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Rural India to fuel mobile services growth

The next wave of mobile services market growth will come from semi-urban and rural areas.

Written by Agencies | New Delhi |
January 23, 2011 11:07:17 am

Rural India is expected to fuel the growth in mobile phone services in the next four years,as cell phones become a vital tool for the government in its financial inclusion programme,according to Global consultancy group Deloitte.

Deloitte said that low penetration levels of mobile phones would provide more business opportunities for service providers.

The paper focusses on how mobile phones can be used to deliver content and services that can help foster inclusive growth in India by digitally empowering citizens across all cross-sections of society,both urban and rural — This paper refers to these services as Utility mobile value added service (MVAS).

“The next wave of growth in subscriptions will come from semi-urban and rural areas. Today,the penetration of mobile phones in urban areas is already 100 per cent while in rural areas it is only 23 per cent,” it said.

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The rural segment services includes selling and procurement information and support for farm commodities,educating farming community on best practises,delivery of healthcare and education to remote village via the mobile broad band network.

Mobile phone subscribers’ base has increased by 35 per cent between March 2009 and 2010 with an even higher increase in low-end subscribers and in rural areas.

Financial exclusion in rural India,which comprises 60 per cent of the Indian populace,is acute,with about 76 per cent of the rural populace facing financial exclusion. It is increasingly difficult for banks to expand in rural areas because of various infrastructure,manpower,and operational problems.

RBI has focused its 100 per cent financial inclusion plan on the public sector Banks. SBI,the country’s largest public sector bank is currently piloting two initiatives for financial inclusion that are based on the mobile-platform.

SBI at present has a tie-up with two organisations for providing m-banking services in rural areas. Both initiatives were carried out in alliance with the application developers.

Initially,the 3G rollout is expected to be more focussed in urban areas-therefore the uptake of 3G services will be concentrated among urban subscribers,but with increasing coverage in rural areas the uptake among rural subscriber will pick up.

Consumers are also looking for diverse vernacular content at affordable prices — this would enable proliferation of 3G services across the country especially rural India.

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