Mobile phones transform life of India’s poor

Before he got a mobile phone seven years ago, Vijay Navle, a small Mumbai fish trader, spent much of his time and scant income travelling on buses and trains.

Every day, he would make the five-hour round trip to visit fishermen living on the Arabian Sea on the north of the city to see if they had caught any of the prawns and large fish that he sells to exporters at south Mumbai’s Sassoon Dock.

Indian on his mobile phone

Tech trend: a growing number of Indians have mobile phones
EDITOR’S CHOICE
China’s hinterland picks up baton - Jan-18
FT series: Building Brics - Jan-18
Video: Stephen Green on Asia’s rise - Jan-18
Join the debate: Brics consumers - Jan-19
Russian appetite for bling put to the test - Jan-18
James Kynge: China turns inward for future growth - Jan-18

Today, like a growing number of Indians, rich and poor, Mr Navle and the fishermen have mobile phones. Fishermen call him when they catch something and he arranges the pick-up and delivery to customers by phone.

“I can immediately inform my customers that there’s a big catch coming in fresh and we get a better price for it,” says Mr Navle.

For hundreds of millions of people across India such as Mr Navle, the rise of mobile telephony has led to changes in their lives as profound as the advent of the fixed-line home telephone was for rich consumers in the west.

Aside from television, the mobile handset is the first contact for many Indians with the world of sophisticated consumer electronics and their first connection with the organized modern economy. And with third-generation cellular services on the horizon, the next phase of this consumer revolution is poised to begin with the spread of the mobile internet to India’s masses.

“The mobile phone is the first piece of technology that so many people in India will have owned, it’s their first communications device and it’s their first [mobile] entertainment device,” says Kunal Bajaj, managing director with consultancy BDA in New Delhi.

The latent demand for modern communications, coupled with low tariffs of less than one US cent per minute, has turned India into the world’s fastest growing large mobile market by user numbers.

The total subscriber base reached 506m users by the end of November, with 17.7m additions in that month alone, the Telecom Regulatory Authority of India reported.

These numbers have drawn the interest of the world’s largest companies, battling to wrest market share from domestic leaders, Bharti Airtel and Reliance Communications.

The fierce competition has led operators to introduce a myriad of low-cost data services for consumers and “micro-businessmen”.

Vodafone has introduced a service allowing urban consumers to make purchases such as film tickets, using voice and the keypads of their phones.

Reuters operates a short messaging service, Reuters Market Light, that provides farmers with instant crop price and weather updates. Others provide music-on-demand, ringtones and music video downloads that work even on low-bandwidth second-generation networks. These services lack the sophistication of those designed for smartphones in rich countries but can be ingenious in their simplicity.

“In states like Bihar and Uttar Pradesh you are finding huge amounts of activity around these types of [video] entertainment applications,” Mr Bajaj says, referring to two of India’s poorest states.

As these applications become commoditised, the industry is looking to 3G for growth. The government is expected to launch its long-delayed auction of spectrum for 3G this year.

With fixed-line internet penetration in India estimated at well under 10 per cent, 3G could provide the first contact with the world wide web for many Indians. For it to be successful, however, it will have to overcome many hurdles, such as the need for cheaper smartphones. Those such as the iPhone are unaffordable to the Indian masses.

Tom Levine, head of telecoms practice at Allen & Overy, the law firm, likens the situation to India’s car market, in which the Tata group has launched the world’s cheapest car, the Nano. “The Nano, as we all know, is what India’s really all about, not Mercedes Benzes,” he says.

To aid the spread of 3G, operators will also have to come up with more commercially useful applications for lower-income people, many of whom are illiterate. Examples include enabling online money transfers or crop pricing and trading for farmers. “The question is going to be how, using the greater data speeds available with 3G, you can make something that is useful for people who can’t read,” Mr Levine says.

While mobiles can change lives for the better, advances in technology can also be a double-edged sword, as fish trader Mr Navle is discovering.

The mobile initially gave him an edge. But recently, his income has declined as customers have begun calling around to get a better price. “Earlier, they would deal only with me. I would have dedicated customers. Now they are calling other traders as well,” he says.