 | Issue: | Asia-Pacific III 2009 |
| Article no.: | 13 | |
| Topic: | Mobilising India – a people on the move | |
| Author: | R Chandrasekaran | |
| Title: | President and Managing Director, Global Delivery | |
| Organisation: | Cognizant | |
| PDF size: | 185KB |
About author
R Chandrasekaran (Chandra) is the President and Managing Director of Global Delivery at Cognizant; he has over 25 years of experience in the global information technology industry. His experience spans key functions such as corporate strategy, customer relationship management, business development, and operations management. Prior to joining Cognizant, worked with Tata Consultancy Services, and was responsible for setting up and managing its operations in the West Coast of the US. He also worked in the UK and Europe in delivery and business development roles. In 2008, he received the ‘Distinguished Alumni Award’ from the National Institute of Technology (formerly the Regional Engineering College) in Trichy, India. Mr Chandrasekaran has a Bachelor’s degree in Mechanical Engineering from the Regional Engineering College in Trichy and an MBA from the Indian Institute of Management, Bangalore, India.
Article abstract
Innovation that profitably brings low cost service to India’s population – including in rural areas – has driven growth of India’s mobile telephony markets at rates unseen anywhere else in the world. India currently adds ten to 15 million new subscribers each month. The government’s willingness to innovate – number portability, MVNO licensing, and so on. – has also been an important growth driver. Innovative business models, including joint ventures controlled by major agricultural cooperatives, are also bringing service to rural areas.
Full Article
“Business leaders need to do good, but not by philanthropy or CSR [corporate social responsibility programmes], but by enlarging the scope of business; making it more inclusive. Democratise commerce. People who have access to information will not tolerate inequality”. This astute observation comes from one of today’s foremost business thinkers, management guru CK Prahalad, who, in his bestselling title, The Fortune at the Bottom of the Pyramid: Eradicating Poverty through Profits, expounded on creating profitable businesses targeted at the world’s five billion poor people forming an “invisible, unserved market”. There is no better example of this than the innovation that will shape in India’s burgeoning mobile telephony market during the next few years. With 450 million mobile subscribers – and counting 10 to 15 million subscriber additions per month, the highest anywhere in the world, the mobile revolution has taken over the Indian populace with full and astounding force. Driving this stupendous growth in mobile telephony is the plethora of innovations ranging from the momentous (such as the largest mobile player deciding to give away its network) to the trailblazing (such as one of the top five mobile players offering a per-second, as opposed to the prevalent per-minute, calling regime). Similar innovation is occurring on the regulatory front, such as the move to usher in number portability or the attempts to open up the MVNO (mobile virtual network operator) market in the country. Clearly, an industry beset by seemingly insurmountable regulatory, economic and financial hurdles in the nineties appears to have put all those unpleasant memories behind it for good. The rural tilt Not surprisingly, these innovations tend to suggest that mobile telephony has primarily fulfilled the aspiration of the urban elite. While this may be true to some extent, slowly yet steadily, the rural dimension of the mobile telephony market is fast coming into its own. Among other things, this also owes itself to the intensely competitive mobile market that has made it impossible for the mobile players to rest on their laurels. In embarking on inventive initiatives, progressive mobile service providers in the country are also giving gradually shape to the `ecosystem’ that could boost this shift to rural India. Mobile telephony service providers cannot afford to ignore rural markets for two key reasons. First, as of June 2009, there were more than 125 million subscribers in rural India, growing 78 per cent in the past year alone. Second, over a third to 40 per cent of the mobile subscriber base of practically all the key mobile service providers is from rural India. With the rural mobile subscriber base expected to double in the next few years and given the price-sensitive nature of this market, only innovative and breakthrough products and services can help mobile service providers make a big dent. Sample some of these initiatives and the power behind serving the `invisible, unserved market’ becomes palpable: Joint ventures aimed at creating market-based ecosystem – In a major effort at bridging the urban-rural digital divide, two of the largest mobile groups in the country, over the past two years, have forged a joint venture with cooperative societies to reach out to the rural masses. In mid-2008, one of the large groups signed a joint venture with IFFCO, a cooperative that was set up to provide fertilizers and agricultural services to India’s farming community, and has built a massive outreach through over 39,500 member cooperative services, marketing federations and over 160 Farmers Service Centers (FSC) spread over 29 States/Union Territories across the country. This joint venture aims to offer products and services, specifically designed for farmers, through IFFCO societies in villages across the country. Apart from affordable handsets and connection, the farmer gets access to a value-added platform offering free daily voice updates on mandi (agro commodity) prices, farming techniques, weather forecasts, animal husbandry and fertilizer availability to the farmers. In addition, farmers can also get queries answered through a dedicated helpline manned by experts. In June this year, another mobile major signed a joint venture with Kribhco under a similar arrangement. Apart from providing critical farming updates, it is significant that in both the joint ventures, IFFCO and Kribhco hold a majority equity stake and