Ravi Proj Report

8/6/2019 Ravi Proj Report

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CHAPTER 1

INTRODUCTION


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1.1 Telecommunicationin India

The Indian telecommunication industryis the world's fastest growing industrywith

826.93 million mobile phone subscribers as of April 2011.It is also the second largest

telecommunication network in the world in terms of number of wireless connections

after China. See List of countries by number of mobile phones in use.

As the fastest growing telecommunications industry in the world, it is projected that

India will have 1.159 billion mobile subscribers by 2013.Furthermore, projections by several

leading global consultancies indicate that the total number of subscribers in India will exceed

the total subscriber count in theChina by 2013. The industry is expected to reach a size of

344,921crore (US$76.57 billion) by 2012 at a growth rate of over 26 per cent, and generate

employment opportunities for about 10 million people during the same period.According to

analysts, the sector would create direct employment for 2.8 million people and for 7 millionindirectly. In 2008-09 the overall telecom equipments revenue in India stood at

136,833crore (US$30.38 billion) during the fiscal, as against 115,382crore (US$25.61

billion) a year before.

1.2 Modern Growth

A large population, low telephony penetration levels, and a rise in consumer spending

power has helped make India the fastest-growing telecom market in the world. The market's

first operator was the state-owned Bharat Sanchar Nigam Limited (BSNL), created by

corporatization of the Indian Telecommunication Service, a government unit formerly

responsible for provision of telephony services. Subsequently, after the telecommunication

policies were revised to allowprivate operators, companies such asBharti Airtel, Reliance

Communications, Tata Indicom, Idea Cellular, Aircel and Loop Mobile have entered the

market (Bharti Airtel currently being the largest telecom company in India). In the fiscal year

2008-09, rural India outpaced urban India in mobile growth rate.

The total number oftelephones in the country stands at 861.48 million, while the

overall tele-density has increased to 72.08% as of April 30th, 2011.Mobile telephony

experiences growths at rates such as 15.34 million subscribers a month, which were added in

April 2011.


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1953 12channel carriersystem introduced

1960 irst subscribertrunkdialingroutecommissioned

between ucknowand Kanpur

1975 irst PCM systemcommissionedbetween Mumbai City

and ndheri telephoneexchanges

1976 irst digital microwave junction introduced

1979 irst optical fibresystemforlocal junctioncommissionedat Pune

1980 irst satelliteearthstationfordomesticcommunicationsestablished

at ecunderabad, .P.

1983 irst analog tored Program Control exchangefortrunklinescommissioned

at Mumbai

1984 C-DOTestablishedforindigenousdevelopment andproduction

ofdigital exchanges

1995 irst mobile telephoneservicestartedonnon-commercialbasison15 ugust

1995 in Delhi

Whileall themajorcitiesand towns in thecountrywere linkedwith telephonesduring

the Britishperiod, the total numberoftelephones in1948numberedonlyaround80,000. Post

independence,growthremainedslowbecause the telephonewasseenmoreasastatussymbol

rather than being an instrument of utility. The number of telephones grew leisurely to

980,000 in1971,2.15million in1981and5.07million in1991, theyeareconomicreforms

were initiated in thecountry.

Whilecertainmeasureswere taken toboost the telecom industryfrom time to time,

forexample introductionof the telexservice in Mumbai in1953andcommissioningof the

first ubscriber trunk diallingroutebetween Delhi and Kanpur andbetween ucknow and

Kanpurin1960), thefirst wavesofchangewereset goingby am Pitroda in theeighties.The

real transformation inscenariocamewith theannouncement of the ational Telecom Policy

in1994.

1.5 I i l s : p li i s

All villagesshall receive telecomfacilitiesby theendof2002.


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A Communication Convergence Bill introduced in the Parliament onAugust 31,2001

ispresentlybefore the tanding CommitteeofParliament onTelecomandIT.

National ong Distance ervice NLD) isopenedforunrestrictedentry.

TheInternational Long Distance ervices ILD )havebeenopened tocompetition.

Thebasicservicesareopen tocompetition.

Inaddition to the existing three,a fourthcellularoperator,one each in fourmetros

and thirteen circles, hasbeenpermitted. Cellular operators havebeenpermitted to

provide all types of mobile services including voice and non-voice messages, data

servicesand PCOsutili ingany typeofnetworkequipment, includingcircuit and/or

packageswitches that meet certainrequiredstandards.

Policiesallowingprivateparticipationhavebeenannouncedasper theNewTelecom

Policy NTP),1999 in several new services,which include Global Mobile Personal

Communicationby atellite GMPC ) ervice,digital Public Mobile RadioTrunked

ervice PMRTS)and Voice Mail/Audiotex/ nified MessagingServices.

WirelessLocal Loop WLL)hasbeen introduced toprovide telephoneconnections in

urban,semi-urbanandrural areaspromptly.

Two telecom PSUs, VSNLand HTLhavebeendisinvested.

Steps arebeing taken to fulfill Universal Service Obligation USO), funding, and

administration.

Adecision topermit Community PhoneServicehasbeenannounced.

Multiple ixedService Providers SPs) licensingguidelineswereannounced.

Internet Service Providers ISPs) havebeenallowed to set up International Internet

Gateways,bothSatelliteandLandingstationsforsubmarineoptical fibercables.

Two categoriesof infrastructureprovidershavebeenallowed toprovide end-to-end

bandwidthanddarkfibre,right ofway, towers,duct spaceetc.

Guidelineshavebeen issuedby the Government toopenupInternet telephony IP).

1.6 E g s j pl y

In 1975, the Department of Telecom DoT) was separated fromIndian Post &

Telecommunication Accounts and inance Service. DoT was responsible for telecom

services in entire country until 1985 when Mahanagar Telephone Nigam

Limited MTNL)wascarvedout ofDoT torun the telecomservicesofDelhi and Mumbai.In

1990s the telecomsectorwasopenedupby the Government forprivate investment asapart

ofLiberalisation-Privati ation-Globali ationpolicy. Therefore, it became necessary to


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separate the Government's policy wing from its operations wing. The

Government corporati ed the operations wing of DoT on 1 October 2000 and named it

as Bharat Sanchar Nigam Limited BSNL). Many private operators, such

as Communications,Tata, Vodafone,Loop Mobile,Airtel,Ideaetc.,successfullyentered the

highpotential Indian telecommarket.

1.7 P iv iz i f l i i s i I i

TheIndiangovernment wascomposedofmanyfactions parties)whichhaddifferent

ideologies. Some of them were willing to throw open the market to foreignplayers the

centrists) and others wanted the government to regulate infrastructure and restrict the

involvement offoreignplayers. Due to thispolitical background it wasverydifficult tobring

about liberali ation in telecommunications. Whenabill was inparliament amajorityvotehad

tobepassed, and such a majority was difficult to obtain, given to the number ofpartieshavingdifferent ideologies.

Liberali ation started in 1981 when Prime MinisterIndira Gandhi signed contracts

withAlcatel CITof rance to mergewith the state ownedTelecom Company ITI), in an

effort toset up5,000,000 linesperyear. But soon thepolicywas let downbecauseofpolitical

opposition.She invitedSam PitrodaaUSbasedNon-resident IndianNRI toset upa Center

for Development ofTelematics(C-DOT), however theplan failed due topolitical reasons.

During thisperiod, after the assassination of Indira Gandhi, under the leadership ofRajiv

Gandhi, many public sector organi ations were set up like the Department of

Telecommunications(DoT) , VSNLand MTNL. Many technological developments took

place in this regime but still foreign players were not allowed to participate in the

telecommunicationsbusiness.

The demand for telephoneswas ever increasing. It was during thisperiod that the

Narsimha Rao-ledgovernment introduced thenational telecommunicationspolicy [NTP] in

1994 whichbrought changes in the following areas: ownership, service and regulation of

telecommunications infrastructure.Theywere also successful in establishing joint venturesbetween state owned telecom companies and international players. But still complete

ownershipof facilitieswas restrictedonly to thegovernment ownedorgani ations. oreign

firms were eligible to 49% of the total stake. The multi-nationals were just involved in

technology transfer,andnot policymaking.


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During thisperiod, the World BankandITUhadadvised the Indian Government to

liberali e longdistanceservices inordertorelease themonopolyofthestateowned DoTand

VSNL; and to enable competition in the long distance carrierbusiness which would help

reduce tariff's andbetter the economy of the country. The Rao run government instead

liberali ed the local services, taking the opposite political parties into confidence and

assuring foreign involvement in the long distancebusiness after 5 years.The countrywas

divided into 20 telecommunication circles forbasic telephony and 18 circles for mobile

services.Thesecirclesweredivided intocategoryA, B and C dependingon thevalueof the

revenue ineachcircle.Thegovernment threwopen thebids tooneprivatecompanypercircle

alongwithgovernment owned DoTpercircle. orcellularservice twoserviceproviderswere

allowedper circle and a 15 years license was given to eachprovider. During all these

improvements, thegovernment didfaceoppositionsfromITI, DoT, MTNL, VSNLandother

laborunions,but theymanaged tokeepawayfromall thehurdles.

