Mobile subscriber growth. With an estimated 1.2 billion people in India, the country is one of the most populous nations on the planet, second only to China. The mobile phone is quickly becoming a staple for nearly every Indian: iSuppli anticipates that by 2014, 97 percent of the country’s population will have a mobile subscription of some sort.

Source: iSuppli

Based on the current wireless subscriber base in India, such growth represent roughly 500 million new mobile users. Traditionally, inexpensive feature phones have been the device of choice due to hardware costs, so it’s easy to assume that the bulk of these new additions would be low-cost, basic handsets priced at $40 or less. Surely some portion of the population will be constrained to lower-end devices, but what happens when a smartphone operating system is available for free and can offer a reasonably good experience on minimal hardware?

Android is moving down. Although much of the recent focus on Google’s Android platform has revolved around higher-end devices from HTC, Samsung, Motorola and others, the operating system is beginning to trickle down to second- and third-tier handset makers. Just last month, Alcatel-Lucent  introduced a touchscreen Android phone priced at $129 on a pay-as-you-go contract. That’s still too expensive for many consumers, but as handset adoption rises over the next four years, hardware prices are sure to continue their decline, even as capabilities increase. Another possibility that could improve the Android experience on cheaper devices is the re-use of hot hardware. This year’s 1 GHz Snapdragon CPU, which powers many high-end Android phones, could gain a second life in lower cost devices at a reduced price in the next few years, for example.

3G networks are ramping up. As mobile phone component prices decrease over time and consumers in India purchase more handsets, wireless infrastructure is poised to mature. Up until now, only state-owned carriers are offering mobile broadband in India, but that’s due to change soon. Privately owned Tata Docomo plans to launch nine 3G markets next month, focusing coverage on highly populous cities, says the GSMA’s Mobile Business Briefing today. Tata Docomo is just one of many carriers that won 3G spectrum in auctions this year, so other 3G network implementations are sure to follow. Such news corresponds with outlooks from iSuppli, which reports that 2010 investments in India’s wireless infrastructure equipment market will top $10.8 billion, a gain of 29.7 percent from 2009 investment figures.

Millions are getting social. While you don’t need a smartphone or 3G broadband speeds for basic activities, both attributes add value to social networks. Smartphone apps are often more robust and the sharing of user-created content such as pictures or videos greatly benefit from faster networks. India seems ripe for both smartphone phones and speedy mobile broadband as the number of mobile social networking users in the country increased 43 percent from July 2009 to July 2010, says research firm Analysis Mason. Although only 2.2 percent of the total wireless subscriber base in India currently use social networks on handsets, the country is already the seventh-largest user of mobile social services in the world. With better social apps that Android devices can offer, married with new 3G networks, the region is ripe for low-cost smartphone sales.

Local handset makers can compete. Nokia has dominated the Indian handset market, but the tide appears to be shifting, largely due to local handset makers. IDC says that in 2008, phones built in India accounted for a mere one percent of sales in the country. Just two years later, that figure has risen to 33 percent, much to the chagrin of Nokia, who has seen its share nearly halved in the same time frame. So how is that unproven handset makers without years of software experience can even participate in this market, let alone actually compete against Nokia? The answer lies with the no-cost Android operating system, which removes the need to develop smartphone software. Indeed, Google reportedly pays carriers a part of the mobile ad revenues earned by Android handsets, making it a win-win situation for Indian upstarts such as Spice Mobility, Olive Telecom and Micromax, which is expected to launch four Android devices by this spring.

To be sure, mobile market expansion is just starting to ramp up, and traditional or well-known favorites such as Nokia and INQ still rule the roost. But a combination of factors are beginning to open the door for Android to invade India by the most unlikely team of players. With strong mobile adoption expected in a highly populous area, it appears that low-priced Android phones are poised to jump on India’s newest mobile broadband networks over the next four years, welcoming up to 500 million new mobile web users.

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After extracting a deal from Research In Motion that appears to give state authorities the ability to monitor messages sent over the company’s BlackBerry network — similar to a deal that RIM agreed to with the government of Saudi Arabia — the Indian government has suggested that it may go after both Google and Skype in an attempt to get similar kinds of security concessions.

India’s threat means that this is no longer just about Research In Motion and its specific network or security controls; it’s about gaining widespread and potentially unlimited access to a whole range of cloud-based services. In other words, it means that our growing use of the “cloud” — whether it’s web-based email or web-based voice calls such as those recently launched by Google, or mobile email and data from companies such as Research In Motion — is colliding headlong with the demands of foreign governments to control those services and applications, or at least their demands to monitor them whenever they wish.

