Even as India is moving towards 3G, hundreds of millions of people will still be using feature

phones, SMS and voice. How do we target and cater to these users who are newly experiencing the
Internet? What kind of services will differentiate us in this space?

A report on Internet Trends presented at D10 Conference concluded that India has 121 million internet
users with a penetration rate of 10%. This makes India the third largest internet market in the world, with
United States and China occupying the positions one and two. The number of users has grown
tremendously over the years with a 38% year on year growth. Latest figures show that 48 million mobile
internet users in this country and the mobile internet usage have surpassed the desktop internet usage in
March-April 2012. Multinational internet corporations like Yahoo!, who has been highly dependent on
desktop web users cannot ignore these facts and should concentrate on bringing value to the mobile
internet users in emerging markets like India.

The Situation
India has only 10-15 million smartphone users out of 900 million mobile users. This implies that 90% of
the mobile phone market is accounted for by non-smartphones or feature phones. Even though the
demand for smartphone market has been growing tremendously, the existing market is unlikely to change
radically in the near long term because of the lower rates of adoption. From the given data, even most
conservative estimates project a potential user base of a few hundreds of millions. As the mobile internet
usage increases, more and more Indian customers are going to experience internet on their feature phones.
This presents an immense opportunity for Yahoo! to exploit. The other factors like the decreasing costs of
handsets and the growing demand for digital services from Indian customers also give Yahoo! an
opportunity to deliver these services on their mobile phones.

Localization and Personalization
India is a fragmented market where there is a huge consumer divide based on age groups, communities,
location, and language etc. This creates a demand not only for more localized content serving these
communities, but also for more personalized content so that users can experience them according to their
needs. Generating huge amount of content is a big task and would carry significant costs. Yahoo! can
tackle this problem by providing user generated content strategy or through collaboration with local
content providers and agencies. According to The New York Times, Yahoo! is able to collect far more
data about users than its competitors, from its websites and advertising network. Yahoo! can leverage this
strength in delivering more personalized services to the Indian consumer.

Mobile Value Added Services (MVAS)
The current MVAS market in India is growing at a rate of 32% CAGR. Traditional MVAS in India
consist of ringtones, services over SMS like cricket updates, horoscopes, dating etc. which has 63%
market share. The rest 37% is accounted for emerging MVAS which constitutes mobile apps, games that
have enhanced content. The industry is currently focusing on the infotainment MVAS, but other services
like Education, mCommerce and Healthcare have greater growth potential

Infotainment
An Indian consumer spends an average of 4.5 hours in digital content daily through various
communication media. Yahoo! has a huge presence in this area as Yahoo! Music, Yahoo! News, Yahoo!
OMG etc. Adding more local content to these products would help Yahoo! compete with local players in
India directly. Yahoo! could roll out these services through Yahoo! Mobile and this could be a
differentiating factor against the competition. Right now, most of these services are provided only for
smartphones Blackberry, iPhone and android. However Yahoo! can also target feature phone customers
through java based applications or through partnership with the OEM.



Education
It is a well-known fact that youngsters are driving the internet usage growth in India. School kids and
college going students constitute 48% of the total internet users. Much of this is can be attributed to e-
learning services and educational resources available on the internet. These customers either consume
mobile internet now or use mobile internet later on, so Yahoo! could target this segment by providing
interactive and personalized content on Yahoo! Education. Mobile education is in a nascent stage in
India and Yahoo! could capture most of the market share if it moves quickly.

Ecommerce and Real Estate
Ecommerce growth is tremendous right now as experts agree that the growth is at the inflection point. The
industry is worth around $10 billion and is already crowded with a number of players and mCommerce is
the next big thing in this sector. Yahoo! could be a very competitive player in this sector if it localize its
Yahoo! Shopping product and roll it out to mobile internet users as part of Yahoo! Mobile. The urban
population growth is expected to have an unprecedented increase over the next four decades in India and
this going put increased amount of demand for homes for sale and rent. Yahoo! Homes could position
itself in India as a leading destination for buying, selling and renovating Indian homes.

Healthcare
Mobile healthcare apps are on the rise. People are getting more health conscious and are utilizing
technology to attain better health not just in terms of avoiding diseases, but also staying healthy and fit.
Indian consumers are no different, and this new trend can be understood by the phenomenal growth of
bottle water and the thriving water purifier industry in India. Yahoo! Health mainly caters to the need of
US customers for features like Search for Doctor and Search for Treatment etc. Yahoo! could provide
these features to Indian customers through mobile and supplement those with articles and other featured
content catering to the Indian consumer.

Value at the bottom
Internet penetration in rural India is around 4.3% which is very low, when we consider the market
potential of 833 million potential users. The computer literacy rate and mobile phone penetration rates are
much lower when compared to the urban areas and there is huge potential to cater to, in the future. The
needs and wants of the rural consumers are very different from those of urban. Yahoo! could invest in
providing services in sectors like education, healthcare etc. in local languages, thereby increasing its reach
to rural segment in India. As the computer and mobile literacy rates improve, we can expect a huge
demand for value added services for mobiles and Yahoo! can capitalize on this market by moving in first.

Yahoo! for Everyone
The common idea or theme in implementing all these features is to make Yahoo! Mobile a go to
destination for all the Indian customer needs on mobile. Most of the internet services on mobiles are
provided by different players and consumers will find it more difficult to remember all the brands.
Yahoo! could provide all these services under one umbrella brand. This will create greater customer
involvement which results in more page visits, more advertising footprints and hence more revenues.

References
[1] The internet and Mobile Association of India [IAMAI] (2011). Report on Internet in India (I-Cube).
[2] The associate Chambers of Commerce and Industry of India (ASSOCHAM). Mobile Value Added
Services, Pg. 4-68.
[3] Laxman Narasimhan(2011). Can India lead the mobile-Internet revolution? McKinsey Quarterly