Mobile Services growth in Urban areas is near saturation, infact, it has crossed 100% in cities like New Delhi – There is no doubt that Mobile Industry’s next growth frontier is Rural India, which is triple the size of Urban Market. The rural Indian mobile market is not only large, but the mobile penetration is in some cases in lower single digits.
There is no doubt that, if Indian mobile service providers have to sustain their growth rates, they have to make a deep headway into towns and villages of India.
However, Rural India is a completely new ball game when it comes to mobile services – It has different requirements as compared to urban mobile users. While, urban mobile users crave for higher internet speeds and more rich content on their phones, Rural India is looking for ultra – cheap mobile services.
Accenture released a very informative research- Wanted: New business models for profitable rural expansion - that talks about what rural Indian consumers want when it comes to mobile services.
The research presents a number of important findings, including:
- 1 Basic services are more important than higher-end ones in the short term:
- 2 Mobile operators should focus on ways to reduce the costs being borne by the customer after being connected:
- 3 Simplicity continues to be the name of the game:
- 4 Cost management will drive profitability, at least in the short term:
Basic services are more important than higher-end ones in the short term:
Operators need to generate short-term revenues through voice and more basic value-added services, rather than high-end services and content requiring expensive fees to content developers.
Have a look at below chart, Although camera seems to be most sought after feature, dust resistance and torch light are functions that we (the urban users)don’t even consider while buying a mobile – while they play an important role in decision making of rural citizens.
Mobile operators should focus on ways to reduce the costs being borne by the customer after being connected:
Rural consumers are primarily concerned about their ongoing costs of operating a live connection than they are the initial fixed costs.
Simplicity continues to be the name of the game:
Rural consumers want basic, simple services, and a device that is easy and inexpensive to operate. Voice rather than value-added services continues to be the priority of customers.
Cost management will drive profitability, at least in the short term:
In the rural environment, which has a lower ARPU rate, profitability will be driven by effective cost management capabilities. A better understanding of customer needs, preferences and barriers to purchase will be essential to reducing marketing and after-sales costs.
From this Accenture research it is clear that mobile operators have to stick to basics, customize their offerings to rural consumers and be cost effective, if they want sustained adoption of mobile telephony in Rural India.
Let see how this next growth phase in rural India pans out !