It’s not just India and Saudi Arabia making these kinds of moves either. Lebanon, Algeria, Indonesia and several other countries are said to be watching closely what’s been going on with RIM, with an eye towards pursuing similar deals with the company, and with other web and mobile service providers. There have also been unconfirmed reports that RIM has already handed over some form of monitoring ability to the federal authorities in both Russia and China, although it’s not clear what level of access those governments have received. If India goes after Google and Skype for access to its email, instant messaging or other communications, China and plenty of other countries are almost certain to demand the same kinds of access.

India has focused on targeting Skype because of the government’s belief that terrorists and other anti-government forces routinely use the VoIP service as a way of communicating without having their phones tapped — something that could also be a risk with the new voice services that Google has launched. According to reports from Bloomberg and other news sources, the government wants both Google and Skype to set up servers in that country that can be monitored by security agencies, or to provide a means for tracking voice and instant messaging data.

The U.S. government has the authority to subpoena content from the BlackBerry network, but it doesn’t have explicit decryption boxes running on RIM servers inside corporate premises, which is what it sounds like India and Saudi Arabia want: to be able to simply turn on their eavesdropping devices and collect whatever they wish. Will India or Saudi Arabia or China abide by the same rules as the U.S., and provide full legal justification for doing this if and when it happens? Perhaps. Or they might just conveniently forget about such niceties (although the U.S. sometimes goes outside the legal boundaries as well).

Either way, your data could be at risk. If you send messages over the BlackBerry network, use Skype to call overseas, or send email or use the new voice-calling options from Google, theoretically what you say could be monitored by a foreign government, if India gets its way. There’s no reason to believe that these efforts are going to stop with India, or with just RIM or Skype or even Google; Amazon, Facebook and others could be the next to face such government demands for access to their servers and the information stored there. Living our lives in the cloud is appealing in many ways, but how much freedom do we have to give up in order to do so?

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Post and thumbnail photos courtesy of Flickr users AndyRob and Chrissy575

Wireless Intelligence’s data makes clear that carriers expect 3G data revenue per user (ARPU) of $11 vs. $5 a month for voice services. In order to pay for spectrum and 3G rollouts, the carriers are going to have to execute some fiscal miracles. Here are some other stats from the Wireless Intelligence report:

• There will be 10 million (WCDMA & HSPA) 3G connections by the first half of 2011.
• There will be 100 million 3G connections by the first quarter of 2014.
• By the end of 2014, there will be 150 million 3G connections.
• State-owned BSNL and MTNL, which were the first carriers to launch, have managed to get a mere 1.5 million 3G connections.
• BSNL & MTNL are expected to control about 25 percent of the market, the three largest non-state-owned carriers — Airtel, R-Com and Vodafone — 43 percent of the market.

India is expected to have more than 600 million mobile connections by the end of the first half of 2010 and a billion connections by 2013. Like many developing economies, it’s leap-frogged fixed telecom and is instead embracing the wireless revolution. Huge pent-up demand and ultra-cheap calling plans thanks to a highly competitive market and low-priced handsets have made the wireless phone a fixture even in the most remote parts of the country, bringing telephony to far-flung rural areas.

It’s hard to get one’s head around the impact of India’s mobile revolution. The mobile industry has become the golden goose and the corrupt government structure is trying to kill it by what I think are bone-headed moves.

In my opinion, the long delays in the 3G auctions and rollout has put India behind in the telecom race. By the time 3G gathers momentum in India, the rest of the world will be aggressively embracing LTE, the next-generation wireless broadband standard.

PayPal says it has suspended personal payments to and from India, as well as transfers to local banks in India, although it’s not clear from the company’s short blog post what the problem is or what’s being done to fix it. All it says is that the company is working with its ” business partners and other stakeholders to address questions they have about the service.” PayPal says that commercial payments can still be made to India but merchants in that country can’t withdraw funds in rupees to local Indian banks.

An unnamed analyst quoted by IDG News Service says that the changes may be related to new government rules in India that are intended to prevent or discourage money laundering. These rules, introduced last year, require financial intermediaries to verify the identity of clients carrying out international money transfers.

India has been taking steps to try and improve security as part of its anti-terrorism efforts, including banning the import of cell phones that don’t have an identity code and thus can’t be tracked. It’s possible that the Indian government is concerned about PayPal money transfers being used to fund terrorism, and is requiring the company to either verify who is making and receiving the payment or block the transfer.

According to one online forum discussing the topic, PayPal has been reversing payments since Feb. 1, sending users an email that states:

Dear SENDER,

Your payment of $XX.XX has been returned to you. If you sent the payment with a bank account, the funds will be returned to your PayPal balance. If you paid with a credit card, the amount will be credited back to your card. We returned the payment to you because we have stopped allowing personal payments to be sent to or from India… If this payment was a personal payment, such as a gift to a friend or family member, then we request that you find another payment method until we restore personal payments to and from India. We are trying to resolve this issue as quickly as possible and we’re sorry for any inconvenience. Thank you, PayPal.

