A report by Juniper on mobile coverage for the Indian sub-continent (India, Pakistan, Bangladesh, Nepal and Sri Lanka) states that content revenues in the Indian region should hit $8.3 billion by 2013. The revenues are largely driven by data traffic and are expected to hit $3 billion in 2008.

Key drivers are data-rich applications and services which include entertainment options such as games and personalization offering such as ringtones and ring back tones. According to a February release, approximately 1 million ring tones are downloaded everyday in India. As a mobile base, India is recognised as the second biggest mobile growth market after China with over 278 million subscribers, a subscription base that is set to exceed 737 million connections by 2012.  Music content, for example, is seen as a key growth driver: Ringtones around Bollywood content and devotional music are expected to drive growth in the mobile music market slated to be worth $800 million by 2009, up from $100 million in 2005. Research firm Direct2Mobile forecasts that India’s mobile entertainment market alone will be worth US$2.24 billion by 2013. To increase the market at the 21 percent growth rate predicted, mobile operators will need to aggressively target the Indian rural market, while remaining competitive in the cities. Indeed, Juniper expects a decline in blended ARPU across the region but also expects the fall to be partially offset by the steady increase from data service.

Considering growth is expected to be data driven, a key factor in the growth to 2013 is availability of 3G, states Juniper. Unless the high-speeds afforded by 3G become a reality in India—and soon—growth in data services is likely to plateau. Incidentally, 3G is now looking like a 2009 possibility, rather than a late-2008 entrant, as it was originally positioned.

There seems to be some movement on that front as indicated by this report. Communication and IT Minister A Raja has stated that the government will be announcing a policy for 3G and WiMax soon. Un-official word is it should be public in a week or two. The government is hoping to garner Rs 40,000 crore through the spectrum auction.