After 1995 the government set upTRAI (Telecom Regulatory Authority of

India)whichreduced the interferenceofGovernment indeciding tariffsandpolicymaking.

The DoTopposed this.Thepolitical powerschanged in1999and thenewgovernment under

the leadership ofAtal Bihari Vajpayeewas more pro-reforms and introduced better

liberali ation policies. They split DoT in two- one policy maker and the other service

provider (DTS) which was later renamed asBSNL. Theproposal of raising the stake of

foreign investors from 49% to74%was rejectedby the oppositepolitical party and leftist

thinkers. Domesticbusiness groups wanted the government toprivati e VSNL. inally in

April 2002, thegovernment decided tocut itsstakeof53% to26% in VSNLand to throw it

openforsale toprivateenterprises.TATAfinally took25%stake in VSNL.

Thiswasagateway tomany foreign investors toget entry into the IndianTelecom

Markets.After March 2000, the government became more liberal in makingpolicies and

issuing licenses toprivateoperators.Thegovernment furtherreduced licensefeesforcellular

serviceprovidersand increased theallowablestake to74%forforeigncompanies. Becauseof

all thesefactors, theservicefeesfinallyreducedand thecall costswerecut greatlyenabling

everycommonmiddleclassfamily inIndia toaffordacell phone.Nearly32millionhandsets

weresold inIndia.Thedatareveals thereal potential forgrowthoftheIndianmobilemarket.

In March2008 the total GSM and CDMAmobilesubscriberbase in thecountrywas

375million,whichrepresentedanearly50%growthwhencomparedwithpreviousyear.As

the unbranded Chinese cell phones which do not haveInternational Mobile Equipment


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Identity(IMEI) numbers pose a serious security risk to the country, Mobile network

operators thereforeplanned tosuspend theusageofaround30millionmobilephones(about

8% of all mobiles in the country)by30April.56years the averagemonthly subscribers

additions were around 0.05 to 0.1 million only and the total mobile subscribersbase in

December2002stoodat 10.5millions. However,afteranumberofproactive initiativeswere

taken by regulators and licensors, the total number of mobile subscribers has increased

greatly to811.59millionsubscribersasofMar31st 2011.

India has opted for the use of both theGSM (global system for mobile

communications)and CDMA (code-division multiple access) technologies in

themobilesector. In addition to landlineand mobilephones, some of the companies also

provide the WLLservice.Themobile tariffs inIndiahavealsobecome lowest in theworld.A

newmobile connection canbe activatedwithamonthly commitment ofUS$0.15only. In

2005aloneadditions increased toaround2millionpermonth in theyear2003-04and2004-

2005.

In June 2009, the Government of Indiabanned the import of several mobile

phonesmanufactured in Chinaciting concerns over quality and the lack ofIMEI's which

make it difficult forauthorities inIndia to track thesaleanduseofsuchphones.[20]

InApril

2010, the Government was also reported to be blocking Indian service providers from

purchasing Chinese mobile technology citing concerns that Chinese hackers could

compromise the Indian telecommunicationsnetworkduring timesofnational emergency.Aseries ofattackson Indian government websitesandcomputer networksby suspected

Chinese hackers has also made Indian regulators suspiciouswith regards to the import of

potentiallysensitiveequipment from China.Thecompaniesreported tobeaffectedby thisare

Huawei Technologiesand ZTE.

1.8 T l i i s R g l y E vi i I i

LIRNEasia's Telecommunications Regulatory Environment (TRE) index, which

summari esstakeholdersperceptiononcertainTRE dimensions,provides insight intohowconducive theenvironment isforfurtherdevelopment andprogress.Themost recent survey

wasconducted in July2008 ineight Asiancountries, including Bangladesh,India,Indonesia,

Sri Lanka, Maldives, Pakistan,Thailand,and the Philippines.

The tool measuredsevendimensions:

Market entry


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Access toscarceresource

Interconnection;

Tariffregulation;

Anti-competitivepractices;and

Universal services;

Qualityofservice,forthefixed,mobileandbroadbandsectors.

TheresultsforIndia,point out to thefact that thestakeholdersperceive theTRE tobe

most conducivefor themobilesectorfollowedbyfixedand thenbroadband. Other thanfor

Access toScarce Resources the fixed sector lagsbehind the mobile sector.The fixed and

mobile sectorshave thehighest scores forTariffRegulation. Market entryalsoscoreswell

for the mobile sector as competition is well entrenched with most of the circles with 4-5

mobile serviceproviders.Thebroadband sector has the lowest score in the aggregate.The

lowpenetrationofbroadbandofmere3.87against thepolicyobjectiveof9millionat theend

of2007clearly indicates that theregulatoryenvironment isnot veryconducive.

Some vi l s is i s on ele- ensi y

T ble 1.2

P i l s Wi eless (Fig

es inmillions) Wi e line(Fig

es inmillions)

Total s bs ibers 771.78 34.94

Total netaddition 18.99 -0.15

% ofmonthly

growth

2.52 -0.41

Urban s bs ribers 512.26 26.13

R ral s bs ribers 258.93 8.82

Teledensity 64.74 2.93

Urban Teledensity 143.36 7.31

R ral Teledensity 31.05 1.06

Some vital Statisti s on Cell phones:

LandLines:34.87million eb2011)


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Cell phones:791.38million eb2011)

Annual Cell phone Addition: 227.65million(Feb2010-2011)

Monthly Cell phone Addition:20.20million(Feb2011)

Tele-denisty:69.29%(Feb2011)

Projected Tele-denisty:1.159billion,75%ofpopulationby2013.

TelephoneSubscribers (Wireless andLandline): 826.25million(Feb2011).

Source: Trai, annual report 2010


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CHAPTER 2

TOPIC INTRODUCTION


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2.1 RuralTele hon

Today with the telecom revolution, channels of communications aretaking different

forms. In fact, telecommunications has become such an integral part ofour socio-economic

fabric that it has changed the way people think, act, react, talk, work, communicate and live.

It is difficult to imagine life without telecommunications any more. There is a strong two-

way co-relationship between economic development, literacyand general awakening of a

region, with its tele-denisty. Access to telecommunications has a strong and direct positive

impact on the overall economic growth, development ofthe private sector, delivery of public

services and integration of the rural and isolatedareas with the rest of the country. The poor,

specially the rural poor, have less accessto telecom services than justified by their poverty

levels and the emerging digital divide is widening. It is an established fact that the income

of the poor grows faster in telecom intensive economies and access to affordable telecom

services is essential for any strategy for poverty reduction. Rural communications help people

to participate in market economy and also improve productivity by saving time and

transportation cost. It is therefore, important to extend availability and access to affordable

telecom services in rural and other vulnerable areas.

2.2 Demo ra hicand Geo ra hic factor in India

India is a vast and diverse country, almost of the size and variety of a whole continent.

There are about 300 cities and 4600 towns, besides four metropolitan towns. There are many

languages, cultures, religions, castes, and creed. It is the second most populous country in the

world, the largest democracy and has a great variety in demographic and geographic terms.

The terrain is varied, with hot deserts, high mountains, long coast lines, plateaus, arid and

marshy lands, valleys, forests and fertile lands. It has a population of more than a billion

people and geographical area of about 3.3 million sq kms. The average population density is

319 persons per sq. kms, which varies from as thin as 10 persons per sq. km. in States like


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J&Ktoashighas2000perq.km.in Delhi,Mumbaiandsomeotherareas.Althoughduring

thelast5-10yearsarapidurbanizationofruralareashastakenplace,yetmorethan70%of

thepopulation lives in6,07,491villages.Theeconomyofthecountry isstillpredominantly

dependentonagriculturealthoughthedistributionpattern isgraduallychanging infavourof

industry and service. Due to growth in industrialization, commerce and services the

telecommunicationdemandisgrowingfast.Thedifferenceintele-denistybetweenruraland

urbanareasatpresentismorethanthedifferentialquotientintheirpovertylevels.Anumber

of measureshavebeen taken in therecentpast toaccelerate the telecom growthandoneof

theimmediateconcernsistobridgetheemergingdigitaldivide.

2.3 Ruraltele hon The stakeholders

2.4 The growthoftelecom sectorandchanges inthe polic framework

Initially, theseservices were mainlyused forGovernment, trade and industry. After

independence, thegrowthof telecommunication inIndiapickedupand thepace3gradually

gained momentum. Manufacturing of telecom equipmentbegan inpublic sector units like

ITI,andtelecomservicesweregraduallyspreadinseveralpartsofurbanareas, Government


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offices, trade and industry and some rural areas. With the development of agro-based

industriesand theneedof telecom services in rural areas, therewasasharper focuson the

provision of telecom services in rural areas. In early 1980s, a Mini-mission of Rural

Development wasstartedandaSpecial TaskForcewasset up toopenmoreandmoresmall

andmediumsi ed telephoneexchanges in thevillages.Further,a timeboundprogrammewas

undertaken to extend at least one public telephone in rural areas within easy reach of

villagers. Thegrowthof telecommunication in Indiareceivedamajorspurt inearly1980s

with the launch of Mission Better Communications by the Government. The main

objectivesofthis

Missionwere:

Improvement inQualityofServicesand Customersupport.

