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Well-connected powerhouse

Today, as approximately 10 million customers enter the country’s mobile networks every month, the long wait for a phone appears a distant memory, writes Sunil Bharti Mittal. Special Coverage

india Updated: Nov 18, 2008 22:01 IST

Today, as approximately 10 million customers enter the country’s mobile networks every month, the long wait for a phone appears a distant memory. More importantly, this phenomenal rate of growth makes the country one of the fastest growing mobile markets in the world. I personally see this explosive growth not merely as a connectivity revolution but as a facilitator of two interrelated phenomena — an unprecedented economic resurgence of a billion-plus population and empowerment of the common man.

It’s amazing that India has built this leadership position in telephony in just about a decade. In fact, total telephone connections in the country have grown from a mere 15 million in 1997 to more than 350 million today. Exponential growth of mobile telephony has made this possible.

Today India also happens to be the most competitive telecom market in the world. Mobile tariffs in particular have dropped progressively over the years dropping from a peak of approximately 30 cents a minute to less than two cents a minute, the lowest ever witnessed anywhere in the world. Operators have introduced remarkable innovation with their tariff plans to extend the reach of mobile telephony to the bottom of the pyramid. Payment plans like Life Time Prepaid speak eloquently about these innovations.

Selling at village pan shops, mobile connections constitute modern India’s most powerful movement today touching the lives of the ‘ordinary’ and the ‘powerful’ at the same time. From the fisherman in the high seas to the vegetable vendor on the street to the illiterate housemaid to the farmer in the countryside, everyone is getting linked to his or her marketplace and making the best out of his life situation. The phones are making conventional economic transactions more cost and time efficient. They are often making up for poor infrastructure by substituting for travel.

Economic empowerment of farmers, who still constitute the largest occupational group in India, has arrived in the shape of services that inform them about weather forecasts and commodity prices at the local mandis on real time. These services enable farmers to take the right decision at the right time. I am truly excited about what is in store for the mobile users in the coming years. Mobile Money Transfer, Mobile Banking and Mobile Payments will become common place in the country. Imagine over USD 25 billion of foreign remittances and over USD 10 billion of domestic money transfers can all happen in real time over the mobile phone. A migrant labourer from Bihar in Punjab can send a few hundred rupees at the cost of an SMS in a most secure manner. The final acceptance by RBI unlocked this vast potential of telephony.

From a macro economic perspective, mobile telephony is truly playing the role of a growth multiplier, making a distinct impact at the grassroots level. Irrespective of the location, urban or rural, the device is helping people to participate in the growth process more productively, making it a truly broad-based phenomenon. It is this welfare function that is driving this revolution spread across the world rapidly. The impact is most visible in the developing world, especially in the rural areas.

In their effort to achieve rapid penetration, Indian mobile companies, however, have gone through enough trials and tribulations; sometimes even threatening to their very survival. Here is an example how Bharti Airtel innovated its business model to meet the low tariff challenge in 2004. For the first time in telecom history, we made some remarkable outsourcing innovations. We put out our entire IT piece in the hands of IBM. Right from the desktop or laptop on the CEO’s desk to the most complex piece of IT, all was given out to the company in one swoop.

The networks were outsourced to Ericsson and Nokia. Under this first of its kind contract, we were not required to pay for the hardware they installed. Rather we paid for the traffic that comes out of these networks. It was an unusual model. Obviously risky, but having the potential to open up new frontiers in telecom network management. The rest is history as many across the world adopted the model to meet competitive challenges in their respective markets.

It feels great to be part of such an astounding story of growth. I am convinced that India’s leadership in the world of telephony is here to stay, as the penetration level increases and newer services find their way into the market. Our contribution to global telecom assumes importance in the light of the fact that services developed for the Indian market do have the maximum potential to impact lives in the developing world. The sheer number of lives our innovations stand to influence in this world is truly enormous.