India, the next gold rush?
Already the major Indian mobile network operators, such as Bharti Airtel, or Hutch Essar, are among the major players in the industry. But with just over 125 million subscribers out of a 1,130 million population, there is a huge potential for growth. The whole Indian economy is booming, so there is no doubt mobile communication will attract an increasing number of customers, allowing Indian penetration rate to soar.
Payments projects are also booming. The Indian financial community has realized the potential of the unbanked or underbanked population, and many developments target this population segment. For the time being, technical solutions are not frozen, with many options being explored from magstripe, to purely biometric solutions. Of course, international standardization also impacts the Indian financial community, and smart cards, contact or contactless cannot leave them indifferent.
Both the Indian federal government and the States governments are launching numerous ID card project (cf. Focus hereunder).
The question remains, who will profit from this boom? Most western traditional members of the smart card value chain already have facilities in India, and are ready to ramp them up to follow the demand. But, as India has a long history of economic protectionism, it is easy through some standardization decisions to reserve the businesses to local players, emulating in this the decisions made by the Chinese government on ID cards or 3G mobile communication networks. The drawback of such decisions is that even if local companies are sheltered from the international competition for a while, it makes it harder for them to reach international levels, to develop international standard products, and at the end to become competitors to be considered on the international scene.
We, as an industry, have got to monitor closely developments in India, as decisions made by a few civil servants may shape the future competitive landscape of the industry.