Improvement ofaccessibilitywithin theexistingnetwork. Concentrated attention to the indigenous development and manufacture of certain

Technologies andproducts.

Target of Telephone on Demandwas also set up, as tobe achievedby the year

2000.

Participationof theprivate sector inproduction and services of telecom sectorwas

permitted.

Besides, under the Mission Better Communications a special R&D Centre called

CentreforDevelopment ofTelematics(C-DoT)wasestablished in1984,withanobjectiveof

developing the latest world class indigenous switching equipments of Digital Electronic

Exchanges and transmission systems suitable for Indian conditions,particularly for rural

areas.Themanufacturingofcustomerpremisesequipments like telephone instruments,drop-

wireetc.started in theprivatesector in1984.Several other initiativeswere taken, Postsand

Telegraphs were segregated, Mahanagar Telephone Nigam Limited (MTNL) and Videsh

Sanchar Nigam Limited (VSNL) was set-up as separate corporate entities. A rapid

proliferation ofSTD/PCOs (Public telephone call centres) tookplace all over the country,

both inurban/semi-urbanaswell as inrural areasandaccessibilityandsoalso thedemandfor

the services rapidly increased with availability of facilities nearby.To facilitate the faster

growth of telecom services in the country, the Government of India constituted Telecom

Commission in 1989. This is the apex policy making body, with full powers of the

Government.Telecommunications,which isacentral subject in thefederal set up,receiveda

major concentrated thrust by this high-powered Body. The process of telecom reforms


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receiveda further fillip in1990s,with the introductionof theNew Economic Policy1991.

Value added services were opened to theprivate sector.Licenses were granted toprivate

operators forproviding cellularmobileservice in fourmetrosandalso forpagingservices.

With theNational Telecom Policy1994(NTP 94),further thrust wasgiven,specific targets

wereset forachievement includingforrural areas.Several otherliberali ationmeasureswere

effective, includingopeningupofbasic telephonyforprivatesectorandestablishment of

Telecom Regulatory Authority of India (TRAI). However, the most significant

landmark in telecom reformswasNewTelecom Policy 1999 (NTP 99),which heralded a

seriesofinitiatives,completelyopening the telecomsector.

2.5 New Telecom Policy 1999 (NTP-99)

Themost important landmark in theprocessof telecom reformswasNTP 99which

was made effective from 1st April 1999.Thispaved the way for change-over from fixed

license fee to revenue sharing, migration of existing operators to the new regime -thus

resolving their long-standingdifficulties,strengtheningofRegulator(TRAI),openingof the

National Long Distance, corporatisation of telecom services, and establishment of Bharat

SancharNigamLimited(BSNL)etc.Thepolicyhadalsostipulatedseveral specificand time-

bound targets in tele-denisty,rural telephony,etc.

The following specific objectives, targets and stipulations for rural areas are enshrined in

NTP 99:-

Objectives

Availabilityofaffordableandeffectivecommunicationsfortheciti ens.

Strive toprovideabalancebetween theprovisionofuniversal service toall uncovered

areas, including the rural areas, and theprovision ofhigh-level services capable of

meeting theneedsofthecountryseconomy.

Encourage development of telecommunication facilities in remote, hilly and tribal

areasofthecountry.

Encourage development of telecom in rural areas making it more affordable by

suitable tariff structure and making rural communications mandatory for all fixed

serviceproviders.

Targets

Increaserural tele-denistyfrom thecurrent level of0.4 to4by theyear2010.


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Achievetelecomcoverageofallvillagesinthecountryandprovidereliablemediato

allexchangesbytheyear2002.

AreasofNorth East, Jammu & Kashmirandotherhillyareas,tribalblocks,etc.tobe

identifiedasspecialthrustareasforaccelerateddevelopmentoftelecommunications.

2.6 Uni ersal ser iceo ligation

UniversalServiceisdesirableforsocial,economicandpoliticalreasonsandtoenable

low-incomecustomers,customers living inrural, remoteandhighcostareas, thephysically

disadvantagedandelderlycustomerstoparticipateinthemainstreamandremovethefeeling

of isolation. The common approach to Universal Service in the developing countries like

IndiaistoprovideUniversalAccess,individuallytohouseholdsataffordablechargesandto

theothersbysharedaccessthroughasuitableprovisionofsubsidy.Itisessentialinapublic

policy,toprovideavailabilityandaccesstoallpeopleforbasictelecomservicesataffordable

andreasonableprices. Oneoftheincentivestotheoperatorstoinvestinruralareascouldbe

toprovide funds through USO Fund. Till so far, the entire development in rural areas has

been doneby the incumbent operator through cross-subsidization. However, with tariff

rebalancing, deregulation and corporatisation of the incumbent operator, the situation has

perceptibly changed and warrants a careful look on the arrangements, to meet the rural

telecom needs. While thederegulation had, nodoubt, expected theprivate sector toplaya

significant role inproviding the telecom services in the country, the experience so far has

beenthattheprivateoperatorshaveconcentratedmainlyintheurbanareasbothinthebasic

and value added services, despite the clear contractual obligationof theprivate sector to

providecertainpercentageoftotalnumberoftelephonesintheruralareas. Inaderegulated

environment,private operators, generally tend to concentrate in the high income and high-

densityareaswithhighincidenceofinformationintensiveindustries/activities.Theprovision

of telecom facilities in rural areas canbring about significant changes in socio-economic


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conditions of these regions as also the integration with the rest of the market economy,

bringing inconsiderabledirect and indirect benefits to theeconomy.

Someoftheadvantagesare indicatedbelow:-

Telecommunicationfacilitiesenhance theregionsappeal asanattractive locationfor

investment.

Local producers and service sector get enriched through integration of market and

provisionofregional,national and international links,whichcan improvebetterprice

reali ationofgoodsandservices

Diffusionofinnovative technologiesand information-basedservices isfacilitated.

The quality and efficiency of thegovernment at the grass root level can improve

throughe-governance.

Researchanddevelopment in leadingedge technologiescanbestimulated. Twomajorbarriers torural economicgrowth i.e. thedistancefrom themarket place

and lackofeconomiesofscalecanbebrokenby telecomfacilities,particularlywith

broadbanddatacommunicationfacility.

There is considerable latent demand in rural areas, which can surface with right

conditionsandstimulants.

Information and communication technology (ICT) centres in rural areas can be

effectivelyusedforproviding informationanddeliveryofpublicservicesonmatters

related toproduction,prices,health,education,animal husbandry,weatherconditionsandservicesector.

Greater employment opportunities and other benefits flowing from essential

applicationsof information technologyvi .e-commerce,e-governance, telemedicine,

distance learning,softwaredevelopment,e-businessoperationetc. to theadvantageof

rural population.


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Universal

Service

Objectives

USO

Funding

Policy

Roll Out

ObligationCompetition

Termination

Charges

Tariff

Policy Access

Deficit

Charge

Government

Funding

Rural Service Providers

Implementationof USO Fundactivities

DoThas entered intoAgreementswith M/s BSNL and Private Operators in March

2003foroperationandmaintenanceofexisting Village PublicTelephones(VPTs),providing

Rural communityphone (RCP) and for installation of Rural Household Direct Exchange

Lines(RDELs). Substantialprogresshasalreadybeenmade inall theseareas.

USO Fund has also been utili ed to provide subsidy support for setting up and

managing infrastructuresites in500districtsforprovisionofmobileservices in thespecified

rural andremoteareas,where there isnoexistingfixedwirelessormobilecoverage.

USO Fund subsidy for wirelessbroadband hadbeen given to BSNL for installing

Wimax BTS in rural India. BSNL till datehas rolledout approximately1000 Wimax BTS

and is inprocessofdeployinganadditional 7000 BTS inrural area. DoT isalsoconsidering

support to thewinners of Broadband WirelessAccess (BWA) spectrum auction toensure

level playingfield inrural area.


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Table 2.1

Year Collections

(Crore`)

Disbursement

(Crore`)

Accumulated Balance

(Crore`)

2002-2003 1653 300 1353

2003-2004 2143 200 3296

2004-2005 3457 1314 5439

2005-2006 3500 1750 7189

2006-2011* 37541 17936 25044

Source: Informationreceived fromofficeof USOF,DOT


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Reliance Communications

Reliance Communications Limited is the flagship Company of Reliance Anil

Dhirubhai Ambani Group,India's third largest businesshouse.Thecompany isIndia's largest

privatesector informationandcommunicationscompany,withover100millionsubscribers.

They have established a pan-India, high-capacity, integrated (wireless and wire line),

convergent (voice, data and video) digital network, to offer services spanning the entire

infocommvaluechain.Thecompanysharesare listedon theNational StockExchangeand

the BombayStockExchange.

