How telecom can enrich billion lives in next few years?

How telecom can enrich billion lives in next few years?
v  Bridging the digital connectivity gap
·         Overall telecom penetration gap – VLR (Active mobile customers)- 707.3m; If we exclude multiple connections[1] and ~325m population below age of 15[2], somewhere about 375m Indians do not have an active telecom connection yet.
·         Rural telecom penetration gap – Almost 500m rural population does not own a phone
·         The rural mobile subscriber base is anticipated to grow at a compound annual growth rate of 12% between 2012 and 2016, at nearly twice the expected growth rate of the saturated urban market. It is likely that 62% of the new mobile subscribers added in the next five years will be from the rural market.[3] The National Telecom Policy (NTP) 2012 also envisages to increase rural teledensity from the current level of around 39 to 70 by the year 2017 and 100 by the year 2020.[4]
·         Internet access gap is likely to be bridged in next few years by mobile broadband. 3G subscribers are expected to reach 142 million by 2015, accounting for 12% of the total wireless subscriber base. Further, 3G subscribers are expected to be more than 300 million by 2020, accounting for 20% of the total wireless subscriber base.[5]
v  Financial Inclusion through Mobile Platform   
·         Primary attribute of inclusive growth is financial inclusion which requires  greater access to capital.
·         Out of approx 1200 million of Indian population, nearly 70 percent lives in rural locations and over 90 million rural households are on farming.
·         Approximately 27 percent are indebted to formal sources and 13 percent are availing loans from the banks in the annual income bracket of INR 50,000 or less.
·         Millions of people in rural India have little or no access to credit, even from non-institutional sources. Approximately 50 million farmer households in India have not taken any bank credit so far
·          Rural banking does not appear to be a financially viable activity for banks either.
·         Banks have ~7.4 lac point of sales, ~ 1 lac ATMs, ~94000 branches of scheduled commercial banks[6] , 18.3m credit cards and 302m debit cards[7]. Whereas Telecom Service Providers have ~150 Lac point of sales and cover 80% of Indian geography.
·         Mobile platform by creating a branchless banking system for the communities can be a  potential tool for financial inclusion. 
·          Low tariffs and low cost of handset provide a clear value proposition for driving financial inclusion through mobile platforms.

v  Efficient delivery of public services
·         By virtue of their ubiquitous nature, mobiles enable anytime, anywhere access to and delivery of services, bridging the last mile gap without huge upfront investments, even from rural and remote areas of the country, where computer and internet penetration is still low.
·         Department of IT  finalised the Mobile Governance Policy Framework in January 2012
·         The Framework  addresses  many essential issues that can help efficient delivery of public service through mobile
o    making government websites mobile-compliant,
o   developing mobile applications  in open standards to become interoperable across various operating systems and devices,
o   use of uniform/single pre-designed numbers in the form long/short codes for mobile services,
o   creation of Mobile Service Delivery Gateway (MSDG) as the core integrating infrastructure for multi-channel delivery
·          Department of Information Technology (DIT), Government of India, has created National e Governance Division (NeGD) as an autonomous business division within Media Lab Asia, under the Ministry of Communications and Information Technology, Government of India, for taking up the tasks being carried out by the Programme Management Unit National e-Governance Plan (PMU-NeGP) at DIT. NeGD through Centre for Development of Advanced Computing (C-DAC), has been developing the modularly-scalable Mobile Service Delivery Platform and Gateway (MSDP/ MSDG)
·         Strengthening this framework and bringing more and more government schemes and services under it in next few years can help to bring in inclusive growth

v  Effective transfer of benefits under govt. schemes
·         The service, based on mobile phones and biometric authentication, can form the core micro-payment platform for the transfer of benefits under various government schemes

v  Creating more jobs
·         Research conducted by ITU and several other entities have shown direct correlation of increased telecom penetration and broadband access to economic development
·         While the telecom industry in the rest of the world obtains 35-50% revenues from non-voice services, India derives only ~15% of sales from non-voice/ data services. Projections by UBS for major telecom players in India indicate that the non-voice revenues are going to be ~30% of total revenues for these players by 2020 With digitization of cable TV services, convergence encompassing TV, broadband and Telecom is possible. All this will shift the focus towards multi lingual content creation and VAS innovation.
·         More jobs expected in telecom related equipment and handset manufacturing, network expansions etc

What should be the policy focus?
·         Further improve percolation of internet/broadband
·         Improve impediments(like Right of Way and tower site clearances) for creating physical infrastructure
·         Further enhancement of network capabilities (esp. Optical fiber network) in rural areas
·         Improve resilience/robustness of  mobile infrastructure esp. for  remote areas
·         Bring down cost of entry level handsets to below Rs 500 & smart phones and tablets to below Rs 2500; Make available multi-lingual handsets
·         Foster innovation in local/rural content and VAS with a focus on regional languages
·         Promote R&D and indigenous manufacturing of telecom and related equipments
·         Complete integration of mobile delivery infrastructure with the core e-Government backbone infrastructure. 



[1] GSMA report says on average every mobile users in India has 2.2 SIM, compared to worldwide average SIM per person of 1.85;  If we take world average of 1.85 it means of 921m subscriptions in India, the unique subscribers are about 497.8m
[2] http://www.nationmaster.com/country/in/Age_distribution
[3] Source – Evalueserve research estimates  www.evalueserve.com  
[5] Enabling the Next Wave of Growth in India : Ernst &Young  and FICCI
[6] excludes rural post offices -1.15 lac , co-operative banks, agricultural credit societies, self help groups etc
[7] http://www.rbi.org.in/scripts/ATMView.aspx

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