A study of critical power and fuel dependencies for Indian GSM site solutions
Published by shashwat.nagpal in Read Resource library White Papers
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India’s overall economic growth has dramatically increased rural India’s purchasing power. Marketers are now looking at smart ways to reach the rural market. Some Indian companies have modified their offerings specifically for the needs of rural markets.
Hindustan Lever Limited (HLL) is a good example with successful rural marketing projects like ‘Project Shakti’ and ‘Operation Bharat’. The main emhasis of HLL’s strategy has been to focus on penetrating the market down the line and focusing on price point. Hindustan Lever relies heavily on its own company-organised media. These are promotional events organised by stockists.
Coca Cola India entered the rural market by introducing bottles priced at Rs. 5. The campaign was backed with ads featuring well-known actor Aamir Khan. During the Aamir Khan ad-campaign, they also used local language in advertising. A combination of TV, cinema and radio was used to increase the reach to rural consumers. Coca Cola have also used banners and posters, and tapped many local forms of entertainment. Because of the common lack of electricity and refrigerators in rural areas, Coca Cola provides low-cost ice boxes — a tin box for new outlets and thermocool box for seasonal outlets.
A thorough understanding of the rural consumer is a crucial key to rural marketing success. Rural marketeers also need to take the large diversity of customs and language into account. Ideas and techniques used in urban areas just won’t work for rural consumers.
Mobile telephony can better enable rural marketing in the following ways:
Clearly there are many advantages to marketers if the mobile telephone density increases in rural India. With VNL’s solar powered GSM system – WorldGSM™ – mobile operators can finally provide rural mobile telephony services to India’s villages. This will in turn will enable better rural marketing specifically designed for rural consumers.
Published by Sapan Goel in The Microtelecom Revolution Blog
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Urbanization is a subjective concept and has a different meaning in every individual’s mind; but what remains common is the idea that urbanization defines a change in the way people think, live, and interact.
All those of you who have studied Sociology must be well aware of how urbanization is changing the rural landscape, as the latter expands to merge into urban areas. What is more interesting is the ‘city lifestyle’ which is redefining the way rural folks live.
I’d like to look at the business side first – with SEZs (Special Economic Zones) being set up across the remote regions in the country, the rural population has not only been blessed with employment opportunities, but also higher wages and a better standard of living. A majority of the people who migrate from rural to urban areas do so for the job opportunities that cities have to offer. But with BPOs and manufacturing units setting up shop next door, the rural youth don’t seem to be complaining. In fact, the BPOs have started a new trend in rural India, one which prevailed in the metros, and then trickled down to the tier II and III cities – earning enough money not only to support family needs, but also to engage oneself in small indulgences. The income earned is also giving many the opportunity to study further with the money they save up.
The rural business story also has another side, where some of the biggest retail and FMCG brands have opened their chains in rural and remote areas, because as urban markets reach their peak, and begin to stabilize, rural India is on a high. As technology penetrates into the semi-urban and non-urban regions, and TV sets, PCs and mobile phones enter rural homes, there is an increase in the way that individuals and families are emulating the lifestyle of city people.
From a consumer’s perspective, people in rural India have enough reasons to smile; after all, they are the next billion users of every product and service that companies across sectors have to offer. The economic slowdown has accelerated this development, as even the biggest corporate houses are eyeing the domestic market. In all this, the telecom industry is one of the few that has already touched lives in rural India, mainly because it was one of the first sectors to realize the potential that the untapped rural market held.
Rural urbanization can not only ease the pressure of surplus labour in rural areas and change the way India lives, but it also curbs the flow of rural laborers into big cities and helps stimulate national economic development.
So, where is your next business venture headed?
Published by Vasundhara Mudgil in The Microtelecom Revolution Blog
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With entrepreneurship penetrating every sector of the Indian market, rural India is not far behind.
In fact, the government, NGOs and the private sector unanimously agree that rural entrepreneurship = rural development. For the government and the NGOs, this is possibly the best way to uplift the rural community, and for the corporates, it provides value addition by giving them the opportunity to reach into remote areas.
There are a number of platforms in the urban areas that have a positive impact on the entrepreneurial environment – there are investors who are looking out for that one great idea that deserves their money; and there are networking events, where various entrepreneurs come together to understand various business models, and to discuss their own. A quick glance at the rural market, in comparison, shows that though entrepreneurship is headed in the right direction, there is still a long way to go.
