Volume 3, Number 2, April June 2014

ISSN (Print):2279-0934, (Online):2279-0942

PEZZOTTAITE JOURNALS

MOBILE PHONES, TELECOM INDUSTRY AND THE EXPECTATIONS OF YOUNG

CONSUMERS FROM THE HANDSET MARKET IN RURAL INDIA
Nabajyoti Deka1
ABSTRACT
India has gradually emerged as a potential market for the entire world in the last few decades. Post economic liberalization,
the domestic market, especially the rural market in India has shown phenomenal growth. Fast Moving Consumer Goods,
Automobiles, banking and several other sectors show its presence deep in the rural market by making the products (and
services) available to consumers belonging to the hinterland and remote villages. Telecom industry is one such sector, which
seems to have revolutionized the entire rural market by providing better connectivity in the post liberalization era. If good
roads have increased the efficiency of supplying products, usage of phones have led to flow of information in a much faster
way than it happened earlier.
The recent developments in the telecom industry (especially wireless services) indicate promising future for the service
providers and the mobile handset marketers. However, a lot more depends upon the availability of services, data usage, the
users and most importantly, the devices that are used by the consumers to access those services. If observed closely, the rural
youth have turned tech savvy and have strongly emerged as the consumer segment for many electronic items including mobile
phones. It is this consumer base, which can be seen using variety of mobile handsets to access several of the voice and data
services offered by the service providers. Mobile phones have become an integral part of their life, which was not the case
until recent past.
This study is an attempt to understand the behaviour of these rural tech savvy consumers by considering the broadly available
mobile phone variants in the rural market. A small survey has been conducted amongst college students to find their
preferences and attitude towards the handsets. The aim is to understand various factors that may influence marketing and
branding of mobile phones to the rural young population. The study focused on understanding several parameters like brand
preference, price, features etc. that lead to buying decisions. It revealed many interesting aspects of Marketing and Branding
of mobile handsets in rural India, some of which can be implicitly extended to other similar electronic products in the market.
KEYWORDS
Rural Market, Mobile Phones, Youth, Behaviour, Marketing, Branding etc.
INTRODUCTION
The growth story of the Indian telecom industry, especially after the economic liberalization, is highly appreciable. Today, the
telecom industry has become the backbone of industrial and economic development of the nation. It is one of the fastest growing
industries in the world and has achieved several milestones in terms of providing services and increasing its user base. The
telecom industry, which can be classified into two broad categories i.e. fixed and wireless cellular services, caters to the people
living in urban and rural locations. The urban location, which consists of big cities and towns, possesses higher teledensity as
compared to the rural areas. There are several infrastructural bottlenecks in providing telecom service to the vast population
residing in the remote villages and small towns. However, structural reforms, regulatory liberalization, FDI, participation of
private players coupled with several other factors have led to unprecedented growth in the sector over the past decade (1). The
availability of basic and cheaper models of mobile phones is one such factor, which has multiplied the number of users who enjoy
telecom services, in quick span of time. There were times when only rich and privileged could afford a mobile phone. These
devices were beyond the reach of common middle class in cities, let alone the people living in rural areas. Today, even a daily
wage earner can afford to have a basic or multimedia handset to call his near and dear ones, and at the same time enjoy certain
voice services. As incomes rises, rural consumption shifts from necessities to discretionary goods and lifestyle products like
television, mobile phones etc. About one in every two rural households has a mobile phone today, even in poorest states such as
Bihar and Orissa (2). Several global brands like Nokia, Samsung, and LG etc. see rural India as a great opportunity and
manufacture phones that are suitable for rural conditions. The local companies like Celkon, Micromax, Karbonn mobiles etc.,
along with china made cheap handsets, also share a significant pie of the consumer base in the small towns and villages. Who
exactly are the consumers that many of these cell phone marketers cater too? Which variety of mobile phones do the consumers
prefer to buy and what purpose do they use them for?
A recent report by Telecom Regulatory Authority of India (TRAI) states that out of 886 million wireless telecom subscribers in
India, 360 million are from villages and small towns. In addition, the overall rural teledensity found to be close to 42% as
compared to 138% for urban areas (3). The above statistics indicates the huge gap between the urban and the rural user base,
1