control the working of the joint venture. Clearly, initiatives like these are providing a big impetus to `social entrepreneurship’, helping create business models and low-cost products and services that can go a long way in resolving social inequities. Innovation down the chain – The growing importance of the rural market and competitive intensity are also inspiring other mobile majors to innovate. Some examples include the recent launch of machine-to-machine applications, broadband at an affordable price, and specific value-added services tailored for the masses. Under machine-to-machine applications, there is a growing market for automating agriculture and irrigation services/soil analysis or data gathering for milk and other agro cooperatives. Similarly, enhancing Internet penetration through affordable broadband access is also one of the priorities, much like access to information through such channels as voice, SMS (mobile phone), and data (through the Internet). Investing in WiMAX – a low-cost technology that overcomes the last mile barrier by providing high-speed, wireless, broadband connectivity, especially in remote, sparsely populated areas – can offer a substantial leg up to the efforts of the government to provide a range of e-governance applications aimed at making a meaningful difference to the rural poor. With the bidding process for WiMAX expected to get under way early next year along with 3G, the opportunity to reach out to the rural hinterland may well be just around the corner. The missing links… Amidst all this innovation, conspicuous by their absence are the so-called `Next-Generation Solutions’ to some of the fundamental problems plaguing much of India, such as lack of easy access to high-quality primary education and affordable healthcare. Practically all the interesting experiments taking place globally are in the two key areas of education and healthcare. Education -The fundamental issues facing education are fairly pronounced in India in terms of both hardware (buildings or technology) and software (pupil-teacher ratio, pedagogical methods and relevance of content). The situation in rural schools is even worse. Obviously, a combination of hardware and software inadequacies has led to high drop-out rates in schools, especially in rural swaths of economically laggard states. Less than a year ago, while reviewing the ‘Sarva Shiksha Abhiyan’, India’s flagship school education improvement program – or the Education for All Movement, the World Bank lauded existing efforts to improve standards of education, the teaching/learning systems, and infrastructure, and monitor the program. However, it recommended that issues of dropout and retention be addressed more strongly by critically analyzing the available data. I also recommended making full use of the findings of the planned study on dropouts and strengthening action at the local level, particularly by focusing on community participation initiatives focused upon the problem of dropouts and irregular student attendance. Even as the government addresses these fundamental issues, it is still possible to use a variety of technology tools to make education far more effective in reaching out to the underserved rural markets. Significant amounts of research today is focused on using the Internet and the mobile networks for education. For instance, the World Bank has started a blog focused primarily on tracking the use of mobile phones for education, with the text2teach project in the Philippines being one of the most well-known and biggest pilot projects in this area. Another rural case study in Peru has highlighted an important point; no matter how educated people are, if education is of poor quality, it will not have a significant impact – despite its ready availability via the use of mobile phones. For youth to effectively utilize services such as microfinance, micropayments, eGovernance and mobile commerce functions, such as money transfers, of any kind, good quality education is the indispensable enabler that will driving transformation in their lives. The efficacy of these efforts will depend, apart from the quality of training given teachers, upon improvements in technology-based teaching aids used in schools. While technology-based teaching aids are proliferating in private schools, be it Smart Class from Educomp, e-Pathshala from Classteacher.com or K-Yan by ILFS ETS, such aids are not available in government or rural schools. This constraint can only be overcome by allowing `social entrepreneurship’ to thrive in rural areas in a public-private partnership mode with sound financial backing. In the area of higher/technical education, efforts must be stepped up to reach the full potential of the Union Government-funded National Program for Technology Enhanced Learning where students in the thousands of science and technology colleges can watch pre-recorded videos of lectures and classroom demos by renowned teachers. Healthcare – In healthcare, mobile phones are likely to be highly effective and pervasive, especially in a developing country like India where 125 million rural folks have access to a mobile phone. Experiments involving the use of mobile technology to create health awareness or train healthcare professionals have yielded significant benefits across the globe. A relatively simple application like text messaging has worked wonders. In South Africa, SMS reminders about taking medication for TB have been found to increase the compliance rate to 90 per cent or more, compared to half that without it. Similarly, in public health HIV/AIDS or epidemic campaigns, mobile phones have proved to be lifesavers. Econometric studies have proved beyond question the positive effect that mobile telephony has on economic growth. This effect is now known to be twice as strong in the developing world. Evidently, the next frontier in the mobile revolution unfolding in India and elsewhere is all about leveraging the power of mobile telephony to build social capital. With such phenomenal adoption of mobile telephony, India has the potential to emerge as a leader in pushing the envelope on innovative mobile applications for the masses and make inclusive growth a reality.
