Rural India key growth driver of telecom industry

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Staff Reporter | 13 Feb, 2009
Rural population is the key growth driver of India's telecom industry though "affordability still remains a key issue", said a study released in New Delhi on Thursday.

According to the study by LIRNEasia, and information and communication technology policy organisation, 27 percent of the total mobile owners at the bottom of the pyramid (BOP), or the poorest socio-economic group, were added last year, whereas the urban areas added only 19 percent.

"Just five years ago, the massive momentum developed by the Indian telecom industry did not include rural areas. But now, the picture is different," the study said.

It added that phone ownership - both landline and mobile - at the BOP increased a whopping 131 percent between 2006 and 2008.

"Affordability still remains a key issue for the people at the bottom of the pyramid to buy mobile phones," Rohan Samarajiva, chairman and chief executive of LIRNEasia, told IANS.

Mobile ownership is as high as 40 percent at the BOP whereas the fixed phone ownership is 8 percent.

The study said India has a large second hand mobile phone market. "Most of the rural customers on an average spend $34.82 to buy a second hand phone and approximately $48 for a new phone," Samarajiva said.

However, a major chunk of the people still utilise only voice services and services like payment through mobile. Other value-added services are still at a negligible level, the study said.