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Mission Rural India

Service providers have no other option except going to rural India, where 65% of the geography is
waiting to be tapped

Sunday, December 02, 2007

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The present rural India with a substantial improvement

in purchasing power presents a growing potential for
telecom operators. Indeed rural consumers have become
the prime target market for every consumer durable and
non-durable like electronics, automobiles, etc. However,
these are the areas still characterized by low per capita
income, low literacy rates, low level of industrialization,
and poor agricultural productivity. These characteristics
of rural India limit its capacity for consumption of goods Current Issue
and services. However, with the telecom tariff having
come down to the lowest level, there is ample scope for
expansion of telecom networks in rural areas.

The Telecom Regulatory Authority of India data shows

that rural mobile phone connections stood at 39.46 mn
as of June 2007. With a total subscriber base of 185 mn
in that month, rural subscribers formed a formidable
block of 21.31% or over one-fifth of the total mobile
user base in India.

Rural on a High Click here to book your copy

State-owned Bharat Sanchar Nigam (BSNL) commands the lion's share of rural mobile phone users by
virtue of its massive countrywide network coverage. Still, rural mobile penetration is pretty low, just now
4.92%, though it has touched double digits in some prosperous states like Punjab, Kerala, and even
Himachal Pradesh. However, overall rural penetration remains way below the 43.88% mobile density in
urban areas.

Rural India, experts say, represents the next big growth opportunity for mobile service operators.
Commenting on the data, TRAI chairman Nripendra Misra says that the next phase of mobile phone
growth would come from the hinterland. Operators need to roll out infrastructure rapidly in the under-
served areas of the country, he adds. “Of the next 250 mn users who will go mobile, as many as 100
mn will come from rural India,” he says.

It is perhaps because of this that TRAI has asked the Department of Telecom (DoT) to sanction
incentives for rolling out mobile networks in rural India. In its recent recommendations on licensing
reform, the regulator asked the government to give incentives for rural networks by reducing the levy
charged for development them. BSNL director (finance) SD Saxena says that nearly 70% of all future
mobile growth in the country would come from rural areas.

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Mission Rural India http://voicendata.ciol.com/content/top_stories/107120201.asp

“People in rural areas have the money and desire to go mobile. There is a lot of scope for growth,” he
says. BSNL has recently contracted purchase of over 22 mn mobile connections; a significant portion of
it will go into semi-urban and rural rollout.

The Wireless Hinterland

Top 15 states Rural mobile Penetration in
Total rural
in terms of connections (in rural areas (in
population (in mn)
rural mobility mn) %)

Punjab 2.24 10.83 20.69

Himachal
1.0 5.85 17.09
Pradesh

Kerala 2.66 25.03 10.63

Haryana 1.66 16.27 10.20

Gujarat 3.20 34.42 9.31

Tamil Nadu 2.8 32.86 8.52

Andaman &
Nicobar 0.02 0.27 8.27
Islands

Rajasthan 3.27 48.66 6.72

Maharastra 3.79 59.67 6.35

Karnataka 2.25 36.56 6.15

Andhra
3.27 59.27 5.52
Pradesh

Jammu &
0.43 8.24 5.21
Kashmir

West Bengal 3.01 62.48 4.81

Orissa 1.28 33.06 3.88

Uttar Pradesh 4.60 147.00 3.13

Total 35.51 580.47 6.12

All India
39.46 802.00 4.92
(Total)
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