The companyoffers the full value chainofwireless (CDMA and GSM),wire line,

national longdistance, international,voice,data,video, Direct-To-Home(DTH)and internet

based communications services under variousbusiness units organi ed into three strategic

customer-facing business segments; Wireless, Global and Broadband. These strategic

businessunitsare supportedbypassive infrastructureconnected tonationwidebackboneof

Optic Fibre Network fully integrated network operation system andby the largest retail

distributionandcustomerservicesfacilities.The Companyalsoowns through itssubsidiaries,

a global submarine cable network infrastructure and offers managed services, managed

Ethernet andapplicationdeliveryservices.

Thecompany isIndia'sfirst telecomserviceproviderofferingnationwide CDMAand

GSM mobile services with digital voice clarity.Their mobileportal, R World, offers the

widest range of mobile content spanning e-commerce, m-commerce entertainment, music,

news, astrology, cricket,bollywood, maps, search, one-click set-up, access to email and

social networking.Thecompanyoffers themost comprehensiveportfolioofenterprisevoice,

data, video, internet and IT infrastructure services catering to large, medium and small

enterprises for theircommunications,networkingand IT infrastructureneeds.Theirproduct

portfolio includesnational and internationalprivate leasedcircuits,broadband internet access,


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audiosolutions including Centrex, toll freeservices,voice VPN,videoconferencing, MPLS-

VPN,remoteaccess VPN, Global MPLS VPNmanaged internet datacentre(IDC)services to

namea few.The companyoperatesnationwide Direct-to-Home satelliteTV servicesunder

itswhollyowned subsidiary, Reliance BigTV Limited (BigTV).They formedanalliance

with PolycomInc., theglobal leader in tele-presence,videoandvoicesolutions, to introduce

world'sfirst wireless,high-resolutionvideoand CD-qualityaudio,conferencingservicealong

with simple-to-use content sharing capabilities - at abandwidth speed of 256 kbps at any

place. They own and operate the world's largest next generation IP enabled connectivity

infrastructure, comprising over 2, 77,000 kilometresof fibre optic cable systems in India,

USA, Europe, Middle East and theAsia Pacificregion.

Reliance CommunicationsLtdwas incorporatedon July15,2004asaprivate limited

companywith thenameofRelianceInfrastructure Developers Pvt Ltd.In July25,2005, the

companywasconverted intopublic limitedcompanyand thenamewaschanged to Reliance

Infrastructure DevelopersLtd. During theyear, thecompanyaltered theobjectsclauseofthe

memorandum of association to carry on thebusiness of telecommunication, infrastructure,

telecommunication system, telecommunication networkand telecommunicationservices. In

August 3,2005, theyfurtherchanged theirname to Reliance Communication VenturesLtd.

InAugust 11,2005, theequitysharesof thecompanywereacquiredby RelianceIndustries

Ltdand thus thecompanybecame thewhollyowned subsidiaryofReliance IndustriesLtd.

As per the scheme of arrangement, all the properties, investments, assets and liabilitiesrelated toTelecommunication Undertaking of Reliance IndustriesLtd was transferred and

vested in the company on a going concernbasiswith effect from December 21, 2005. In

March6,2006, theequitysharesofthecompanywere listedon the BombayStockExchange

Ltdand theNational StockExchangeofIndiaLtd.In June7,2006, thenameofthecompany

waschangedfrom Reliance Communication VenturesLtd to Reliance CommunicationsLtd.

As a result of a Scheme of arrangement with Reliance Industries Limited, the company

became the holding company of minority interests in the telecommunications companies

formerly controlled by Reliance Industries Ltd. The company restructured the telecom

businessesby realigning the economic ownership of variousbusinesses into the company.

UnderaSchemeofAmalgamationandArrangement whichbecameeffectivefromSeptember

12,2006, interalia, RelianceInfocommLtd,Ambani Enterprises Pvt Ltd, Reliance Business

Management Pvt Ltd,Formax Commercial Pvt Ltd, Reliance CommunicationsTechnologies

Ltd, RelianceSoftwareSolutions Pvt Ltd, Reliance CommunicationsSolutions Pvt Ltdand


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Panther Consultants Pvt Ltd were amalgamated with the company and the and Network

division of Reliance Communications Infrastructure Ltd was de-merged to the company.

Upon the Scheme of Amalgamation and Arrangement all the subsidiaries of erstwhile

Reliance Infocomm Ltd, Reliance Infocomm Infrastructure Pvt Ltd, Reliable Internet

Services Ltd and Campion Properties Pvt Ltd including the subsidiaries of Reliance

Communications Infrastructure Ltd, Reliance Telecom Ltd and Flag Telecom Group Ltd

became the subsidiaries of the company. During theperiod 2006-07, ParadoxStudiosLtd,

Reliance Digital WorldLtdandNISSpartaLtdceased tobesubsidiariesofthecompanyand

Gateway Net Trading Pte Ltd, Reliance Communications (Singapore) Pte Ltd, Reliance

Communications (Hong Kong) Ltd, Reliance Communications (New Zealand) Pte Ltd,

Reliance Communication (Australia) Pty Ltd. RCOM Malaysia SDN BHD, Synergy

EntrepreneurSolutions Pvt Ltdand RelianceNext GenerationTechnology Pvt Ltdbecame

subsidiaries of the company. During the year 2007-08, Reliance Tech Services Pvt Ltd,

Reliance BigTV Ltd, Yipes HoldingsInc, Reliance GlobalcomServicesInc, YipesSystems

Inc, YTV Inc, Anupam Globalsoft (U) Ltd, Lagerwood Investments Ltd and Reliance

Telecom Infrastructure (Cyprus) Holdings Ltd became the subsidiaries of the company.

While,Flag Projects PteLtd,Alsign Holdings PteLtd,Actaram Capital PteLtd, Reliance

TelephonesLtdand GatewayNet Trading PteLtdceased tobesubsidiariesofthecompany.

Asper theschemeofarrangement amongst thecompany, RelianceTelecomLimited

(RTL)and RelianceInfratel Limited(RITL), thepassive infrastructureof the CompanyandRTL was de-merged and vested into RITL, with effect from April 10, 2007. The group

structure involving various subsidiaries of the company was reorgani ed during the year.

Consequently, Reliance InfoinvestmentsLtd and Synergy Entrepreneur Solutions Pvt Ltd

amalgamated with Reliance Communications Infrastructure Ltd with effect from July 23,

2007 andSeptember 1, 2007 respectively and Reliable Internet ServicesLtd amalgamated

with RelianceTelecomLtdwitheffect fromSeptember29,2007.FLAG TelecomUSALtd

wasmergedwith Yipes HoldingsInc.witheffect from December17,2007. During theyear,

the companyacquiredUganda-based companyAnupam Globalsoft (U)Ltd,holding Public

Infrastructure ProviderLicenseand PublicService ProviderLicense toofferMobile,Fixed

Line,Internet,National andInternational Long Distanceservices, inaddition to WiMaxand

Wifi services,marking their entry inUganda InApril 2008, they alsoacquired controlling

stake in Reliance WiMax World Limited (formerly eWave World Limited), a UK

headquartered company focused on the rapidly developing market for wireless telephony


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services using the WiMAX technology standard. During the year 2008-09, the company

launched GSM services in 14 service areas and commenced commercial operations.They

receivedstart-upspectrum to launch GSM servicesfrom Department ofTelecommunications

(DoT) under their existing Unified Access Service License (UASL) in 14 service areas.

Reliance Big TV Ltd, a wholly owned subsidiary of the company launched fully Digital

Home Entertainment Direct To Home (DTH)Serviceon themost advanced MPEG 4 DTH

Platform. During the year, Reliance Vanco Group Ltd and their subsidiaries, Reliance

WiMax World Ltd and Gateway Net Trading Pte Ltd became the subsidiaries of the

company. While, FLAG Telecom FranceNetwork SAS, FLAG Telecom France Services

EURL,FLAG Telecom KoreaLtdandFLAG Telecom EspanaSAceased tobesubsidiaries

of the company.The company rolled out their fastest Wireless Internet service, 'Reliance

Netconnect Broadband Plus', with a downlink speed of up to 3.1 Mbps. This makes

Netconnect Broadband Plusbest suited forvideostreaming,video surveillance, richmedia

content andsuperiorInternet browsing.Thecompany through theirwhollyownedsubsidiary,

Reliance Communications InfrastructureLtd, formed a joint venture with Krishak Bharati

CooperativeLtd (Kribhco), apremier co-operative societywith an unparalleled marketing

network in rural India. The company made a tie up with Flytxt, a leading technology

provider, for the implementation of an integrated carrier-class mobile marketing software

platformcalledNeonon the RCOM Network.Also, theymadea tieupwithSASforbetter

business intelligenceandanalyticsandAMDOCSforCustomerSelfServicesystems. During

the year 2009-10, Global Innovative Solutions Pvt Ltd, Reliance WiMax D.R.C. B.V,

Reliance WiMax Gambia B.V. Reliance WiMax Mauritius B.V., Reliance WiMax

Mozambique B.V, Reliance WiMax Niger B.V., Reliance WiMax Zambia B.V., Access

BissauLDAbecame thesubsidiariesofthecompany. While, Reliance MobileLtdand Vanco

(India) Pvt Ltd ceased tobe subsidiaries of the company.Asper scheme of arrangement

between thecompanyand RelianceInfratel Ltd, the OpticFiberUndertakingofthecompany

wasde-mergedand transferred to RelianceInfratel Ltdwitheffect fromApril 1,2008.Also,

Reliance GatewayNet Ltd,awhollyownedsubsidiaryofthecompanyamalgamatedwith the

companywitheffect from July13,2009.

