At 400+ million mobile subscribers, India is the fastest growing mobile market in the world. Very Soon, it could overtake China to become the biggest. How does this size help? What about quality, especially the quality of services that can be delivered through mobiles? Is their enough innovation at the top, middle and bottom rungs of the subscriber base? Going by the revenue split of major mobile operators, where VAS (SMS,Ring back tones, USSD Alerts) accounts for 10% of gross revenue, the answer is a clear NO.

This somehow parallels the fact that we are the biggest democracy in the world, yet nowhere near the best in democratic practice. I would argue that in the race of getting the maximum subscribers on board their network every month, the mobile operators are missing some HUGE opportunities (I will list them later in this post).

The ever lowering ARPU’s mean that the window of opportunity for this innovation is already vanishing. As a business, keeping the pipes reasonably functional for 50-100 million subscribers (per operator) at ultra low margins is incredibly difficult. Innovating with smart services on top of this reality is almost impossible. This is where the gold rush of mobile penetration may have actually harmed, rather than helped the average Indian mobile user.

Low call rates, Low ARPU, Low cost handsets have trained an entire generation to remain content with making voice calls, playing useless bundled games, signing up for cricket alerts and ring back tones. High volumes lower costs but raise the barriers of entry for truly ground breaking innovation. Such innovation always starts small and scales organically after attaining critical mass.

The global mobile future is one of Data and Applications , but the rules of the game (especially in India) are incredibly skewed against those who have the ability to innovate (the operators cannot, as explained above) in these verticals.

Some of these verticals include :

1) Mobile Payments – By far the biggest unsolved problem, given that India has the largest number of un-banked people in the world. Many biggies are taking a shot at this, but I have not seen anything path breaking yet.

2) Real time information – Twitter is not the answer for this. As fishermen in Kerala sharing info on fish prices have demonstrated, there is incredible value locked into this vertical. A new data sharing platform, perhaps?

3) Mobile Internet – I would stick my neck out and say that Opera Mini is not the answer. The browser for mobile, especially the ones most of 400 million use, needs to be different. Or maybe, a browser is not needed at all.

4) Public Service Delivery Platform – In keeping with a unique national identity effort, a nation wide platform could be built for delivering key services like healthcare, education and energy through the mobile.

What do you think? How can these values be unlocked?