The most critical factor in this context is the availability of viable and sustainable investment opportunities, and the lack of communication facilities in remote areas. The most common businesses that are initiated are those that are started by external groups, and entail textile production, agri-tourism, small retail businesses, craftsmanship etc. However, even though the NGOs and government bodies have collaborated to establish self-help groups to alleviate rural poverty, the lack of confidence amongst most of the rural population has proved to be a deterrent to the idea of innovative rural entrepreneurship.
Some of the main issues that the rural community faces while setting up their unique businesses include lack of knowledge about profit yielding industries, and of access to capital. Limited knowledge and experience about the resources available to build their business has also stopped the already apprehensive rural community to embrace the spirit of entrepreneurship.
I’d like to give a couple of examples of successful rural entrepreneurship – one that is led by Unilever, and the other which is a self-driven initiative by an individual in Tamil Nadu. Unilever connects self-help groups with business opportunities through Project Shakti. It specifically gives the women groups a chance to become small-scale sellers of its products, wherein each entrepreneur buys a small stock of items that are then sold direct to consumers in their homes. In association with the local district authorities, Unilever also provides free training on the basics of business management and sales. Piloted in 2002, Project Shakti saw immense popularity with more than 45,000 entrepreneurs covering 3 million homes in 100,000 villages in 15 states in India.
The other interesting instance is about a rural entrepreneur: T. Mariappan, a banana grower in a village close to Tiruchi, who designed a banana dehydrator by trial and error method, to produce a type of sweet from the fruit. Impressed by what Mr. Mariappan had to offer, the Indian Overseas Bank has sanctioned Rs. 11 lakh for his project. Currently marketing the produce in 400-kg packs and in sachets, the rural entrepreneur’s future plan is to use a solar energy-operated dehydrator for large-scale production.
According to a report by Food and Agriculture Organization (FAO) on entrepreneurship;
“From the perspective of the process of entrepreneurship, whether the location is urban, semi-rural or rural, is not important in itself. For example, the needs of a would be entrepreneur or an existing small business do not differ much from those in an urban area. To realise their entrepreneurial ideas or to grow and sustain in business, they all need access to capital, labour, markets and good management skills. What differs is the availability of markets for other inputs.”
And it is exactly this gap that needs to be filled if the rural entrepreneurs are to walk shoulder-to-shoulder with urban entrepreneurs.
Published by Vasundhara Mudgil in The Microtelecom Revolution Blog
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With spirits down and low in urban areas (largely because they have reached a saturation point, and partly due to the credit crunch), the next phase of development in India will come from the tier II cities and the rural parts of the country.
Whether it’s the retail, banking or telecom sector, everyone has their eyes glued on the next billion users of their facilities and services.
What is fueling this phenomenal growth? Micro finance. Two simple words that promise to change the rural landscape.
Let’s begin with telecom itself, where close to 60% growth is expected from rural India. By collaborating with micro finance institutions (MFIs), telecom operators, and equipment and handset manufacturers are helping benefit the self employed population in Indian villages. Anytime, anywhere connectivity now enables rural entrepreneurs to deliver their services on call.
More specifically, rural entrepreneurs have chosen to use credit provided by MFIs to start their own ventures or to become associated with established corporates that aim to reach the rural hinterland through local partnerships.
In the last couple of years, banks such as ICICI have also made headlines for reaching out to rural customers through its customized loan portfolio. Microfinance is seen as a mutually profitable venture that provides new business opportunities for banks, and opens up new avenues of opportunities for the rural banking customer. For example, the Financial Information Network and Operations (FINO), in association with the World Bank, is expected to run pilot projects with microfinance institutions, banks and government agencies to make use of IT in rural banking.
To ensure that microfinance is successfully implemented, it is also important for rural bankers to understand its true role. In fact, in Philippines, there are foreign-funded programs that aim to teach the rural bankers how to effectively design their microbanking-related business.
Anticipating the retail boom in the country, various agri-business consultancies and big names in the retail sector have opened the doors to microfinancing and are inviting people from rural regions to join them in taking the business of retail to hinterland. Apparently, Reliance Retail is eyeing partnerships with existing MFIs as part of its supply chain with rural and semi-urban markets. Retail biggie Bharti is also believed to have shown interest in exploring the MFI route for supporting the retail supply chain, contract farming operations and dairy sourcing.