During the year, the company won theprestigious Global World Communication

Awards09,held inLondon.Theyalsowon this award in the Best Device Categorywhere

theyparticipatedwithanewnetworkdevice,developedwith CISCO.Thecompanywas the

only Indian company to win an award at WCA 09.The company received the Frost and


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Sullivan Market ShareLeadership award for 'Data Center and ManagedServices' category

(FY 2009). They also received INFOCOMM - CMAI National Telecom Award for the

'Largest TelecomNetwork' category,presentedbySecretary, DoTand Chairman,Telecom

Commission.The company has joined the consortium ofUSD 400 million, 8,300 km, 17

Tbps design capacitySingapore - Hong Kong - Japan (SJC) cable system.TheSJC cable

system isexpected tobecompletedby thirdquarterof2011.


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CHAPTER 4

RESEARCH METHODOLOGY


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4.1 Problem statement

To bring about a socio economic transformation in the livelihood of the rural

populationofIndia throughmobile telephony.

4.2 Objectives ofthe study

1. Tounderstand the impact ofmobilephoneson thesocioeconomic livelihoodof

theruralpopulation

2. Tounderstand thescopefortelecomplayers toreachout toasubstantial segment

ofnon-adopters in therural Indianmarkets.

3. Tounderstand thefuture impact ofinternet technology to theruralpopulation.

4.3 Scopeofthe study

Themobilerevolution in the last fewyearshaschanged theway interactionfunctions

in India.Amajorityof the rural populationusers are undergoing transformational changes

that could be attributed to the penetration of mobile telephone into the rural markets.

Considering that the growth that can reach 1.2 % a year for every 10% ofpenetration it

becomes critical to understand the impact of mobile telephone on the socio-economic

elementsoftherural population.

80%of themarket is lookingforhighly localizedservicesand indigenousplayers toprovide theseservices to them.Theoptimum target market wouldbe therural youthwhoare

willing tospend Rs.10adayon some interesting service. Playersmakegravemistakes in

positioning their servicesbecause they assume that theparticular service is not fit for the

rural market.This in turnmakes it difficult forpeople in the rural areas todiscover these

services.Therural market needs tobeviewed inamore integratedfashion. VASfortherural

areashas tobedifferent from the normal VAS.For instance,according tome you havea

phone that servesasaclockandapaperweight, it isnot something that youmayconsideras

a normal mobile value added service,but that might well be the kind of service a ruralsubscriberwantsand iswilling topayfor.

All the above mentioned attempts would allow the researcher to recommend the

company themarketingchannels that theycanopt forandhow it canbeoptimallyutilized.


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4.4 Research Design

1. Survey Method

Interviews with large number of respondents with apredesigned questionnaire are

called a survey. Various services regularly conduct surveys.Surveys are the most flexible

means of obtaining data from respondents. The researcher can focus only on a certain

segment of thepopulation.Surveys are theprimary means of obtaining information about

consumers motives, attitudes andpreferences. A variety of questions canbe asked, and

visual aids,packages,productsor otherprops canbe usedduring the interviews. Properly

analyzed, surveydata canbemanipulated inmanywaysso that the researchercan lookat

intergroupdifferences,examine theeffectsof independant variablessuchasageor income,

orevenpredict futurebehaviour.Surveyscanbebroadlyclassifiedon thebasisof theircontent aspsychographicand

lifestyles, advertising evaluation or general surveys/ field surveys. For this particular

research,fieldsurvey isdone tocollect data.

Asampleofthequestionnaire isattachedalongwith theannexure.

2. Sample size

Samplingdesign startsby specifying the target population.The target population is the

collectionof elementsorobjects that process the information sought by the researcherand

about which inferences are tobemade.The target population has tobe definedprecisely.

Imprecisedefinitionof the target populationwill result inresearch that is ineffectiveat best

andmisleadingat worst.

Since the topic of the research is to find the socio economic impactsofmobilephone

adoption inrural India & theroadaheadforrural India in termsofadoptingdata technology,

thesubjectswhowereselectedforthearecategorisedasunder,

1. Labourers

2. Farmers

3. Businessman

4. Students


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Strata sample size

Students 60

Businessman 60

Farmer 60

labor/labor contactors/engineers etc 60

Stratifiedsamplingwasadoptedwhileconducting thisresearch.All thesubjects taken

were residing in villages with apopulation size of less than 1500. The investigator has

selected rural areas in southern Karnataka as his research area. Rural Karnataka has a

populationof4,03,46,268ason May2011.

Thedatacollectionfor theresearchwasdonebetween the timeperiodof8th May to

18th May.

4.5 Formulaused for sample sizeestimation

n= (Z^2(p*q)/e^2)

(Wheren=samplesize,z=confidence interval,p=noofpeopleusingcell phone,q=(1-p),e=

marginorerror.)

For95%confidence interval,assuming70%adopters & 30%nonadoptersand5%

marginoferrorweget n=322.69

Numberofvillagessurveyed:23

Averagepopulationofthevillagessurveyed:900

70% mobile users in rural areas

30% non mobile users

confidence level 95%

confidence interval 5%

sample size 322.6944


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Table 4.1

4.7 Methodofcollecting data

One of the objectives of the research was to understand the impacts of mobile

telephoneon thesocioeconomic livelihoodsof therural population. Henceacasestudyon

tworural individualswasdone, tounderstand thechangesbrought about by themobilephone

in theirday today livelihood.Questionnaireswerealsoadministered to individualsbasedon

thestrata towhich theybelong in theresearch locations.

y Primarydatacollection:Thiswasdone throughadministeringquestionnaires & field

interviews.

y Secondarydatacollection:Secondarydata isdatacollectedbysomeoneotherthan the

user. Commonsourcesofsecondarydataforsocial science includecensuses,surveys,

SL no village district population crops grown

1 mandigere nelamangala 800 ragi, corn

2 bardi nelamangala 700 ragi, corn, vegetables

3 asruvalli nelamangala 750 ragi, corn, vegetables

4 budiyal nelamangala 800 ragi, corn, vegetables

5 govindappa layout nelamangala 1500 semi rural

6 mopparahalli doddaballapura 350 ragi, mostly contractors

7 kodimanchanahalli doddaballapura 500 ragi,vegetables

8 siddnayakanahalli doddaballapura 1200 ragi,vegetables

9 singanayakanhalli doddaballapura 800 ragi,vegetables

10 venkatagirikote devanahalli 800 ragi,vegetables

11 devanahalli devanahalli 1500 ragi,vegetables

12 vibhutikere ramnagar 700 serciluture,ragi,corn

13 ubudgere ramnagar 700 serciluture,ragi,corn

14 anjanapura ramnagar 800 serciluture,ragi,corn

15 bannikuppe ramnagar 1200 serciluture,ragi,corn16 devaradoddi ramnagar 700 serciluture,ragi,corn

17 machsatahallidoddi ramnagar 600 serciluture,ragi,corn

18 gudnalli anekal 1500 vegetables, ragi, battha

19 geretikanabele anekal 800 vegetables, ragi, battha

20 channegowdandoddi mandya 800 ragi, sugarcanes, corn, sericulture

21 doddagarudanadoddi mandya 1200 ragi, sugarcanes, corn, sericulture

24 somanahalli mandya 1500 ragi, sugarcane, industrial area

22 bommasandra industrial are anekal semi rural ragi,industries

23 jigani anekal semi rural ragi,industries


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organizational records and data collected through qualitative methodologies

orqualitativeresearch

Limitations

1. The estimated sample size was 322, due to time constraints 240 samples were

collected.

2. Theresearchwasrestricted torural areas in & aroundSouthern Karnataka.

3. All thevillages insouthern Karnatakawerenot taken intoaccount forthisresearch

4. The subjectswho answered thequestionnairebelong to various age groups and the

conclusionsderivedfrom thehypothesis testingmayhavedeviations.


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CHAPTER 5

DATA ANALYSIS &

INTERPRETATION


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5.1 Population figures:

Year India-population urban India population

rural India population

inmillions

2001 1028610328 285000000 7422002 1045469269 289671154.8 754.2

2003 1062604528 294418870 766.7

2004 1080020634 299244400.2 779.3

2005 1097722191 304149021 792.1

2006 1115713876 309134028.7 805.2

2007 1134000445 314200740.6 818.5

2008 1152586732 319350496.1 831.9

2009 1171477648 324584656.1 845.7

2010 1190678186 329904604.2 859.6

2011 1210193422 335311746.2 873.8

Population inIndiahasseenadecadal growthof1.6%. Population inurbanIndiahas

seenadecadal growthof1.67%,whilepopulation inrural Indiahasseenadecadal growthof

1.64%.

