It is expected that of the next 250 million Indian wireless users, approximately 100 million (40%) will be from rural areas, says a FICCI Ernst & Young paper on Telecom: The Last Frontier: Connecting Indias Rural Telecom Community.
The paper points out that operators have demonstrated they can achieve profitability in spite of ARPU of less than USD 6 per month by reducing fixed costs, controlling variable costs and carefully tailoring services to the requirements of their customers. A similar model with minor customisation could be emulated in the rural areas.
The USO Fund has large untapped reserves to support a range of new schemes. With the likely phasing out of the Access Deficit Charge (ADC), new incentives for rolling out mobile networks in rural India will come to the forefront. Passive infrastructure sharing and spectrum hoarding cess on defaulter operators who fail to meet their roll out obligations are illustrations of proactive government initiative.
Active and passive infrastructure sharing not only reduces opex and capex but also compresses the operators time frame to enter into the market. Erecting wireless telecom towers in Indias tough rural terrain is still expensive and logistically challenging, reinforcing the desirability of sharing.
Operators have operationalised cost-effective business models that help maintain profitability in the low Average Revenue Per Person (ARPU) telecom market in India. Examples include outsourcing of core services, introduction of a managed services model, sharing of passive infrastructure and innovative tariff packages like micro prepaid and lifetime validity. Further innovation in such strategies will be decisive to grow the rural market.
The FICCI- Ernst & Young paper notes that operators are driving down the handset costs to aid access in rural areas. Handset makers have provided ultra low cost handset of approximately USD 20 or Rs 800 to the market with built-in subsidies and lifetime validity with minimal maintenance costs. This has also been given a fillip through effective distribution in the remote areas.
Marketing innovations are being implemented that help establish a comprehensive sales and distribution channel to enable reach and access of the communications products to the remote locations. Emphasis has begun to shift from a marginal increase in teledensity to reaching a critical mass in rural areas that have access to and affordability of telecom services.
Moreover, operators could learn from interesting business models that have been experimented across the developing world for expanding rural connectivity.
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It is expected that of the next 250 million Indian wireless users, approximately 100 million (40%) will be from rural areas, says a FICCI Ernst & Young paper on Telecom: The Last Frontier: Connecting Indias Rural Telecom Community.
The paper points out that operators have demonstrated they can achieve profitability in spite of ARPU of less than USD 6 per month by reducing fixed costs, controlling variable costs and carefully tailoring services to the requirements of their customers. A similar model with minor customisation could be emulated in the rural areas.
The USO Fund has large untapped reserves to support a range of new schemes. With the likely phasing out of the Access Deficit Charge (ADC), new incentives for rolling out mobile networks in rural India will come to the forefront. Passive infrastructure sharing and spectrum hoarding cess on defaulter operators who fail to meet their roll out obligations are illustrations of proactive government initiative.
Active and passive infrastructure sharing not only reduces opex and capex but also compresses the operators time frame to enter into the market. Erecting wireless telecom towers in Indias tough rural terrain is still expensive and logistically challenging, reinforcing the desirability of sharing.
Operators have operationalised cost-effective business models that help maintain profitability in the low Average Revenue Per Person (ARPU) telecom market in India. Examples include outsourcing of core services, introduction of a managed services model, sharing of passive infrastructure and innovative tariff packages like micro prepaid and lifetime validity. Further innovation in such strategies will be decisive to grow the rural market.
The FICCI- Ernst & Young paper notes that operators are driving down the handset costs to aid access in rural areas. Handset makers have provided ultra low cost handset of approximately USD 20 or Rs 800 to the market with built-in subsidies and lifetime validity with minimal maintenance costs. This has also been given a fillip through effective distribution in the remote areas.
Marketing innovations are being implemented that help establish a comprehensive sales and distribution channel to enable reach and access of the communications products to the remote locations. Emphasis has begun to shift from a marginal increase in teledensity to reaching a critical mass in rural areas that have access to and affordability of telecom services.
Moreover, operators could learn from interesting business models that have been experimented across the developing world for expanding rural connectivity.
| Check Top MBA Colleges in India by Cities | | |
| Also Read Important Articles on MBA Admission | ||
| Top MBA Colleges in India | MBA Admission | MBA Entrance Exam |
| MBA Placements | MBA Ranking In India | GD Topics |
As the population and disposable income of rural India grows, rural telecom connectivity is poised for explosive growth in the next 5-10 years.