Markets: Eerie calm

Markets: Eerie calm

it is not clear when market sentiment can change; as in the past, it can be quite sudden.
At a turn and yet not

At a turn and yet not

RBI could be tempted to cut policy rate to support growth at its bi-monthly review.

Rural India hits speed dial on road to mobility

Aug 19 2011, 06:41 IST
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SummaryRural India is hooked — to the mobile phone — so much so that it has overtaken urban India on number of subscribers as well as active connections, reveals ‘India Mobile 2011’, a Juxt Consult survey exclusive to FE.

Rural India is hooked — to the mobile phone — so much so that it has overtaken urban India on number of subscribers as well as active connections, reveals ‘India Mobile 2011’, a Juxt Consult survey exclusive to FE.

Of a total of 407 million-plus mobile phone users in the country, there are over 218 million rural mobile subscribers compared with 188 million urban subscribers, while the connections are pegged at 269 million for rural India, against 218 million for urban India.

The holistic land survey with more than two lakh participants across all 23 telecom circles of the country was conducted between April and mid-June, and pegged the growth in the number of mobile subscribers at 34%, with 103 million mobile users being added in the last one year, while active mobile subscriptions grew by 37% to reach 487 million. However, amidst the overall robust growth of mobile telephony in the country, rural India has scripted its own impressive story. Not only has it emerged as the largest market, but the growth shown by rural India in penetration and tele-density vis-a-vis urban India has also been impressive. Tele-density in rural India stands at 32%, which was just 21% last year. Urban India is much more tele-dense at 64%, as compared to 54% in 2010.

Similarly, while household level penetration jumped from 48% to 71% for rural India, urban India had 89%, just 1% up from the 2010 figure. The lower income class (monthly household income below R6,250) is now the single largest mass of mobile users in India with 40% users, again hinting at the growing dominance of the rural market. What further substantiates this assertion is the fact that the survey found SEC R4/R5 combine in the rural areas and SEC E in urban areas showing the highest increase in user base in the last one year, suggesting deepening of mobile penetration.

This heady concoction of a speedy rate of growth and the still unexploited potential in good measure of the rural market is what’s seducing mobile manufacturers and operators alike, considering urban India is facing saturation, with latest Trai figures pointing at a tele-density of 150% in 21 circles of urban India. Himachal Pradesh has the highest urban tele-density of 430.55%, while Delhi has 209.88%, according to Traidata. Even GSM subscriber additions have been on the decline for six consecutive months, pointing at the

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