25000000

26000000

27000000

28000000

29000000

30000000

31000000

32000000

33000000

34000000

0

20000000

40000000

60000000

80000000

1E+09

1.2E+09

1.4E+09

India

ation

ruralIndia opulation

urbanIndiapopulation


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5.2 Tele-density figures: Comparison

year Indiatele-denisty Urban Indiatele-denisty rural Indiatele-denisty

2001 3.6 10.4 0.9

2002 4.3 12.2 1.2

2003 5.1 14.3 1.5

2004 7.0 20.8 1.6

2005 9.1 26.2 1.7

2006 12.7 38.0 1.9

2007 20.5 49.5 5.8

2008 33.2 81.3 12.6

2009 42.3 95.1 16.6

2010 61.0 119.7 24.3

2011 69.3 150.7 32.1

Tele-density in Indiahasseenadecadal growthof28%.Tele-denisty inurban India

hasseenadecadal growthof24.9%while tele-density in rural Indiahas seena significant

decadal growth of 34.33%.This signifies the fact that rural India is a market with great

potential for telecom companies topenetrate into. With market for telecom companies in

urbanIndiareachingastageofsaturation,rural Indiapresentsamarket whichhasnot been

tapped intoeffectively & amarket withhugegrowth in thenext decade.

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

I

ia-tele

e

sity

urba

I

ia - tele

e

sity

ruralI

ia- tele

e

sity


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5.3 Factors influencing rise intele-density inrural India

Literacy inrural India Vs rural tele-density

year rural India literacy in % rural Indiatele-density

2001 46.1 0.9

2002 47.2 1.2

2003 48.4 1.5

2004 49.6 1.6

2005 50.8 1.7

2006 52.0 1.9

2007 53.3 5.8

2008 54.6 12.6

2009 55.9 16.6

2010 57.3 24.3

2011 56.5 32.1

Using the CAGRmodel,agrowthrateof1.67%hasbeenobserved in literacyrateof

rural India in thepast decade.

Literacyrate ishighlyco-relatedwith the tele-densitygrowth inrural India.The R =

0.7224,signifies thefact that as the literacyrateofrural Indiahasrisen, tele-densityhasalso

seen a significant growth in thepast decade. Thus literacy hasbeen an important factor

contributing to therise in tele-density inrural India.

y = 2.066x - 6.207

R = 0.722

-10

-5

0

5

10

15

20

25

30

0 2 4 6 8 10 12

r ral tele e sity

r

raltele

e

sity

Li

ear (r raltele e sity)


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Percapita Incomeofrural India Vs rural tele-density

year percapita income rural Indiatele-denisty

2004 6660 1.6

2005 7570.2 1.7

2006 8604.8 1.9

2007 9780.8 5.8

2008 11117.5 12.6

2009 12636.9 16.6

2010 14363.9 24.3

2011 16327 32.1

Using the CAGRmodel, a growth rate of 13.67% hasbeen observed inper capita

incomeofthepopulationofrural India in thepast 7years

Growth inpercapita incomeof individuals inrural India ishighlyco-relatedwith the

tele-densitygrowth in rural India.The R =0.9653,signifies the fact that as thepercapita

incomeofrural Indiahas increased, tele-densityhasalsoseenacorrespondinggrowth.Thus

percapita incomehasbeenan important factorcontributing to therise in tele-density inrural

India.

y = 0.003x - 24.40

= 0.965

-5

0

5

10

15

20

25

30

35

0 5000 10000 15000 20000

r ral tele e sity

ruralteledensity

Linear (ruralteledensity)


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Electrificationofrural households Vs rural tele-density

Year electrified villages rural Indiatele-density

2004 474982 1.6

2005 479144.9303 1.7

2006 4,83,344 1.9

2007 487580.5675 5.8

2008 491853.9167 12.6

2009 496164.7191 16.6

2010 504900 24.3

Using the CAGRmodel,agrowthrateof0.87%hasbeenobserved innumberofrural

householdselectrified in thepast 6years.

Increase in the number of rural householdsbeing electrified in India is highly co-relatedwith the tele-densitygrowth inrural India.The R =0.9315,signifies thefact that an

increase in the number of rural householdsbeing electrified, tele-density has also seen a

significant growth in the 5 years. Thus electrification of rural households has been an

important factorcontributing to therise in tele-density inrural India.

y = 0.000x - 397.3

= 0.931

-5

0

5

10

15

20

25

30

470000 475 000 480000 485 000 490000 495000 500000 505000 510000

rural teledensity

ruralteledensity



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Populationdensity ofrural India Vs rural tele-density

year populationdensity/sq m rural Indiatele-density

2005 488.8 1.7

2006 492.466 1.9

2007 496.159495 5.8

2008 499.8806912 12.6

2009 503.6297964 16.6

2010 507.4070199 24.3

2011 511.2125725 32.1

Using the CAGR model, a growth rate of 0.75% hasbeen observed inpopulation

densityofrural India in thepast 6years.

Populationdensityofrural India ishighlyco-relatedwith the tele-densitygrowth in

rural India.The R =0.9568,signifies thefact that as therise inpopulationdensityofrural

Indiahasresulted in thecorresponding tele-densityhasalsoseenasignificant growth in the

past decade.Thus literacyhasbeenan important factorcontributing to therise in tele-density

inrural India.

y = 1.404x - 688.6

R = 0.956

-5

0

5

10

15

20

25

30

35

485 490 495 500 505 510 515

rural teledensity

ruralteledensity



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5.4 Correlationanalysis

Correlations

tele-denisty

per capita

income

population

density of

India literacy rate

tele-denisty Pearson

Correlation

1 .987 .974 .977

Sig. (2-tailed) .000 .001 .001

N 6 6 6 6

per capita income Pearson

Correlation

.987 1 .996 .997

Sig. (2-tailed) .000 .000 .000

N 6 6 6 6

population density

of India

Pearson

Correlation

.974 .996 1 1.000

Sig. (2-tailed) .001 .000 .000

N 6 6 6 6

literacy rate Pearson

Correlation

.977 .997 1.000 1

Sig. (2-tailed) .001 .000 .000

N 6 6 6 6

**. Correlation is significant at the 0.01 level (2-tailed).

From the correlation table above it is evident that, tele-denisty in rural India is highly

correlated(statisticallysignificant sincep


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3. Feel moresecureabout theirfamilies

4. Family tiesarekept intact,relativesandotherfamilymembersarealways in touch.

5. Get more informationabout theiroccupation, jobopportunities,educationetc

6. Keep themselves informedabout politics,sportsetc(basically theday todayevents)

7. Generatemorerespect from thesociety

8. Savemoremoneymeant fortransport, travellingetc

9. Haveenhanced theirsocial connectivity

Apilot test was conductedwith 30 samples.Analysiswas done on the 30 samples

collectedfrom thepilot survey tocheckthereliabilityofthescaleused in thequestionnaire.

Cronbachalphawhichsignifies thereliabilityofthescalewascalculated, & thevalue

obtained0.717wasfound tobemore than the theoretical valueof0.6requiredforascale to

bereliable.

Apaired samples t test was conducted inorder todetermine ifstatistical significant

difference existsbetween mean scores on socio economic livelihoods ofbefore & afteradoptionofthemobile telephone inrural areas.

Paired Samples Statistics

Mean N Std. Deviation Std. ErrorMean

Pair 1 make profitable choices in

business, occupation etc

1.16 230 .364 .024

make profitable choices in


4.50 230 1.093 .072

Pair 2 make profitable

associations with

suppliers, customers etc

1.16 170 .372 .029

Reliability Statistics

Cronbach's

Alpha N of Items

.717 18


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make profitable

associations with


4.52 170 .681 .052

Pair 3 feel secure about my family 1.09 232 .281 .018

feel secure about my family 4.78 232 .412 .027

Pair 4 keep in touch with all my

relatives, friends etc

1.07 232 .261 .017

keep in touch with all my


4.76 232 .429 .028

Pair 5 get more information about

my occupation, job

opportunities, education

etc

1.30 232 .605 .040

get more information about

my occupation, job


etc

4.61 232 .628 .041

Pair 6 keep myself informed

about the happenings in

the city, country etc

1.32 108 .470 .045

keep myself informed



4.84 108 .366 .035

Pair 7 generate more respectfrom the society

1.39 232 .629 .041

generate more respect

from the society

4.75 232 .436 .029

Pair 8 save more money meant

for travelling, access to

information etc

1.29 232 .454 .030

save more money meant


information etc

4.77 232 .472 .031

Pair 9 enhanced my social status 1.21 212 .407 .028

enhanced my social status 4.84 212 .368 .025


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Paired Samples Test

Paired Differences

Mean Std. Deviation Std. Error Mean


business, occupation etc -



-3.343 1.370 .090

Pair 2 make profitable associations

with suppliers, customers etc

- make profitable

associations with suppliers,

customers etc

-3.359 .758 .058

Pair 3 feel secure about my family -

feel secure about my family

-3.698 .469 .031


relatives, friends etc - keep in

touch with all my relatives,friends etc

-3.685 .510 .033


my occupation, job

opportunities, education etc -


my occupation, job

opportunities, education etc

-3.315 1.136 .075

Pair 6 keep myself informed about

the happenings in the city,

country etc - keep myself

informed about the

happenings in the city,

country etc

-3.519 .634 .061


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Pair 7 generate more respect from

