Over the past few years, telecom operators have been increasingly shifting their focus to rural areas as the markets in Tier 1 cities and metros reach saturation levels in terms of mobile penetration. The low rural teledensity of 40.36 per cent presents major business opportunities for the telecom sector. Operators are offering local language-based subsidised handsets, lower tariffs and applications that are relevant to farmers and village communities. They are also selling handsets with pre-embedded value-added services (VAS). The launch of 3G services has also led to an increased focus on rural-specific content. Service providers are tying up with handset manufacturers to offer affordable 3G devices.

Encouraged by such operator initiatives, rural areas are moving ahead of urban regions in terms of new mobile connections. According to the Telecom Regulatory Authority of India, subscriptions in urban areas decreased from 599.2 million in August 2012 to 595.69 million in September 2012, while those in rural areas increased from 340.37 million to 342.01 million during the same period.

However, telecom companies face several challenges in rural operations. The biggest issue is managing absence of telecom infrastructure like towers and base transceiver stations in suburban and rural areas. Tower operators have to bear a huge initial fixed cost to enter rural service areas. Moreover, such areas lack basic facilities including roads and power, and, therefore, developing telecom infrastructure in these regions involves greater logistical risks and increases the time taken to roll out services.

Industry experts, however, expect the rural segment to witness significant activity, as operators and the government look to capitalise on the opportunities offered by this market. According to industry experts, the key demand drivers for mobile telephony in rural areas will be micro-banking, information services, commodity trading, health and education services, regional entertainment and location-based applications.

tele.net takes a look at operator initiatives in this space...

BSNL

Bharat Sanchar Nigam Limited (BSNL) has tied up with Teracom to launch the Lofty Tab, a tablet PC for rural users. The device is available in three versions, priced at Rs 3,999, Rs 6,499 and Rs 10,999. The first offers users 4 GB of internal memory, a 0.3 megapixel camera and an inbuilt music player. The device, priced at Rs 6,499, offers Wi-Fi connectivity, the Microsoft Office suite and support for a 3G data card, while the high-end version features a built-in 3G SIM card slot, and 3 megapixel dual cameras.

The operator has also tied up with the National Payment Corporation of India to offer its unbanked customers the National Unified USSD platform-based mobile banking service. Users can avail of the interbank mobile payment service fund transfer facility, which has a daily transaction limit of Rs 5,000 per customer.

BSNL has also tied up with SIS Infosystems to launch telephones with video calling facility. The operator charges Rs 3 for a 45-second video call.

Bharti Airtel

The company has signed microfinancing agreements with Nokia and SKS Microfinance. Under these partnerships, Bharti Airtel provides subsidised tariffs and SIM cards to rural users, Nokia provides subsidised handsets and SKS offers microfinance. Also, the operator has a joint venture (JV), IFFCO Kisan Sanchar, with Indian Farmers Fertiliser Cooperative Limited, which offers low-cost handsets; customised services including voice-based updates on crop prices, farming techniques and rural health initiatives; and helpline services, besides distributing Bharti’s products to the agricultural community.

Bharti’s wholly owned subsidiary Airtel mCommerce Services Limited has launched the Airtel Money Super Account in association with Axis Bank. Subscribers can open a no-frills savings account with Axis Bank, leveraging the operator’s mobile wallet (Airtel Money) platform. This service enables users to undertake banking transactions like cash deposits, money transfer and withdrawal.

The telecom major has also partnered with handygo Technologies to launch the Behtar Zindagi mobile-based service for farmers and other rural communities across Rajasthan. This facility will offer users access to information and updates on the weather, mandi rates, agriculture, fisheries, health, education and finance. The ‘Behtar Zindagi’ service is available in Hindi and 17 regional languages.

A group company, Beetel Teletech has launched the GD-470 dual-SIM touchscreen handset, priced at Rs 3,300. The device supports Bluetooth connectivity, and file formats like 3GP, AVI, MP3 and MP4 up to 25 frames per second (fps). Its other features include a 1.3 megapixel camera, a built-in FM radio, expandable memory of up to 8 GB and access to Beetel World.