Lecturer, Department of Management, Rajiv Gandhi University of Knowledge Technologies, Andhra Pradesh, India,
u.nabadeka@gmail.com
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Volume 3, Number 2, April June 2014

ISSN (Print):2279-0934, (Online):2279-0942
PEZZOTTAITE JOURNALS

which also indicates the huge opportunity that the mobile marketers and the telecom service providers have in front of them. It is
noteworthy that more than half the population of the nation is under the age of 30 with a significant portion in the 15-24 age group
and belonging to rural India. Although, there is no definite statistics to prove, analysis of several recent reports lead to the fact that
a vast majority of the rural mobile phone users are young. Most of these young consumers are educated, informed, and confident
as compared to their elder generation. They are computer literate and use internet, they are capable of taking their own buying
decisions and can influence others when it comes to product preference, and more interestingly, they are willing to spend money.
In a situation as such, when the demographics and several factors are fast changing the dynamics of the rural market, the handset
market too is no exception. This necessitates the study of the rural consumers in various perspectives, the young tech savvy
mobile phone users in this context. How do these rural consumers perceive the device as? What other purposes do they use them
apart from voice and text service? Although rural consumers buy mobile phones largely for communication, they are increasing
viewing these devices as their window to the world, according to the chief marketing officer of Aircel ltd.(4). As the situation
reveals, research must be done to find the preferences of the consumers when it comes to buying a cell phone. Study must be
performed to analyses the parameters that may help the marketers to fulfill the needs and wants of the mobile users in a better
and more profitable way.
LITERATURE REVIEW
Selling products and services to rural India have always been a different game for many business organizations. Understanding the
rural consumers, their buying behaviour, spending habits etc. have always been a challenge for the companies catering to the
market. Various research articles and business reports mentioned the challenges being faced by the marketers while connecting to
the small town consumers due to many unavoidable reasons. Communicating the brand, distributing the products, pricing,
packaging and several other factors have been major concerns. Once those hurdles are overcome, creating brand identity and
positioning becomes a challenge when there are many players in the same battlefield. If the telecom industry in the rural market is
considered, it consists of almost a dozen service providers, and if not less, equal number of recognized mobile handset marketers.
It has realized the need to think of better, more detailed ways of acquiring, retaining and serving customers in the rural market (5).
The service providers should look forward to reduce service redundancies and other measures to cut the average cost to serve the
customers for a better delivery model. In a similar way, mobile manufacturers must offer handsets that are customized to the
village users preferences, such as more phones with torchlights and loudspeakers for playing music. The mobile phone and its
applications should be able to improve the overall quality of life of the rural mobile phone users, keeping in mind their context (6).
With the knowledge of the scenarios, the way forward is to provide relevant value added services using suitable technologies.
The changing trends in the user demographics, with age group playing a significant role in the mobile user base, have brought in
new challenges for the marketers in terms of usage and service offerings. Mobile handsets are used as much for entertainment as
it is used for communication. Study shows that mobile internet access is spreading fast among educated youth (7). Earlier,
people used mobile phones for only calling facilities, and text services (if educated). Today, they download songs, video clips and
images, use SMS and internet services for various purposes. GPRS option, touch screen, loud speakers, blue tooth transferring and
other features find huge popularity in the rural mobile phone using community. The challenge for the marketer is to understand
those vivid expectations of the rural customers from a handset, and more importantly making it available to them through multiple
product variants at an affordable price range. "Mobile phones of sub 2,000 price segment contribute 24% of urban India sales
value whereas in rural India, share of this price segment doubles," said Anant Jain, GfK Nielsen India's account director for
telecom and IT (8). The study by GFK Nielson also revealed that there are more than 1,500 different models in the market from
over a 100 brands in different price ranges, leading to increasing share of evolving features, such as multiple SIM slots, social
networking applications and touch screen. In a situation as such, understanding the consumer behaviour towards the mobile
handset models is inevitable, in both business and academic point of view. The consumer preferences, their needs, buying
parameters, affordability and other perspectives about the products available in the market must be studied for mutual benefit of
the business organizations and the rural community.
RESEARCH METHODOLOGY
The objective of the paper is to correlate the concepts of rural marketing to mobile handset market by keeping in mind the
recent developments in the telecom industry of the country. It is an attempt to understand those several factors that may decide
sales of mobile phones in thousands of villages and small towns in India.
The study is a blend of theoretical and practical analysis of various aspects of Rural Marketing as well as the presence of
telecom sector in rural areas. To bring out the practical aspects that keep relevance to the study, a survey have been conducted
amongst young (college going) students in Nuzvid-a small town in Andhra Pradesh, who are assumed to be more informed and
conscious about the various handset models and its usage.
The research methodology adopted is qualitative as well as quantitative with some statistical charts being used to represent certain
findings of the survey. Convenient sampling has been used to select the respondents for the questionnaire and discussion. The
questionnaire included questions that meant to find preference of handset models, parameters considered, price range and few
others that would help to understand the target consumer. The surveys result have been analyzed and relevant information have
been represented in diagrams for better understanding of the research paper.
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REPRESENTATION OF KEY FINDINGS AND ITS ANALYSIS

