything’s just fine, but that would be equally true of all growing categories. The question is, is mobile telephony making a sizeable difference to the consumer’s life?
The results of the Most Trusted Brands survey over the last four years provide an answer: mobile telephony brands — both handset brands as well as service brands — have rapidly risen up the ranks over the last two-three years, evidence of how consumers have come to regard the importance of the category as a whole. In fact, it can even be argued that mobile brands are challenging the domination of FMCG brands when it comes to factors like trust.
Look at the example: this year there are four mobile telephony brands in the Top 50 list, and eight brands in the Top 100 list — last year, the Top 50 had two brands while the Top 100 had six. What’s more, almost all the brands in the category have improved their ranking over last year, with Hutch/Vodafone being among the overall Top 10 gainers this year. BPL Mobile and Idea Cellular are the only two mobile brands that have slipped, the former now merely a shadow of its former image.
One of the most remarkable aspects of the rise of the big mobile brands is the fact that none of these existed in the country before 1994. The rapid rise of the category in the Trusted Brands list is a direct result of the increased use of telephony. The fact that people live their lives by their phones is significant. The mobile has transcended from being just a communication device to being an integral part of their life. Hence the attachment is far more, a great driver of trust. Today, mobility is seen as a ‘life-enabler’ or a basic necessity by consumers.
In 2007, the total size of the telecom market (combined revenues from telecom services including handsets, airtime and value-added services) was estimated to be in excess of Rs 105,000 crore or $25 billion. Mobile penetration in India is expected to touch 20% in 2008, up from 8% in 2004. A mobile customer base of over 500 million-plus customers is definitely in sight within the next two years. With that, mobility will be one of the highest penetrated mass categories in India.

In fact, its the FMCG-isation of the category particularly in terms of pricing that has really contributed to growth. And innovation has been a critical component. Constant product innovations have been at the heart of enhancing category relevance. In mobility, penetration is measured at an individual level, whereas FMCG measures category penetration at household levels. A pure comparison on absolute percentage penetration numbers is often misleading. With over 250 million individual people using mobile phones, mobility is already more mass than a lot of conventional FMCG categories like skin creams, shampoos and beverages.

There is no executive or a business man right from Director to Junior Assistant who is not dependant on Mobile Telephony. Some house holds in India particularly in metros and larger cities have a cellular phone for each family member. Apart from business they provide a lot of conveniences to the users. That is the reason even chauffeurs and domestic servants are provided with suitable mobile telephony.