India Inc India Inc: Wednesday, 06 July 2011 09:29

Special Report: Rural India holds key to mobile growth

NitinDahadeditedSenior industry executives from the global mobile and wireless industry gathered in the UK recently to discuss the future of the industry, at the Future of Wireless International Conference organised by Cambridge Wireless.

Speakers and delegates came from the US, China, India, South Korea, Africa and many other countries. While the key theme of the conference was about how operators and developers in the whole ecosystem can deal with the global explosion in use of mobile data, there was an interesting perspective on the reality and opportunity in the Indian market from India’s Reliance Communications.

R. Swaminathan, executive senior vice-president and hub head of the wireless business of Reliance Communications said that by 2015 there would be more rural mobile subscribers than in urban areas, and so operators and developers should be looking at developing products and services for rural markets.

According to the Telecom Regulatory Authority of India (TRAI), the number of mobile subscribers in India at the end of April 2011 was 826.93 million, of which 66.20 per cent were urban subscribers and 33.80 per cent were rural subscribers. With almost 870 million people in India living in rural areas, there is clearly a lot of room for the rural percentage to grow if the right services are made available.

Even with average revenue per user (ARPU) of only $2 per month, this can turn into significant revenues annually.

Many other Indian technology business leaders also look at the India opportunity in similar terms – customisation for the rural market is the key to success in India. Quoting examples in other industries, like the ultra low cost ‘Chotukool’ refrigerator from Godrej & Boyce designed without a compressor for rural markets, and the low cost solar powered ATM machine from Vortex, Swaminathan pointed out that low cost handsets would be the driver to add many other services and revenue opportunities for the rural user. The entry cost has reduced from an average of $450 in 2000, to $26 in 2011.

Such a low cost of entry provides empowerment to the rural user, giving access to education, medicine, e-government, mobile banking and many other rural apps.  The bigger picture of rural mobile telephony is the socio-economic impact.

It gives the rural dweller, farmer or village inhabitants:

  • personal identity that improves social status and their ability to get more credit
  • better relationships with their ability  to be in touch with family and friends
  • lower costs with ability to avoid travel and gain better negotiating ability
  • higher income through better price realisation for produced goods.

The key message then is that India is a great opportunity for technology with a human touch – in other words, technology that is customised for local and rural needs. India’s rural inhabitants need low cost data devices, handsets and tablets, customised for Indian languages, and providing text-audio-text capabilities.

It is inevitable that rural mobile subscribers will grow, and this presents potential market value for operators, handset and tablet manufacturers, and mobile application developers.

by Nitin Dahad

The author is a consultant and adviser in the electronics, semiconductors and wireless industry, with over 25 years experience in working with large corporations as well as start-ups globally, particularly the UK, USA and India. Nitin is an electronic engineering graduate from London.

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