Race to the bottom: cell phones in India
India is one of the fastest-growing mobile phone markets in the world, adding 6 million new subscribers a month. In a market where 135 million cell phones are already in place and 450 million users are expected by 2010, handset makers are turning their attention to rural markets:
Since many people in India's countryside often need to share one phone, Nokia's new models include features enabling multiple users for each handset. For the first time, the phones have a call-tracking application and a multi-phonebook to make phone sharing simpler for customers at the bottom of the pyramid.
The low-cost cell phones will have FM radio and even a flashlight at prices as low as $19.
Comments (1)
Bookmark
E-mail
Facebook
I think the market for cellular phones in rural India has started now. It was never there. The urban/rural penetration ratio in 2007 is no better than what it was in 1997, when the cellular phone was an urban luxury. It means that the 183.5 million cellular phones as on March 31, 2007 are clustered in cities and towns, where about 310 million people live.
The author thinks that Nokia, as the leader of the handset market, is aiming at a rental-oriented business strategy. But it really doesn't work for the mobile phone, which is a very personal product and will remain so, however poor the user is. There are quite a few things that no user would like to share, like wrist watches, bicycles, rings. Mobile phone is one of them.
To facilitate spread of telephony in the villages, the Telephone Regulatory Authority of India (TRAI) has allowed mobile service operators to hive off their cell towers business, and to treat the running of cell towers as an independent 'networking' business. Following this policy shift, Nokia, and Siemens, the German telecoms major, have formed a Joint venture--Nokia-Siemens Network Company. It is leasing and erecting cell towers across riral India and Nokia is making low cost handsets exclusively for use through these towers. The idea is to distribute it free of cost among villagers but they can make a call within a radius of 4/5 Kilometers from the tower, though they can receive calls from anywhere. For this facility, they may be required to pay $3 a month, and that's all.
Seems like a modest fortune at the bottom of the pyramid.
Posted by: Sumit Mitra | May 30, 2007 6:16:43 AM