Engaging India: Rural Technology

Wednesday, November 1, 2006

What does giving small loans of less than $100 to India?s poor have to do with mobile phones? The potential in this answer could help more of India?s 75m very poor households lift themselves out of poverty while adding momentum to the world?s fastest-growing mobile phone market.

Let?s start with telecommunications. India recently overtook China as the fastest growing mobile phone market in terms of new monthly subscribers. More than 6m new mobile phone subscriptions were logged in September alone, bringing India?s total wireless customers to 130m. Industry officials and executives are remarkably confident that India will reach its breathtaking goal of claiming 500m mobile phone subscribers by 2010.

But everyone agrees that key to the industry?s growth is expanding mobile phone use to rural areas where nearly 70 per cent of the country live. In rural areas, overall phone penetration can be as low as 2 per cent versus 40 per cent in cities.

Many things must fall into place for rural telecom expansion to happen. Per capita incomes need to rise and handset prices need to come down. Clearly this is no easy task.

Yet there is also the challenge of making telecom services relevant to rural consumers.

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Source: Financial Times (link opens in a new window)