the society - generate more

respect from the society

-3.353 .742 .049

Pair 8 save more money meant for

travelling, access toinformation etc - save more

money meant for travelling,

access to information etc

-3.478 .816 .054

Pair 9 enhanced my social status -

enhanced my social status

-3.632 .700 .048

Paired Samples Test

Paired Differences

95% Confidence Interval of the

Difference

Lower Upper





-3.521 -3.165


associations with

suppliers, customers etc -

make profitable

associations with


-3.474 -3.244

Pair 3 feel secure about my family

- feel secure about my

family

-3.759 -3.638


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relatives, friends etc - keep

in touch with all my


-3.751 -3.619

Pair 5 get more information aboutmy occupation, job


etc - get more information

about my occupation, job


etc

-3.462 -3.168



the city, country etc - keep

myself informed about the

happenings in the city,

country etc

-3.639 -3.398

Pair 7 generate more respect

from the society - generate

more respect from the

society

-3.449 -3.258


for travelling, access toinformation etc - save more

money meant for travelling,

access to information etc

-3.584 -3.373

Pair 9 enhanced my social status

- enhanced my social

status

-3.727 -3.537

Paired Samples Test

t df Sig. (2-tailed)





-37.010 229 .000


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associations with

suppliers, customers etc -

make profitable

associations with


-57.772 169 .000

Pair 3 feel secure about my family

- feel secure about my

family

-120.027 231 .000



keep in touch with all my


-110.114 231 .000


my occupation, job


etc


my occupation, job


etc

-44.449 231 .000




keep myself informed



-57.705 107 .000

Pair 7 generate more respect

from the society

generate more respectfrom the society

-68.883 231 .000


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information etc

save more money meant


information etc

-64.912 231 .000

Pair 9 enhanced my social status

- enhanced my social

status

-75.581 211 .000

From thepaired samples t test it is evident that there exists a statistical significant

difference in livelihood scenariosbefore & after mobile telephone adoption. Taking the

exampleofoneof thehypothesiswhich talksabout monetarysavingsbefore & aftermobile

telephoneadoption, themeanvalue forbeforeadoptionstandsat 1.29 & thecorresponding

meanvalueforafteradoptionstandsat 4.77.Thus thereexistsastatisticallysignificant mean

difference of -3.478(significant at 0.05) in the before mobile adoption & after mobile

adoption.

Thus we reject the null hypothesis that there exists no difference in the socio

economicsituationofarural individualbefore & aftermobile telephoneadoption.


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CHAPTER 6

CASE STUDY


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Case 1: Siddaramu

Name:Siddaramu

Occupation:Farmer

Grows Ragi

Lives in Channegowdandoddi

Town: Maddur

District:Mandya

Annual Income:`45000

ProfileofSiddaramu:

Siddaramu isafarmerbyprofession.

Hehasdonehisbasicschooling i.e. till 4thstandard.

Hes from a village by the name Channegowdandoddi in the town of Maddur,

Mandyadistrict.

Thepopulationofthevillage is in therangeof1000-1200.

Peopleherearemainly involved infarmingwithragi,sericulture,corn,sugarcaneetc

being thecropsgrown.

Average incomeofan individual in thevillage is Rs40000pa.

Siddaramu is married to Janaki & has one son. His son works as a cab driver in

Bangalore.

Siddaramucultivatesragi andsells them to traders in the townofMaddur toearnhis

income.

Siddaramusays irrigational facilitiesareadequate in hisvillage & theydonot face

waterscarcity.


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49

Communicationnetworkof Siddaramu

Socioeconomicimpacts

From the

table we can see that Siddaramu hasbeen able to make significant savings owing to the

adoptionofmobiletelephone.Farming & transportexpensesforSiddaramuhavegonedown

significantlyowingtothemobilephoneadoption.

Impactareas (afteradoption

ertili ers, manureetc` 14000

Communication` 200

Transport `1500

Impactareas (beforeadoption!

"

ertili# ers, manureetc`16000

Communication`400

Transport`5000

12.4%

sa$ ings

50%

sa$ in s

30%

sa$ ings


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50

Aftermobileadoption

Fertilizer,manureetc Receives them on credit in case void of cash. This

scenario was unimaginable before mobile adoption.

Owningamobile telephonehas increased the trust fact

& alsohehasbeenable tomakeprofitableassociations

with traders in thecity

Communication Hassaved immensely in thisarea,byreducing travel to

visit relatives,communicatewith local farmersetc

Transport Anotherhigh impact areawherehehasmade savingsby reducing travels to the town topurchasenecessary

farming items,visit relatives,friendsetc

Siddaramubelieves afterhe hasbought themobilephone hehasbeenable to save

significantlyonhis travel expenses.According tohim, inamonthhesavesaround Rs

150permonthmeant fortravelling to thecityofMandya,meetingwithhisfriendsby

travelling to the townetc.

Throughuseof themobilephone,hesavessubstantiallyon travel timeby reducing

thenumberofcity trips tomaintainrelationshipswith traders

Siddaramu leverages different relationships with different traders, moneylenders or

wholesalepurchasers tooptimisesaleofhisproduceafterharvesting.

Gainsotherkindsof incremental informationsuchasmarket ratesforhiscrops,anyincentivesfrom thegovernment directed towardsfarmersetc.

ThemobilephonehasenabledSiddaramu toovercome thevulnerabilitycausedbya

lackof timely informationor lackofcommunication toachievemaximumprofitsfor

himself


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Case 2: Umesh

Name:Umesh Village: Devaradoddi

District: Ramnagar

Occupation:Student/farmer

Annual Income: Rs60000

Growsragi,sericulture

Profileof Umesh:

Umesh isastudent/farmerwhocultivatesragi.

Umesh liveswithhisparentsandayoungerbrother inavillagecalleddevaradoddi,

Ramnagardistrict.

Thevillagehasapopulationofaround800.

Peopleheremainlyemploy themselves infarming.

Ragi,corn,sericultureetcaregrown in thisregion.

Average incomeofpeople in thisvillage is Rs60000pa.

Umesh tries toeducatehimselfon improvedfarming techniques. Hedoesfarming in

themorning & attendscollege in theevenings.


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Communicationnetworkof Umesh

SocioEconomic Impacts

From the table we can see that Umesh hasbeen able to make significant savings

owing to theadoptionof mobile telephone.Farming & transport expenses forUmeshhave

gonedownsignificantlyowingtothemobilephoneadoption.

Impactareas(afteradoption%

&

arming expenses

(fertili ' er, manure, seeds etc%

`22000

Tra( elling`2000

Profit from selling his produce`57000

Impactareas(Beforeadoption)

0

arming expenses

(fertili 1 er, manure, seeds etc)

`25000

tra2

elling`4000

Profit from selling his produce`55000

12%

sa3

ings

50%

sa3

ings

3 4 6% p 5 ofit


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53

Aftermobileadoption

Farm

in

gex

pen

ses

(fertilizer, manure,

seeds etc)

According toUmesh,hehasbeenable tosaveconsiderablyonhis

farming expenses by adopting inexpensive means of farming.

Purchasing seeds of high quality at feasible rates by having

profitable associationswith the traders. Hehasbeen able to sell

his produce at the best market rate possible owing to the

informationhereceives throughhismobilephone

Transport

Umesh has been able to save significantly on his travelling

expensesaftermobilephoneadoption. Hehasbeenable tokeep

in touchwithhisfamily,relatives,friendsetc through themobile

phone instead of travelling to the respective locations to meet

them. Also he says, traders visit him tobuy hisproduce thus

cutting down on his travelling expenses to the town to sell his

produce

According to Umesh, after mobile adoption he has been able to balance his

occupationandeducation inanefficient manner.

Hehas increasedhis social connectivitywhichaccording tohimdidnot exist before

hebought themobilephone

Alsohesavesonhis travel to thecity tobuynecessary itemsfor farming & forhis

householdbymakingacall tohisfriendswhowork in thecity & thusbringhome the

itemsherequires.

Hehasalsodevelopedacertainamount oftrust withvendors & traders, therebyeven

through ifhe isrunningshort offinance,vendors & tradersdoofferhimcredit since

theycancontact him throughhismobilephone.

Alsoowingamobilephonehasbeen ledhim toundergoeducation in the town.

Hekeepshisfamily informedabout hiswhereaboutsand thushasdevelopedafeeling

ofsecuritywithinhisfamily.


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CHAPTER 7

CONCLUSIONS, SUGGESTIONS &

THE ROAD AHEAD...


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With issues around two primary prerequisites, mobile adoption is not seen as a

feasibleadoptionforcertain individuals inhighlyrural remote locations.