The data represented below is intended to bring various perspectives of young consumers with respect to mobile phones and its
usage. Moreover, each of the diagrams and the analysis that follows afterwards is an attempt to bring in relevant information
pertaining to user preferences and expectations from a mobile handset. It is to be noted that all figures mentioned below is in
terms of percentage users out of 165 total respondents.
Mobile phone variants preferred by the respondents under four broad categories while buying their current handset.
Graph-1: Mobile Phone Variants and User Profile
50
40
30

Total

20

Male

10
Female

0
Basic phones Multimedia
options

GPRS
enabled

Touch
Screen

Sources: Authors Compilation

Parameter Considered the Most Important while Buying a Handset
Graph-2: Parameters Vis-a-Vis Respondents
70
60
50
40
30
20
10
0

Total
Male
Female

Brand

Quality

Price

Features

Sources: Authors Compilation

The Purpose for Which the Respondents Use their Mobile Phones the Most (Apart From Calling and Sending Text Messages)
Graph-3: Most Preferred Mobile Phone Activity by the Users
70
60
50
40
Total
Male
Female

30
20
10
0
Browsing

Playing Games

Songs and
Videos

None

Sources: Authors Compilation

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989 | P a g e

Volume 3, Number 2, April June 2014

ISSN (Print):2279-0934, (Online):2279-0942
PEZZOTTAITE JOURNALS

How Frequently Do the Respondents Change Their Handset?

Graph-4: Time Frame of Consideration Vis-a-Vis Respondents
70
60
50
40
30
20
10
0

Total
Male
Female
Once in a year Once in 2/3 years At the point of
Damage

New attractive
model

Time not a
consideration

Sources: Authors Compilation

The Most Attractive Price Range of a Handset That Would be preferred by the Respondents.
Graph-5: Price Brackets (in Rs) and the User Response
60
50
40
30

