Rural thrust is key to growth of Indian telcos

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Feb 22: Sunil Bharti Mittal, chairman of India’s second-biggest mobile-phone network, says fishermen on the nation’s southern coast are using their cell phones while at sea to call traders and find out who’s paying the most for lobsters. He’s planning to stop that.

Instead, Bharti Tele-Ventures Ltd will offer the fishermen a wireless Internet service that would provide up-to-date prices for their catch and even allow them to book orders from their boats. Doing that, the fishermen “will significantly increase their earnings”, he says.

Fishermen aren’t the only ones on Mr Mittal’s radar screen. In the next 12 to 24 months, he plans to introduce technology that will enable farmers to monitor weather conditions in real time on their mobile phones, Mr Mittal said at an Ernst & Young conference in Singapore last week.

The abysmal lack of communication facilities in rural areas has been, until now, a source of some satisfaction to those who believe that by progressively opening up the industry to private and foreign investors in the past decade, India has only looked after the interests of privileged city dwellers.

The naysayers, prominent among them the Left who opposed the government’s decision this month to allow foreign investors to raise their stakes in domestic telecommunications companies to a maximum of 74%, from 49%, should sit up and take notice as benefits of greater competition begin to flow to the remotest corners of the country — with private investors’ money and not government subsidies.

Reliance Infocomm Ltd, Bharti’s bigger rival by subscribers, recently announced that by end-2005 it will provide voice, data and video access to 650 million people across 400,000 villages and 5,700 cities and towns in the country. Reliance, which has 10.5 million subscribers, is calling the expansion an attempt to bridge India’s “digital divide.”

Only 1.5% of people living in the country’s rural aera have access to telephones, compared with 25% in cities. In part, what’s causing connectivity to start spreading to rural India is a glut in global bandwidth. In partnership with Singapore Telecommunications Ltd, Mr Mittal has set up the world’s biggest privately held undersea cable by capacity — an 8.4 terabit-per-second line joining India to Singapore.

Reliance Infocomm bought international capacity last year by acquiring the network of Hamilton, Bermuda-based Flag Telecom Group Ltd, which came out of bankruptcy protection in 2003.