New Delhi: The mobile phone is enabling people at the bottom of the pyramid such as balloon sellers and water melon vendors to do business in a wider geography. While the former reaches out to a potential market much faster because of the timely information he gets about crowd gatherings on his cell phone, the latter isn’t worried any more about the nine-month-long off-season as he can easily find alternative work as a repairman.

Rural folk are subscribing to mobile services in larger numbers than their urban counterparts

According to data on rural telephony compiled by the Telecom Regulatory Authority of India (TRAI), rural folk are subscribing to mobile services in larger numbers than their urban counterparts. Rural connections stood at 39.46 million in June 2007, or 21.31% of the national subscriber base of 185 million achieved that month.

Little wonder then, that mobile penetration in rural areas was the highlight of discussions at the Telecom CEO Conclave, held in New Delhi recently. The subject was part of the overall deliberations on the projected expansion of the mobile phone network to 500 million subscribers by 2010.

Video would be the most popular and relevant application in the rural telecom scenario and mobile service providers must go for multiple uses of the mobile based on a combination of voice and video, leading telecom executives asserted at the conclave.

“In the rural context, it would be voice messaging, not SMS, that would be popular" said K Sridhara, member-technology, Department of Telecommunicatons (DoT). He rejected the contention that rural users are too poor to pay for mobile services, quoting his own personal observations in remote areas.

In order to provide affordable services in the face of expected fall in average revenue per unit (ARPU) and high cost of capital equipment and operation, telecom service providers must treat their service “as a destination, not a gateway" said Stefen Rust, global head of marketing & strategic development, Sun Microsystems Inc.

Suggesting a solution to the problem of raising per user revenue in rural areas, Rust called for “moving the aggregation of content on to the platform of the networks to enable rural users to access a wide range of services that gave end user value in the rural context Java had made this possible" he added.

To overcome falling ARPU in the rural context, both volume game and additional services like advertisements should be pursued so that service to the user would be economic at a very low cost to him. Indian manufacturers plan long-term for the right product through adequate investment in R&D, Shridhara added.

In Taiwan they were focusing on the futuristic WiMax putting almost a fourth of their R&D funds in that development.

While admitting the tremendous challenge that telecom companies would face in the attempt to cover rural areas, all the panelists at the discussion agreed with Jagbir Singh, CTO – Mobility, Bharti Airtel Ltd that “we are positive about rural coverage". Singh however explained the difficulties operators faced in getting power connection and regular supply for the cell sites to function. Back up with solar or other sources added to the cost heavily. The low population density in rural areas necessitated more towers and higher ones that further raised costs.

Language was another problem and there were many dialects that had no alphabet. To meet these challenges Singh suggested simplifying product access, offering customer-centric solutions like popular music and hello tunes, and sharing infrastructure.

Most participants also were hopeful wireless Broadband would be a popular and relevant medium in the rural areas with UT Starcom managing director, Vijay Yadav, suggesting involvement of locals in the network job in addition to USO funding. The UT Starcom chief wanted the industry to realize the potential of the customer also becoming the producer, the Prosumer business model, as he termed it.

“The Prosumer will play a key role with villagers delivering services to urban areas over the broadband network and the urban areas doing the same to global customers," Yadav underlined the evolution of the service in the coming years. He felt that mobility was more relevant to rural areas as people had to contact markets and vendors located at distances.