Another user said that he or she received an email from PayPal saying the company had suspended “specifically those funds transfers that do not have an underlying exchange of goods or services.” The email recommended that the seller contact the buyer and ask them to pay again, and specify that goods were the reason for payment. Other disgruntled and confused PayPal users are discussing the issue in forums here and here.

Post and thumbnail photos courtesy of Flickr user quaziefoto

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As demand skyrockets, data providers are spending lots of money to install new pipes. SEACOM, a 17,000 km undersea cable linking the southern and eastern regions of Africa to India and Europe with 1.28 Tbps of bandwidth, went live last month. The $650 million project brings a huge increase in connection speed and reliability to the continent, and will serve up data to the millions of Africans buying new phones over the next few years.

And launching today is a new overland cable connecting India and China. The cable, going through the “inhospitable terrain of the Nathula pass,” provides connectivity with much less risk of problems due to natural disasters. Southeast Asia is home to a number of different natural disasters, including earthquakes and typhoons, and undersea cables can be vulnerable to breakage. One thing is certain: Everyone needs fast Internet connections, and the developing world is no different. In the U.S., we’re focusing on the last mile and getting higher-speed Internet to our more rural areas. However, we don’t really have to worry about getting fast data access on a continental scale. Something to reflect on next time you have a dropped call or two.

(Photograph of CS Tyco Reliant, submarine cable laying ship courtesy Tyco Telecom.)

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I am just shocked at the sheer magnitude of the attack, which has left more than 75 dead and 200 injured, along with news of people being taken hostage. The ghastly acts saw terrorists attacking various locations, including busy train station, hotels and hospitals. The shootouts saw some senior cops killed in the line of duty, and the Army has been called in. The shock is so extreme that I am incapable of anger.

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Given India’s burgeoning middle class and ever-expanding pool of skilled tech workers, the move was understandable. Perhaps recognizing that fact, Electronic Arts and Microsoft joined with several Indian firms to form the Indian Games Industry and Trade Association back in 2006; it’s no surprise other major Western publishers are following suit.

What kind of games will Ubisoft develop in India? Well, the studio Ubisoft acquired was a division of Gameloft, which specializes in games for handheld consoles and mobiles, recently unveiled plans to port their titles to the Wii, and expects to release 15 games for the iPhone by the end of 2008. Assuming Ubisoft retains that focus when it takes over from Gameloft (and there’s no reason to doubt that), I’d expect to see more of the same on a vastly increased output level. Only made in India.

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I did meet some terrific people and companies, however — in New Delhi my dinner host turned out to be an F|R subscriber! — and you’ll be hearing more about many of them over the next few days. But before I go back to nursing my jet lag, let me leave you with this Thought of The Day, from a rather unexpected source.

One city I visited was Kolkata (previously called Calcutta), to see an outpost of IT-outsourcing specialist, Tata Consultancy Services (TCS), one of India’s top 10 publicly traded companies, and an operating unit of the famous Tata Group. On our way to TCS, we made a stop in town, at the mission of the late Mother Teresa.

“Mother,” as the nuns still refer to her, died in 1997, but her writings and missives are displayed throughout the public areas of the place. Some of them strike very universal, non-religious themes. This is a woman who, by her own choosing, took on big, largely non-abating challenges (in her case, poverty) in an ambitious effort to change the world as she saw it. She even founded a new order to do it (the Catholic Church thought she was nuts and forced her to venture out on her own).

No surprise then, that Mother Teresa’s writings reveal an individual who was perpetually tired, often discouraged, and who felt very much alone. (Sound familiar?) Yet she persevered. And controversial as she has become since her death, I found these words, on her own sense of failure and how she overcame it, to be comforting:

Within me everything is cold. It is only that blind faith that carries me through. [This] smile is a big cloak which covers a multitude of pains in this darkness. [But] do not allow yourself to be disheartened by any failure, as long as you have done your best.
Later, addressing her 4,500 “employees” in the Missionaries of Charity she concluded:
What I can do, you cannot. What you can do, I cannot. But together we can do something beautiful…

Mother Teresa must’ve been a great leader in her own way — her 57-year-old operation now spans 133 countries. And I think she could’ve been writing of just about any entrepreneur’s state of mind with the words above, and so here’s your…

Thought of The Day: Even Mother Teresa, a soon-to-be-saint, felt discouraged by the challenges of breaking the mold. Heck! So don’t beat yourself up if you have a bad day, founders. You can’t do this alone. When it gets “dark,” enlist help and carry on.

Now off I go to nap. I hope everyone has been well, and busy.

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