New Delhi: Lattoo may be a relatively poor 35-year-old mason living in a New Delhi slum, but he still typifies the reason why India’s mobile phone market is the world’s fastest growing.
He spends about Rs 20 a day on topping up the mobile phone he acquired two months ago to keep in touch with his mother in a village in central India.
“My uncle in the village has a phone too. So my mother doesn’t have to go far to make a long-distance call,” says Lattoo, who earns just Rs 550 per month.
That may not seem much to many people, but it still means a lot to Lattoo, who goes by one name, represents the new cell phone user in India: lower-middle class, self-employed and urban.
He is one of millions buying new phone subscriptions every month. The government expects 500 million mobile phone users by 2010.
India registered more than eight million new connections in August alone, taking the total number in the country to over 200 million, according to the Telecom Regulatory Authority of India.
Arvind Singhal, chairman of retail consulting firm KSA Technopak, said the government’s projection of half-a-billion could be hit. “This number is an achievable projection, considering we were adding only six million new subscribers just a few months ago,” he said.
“There is no sign of deceleration, even if this number does not accelerate,” Singhal said. The growth is being driven almost entirely by lower-income groups. The prices of handsets and calls are among the lowest in the world and still falling.
Chauffeur Ashok Gautam, 22, spends less than Rs 160 a month to remain connected. He says he can afford that on his monthly salary of Rs 5000. “Thanks to this phone, I don’t have to wait for hours in the car for Madam. Now, I feel free,” he said referring to his boss.
Autorickshaw driver Kishan Lal said his son bought him a handset a few years ago. “Life is easier with this phone and there is no tension, I can get in touch with people when I need to,” he said.
India’s legion of self-employed, which comprises half the workforce, has benefited the most. Maids, cooks, autorickshaw drivers and construction workers have bought mobile phones even on incomes as low as 100 dollars per month.
“It’s no longer a status symbol. It is increasingly becoming a necessity like water and electricity,” Singhal said. Now when a carpenter sticks up advertisements at a local grocery to find business “he has a mobile office” where people can call him, he said.
Despite the surge in mobile users, the growth is still largely confined to cities. A huge market in rural areas, where nearly 70% of India’s 1.1 billion population lives, remains untapped.
Telephone penetration in urban India is around 25 per 100 people but just 1.6 per 100 in rural areas.
The country’s total “teledensity” -- the number of people owning a telephone out of every 100 people -- also remains low at 21.20% in August, according to official data.
But mobile phone companies are rolling out coverage to rural and remote areas to increase their clients.
“Landline networks are not very effective in many of these places. So, mobile phones are a big necessity in rural areas,” Singhal said. “It’s not an indicator of wealth any more. A mobile phone is a tool that is likely to improve productivity dramatically.”