Electricity is the Bottleneck for Mobile Penetration in Rural India

Atanu Dey on why electricity is the bottleneck for mobile usage in rural India --

We don’t usually associate telecommunications with power. But cellular towers don’t work on love and fresh air (and fresh air is not something that you can take for granted, anyway.) They require power and in areas where the grid is unreliable, you have to spend fairly large sums on diesel generator sets. That, among others, is a major problem in rural India. The cost of energy accounts for a third of the operating costs of a cellular network, I am told. Higher costs means higher prices. So what’s to be done.

I am a firm believer in the market. The market figures out a solution. Recently I came across a firm that has developed cellular technology that is miserly in the use of electricity. It does not require grid and can do without diesel generator sets. It is VNL, a Swedish Indian company. As they claim, “VNL’s WorldGSM™ is the industry’s first microtelecom solution; a complete re-engineering of GSM for the billions of low-income, rural users.”

As you know by now, I'm a big believer in the idea of of transforming the macro into the micro and microtelecom sounds more exciting than anything else I have heard of late.

By the way, mobile penetration in rural India is growing fast. According to TRAI, at the end of June 2008, the rural wireless subscriber base in India was 71 million, or 25% of the 287 million mobile subscribers in India. Even more importantly, out of the 25.8 million new mobile subscribers in April to June, 8.55 million, or more than 30%, were rural subscribers.

Clearly, mobile penetration in rural India is increasing and initiatives like microtelecom will only enable the process.