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Go Rural is the mantra of all service providers in the country. The next growth wave is likely to come from rural India and operators are coming out with various strategies to garner the maximum share of this pie. With the exception of Virgin Mobile, every operator worth its salt is focusing on the rural segment.

Recently, Communications and IT Minister, A Raja came up with the target of 200 mn rural telecom connections by 2012 at a penetration rate of 25%. As of now, around 88 mn phones have been provided in rural areas with a tele-density of around 11%. Experts believe that this target is on the conservative side and India is likely to achieve it by 2011, judging by the way service providers are making a beeline for the rural segment. "According to our predictions, we are looking at a target of 730 mn wireless subscribers by 2012, so rural subscribers should contribute at least 50% of it; and we feel a target of 200 mn rural subscribers is achievable by 2011," says Madhusudan Gupta, senior research analyst, Gartner.

The Big Players
Reliance and Airtel have a strong focus on the rural segment and are investing heavily. Both have pan-India network presence, covering all 23 circles in the country. Followed by BSNL and Vodafone, which have presence in 21 and 16 circles, respectively. Bharti Airtel is clearly the leader as far as the rural subscriber base is concerned and the company would want to take full advantage of its first-mover advantage. "We offer post-paid, pre-paid, roaming and VAS through our extensive sales and distribution channel covering 9,23,472 outlets. Currently, our network is present in 5,048 census towns and 3,64,287 non-census towns and villages in India, thus covering approximately 74% of the country's population," says a Bharti Airtel spokesperson.

"Almost 50% of our monthly net customer additions come from the rural areas.Over 74% of our population is expected to go mobile over the next decade and that in itself is both an opportunity and a challenge. In our quest to get a disproportionate share of these new customer additions, our top priority is to strengthen availability (of network, recharges) and operations so as to leverage the most out of the first-mover advantage," the spokesperson added.

Game Plans
Following in the footsteps of Chinese service providers like China Mobile, Airtel also plans to use text-based services to expand to the rural market, and this is exemplified by the Bharti-IFFCO tie-up. It aims to better understand the requirement of the rural sector, and is also looking at more such tie-ups in the future. The company has also entered into a strategic tie-up with Indian Farmers Fertilizer Cooperative (IFFCO) and formed a new JV called IFFCO Kisan Sanchar Limited. This JV endeavors to provide market information to the farmers. The company recently tied-up with IFFCO to address the rural segment to as part of this tie-up, the subscriber will get a bundled deal with an Airtel mobile connection. The farmer will also get access to a VAS platform that will broadcast five free voice messages on mandi prices, farming techniques, weather forecasts, dairy farming, animal husbandry, rural health initiatives and fertilizer availability.

Bharti Airtel recently launched rechargeable coupons worth as little as Rs10, Rs 20, etc. Inspiration for this has come from the 'satchet model' followed by FMCG companies to address the rural market. Bharti Airtel has come out with a unique retailer and distributor program to address the rural customer and his specific requirements. It has approximately 8,00,000 points of sale and, going forward, the share of the rural retail outlets is likely to substantially go up. The company is looking at rural retailers to not only help in acquiring new rural customers but also act as a local one-stop-shop for rural customers.

Mobile has gone rural and this restaurant in Dharamshala, Himachal Pradesh, keeps the hoarding but no SIM

Ace rival Reliance Communications is not far behind. "Our network provides voice and data telephony services to over 4.5 lakh villages currently and we are in the process of expanding to cover 6 lakh Indian villages. On the completion of our ongoing expansion plans, we would be covering over 97% of the Indian population," a Reliance Communications spokesperson said. The company is believed to have earmarked a capex of $2.5 bn for our network expansion plans. Reliance is planning to add 100 mn customers for India as a country and to meet this target it is putting a pan-India 1,20,000 km fiber optic integrated network.

Bharti Airtel might still have an advantage compared to Reliance Communications, though it is present in fewer villages. The company is planning to add another 1,00,000 villages by the end of the current year. Bharti's's tie-up with IFFCO is going to play a key role in its rural customer acquisition strategy.

BSNL is planning to provide an umbrella curve through their WLL network in rural areas so that if there is requirement for connection in any particular area, the company would be able to provide that through its wireline or wireless network. However, the only drawback is that the company needs to roll out its plans in a much faster manner.