When Mud Shack Meets MP3

Oct 12th, 2010
My  latest  column (Dev 360) in The  Asian  Age and Deccan  Chronicle

When mobile phone marketers light up at the mention of the man in the mud shack, you know something serious is happening in the Indian countryside. The big picture is the soaring number of mobile phone connections in the country — over 670 million at last count. Zoom in, and there is the more fascinating story of how low-cost, long-battery-life cellphones are showing millions of Indians a way out of the ghetto.

Last week, I dropped into the office of a man who explained how batterynomics works on the ground. His work takes him to places that are yet to be connected to the power grid or have little electricity. Pretty bleak scenario, you would think. But not for Rajesh Sharma, director of operations, Zen Mobiles and rural markets adviser to the Indian Cellular Association.
Key to the wild success of the new models of cellphones with long battery life, he points out, is India’s failure to provide 24×7 electricity to the vast majority of its people. Around 89,000 villages out of 5.93 lakh still remain un-electrified. A majority of the un-electrified villages are in Bihar, Jharkhand, Orissa, Chhattisgarh, Uttar Pradesh and Rajasthan — states lagging behind in key human development indices.
Zen Mobile’s latest promotional campaign starring Bollywood icon Amitabh Bachchan seeks to tap this terrain. In the commercial, Bachchan, dressed in rustic gear, is the man with a projector surrounded by villagers waiting to see the Bollywood blockbuster Dhoom. Unfortunately, just as Dhoom’s title track comes on, the lights go off. The audience is livid and wants the money back. Bachchan asks everyone to be quiet and pulls out his ace — a Zen M-25  handset equipped with long battery back-up, video applications and  multimedia. Anger turns to exuberance and the crowd grooves to the title track Dhoom Machale playing on the mobile which incidentally costs around `3,000. The promo calls it Zen Mobile’s mini-theatre.
Mr Sharma is optimistic about the product’s future. In small-town India, where everyone lives with agonising power outages and in the villages, the message rings true.
Shyam Raj, a mobile phone dealer in Dumka, Jharkhand, draws attention to a common sight in the countryside: people trudging miles to recharge their mobile phones. Each recharge costs between `5 and `10. The user has to make at least a dozen such trips every month. Whoever has access to electricity — the grocer or the petrol pump dealer — can make money out of it. Low-cost cellphones with long life battery are a huge boon to Mr Raj’s customers, as they save time and cash.
The phone has thrown up immense possibilities to those minimally touched by development. The farmer in a remote village can know mandi prices and much else. But utility is not the only attraction. Whether millionaire, mazdoor or mud shack dweller, the mobile phone today is as much an entertainment device as a communication tool. The difference is that the mazdoor and mud shack dweller want the combo cheap, and customised to their special needs. Whoever figured this out early is making heavy inroads into the exploding rural customer base. Whoever did not is suffering.
It is pretty much a David and Goliath tale with a touch of Hindi-Chini bhai bhai. The telecom revolution kicked off in India in the late ’90s. Traditionally, multinationals ruled the roost. But in a hyper price-sensitive market like India, it was only a matter of time before local and less-known manufacturers clambered aboard the mobile phone bandwagon. The leader in this pack of emerging vendors is Micromax Mobile whose founder was inspired by a group of villagers standing in the afternoon heat waiting to get their cellphones charged from a car battery that was mounted on a bicycle.
Today it is these local low-cost mobile handset sellers who are creating the buzz. With over half of India’s population living in villages and the teledensity in its urban centres — like Delhi, Chennai and Mumbai — having reached saturation point, customising handsets for first-time buyers is a smart strategy that is paying off. And India and China are working together to make the rural backwaters the hotbed for innovation — Indian vendors typically get the phones manufactured in China or Taiwan.
Why are the less known Indian companies giving sleepless nights to the likes of Nokia, the market leader? Mr Sharma says it is because the locals figured out that many of the new customers would be small town, rural and poor, and spent time designing products to cater to their unique needs.
Apart from long battery life, the dual SIM card is a big attraction of the new mobiles. Every low cost cell offers this facility. Nokia got on to the dual SIM game a little late, losing market share in the process. Users are buying phones that support more than one SIM to take advantage of a variety of plans offered by different service providers. Typically, at the low end, people want one reliable number for the free incoming calls, and they have another for outgoing calls.
The Indian companies are doing well because they are incorporating feedback from the field into the design. Earlier models of a particular brand of low cost cellphone had a torch at the top of the handset. There were complaints and the more recent models have the torch at the bottom so that a user can continue speaking while walking down unlit village lanes. These phones also have a slot for a memory card. For a few hundred rupees, one can buy such a card with local content — songs, videos — opening up immense possibilities for locale-specific entertainment.
All this is exciting not only for those in the mobile phone business. Mapping the trail of the buyers of these new gizmos provides a handy deprivation index for planners. The first-time users of a low cost long battery life cellphone are most likely to live in areas that are hungry for reliable energy, and least likely to have access to a health centre with a fridge to store life-saving drugs or a school with students who have enough light in the evenings for their homework.

Patralekha Chatterjee writes on development issues in India and emerging economies and can be reached at patralekha.chatterjee@gmail.com

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One thought on “A slice of Italy, 2010

  1. Hola Patralekha ~

    Very eloquent article. Thank you for your analysis.

    I just thought I’d drop a quick line… My husband Suresh Krishnan is originally from Kerala and is considered the pioneer of adventure tourism in the Northern Zone of Costa Rica and has created one of the most-successful adventure businesses in Central America (www.desafiocostarica.com)

    Pura vida,
    Christine (Suresh Krishnan’s wife)

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