Most of the internet usage in India now happens on smartphones. Smartphone penetration as of Sept 2015 is close to 25%, and is
rising by 200-300 bps every quarter. India has over 100 mn subs who access wireless broadband through mobile, and this number has been growing at close to 70% over the last few quarters. With falling smartphone prices and better 3G/4G coverage, smartphone
penetration is expected to grow rapidly (GSe 48% by 2017). We expect smartphones to account for an increasing chunk of media consumption of mobile, leading to content makers being better able to monetize their properties. With new avenues for media
distribution through OTT apps etc., we believe traditional distributors like DTH operators are most at risk.
With the rising proliferation of smartphones and 3G/4G connections, we believe that consumers will have newer channels to consume media, particularly video content. Several new over the top (OTT) apps already deliver TV series, movies and music on handheld devices at costs similar to that of cable content. We believe that content providers and broadcasters are using online distribution to reach a wider audience directly and to negotiate better terms with distributors. Surveys in developed markets like the USA suggest that digital media consumption has overtaken television. With a large youth population and lower television penetration, we expect this trend to be more pronounced in India.
