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Rapid mobile growth amongst India's poor

Just five years ago, the Indian telecom industry’s massive momentum barely included the poor.  Today, the picture is very different.

In January alone, fifteen million new telecom connections were made.  Eighty-six percent of the 429 million people at the Bottom of the Pyramid (BOP) in India, who are the poorest of the poor, are now making or receiving calls.  Almost half own their own mobile phone and although the other half still rely on friends,  family and public phones for calls, most can now access a phone in minutes - whereas two years ago, it would have taken  30 minutes or more for 13 percent of rural Indians. By 2014, only a few Indian households will lack a phone.

These are just some of the top-line findings emerging from the newly released study looking at Teleuse at the BOP in India, Bangladesh, Pakistan, Thailand, Philippines and Sri Lanka. The study conducted by LIRNEasia also reveals that since the last study in 2006, ownership of mobiles among the BOP in both rural and urban India has leapt to 40 percent from 9 percent. 
Mobiles are now the most used form of communication, pushing public phones into second place.  The BOP access to the mobile has been achieved in record time and is on course to continue; as in both rural and urban India, over 90 percent of those who plan to buy a phone declared the intention of getting a mobile. The main reason given for not owning a phone was affordability and the lack of a need.  Conversely, the most sought after features by the BOP in a mobile phone are a color screen and a flashlight by rural villagers; with the addition of a camera and radio function by urban dwellers. 

That all important first time

The rapid evolution of the mobile into a multi-purpose communications and knowledge tool combined with its fast adoption by the BOP, means they and the majority of people in the developing world are likely to have their first Internet experience via a mobile.  To ensure they get access to the social, educational and economic benefits the connected world enjoy,  government and industry in South Asia need to understand potential barriers to usage and to identify what will motivate use of ‘non-voice’ applications among the BOP.

 
So while LIRNEasia’s previous studies focused on all types of telephone usage among the BOP, the new research also looked at if and how mobile phones are being used for non-voice, or Mobile2.0 applications.  It found that at the BOP, there is only a little take-up or awareness of these services which include payments, text voting, market information, health information and e-government services.  Some premium SMS services such as agricultural, weather and health-related information are used, but sharing of files, downloading of music or even playing non-interactive games is low. 

They are also behind in using electronic top-ups in India, but this is seen as a ‘trustworthy’ activity which could make it a ‘door opener’ for more than voice services. 

 
Dr. Rohan Samarajiva, Chair and CEO of LIRNEasia comments: “Although usage is relatively low, these are the ‘doors’ through which people enter these services.  There is huge potential for more than voice services.  We now need to make sure appropriate services are available and promote them; for example 25 percent of people on pre-paid cards already use the phone to check their balance.  It’s a real chicken and egg situation.  Thankfully operators and vendors such as Nokia are already looking at providing information services for the BOP.  We must start marketing the phone as a universal gateway to knowledge....not just as a way of talking to people.”

The mobile aids income generation

The largest perceived benefit of a mobile phone in the Indian BOP is in emergency communication and relationship maintenance and although positive, most currently perceive only a small benefit on economic factors.

   
 “What are needed are good role models and stories of how people from the BOP are using their mobiles to gain advantages in earning a living as well as keeping in contact with family and friends,” says Samarajiva. “I was intrigued that Bangladeshi and Indian women despite coming from very conservative societies understand how the mobile phone can save them money and time.  This underlines that we need to demonstrate how the phone can put money in people’s pockets rather than taking it away.  We must stop thinking of the mobile as a consumption item and show it as a valuable aid to income generation.”

A strongly perceived benefit for the BOP teleuser was ability to save money on travel.  “The telecom/transport tradeoff with people substituting travel with use of the phone has been internalized and understood by the BOP,” explains Samarajiva. “People across South Asia told us how the phone saves them time and money they would have spent traveling into or around the city just to talk to someone.  At a micro level, BOP quality of life is being improved as they avoid often difficult and unnecessary travel, time and cost.  Also there is a fascinating side benefit in carbon emissions savings and the potential for positive environmental benefits. “ Three quarters of teleusers in India stated that they use the phone for business, financial or work-related purposes which contributed to their economic wellbeing. In Bangladesh, this is even higher with almost 90 percent using it for business-related purposes and three quarters of them using it for that purpose daily.

“This finding jumped out at me because these are extremely poor people and yet they invest in using a phone.  In my view, South Asian BOP teleusers are beginning to realize the benefits of the mobile balances out the costs and they no longer see it as a drain on finances,” comments Samarajiva.

Enhancing quality of life

The study shows the potential impacts the mobile could have on quality of life for the BOP as well as the country’s own economies are huge.  Nearly half the BOP now have easy access to a phone or own their own mobile but there is more to be done and according to Samarajiva - to serve the BOP efficiently and successfully will require government support, education and innovations in technology, business models and policy.
He concludes, “People are doing hard things and their efforts are producing fruit.  Governments are making policies, retailers and shopkeepers are giving connections, vendors like Nokia are making cheaper phones available and significant achievements are being made.  To date, industry has been driving the process but now we need government action to reduce taxes and levies.  This will increase BOP connectivity and prosperity, benefit the economy of the country and postpone the early onset of a slowdown.”

The complete LIRNEasia study will be published late May 2009.  To preview key results, click here