Catering to the Bottom of the Pyramid

A few days back, a handset manufacturer and a telecom operator joined hands to launch a data service to provide Indian consumers with access to relevant content on agriculture, education, healthcare, and entertainment. With data services becoming a focus for telcos and rural tele-density experiencing a bulge, there is immense potential for data services specially targeted for rural India. It is an irony that telcos, who introduced mobile services in India for mobile voice communication, are today considering data services as their 'money-spinner'. While the rural consumers reap the benefits of 'value-for-money' data services, it will be highly stimulating to watch out how telcos, handset manufacturers, and the allied industry convert this market opportunity into business gain.

According to the latest estimates by Trai, total mobile subscriber base in India had reached 811.59 mn at the end of March 2011, registering a growth of 2.55%. Interestingly, rural subscription reached 273.54 mn in March 2011, indicating a higher growth (2.75%) than urban subscription (2.45%) in the mobile space.

In a fast expanding and largely untapped rural mobile market, handsets makers and service providers are gearing up to take the first-mover advantage with mobile applications specially designed for rural India. With declining voice revenues, and increasing focus on data services, affordable and customized mobile application will be a boon for rural customers who are not very well connected by the internet.

While the tele-density in rural India is attributed to voice services, there is tremendous potential to use technology to impact the rural economy positively through the effective use of data services. Mobile services and the emergence of wireless technologies have immense potential to tackle the key challenges of illiteracy, unemployment, superstition, and poverty in rural India. This will certainly hasten our steps towards the critical 'inclusive' growth that is on top of the national agenda.

The gradually declining average revenue per user (ARPU) in India can be revived to a great extent by using mobile services not just for voice calls, but for data services in education, healthcare, agriculture and infotainment. In developed countries like the United Kingdom, although the rural population is smaller as compared to urban population, rural subscribers have surpassed their urban counterparts in many of the wireless services usage. In the US and Australia, rural mobile health services are very popular.

There are several examples of successful mobile phone-based services for rural environment across the globe. Right here in India, Nano Ganesh, a mobile project which was nominated for the Global Mobile Award in the Mobile World Congress 2010, allows farmers to use their mobile phones to remotely control irrigation pump sets located in far-off locations from their homes. Another mobile-based irrigation control system 'm-Irrigation' developed by an Indian electronic automation company called EMRAL has managed to sell 750 units in 4 years. In rural South Africa, a simple mobile based ordering/delivering project called Collaboration@Rural, enables retail shops to sell goods to their customers. Another project popularly known as 'mHealth' provides mobile phone owners in Africa updates on diseases via SMS. Many countries also use data services like advanced mobile phone alerts to warn of an impending natural disaster.

New opportunities like 3G and broadband wireless access (BWA) in India abound to provide rich rural mobile applications. The decreasing cost of mobile hardware, development of cost-effective open source mobile software, and the availability of affordable feature-rich mobile phones with high-end graphic support would make for easy adoption of mobile based rural applications. Moreover, alternative power options like mobile phones running on solar power will be of great advantage for areas with electricity problems.

With the exponential growth in wireless communication in rural India, mobile handset manufacturers, telcos and allied industries need to devise innovative and 'value-for-money' solutions to address the unique needs of this eager market. The telcos and handset makers should take initiatives to build their region specific R&D capabilities so that they can build relevant applications for the rural market. Alongside, the government too also has its own share of responsibilities in facilitating rural mobile penetration through buffer initiatives such as allocation of funds for mobile infrastructure and the right regulatory policies to help the telecom industry survive and grow, while supporting the national agenda of sustainable and inclusive growth.

Vinod Sawhny
The author is executive director and CEO, Beetel Teletech
vadmail@cybermedia.co.in