Vodafone India

Vodafone India and ICICI Bank have launched a mobile money transfer and payment service called m-pesa. Vodafone India provides this service through its 100 per cent subsidiary, Mobile Commerce Solutions Limited (MCSL). The service comprises a mobile money account with ICICI Bank and a mobile wallet issued by MCSL. The service will allow customers to withdraw and deposit cash from designated outlets, transfer money to any bank account in India, recharge mobile and direct-to-home services and pay utility bills. The service will be initially launched in the country’s eastern region.

The operator has also partnered with HDFC Bank to launch an m-banking solution for the unbanked. The platform has combined HDFC’s MobileBank Account facility with Vodafone’s m-paisa service. The bank has appointed Vodafone India as a corporate business correspondent, allowing select retailers of the operator to represent the bank as subagents. The service enables users to undertake basic banking transactions through handsets.

Idea Cellular

The operator has introduced the ID 918 smartphone. Priced at Rs 5,994, the handset runs on Android 2.3 and supports dual SIM cards. It has a 3.2 inch WVGA capacitive touchscreen, a 3.2 megapixel rear camera, 150 MB of internal memory and 512 MB RAM. The company is also offering voice and data benefits worth Rs 2,340 with the device. Users can avail of these benefits for 48-72 hours after the first recharge and the first call from the smartphone. Data download after the first recharge is priced at Re 0.05 per 10 kB.

Idea Cellular has also introduced the Special Weekend Recharge offer for rural customers in Tamil Nadu. Priced at Rs 4, the recharge coupon enables users to make local calls at Re 0.10 per minute within Idea’s network and at Re 0.30 per minute to other networks.

The operator also has a partnership with Axis Bank for the Idea MyCash m-banking facility. Besides offering basic banking services like cash deposit and withdrawal, and balance enquiry, the mobile-based financial inclusion initiative enables money transfer by the migrant population in urban areas to beneficiaries in rural areas.

TTSL

Tata Teleservices Limited (TTSL) has launched the Sneham pack for TATA DOCOMO’s rural prepaid subscribers in Andhra Pradesh. The recharge voucher is available for Rs 23. With this pack, subscribers can make local calls on TATA DOCOMO’s network at Re 0.1 per second.

The operator’s 123 recharge voucher, which is priced at Rs 123, entails 20 hours of free talktime. This is valid on local calls made within the operator’s network for 30 days. Thereafter, all calls will be priced at Re 0.01 per six seconds.

The Smart Life 3G plans for rural prepaid customers in Kerala are priced at Rs 146, Rs 199 and Rs 246, and offer free talktime worth Rs 50, Rs 100 and Rs 150 respectively. The Rs 146 plan offers free 3G data usage of up to 300 MB, while the other two plans provide free 3G data usage of up to 400 MB and 600 MB respectively.

RCOM

Reliance Communications (RCOM) has a partnership with the State Bank of India (SBI) to offer services such as balance enquiries, mini statements, fund transfers, cheque book issuance, mobile recharges and bill payments through handsets. In 2011, the operator launched a JV company, Kribhco Reliance Kisan Limited (KRKL), in partnership with Kribhco, a cooperative society. The JV’s key focus area is to provide state-of-the-art telecom products and services in rural India. KRKL, through its network of over 25,000 cooperatives and 60 Krishi Seva Kendras, aims to develop a distribution model to cover the majority of the country’s rural population.

RCOM has also launched the Master Plan prepaid scheme for customers in Karnataka. It is priced at Rs 46 and Rs 101 for new customers and Rs 74 for existing customers. The prepaid card is valid for six months and local calls within the operator’s network are priced at Re 0.05 per minute. Calls to other networks are priced at Re 0.30 per minute. Users can avail of full talktime on all top-ups, along with 500 MB of free data usage. All SMSs are charged at Re 0.50 per message.

Miscellaneous

Mobile VAS provider handygo Technologies has partnered with the Centre for Agriculture Bioscience International (CABI) to provide mobile-based agriculture solutions in rural areas. Region-specific data including agricultural content and advisory services will be provided by CABI, while handygo will provide the technology platform. The solution is available on both the interactive voice response and SMS platforms. The pan-Indian service is available in 18 regional languages.