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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
Linear (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
Linear (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
business, occupation etc
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
suppliers, customers etc
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
relatives, friends etc
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
opportunities, education
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
about the happenings in
the city, country etc
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
for travelling, access to
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
Pair 1 make profitable choices in
business, occupation etc -
make profitable choices in
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
Pair 4 keep in touch with all my
relatives, friends etc - keep in
touch with all my relatives,friends etc
-3.685 .510 .033
Pair 5 get more information about
my occupation, job
opportunities, education etc -
get more information about
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
Pair 1 make profitable choices in
business, occupation etc -
make profitable choices in
business, occupation etc
-3.521 -3.165
Pair 2 make profitable
associations with
suppliers, customers etc -
make profitable
associations with
suppliers, customers etc
-3.474 -3.244
Pair 3 feel secure about my family
- feel secure about my
family
-3.759 -3.638
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Pair 4 keep in touch with all my
relatives, friends etc - keep
in touch with all my
relatives, friends etc
-3.751 -3.619
Pair 5 get more information aboutmy occupation, job
opportunities, education
etc - get more information
about my occupation, job
opportunities, education
etc
-3.462 -3.168
Pair 6 keep myself informed
about the happenings in
the city, country etc - keep
myself informed about the
happenings in the city,
country etc
-3.639 -3.398
Pair 7 generate more respect
from the society - generate
more respect from the
society
-3.449 -3.258
Pair 8 save more money meant
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)
Pair 1 make profitable choices in
business, occupation etc -
make profitable choices in
business, occupation etc
-37.010 229 .000
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Pair 2 make profitable
associations with
suppliers, customers etc -
make profitable
associations with
suppliers, customers etc
-57.772 169 .000
Pair 3 feel secure about my family
- feel secure about my
family
-120.027 231 .000
Pair 4 keep in touch with all my
relatives, friends etc
keep in touch with all my
relatives, friends etc
-110.114 231 .000
Pair 5 get more information about
my occupation, job
opportunities, education
etc
get more information about
my occupation, job
opportunities, education
etc
-44.449 231 .000
Pair 6 keep myself informed
about the happenings in
the city, country etc
keep myself informed
about the happenings in
the city, country etc
-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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Pair 8 save more money meant
for travelling, access to
information etc
save more money meant
for travelling, access to
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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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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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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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!!!....
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