NEW DELHI: Mobile phones seem to be ringing incessantly in rural India. Of the total 884 million mobile connections in the country, 303 million are in the rural space. The segment contributes, on an average, 40 per cent of the total 2 million connections added each month in the country. Data released by Telecom Regulatory Authority of India (Trai) in November 2011 shows that the share of urban subscribers marginally decreased from 65.86 per cent in October 2011 to 65.73 per cent in November 2011, while rural subscribers crept up from 34.14 per cent to 34.27 per cent.
PUSH AND PULL
Triggering the growth are multiple factors. For one, service operators are vying with each other to offer customers unique tariff schemes that offer more voice calls per minute for a paisa. Mobile marketers too are doing their bit to get in more rural clients with handsets that are customized for them. Consider Samsung’s Solar Guru phone (Guru E1107) and Micromax’s X1i+, which offers a battery life of 15 hours. It is a killer feature, in power-starved rural India. Though it was Nokia that set the ball rolling in 2005 with its 1110 phone, which doubled up as a flashlight and came in very handy in the villages. “Priced at Rs 1000, it was easily adopted by the rural folk,” says NK Goyal, a Delhi-based telecom analyst.
That’s not all. The opening up of BPOs—paying average monthly salaries of Rs 5,000—and government employment schemes like the NREGA have augmented the disposable income in villages, especially among the youth. This, in turn, has led to a high demand for new phones.
According to a study undertaken by Delhi-based market research and consulting specialists JuxtConsult, almost 82 per cent of all mobile handsets sold in India cost below Rs 3,000. In rural India, this figure slips a little lower, to Rs 2,078.
But, if you think rural means cost conscious, you would be wrong. “The rural market demands affordable phones with value-added features and an assurance on service,” says Vikas Jain, business director, Micromax Informatics Ltd. Indeed, companies like Nokia and Micromax, which have distribution channels in more than 3,000 cities and over 2 lakh retail channels each in the rural areas, say the rural customers asks the most searching questions about after-sales service.
While it is true that most villagers use their mobiles largely for voice calls, the youth—which accounts for 55 per cent of the rural population—wants all the features that are enjoyed by its peers in the cities. “Demand for feature-heavy smart phones is increasing everywhere in India, even in the rural market,” says P Balaji, managing director, Sony Ericsson Mobile Communications India Ltd.
The study by JuxtConsult, in fact, says though only 6 per cent are internet-enabled, 80 per cent of the ‘most used’ handsets both in the urban and rural India have games loaded. Fifty-five per cent have FM and 18 per cent have cameras. “The rural youth demands music, camera and games in its phones, while SMS-based service like weather forecasts are popular with the older customers,” explains Ranjit Yadav, country head, Samsung Mobile and IT.
SHARE BY STATE
According to Trai, the northern states have a larger appetite for mobile services. Leading the pack is Himachal Pradesh with 69.60 per cent rural mobile teledensity, followed by Punjab (59.32) and Haryana (54.25). Tamil Nadu is fourth at 51.11 per cent, followed by Gujarat (48.79), Maharashtra (47.84), Kerala (47.64), West Bengal (40.37), Rajasthan (39.97) and the North-Eastern states (36.44). The lowest demand is in Bihar, where just 23.49 per cent additions were made in the quarter September-November 2011.
Not that the phone bills are huge in any of the states. “The average monthly bill in rural areas is less than `100; in some states it is under `50,” says a senior executive in Bharti Airtel. The majority of customers use prepaid connections in line with the national average where prepaid accounts for 94 per cent. “The monthly average pre paid bill across the top 10 states is estimated at Rs 180-Rs 200,” says a senior Trai official. “The average bill for a post-paid connection in urban areas is Rs 3000 and for pre-paid is about Rs1,200.”
OPERATOR PLANS
Bharti Airtel, with a 23.90 per cent share of the rural market, is now further expanding its network It has placed orders with Ericsson and Nokia Siemens Network (NSN), the telecom network equipment vendors who also manage Airtel’s network. They will roll out networks in the rural market to provide connectivity in far flung areas, not yet covered by them. Vodafone, with 18.7 per cent rural subscribers, is set to launch a tariff scheme in February, to attract more subscribers. “Till now we offered only voice under different tariff schemes, we will now offer free customized sms. It could be news from mandi or local officers visiting them,” said a Vodafone marketing executive. Idea Cellular Ltd, with 17.51 per cent market share thanks to its acquisition of Spice operations in Punjab and Karnataka in 2008, says it has done well in the rural market.
BSNL, with 11.43 per cent market share, has the largest network reach in rural areas but hasn’t been able to convert this to subscriber addition. Instead, the introduction of mobile number portability has seen many of its subscribers moving over to private operators. At present, Reliance Communications is the smallest player with a 10.98 per cent market share in rural India.