Rural India is Next Big Market for Mobile Cos

Monday, October 1, 2007

It is surely a concept come true for C K Prahalad, whose idea that fortune now lies at the bottom of the pyramid is bearing practical results.

Breaking the misconception that only the urban centers power the phenomenal growth in mobile telephone, is latest data compilation introduced by the telecom regulator, TRAI, which shows that rural India is going to be the next big market for the mobile companies.

The Telecom Regulatory Authority of India data shows that rural mobile phone connections stood at 39.46 million up to June 2007. With a total subscriber base of 185 million that month, rural subscribers formed a formidable block of 21.31 percent, or over onefifth of the total mobile user base in India.

The number of rural mobile subscribers is nearly the same as the 40 million fixed line connections installed in the country ever since the first landline telephone exchange was installed in Kolkata by the British in 1881. And if one takes into account the rapid monthly addition in mobile usage overall, rural mobile connections would have already surpassed the total fixed line connections this July itself.

State-owned, BSNL commands a lions’ share of rural mobile phone users by virtue of its massive country-wide network coverage. Still, rural mobile penetration is pretty low – just 4.92 percent, though it has touched double digits in some prosperous states like Punjab, Kerala and even Himachal Pradesh. However, overall rural penetartion remains way below the 43.88 percent mobile density in urban areas.

Rural India, experts say, represents the next big growth opportunity for mobile services operators. Commenting on the data, TRAI Chairman Nripendra Misra said the next phase of mobile phone growth would come from the hinterland, adding that operators need to roll out infrastructure rapidly in the under-served areas of the country.

“Of the next 250 million users who will go mobile, as many as 100 million will come from rural India”, he said. It is perhaps this reason the TRAI has asked the Department of Telecom to sanction incentives for the roll out of mobile networks in rural India.

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