Further infrastructureroll out ofbothmobile telephonyaswell asofbasicelectricity,

canfurtherenablemobileadoption inremote locations

5. Networkprovidersmust develop innovative VAS targeted towards therural population.

Perhapsmost important,operatorsmust understand theircustomersdeeplyenough

todevelop relevant and innovativevalue-added servicesgeared toward the rural

population.

Companiescustomizingproductsforrural masses

Company name Products

Godrej Chotukool

Refrigerators

Nokia Lifetools

Vortex Lowcost ATMs

Reliance

Communication

Gramada phone

Nokiaasahandset manufacturerhasdevelopedLife tools.LifeTools isa VAS

developedkeeping inmind theneedsoftheruralpopulation inIndia & isaimedat

helpingfarmers toget local informationonseeds,crops,marketsandweather.

6. Rural markets offer a hugepotential in terms of market,but serviceproviders must

providevalue to theenduser i.e. therural individual inorder togeneratemoreprofits.


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7.2 Suggestions

1. Basestations that functiononsolarpowershouldbe installed inrural & remoteareasof

India.This in turn

Reduces thefuel costs incurredbycompanies,

Requires less than50W ofpowerperBaseStation.

Reduces the investment costs incurredby companies, hence companies tend to

botherlesson therevenueaspect fromrural India.

2. Increasedgovernment subsidiesprovidedfornetworkroll outs in therural areas.

3. Voicebased VAS for therural population.Since therural population is lowon literacy

rate,SMSbased VASareunaccountedfororarenot relevant to therural population.

4. Asmentioned in thefindingsof theresearchconducted,rural populationdoesexploit all

the features that areavailableon themobilephone.Thusreading & sendingSMSsare

out ofthepicturewhen it comes torural India.

5. Service providers can initiate voice based VAS, to better connect with the rural

consumersbyproviding them informationwhichhelp them in theiroccupationaswell as

caterto thegeneral needsoftheruralpopulation.

E.g.market info,weatherforecasts,regional aswell asnational newsetc.

7.3 Theroadahead: Broadband inrural India

Broadband facilities enablepeople to interact with governments, conduct business

communicationwithpeers,andaccessbetterhealthcareandeducationservices.

Initiativesforruralbroadbandpenetration:

y Grameen Gyan Abhiyan

InAugust 2007, the government launched the Grameen GyanAbhiyan (GGA),which

envisages knowledge and skill empowerment of rural families using information and

communication technology (ICT).A nationwide scheme, it will cover everyblock with a

villageresourcecentre,andprovideavillageknowledgecentreforeachpanchayat.Last mile


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connectivitywill beachieved throughacombinationofthe internet andcommunityradio,as

well as that ofthe internet andmobilephones.

y CommonService Centres

The Common Service Centre (CSC) scheme is yet another initiative to enhance rural

broadbandpenetration.It ispart of theNational e-Governance Plan (NeGP)of theNational

Common Minimum Programme. It aims toprovide e-governance countrywide through a

publicprivatepartnership(PPP)model.Theschemeproposes toroll out 100,000 CSCs in the

rural areasand10,000 CSCs in theurbanareas.Thekioskswill bespreadequitablyacross

thecountry.

y e-Disha Ekal Seva Kendras

Other private companies such as Hughes Communications India Limited (HCIL),

Microsoft,Alcatel-Lucent, etc.arealso involved invarious rural broadband initiatives.For

instance, HCILand Comsat havepartneredwith the Haryanagovernment toroll out e-Disha

Ekal Seva Kendrasacross the Rohtaktelecomdivision.

Thee-Disha Kendraswill providerural citizenswithaccess toe-governanceapplications

like certificates, land records, social welfare, etc. They will also offer services such as

interactiveeducation, railwayandairline ticketing,mobileprepaid topupsand international

voicecalling.

y ProjectSaksham

Microsoft haspartnered with HCIL to introduce 5,000broadband-enabled ICT kiosks

across200small towns and rural regions in India.Aspart of its rural computing initiative

Project Saksham, Microsoft will offer free 12-day IT literacy programmes for kiosk

operators.The kioskswill be operatedona franchiseebasedmodel, offering e-governance,

ecommerce and e-education facilities.HCIL will offerbroadband services, internet access,

prepaid top-ups,value-addedservices,educationservicesand international voicecalling.

y Infothela

Aspart of the MediaLabsAsiaproject (inwhichAlcatel-Lucent is involved), the IIT

Kanpur-Lucknow Lab is working on a completely new concept. In February 2006, it

developedabattery-powered infothela,amobileplatformequippedwith internet and telecom


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Broadband: economic impact (India)

y According to the World Bankreport 10percent increase inbroadbandpenetrationhelps

in increasing the GDP ofadevelopingcountryby1.38percent.

y Increasingbroadbandpenetrationby 1percent will contribute Rs.162billion to Indias

GDPby2015.

y Rural broadbandexpansionwill meanmoredigital access to therural populationwhich is

sure to throwupopportunitiesfor innovativeservicedeliveryande-commercebusiness

modelswhichareprofitablefordomesticIT industry.

y Services industry contributes a large chunk to the overall GDP of India; hence rural

broadbandpenetration is sure to enhance the economic growth of India in the coming

years.


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Particulars 2010 2015

Wireless broadbandusers (million) 10 158

Penetrationof population 0.8% 12.5%

Wireless broadband service ARPU (`/ month) 523 343

Households with wireless broadband connection

(million)*

6 72

Businesses with wireless broadband connection

(million)*

1.4 4.0

Source: industry inputs, analysys mason, *includes households & businesses withmultipleconnections

& users


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CHAPTER 8

BIBLIOGRAPHY


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y Reliance Communications company profile

http://www.indiainfoline.com/Markets/Company/Background/Company-

Profile/Reliance-Communications-Ltd/532712

y Tele-density figures

http://www.trai.gov.in/

http://www.dot.gov.in/

y Broadband penetration, dataevolution forrural India

http://www.iamai.in/

http://www.imrbint.com/

y Population figures

http://censusindia.gov.in/

y Rural development schemes by Govtof India

http://rural.nic.in/

http://finmin.nic.in/

y Access to communications in emerging markets." Vodafone.com. Vodafone.

Web. 4 Jan. 2010.

http://www.vodafone.com/content/index/miscellaneous/error.html

y International Telecommunications Union

http://www.itu.int/home/index.html

y Market share fortelecom service providers

http://www.indiainfoline.com/

y Telecom policies, subscriber base

http://indiatelecomnews.com/

y Telecommunication in India

http://en.wikipedia.org/wiki/Telecommunications_Statistics_in_India

y Telecom vision 2020

http://planningcommission.nic.in/sitemap/index.php?poli=newdoc.htm

y http://www.itu.int/newsroom/press_releases/2004/NP01.html

y Reliance Communicationrural products(Gramada phone)

http://www.rcom.co.in/Rcom/personal/home/index.html

y Nokia lifetools

http://www.nokia.co.in/


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y Handsetevolution in Indiantelecom

http://www.ericsson.com/thecompany/company_facts/worldwide/as/in

y Developments intelecommunication in India

http://karnataka.bsnl.co.in/

http://www.bsnl.co.in/


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CHAPTER 9

ANNEXURE


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Questionnaire (Socio Economic Impacts)

Demographic profile:

1. Age : a) less than 25 b) 25 -34 c) 35-44 d) 45-54 e)>=55

2. Annual income : a)200000

3.Locat

ion

:

4. Village: town: District:

5. Occupation:

6. Sincehow long have youownedamobiletelephone? :

The statements given belowwill measure the impact ofmobile telephone on your

social & economic livelihood before and after adoption. Request you to encircle the

appropriatenumberat therightofeach statement. Themeaning associatedwitheach

number is as given below.

Previous status

( beforemobile phone)

1 Strongly Disagree

2 Disagree

3 CantSay

4 Agree

5 Strongly Agree


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Previous status

( beforemobile

phone)

Current status

(afteradoptionof

mobile phone)

Imabletomake profitablechoices regarding

my business, occupationetc

1 2 3 4 5 1 2 3 4 5

Imabletomake profitableassociations with

retailers and suppliers

1 2 3 4 5 1 2 3 4 5

I feel more secureaboutmy family 1 2 3 4 5 1 2 3 4 5

Imnowabletokeep my family ties intact,

relatives andother family members can beeasily

kept intouchwith.

1 2 3 4 5 1 2 3 4 5

I cannow getaccess tomore information

regarding my occupation

1 2 3 4 5 1 2 3 4 5

I keep myself informedaboutevents, politics et 1 2 3 4 5 1 2 3 4 5

Generatemorerespect frommy society 1 2 3 4 5 1 2 3 4 5

Current status

(afteradoptionofmobile

phone)

1 Strongly Disagree

2 Disagree

3 CantSay

4 Agree

5 Strongly Agree


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Imableto savemoremoney meant for

transport, otherexpenses

1 2 3 4 5 1 2 3 4 5

I haveenhancedmy social connectivity 1 2 3 4 5 1 2 3 4 5

Thankyou!!!....

Documents

Ravi Proj Report