There are as many opportunities in the rural sector, as there are industries in our country. With external factors such as the sub-prime crisis affecting our bread and butter, perhaps focusing on our internal strengths and opportunities is a good option!
Published by Vasundhara Mudgil in The Microtelecom Revolution Blog
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Mobile operators demand that the Indian government maintains diesel subsidies, underlining that telecom is a public utility and higher fuel costs impacts the consumers.
Business Line reports that “Cellular Operators Association of India and the Association of Unified Telecom Service Providers of India are planning to approach the Government seeking a total exemption or only a marginal increase in diesel price…”
Why? Because power costs are astronomically high; “…cellular operators spend nearly 35 per cent of their operational expenditure on procuring diesel for running generator sets that power their base stations”.
Since mobile infrastructure equipment has high power demands, it is impossible to deploy it without power support in areas where electricity is scarce. This means diesel generators are so far the only solution to provide coverage.
The need for diesel generators holds true for both urban and rural areas – multiple daily power cuts are commonplace in Indian metros, and basically all sites are equipped with generators that run several hours every day. In fact, it’s not uncommon for these generators to run 24/7/365, since shutting down and powering up a generator wears more (and costs more) than leaving it running.
So, while providing mobile coverage to everyone is a top priority, and telecom is truly a public utility, is the solution really to deploy more traditional, power-hungry mobile infrastructure?
From the article:
“…Some companies even deploy helicopters to transport diesel to remote places in order to keep the mobile networks running.”
Clearly, this is not a sustainable practice. And besides the high cost of fossil fuel, the environmental impact is enormous. According to our estimates, Indian mobile operators burn upwards of 2 billion litres of diesel every year, just to power diesel gensets. This translates to 5,24 billion kilogrammes - 5,24 million metric tonnes - of carbon dioxide emitted every year.
There’s a dire need for mass deployment of renewable energy sources and sustainable technology. But clean energy is only one part of the picture.
As we’ve previously underscored, rolling out mobile networks in rural and remote areas requires a complete re-engineering of technology, business models and approach. The solution is actually to let profitability and sustainability go hand in hand.
Quoting Thich Nhat Hanh from yesterday’s Times of India;
“Protecting the environment is protecting ourselves.”
The case for WorldGSM™ has never been stronger.
Published by admin in The Microtelecom Revolution Blog
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Very few advertisements have the knack of making an impact. For me, the Idea mobile ad (of educating rural children) is truly admirable for the social message it echoes.
While in urban India, cellphones are used for catching up with friends, closing business deals and connecting with our near and dear ones. In the rural scenario, mobile phones hold the potential of revolutionizing education.
In a country where the IT and telecom sectors are booming, the average literacy rate is 65%. Is there any way in which these profit-churning sectors are positively affecting the literacy levels?
Distance education is a familiar term for anyone who has pursued their degrees over the internet from a university based out of another state or country. So what is stopping us from localizing the concept of ‘distant learning’ to the grassroot level?
Limited funding and weak infrastructure are two of the major deterrents to the growth of literacy level in rural India. Education is secondary, as schools are not always located in close vicinity, and family obligations and chores dominate the lives of rural communities (including children). Yet, education can touch the lives of those who wish to learn; technology and telecom have already joined hands to make a difference to the lives of the rural youth.
The Lifeline for Education program managed by One World aims to provide academic support to teachers in rural schools in India - using accessible communication mediums like mobile phones. The system uses simple communication protocols to facilitate education in remote regions of the country. The program is servicing 13 panchayats, 164 villages, and 571 schools (as of March 2008) in the Monteswar Block in the Bardhaman district of West Bengal.
Another alternative is for teachers, volunteers and organizations to take the onus of adopting a village and ensuring that they make a difference to the literacy rates in these areas. For example, The Times of India’s ‘Teach India’ campaign created a positive wave in urban India and saw volunteers from every walk of life come together and make a difference to the way that knowledge is shared. It is time to replicate this model in rural India and use mobile phones as a medium to reach lives untouched by the gift of education.
Research company Global Equities has projected that education could amount for 20-25% of iPhone sales in the next few years. No doubt India has a long way to go, but if the public, the corporates and the government collaborate, it is definitely a good time to start the journey.
Nobel Prize-winning economist Amartya Sen sums up the need for education in ten words: “Illiteracy and innumeracy are a greater threat to humanity than terrorism.”
Published by Vasundhara Mudgil in The Microtelecom Revolution Blog
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