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DEVELOPMENT: Rural India Set to Ring in 3G Mobile Technology

Ranjit Devraj

NEW DELHI, Oct 7 2009 (IPS) - As India prepares to roll out third-generation (3G) mobile services in the world’s fastest growing telecom market, there are high expectations that it will benefit people in the vast, impoverished rural hinterland most.

A door-to-door vegetable vendor uses her mobile phone to increase her earnings.  Credit: Ranjit Devraj

A door-to-door vegetable vendor uses her mobile phone to increase her earnings. Credit: Ranjit Devraj

“In the same way that basic mobile services allowed India to leapfrog over the digital divide, 3G services with their video and picture features can transform life in the infrastructure-deficient rural areas,” said Devendra Jalihal, a member of the Chennai-based Telecommunication and Computer Networking Group (TeNeT).

Rural population in India is estimated at seven percent of its 1.1 billion population.

The actual rollout – which will be carried out over a period of three years – is expected to begin in December once the auctions to private operators are over.

3G services to date have been patchy and experimental in India. The state- owned telecommunications company Mahanagar Telephone Nigam Ltd has launched a promotional drive in most of New Delhi, charging 1.80 rupees (3.8 U.S. cents) per minute for a video call within the company’s network. Calls to private internal networks, when available, will cost three rupees (6.4 U.S. cents) per minute.

A specialised group drawn from several departments of the prestigious Indian Institute of Technology-Madras, the TeNeT has been tasked with research and product development for the Indian telecom and networking industry as well as driving information technology policy.

Current TeNeT missions include building 50 million broadband connections over the next five years, helping to double the rural GDP of India, making high-quality distance education possible and driving the next generation of wireless standards.

“At TeNeT we are naturally very excited about the rollout of 3G services because video and pictures can help overcome language barriers. For example, very few farmers speak or understand English, and this limits their access to urban markets using voice alone,” Jalihal told IPS in a telephone interview from Chennai.

“The possibilities are endless — 3G will positively impact such areas as health services, education, agriculture and governance,” said Jalihal. “There will naturally be an increase in public expectations in these areas, and this can dramatically stimulate social change.”

Jalihal believes that the introduction of 3G-enabled mobile services will more than make up for the relatively poor penetration of the personal computer (PC) into India’s rural areas.

Mobile 3G services can make Internet services more easily accessible compared to using a PC, which needs steady electricity supplies, maintenance, broadband services and other infrastructure which are missing in large swathes of rural India.

“While we are approaching a figure of 500 million mobile subscribers, PC penetration in India remains poor compared to countries like Russia, Brazil and China,” Jalihal said.

Internet penetration in India is still seven percent of its population as against neighbouring China’s 25.3 percent of its 1.3 billion people. Within Asia, South Korea has the highest Internet penetration covering 77.3 percent of the population, followed by Japan with 74 percent, Singapore with 66 percent, Malaysia and Taiwan, with 65 percent each, according to Internet World Stats, a data-providing website on world Internet usage.

On the other hand, India is currently adding 10 million new mobile subscribers per month on average. The World Bank estimates that every extra 10 mobile phones per 100 people in a typical developing country can boost GDP growth by 0.8 percentage points.

According to the Telecom Regulatory Authority of India (TRAI), India added more than 30 million new mobile subscribers in the months of July and August. That contrasts with the pre-liberalised era of the 1980s when telephones were considered a luxury and the waiting list for new connections hovered around 20 million applicants.

Privatisation of telecom and mobile technology changed all that. Second- generation or 2G mobile services rapidly seeped down to the grassroots level. Today it is already common to see domestic workers, cab drivers, carpenters, plumbers, vegetable vendors and farmers using mobile phones.

With the advent of 3G, fishermen can negotiate prices for their catch before heading for shore by sending in pictures of the type of fish they have on board. Similarly, farmers and horticulturalists who have perishable produce can take advantage of 3G services to bargain for the best prices before harvesting, bypassing middlemen.

Deven Appiah, a Bangalore-based rose grower, prefers to wait till the last minute before putting shears to his blooms to maintain freshness. “It helps if florists in cities like New Delhi or Mumbai place major orders if they can actually see the colour and size of the flowers in real time.’’ He knows this is possible with the use of 3G facilities.

Jalihal said TRAI policies are structured in such a way as to ensure that private mobile operators are compelled to take their services to millions of rural consumers because that is the only way they can recover the high costs of buying 3G spectrum at government auctions, which are due to be completed by November. One such policy requires the conduct of auctions.

The auctions were originally scheduled to take place in December 2008, but the government was unable to arrive at a reserve price, which has finally been set at 34 billion rupees (722 million U.S. dollars) for an all-India license. The government expects to make at least 237 billion rupees (five billion U.S. dollars) from license auctions.

While operators have been bickering over the high costs of licenses, Jalihal believes that the government can use the money to ensure that the necessary infrastructure gets built and a wider section of the population, particularly in the rural areas, benefits.

Statistics released by TRAI show that there are presently 38 million subscribers across India using Internet services through their mobile phones instead of landlines. This figure is bound to rise when 3G becomes available. TRAI expects that value-added services will drive bigger revenues for the telecom industry in India, and that these could cross 3.5 billion dollars annually by mid-2010.

All the prognoses are upbeat. The Federation of Indian Chambers of Commerce and Industry estimates that there will be 90 million 3G mobile subscribers by 2013 and that annual sales of compatible handsets will reach 81.3 million units by 2013.

According to the International Market Assessment, mobile handset manufacturers are planning to launch 3G phones as cheap as 2,800 rupees (60 U.S. dollars) to tap into India’s rural markets, where three million subscribers are being added each month.

Jalihal is confident that while there are challenges, 3G operators can take advantage of new opportunities in providing a mix of voice, data and video to generate additional revenue that can compensate for the high license fees and also participate in what could prove to be the single biggest step towards socio-economic transformation in India.

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