Total

20

Male
Female

10
0
Below 2000

2000 to 5000

5000 to 1000

10000 & above

Sources: Authors Compilation

The above data representation reveals several interesting consumer behaviour of the mobile phone users in rural part of the
country. It is clearly observed that a considerable proportion of the users, while buying their current handset, preferred to buy
either basic phones or phones with multimedia options. It was found that 40% of the respondents own Nokia phones while 24% of
them have Samsung, rest followed by brands like Celkon, Micromax, Karbonn and other local brands. In response to a question,
52% of the respondents would like to buy Samsung handsets (preferably smart phones) as compared to 25% for Nokia in future.
Interestingly, a significant number of female respondents give importance to quality as an important parameter as compared to
boys. Songs and Videos are the most popular activities being enjoyed in cell phones by both males and females. It is worth to note
that more than half of the respondents would prefer to buy a new handset only when the existing phone becomes unusable. In
addition, most of the respondents would prefer to buy a new phone priced under Rs 5000.The above-mentioned findings
undoubtedly indicates that the young consumers of rural market would like to buy quality products that are more durable and
affordable for them.
CONCLUSION & SCOPE FOR FURTHER RESEARCH
Several things have changed in the field of telecommunication in rural India over the past decade or so. Advent of mobile phones
and other technological advancement in the domain have led to availability of telecom service even to the remotest locations of
the country. Now, mobile phones have become an integral part of life of many who are living in villages and small towns. The
rural people, especially younger ones would be seen using these devices for some or the other purpose. They can be seen using
variety of handsets like phones with basic features, phones with multimedia options etc. Most of them would be seen using their
phone for songs, images, browsing or simply playing games. Their handset preferences have also changed as many of them look
for quality but affordable products and also handsets that would include other additional features of their choice. The rural young
crowd is the one who are providing impetus to data usage and voice based services. The study made for this paper clearly reveals
that this young crowd, which forms a significant portion of the population, would drive the telecom industry and the handset
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Volume 3, Number 2, April June 2014

ISSN (Print):2279-0934, (Online):2279-0942
PEZZOTTAITE JOURNALS

market in rural India. The telecom service providers and the handset manufacturers must come forward together to tap the full
potential of rural consumers, and take the industry to the next level of delivery and sustainability.
The following are the scope for further research based on findings of this study:
1.
2.
3.
4.

Global Vs. local mobile handsets in the rural market,

Various aspects of branding of mobile phones among the rural consumers,
Empirical research on data usage and other services by various segments of the rural consumer,
Further study to be performed by considering demographic, geographic and psychographic factors.

REFERENCES
1.

Indian Telecom Industry, Dun and Bradstreet, December 22 nd, 2009

https://www.dnb.co.in/IndianTelecomIndustry/OverviewTI.asp

2.

(2013, May 15). Masters of Rural market; profitably selling to Indias Rural Consumers (Accenture Report).

3.

Highlights on Telecom Subscription Data as on 31st December,2013,TRAI, 17th February,2014, www.trai.gov.in

4.

Vidhi Choudhury, TVs, mobile phones spearhead shift in Rural India, Live mint & The Wall Street Journal, April 30,
2014,
http://www.livemint.com/Specials/bez364SJNi0rLbVJ1EUHvI/TVs-mobile-phones-spearhead-shift-in-rural-India.html

5.

Building Rural Telecoms, One Rupee at a Time, PWC, January 2012,

http://www.pwc.in/assets/pdfs/telecom/building_rural_telecom_one_rupee_at_a_time.pdf

6.

Shilpa Sharma, Rural India Calling, USID Foundation, September 2009,

http://www.usidfoundation.org/usid2009/callforpapers/papers/Paper-P-00024.pdf

7.

Balwant Singh Mehta, Capabilities, Costs, Networks and Innovations: Impact of Mobile Phones In Rural India, Institute
for Human Development, New Delhi, April 2013, www.capturingthegains.org

8.

Gulveen Aulakh, Rural India Gadget Savvy too: Gfk Nielson, The Economic Times. January 2011,
http://articles.economictimes.indiatimes.com/2011-01-27/news/28425299_1_mobile-handsets-rural-areas-mobilephones

9.

Retrieved from http://pezzottaitejournals.net/index.php/IJRRBP/article/view/895

10. Retrieved
areas-...

from

http://articles.economictimes.indiatimes.com/2011-01-27/news/28425299_1_mobile-handsets-rural-

*****

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