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Tapping New Markets: Operator initiatives in rural areas

June 01, 2012

The rural market has remained largely untapped by Indian operators due to the many challenges it presents. However, with the urban market reaching saturation, operators are now shifting their focus to rural India. The low rural teledensity of 39.22 per cent as against an urban teledensity of 169.55 per cent represents a large untapped potential in the segment.

Operator initiatives in rural areas include infrastructure sharing, establishing collaborative centres for research and development, and service expansion through awareness programmes. Attractive and affordable tariff schemes including lifetime prepaid cards, micro prepaid cards, and low-cost handsets have been introduced by operators to improve mobile penetration in these areas. Operators are also developing value-added services that will deliver relevant content through the right medium (audio/video/text) at affordable prices to these consumers. They are increasingly introducing services and applications in vernacular languages to encourage service uptake in rural areas.

Driven by various operator initiatives, rural areas are moving ahead of urban regions in terms of new mobile connections. In March 2012, of the total 7.85 million net subscriber additions, 6.14 million (over 78 per cent) were from rural areas.

tele.net takes a look at some of the operator initiatives in this space...


Bharat Sanchar Nigam Limited (BSNL) is the only service provider to have made consistent and focused efforts to bridge the rural-urban digital divide. The operator has the largest network reach in rural areas and serves 147,463 of the country’s 250,000 village panchayats. Its broadband network covers 170,000 villages. The service provider has over 24,500 ADSL DSLAMs in rural areas. Also, the government’s programme to establish over 100,000 common service centres (CSCs) for providing access to e-governance applications is powered by BSNL broadband. Special tariff plans offering 4 GB of data download at Rs 400 and 8 GB download at Rs 1,000 have been announced for the CSCs. Besides, the government plans to set up 28,000 broadband kiosks run by BSNL in rural areas to provide access to the internet. Of these, 9,363 kiosks are already operational.

In order to expand its broadband footprint, the operator signed an agreement with the Universal Service Obligation (USO) Fund under the latter’s Rural Wireline Broadband Scheme. As per the contract, BSNL will provide 888,832 wireline broadband connections with a speed of 512 kbps to individual users and government institutions by 2014. The USO Fund subsidy will help the operator provide new connections, customer premises equipment and personal computers in rural areas. By 2014, BSNL plans to provide broadband services to all the 250,000 village panchayats.

The company is also providing 1 Gbps connectivity to 381 universities in urban and rural areas, and plans to connect another 19 such institutions by August 2012. It also provides 10 Mbps connectivity speeds to 27,150 colleges in association with the Ministry of Human Resource and Development. Over 18,000 of these colleges have been provided seven VPN connections each on an average. These initiatives would help provide quality education to the rural population.

Bharti Airtel

Bharti Airtel is focusing on efficient infrastructure deployments, expanding its distribution network through partnerships, and offering customised content and affordable tariffs. The operator has signed microfinancing agreements with Nokia and SKS Microfinance. Under these partnerships, Bharti provides subsidised tariffs and SIM cards to rural users, Nokia provides subsidised handsets and SKS offers microfinance. The operator has a joint venture (JV), IFFCO Kisan Sanchar, with Indian Farmers Fertilizer Cooperative Limited (IFFCO), which offers low-cost handsets; customised services including voice-based updates on crop prices, farming techniques, rural health initiatives; and helpline services, besides distributing Bharti’s products to the agricultural community.

In June 2011, Airtel digital TV, the operator’s direct-to-home division, announced the launch of iKisaan – an interactive service in Hindi.  The service offers real-time access to crop prices, commodity prices, weather information and localised farming advice. The service is powered by handygo.

Recently, the operator partnered with Axis Bank to offer banking services through mobile handsets to the unbanked population in rural and urban areas. The Airtel Money Super Account allows airtel money customers to open a no-frills savings account for banking transactions.

Vodafone India

Vodafone India, which had been mainly offering voice-based services under different tariff schemes, has introduced free customised SMS services.

The operator has a tie-up with ICICI Bank for offering mobile banking (m-banking) services in rural areas. In November 2011, Vodafone India partnered with HDFC Bank to launch m-paisa, a mobile banking service, in Rajasthan. Under this, customers can undertake basic banking transactions through mobile handsets and carry out deposit/withdrawal transactions at Vodafone m-paisa outlets, without going to the bank’s branches. In the first phase, the pilot service has been launched in 10 villages in Rajasthan’s Sikar district. HDFC has appointed 54 business correspondents in these villages, leveraging manpower on Vodafone’s retail network.

Idea Cellular

Idea has taken several initiatives on the VAS front including signing an agreement with VAS provider handygo for launching a rural information service, Behtar Zindagi. The service provides information related to weather, livestock, mandi prices, fishery advisory and finance as well as health-related schemes, and is priced at Re 1 per minute. To provide the latest information, handygo has partnered with Care India, Aviva Life Insurance, the Indian Meteorological Department, the Indian National Centre for Ocean Information Service, Hariyali Kisaan Bazaar, etc. The service is available in the local language apart from Hindi and English.

Idea has also launched the Idea MyCash m-banking facility in collaboration with Axis Bank. Besides offering basic banking services like cash deposit and withdrawal, and balance enquiry, the mobile-based financial inclusion initiative enables money transfer by the migrant population in urban areas to beneficiaries in rural areas.


Nokia India and Tata Teleservices Limited (TTSL) have partnered to offer the Nokia Ovi Life Tools service to plug information gaps in the areas of agriculture, education and entertainment.

In December 2011, the operator partnered with Tech Mahindra’s VAS subsidiary, Canvas M Technologies, to launch a job portal, Saral Rozgar. It is a mobile VAS solution targeted at providing utility-based services to people belonging to the low-income segment. Using this service, subscribers will be able to prepare résumés and apply for jobs via mobile handsets through a simple human-assisted voice call. The service will enable rural people looking to work in cities to register themselves on the portal through their handsets and apply for jobs. The service is charged at Rs 10 for 10 days with 25 minutes of free browsing. The service has a top-up option of Rs 5 for 12 minutes.


Reliance Communications (RCOM) has taken several steps to improve its performance on the rural front. In January 2011, the operator launched a JV company, KRIBHCO Reliance Kisan Limited (KRKL), in partnership with KRIBHCO, a cooperative society. The JV’s key focus area is to provide state-of-the-art telecom products and services in rural India. KRKL, through its network of over 25,000 cooperatives and 60 Krishi Seva Kendras, aims to develop a distribution model to cover the majority of the country’s rural population.

In March 2011, RCOM launched a rural VAS initiative, Behtar Zindagi, in partnership with Handygo. The service is priced at Rs 30 for 30 days.


In March 2011, Uninor launched Soochna Shakti, a VAS aimed at providing employment opportunities for rural subscribers. The application, which was rolled out as a pilot project under an initiative funded by the USO Fund, provides information, expert advice and news alerts on health, education, self-employment and finance.


Operators have started realising the potential of rural areas as the next major growth driver for telecom services in the country. However, there is a need to expedite their initiatives if the country has to achieve the target of 100 per cent rural teledensity by 2020, set under the National Telecom Policy, 2012.


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