Nokia to Offer Phone Installments in India

From
http://online.wsj.com/article/SB125067421010342617.html?mod=rss_india_news
 on August 19, 2009

By R. JAI KRISHNA

NEW DELHI — Nokia Corp. said it is looking to make handsets more accessible and affordable in India, the world’s fastest-growing and second-largest telecommunications market.

Nokia’s Indian unit plans to sell handsets in some rural areas under a program that allows the purchasers to pay in installments, the Finnish company’s chief executive, Olli-Pekka Kallasvuo, said Wednesday.

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Associated Press

Nokia expects about 500 million cellphone users in India by 2010, up from 427 million now. Above, a girl on her cellphone in Mumbai.

“There is a lot of opportunity here [in India], and we need to make mobility more accessible to all people, including those in rural areas, which is the next frontier to be conquered,” Mr. Kallasvuo said.

The company has more than half the share of India’s mobile handset market, according to analysts. Nokia said it plans to roll out the installment plan to sell its handsets in 12 Indian states after a pilot program covering more than 2,500 villages in the southern states of Andhra Pradesh and Karnataka.

Under the pilot program, a microfinance organization bought handsets from Nokia and sold them to women in rural areas by charging them 100 rupees, or about $2, in weekly installments for as long as 25 weeks.

Nokia expects about 500 million mobile-phone users in India by 2010, up from 427 million now, Mr. Kallasvuo said.

“We believe that much of this growth will take place in non-urban markets and rural penetration in India is still very low at 13%,” Nokia said in a statement.

The Hindu Business Line : Import of mobile handsets without IMEI number banned

via The Hindu Business Line : Import of mobile handsets without IMEI number banned.

Huge impact on grey market phones.

Our Bureau

New Delhi, June 17 In a move that could signal the end of grey market mobile phones, the Government on Wednesday banned import of all handsets without the International Mobile Equipment Identity (IMEI) number.

IMEI is a unique 15-digit code that identifies a mobile. It prevents the use of stolen handsets for making calls and allows security agencies to track down a specific user. However, a majority of handsets sold in the grey market do not come with the IMEI, which has is of concern for security agencies.

The Government move to ban handsets without the code will hit a number of Chinese and Taiwanese manufacturers that were flooding cheap handsets in the grey market. The move will have no impact on the 25 million cellular users who already have bought a handset without IMEI. The ban is applicable only on new handsets being imported into the country.

The Director-General of Foreign Trade issued the notification on Wednesday imposing the ban with immediate effect.

Welcoming the decision, Mr Pankaj Mohindroo, President, Indian Cellular Association, said, “This is a step in the right direction to throttle handset grey market. However, much more needs to be done to tackle this menace. We are working with the Government in this regard.”

To protect consumers who have already bought handsets without the IMEI number, the Cellular Operators Association of India has tied up with Mobile Standard Alliance of India to set up 1,600 retail outlets across the country to provide the IMEI number on handsets without one. It is estimated that there are 25 million subscribers across the country using handsets without the IMEI number. Concerned over the national security, the Department of Telecom had earlier asked operators to disconnect services to handsets that do not have the IMEI number by April 15. However, the COAI, representing the GSM industry, has developed a software that will provide the unique number to instruments that do not have it.

The solution is being implemented with the approval of the DoT and the security agencies. Subscribers who do not avail themselves of this facility will be disconnected by the operators after June 30.

Related stories at

• http://efytimes.com/efytimes/fullnewsxml.asp?edid=35220
• http://www.ciol.com/technology/mobility/news-reports/india-bans-mobile-handsets-without-imei/18609121163/0/
• http://timesofindia.indiatimes.com/India/Govt-bans-import-of-Chinese-mobiles/articleshow/4668458.cms

LG-GM730 Smartphone Features Windows Mobile 6.1

From http://www.efytimes.com on June 17, 2009

Wednesday, June 17, 2009:  LG has launched a new handset in LG’s smartphone line — LG-GM730. This is the first smartphone to offer the new version of Windows Mobile 6.1, integrated with LG’s 3D S-Class User Interface. Built-around a 3D cube layout, the S-Class UI eliminates nested menus wherever possible, providing more direct access to features and applications. A flick of a finger rotates the cube so that any one of its five faces can be accessed instantly.

“Users, especially beginners, find smartphones to be too complicated for everyday tasks because of their unfamiliar and complex environments,” said Dr Skott Ahn, chief executive officer, LG Electronics Mobile Communications Company. “The combination of Windows Mobile and our new S-Class UI will make the LG-GM730 the most functional and easiest to use smartphone ever created. Starting with LG-GM730, we are introducing a new direction for phones that are smart and advanced but at the same time, user-friendly.”

LG-GM730′s multitasking environment allows users to run a number of applications simultaneously in separate windows without having to stop one task to start another. ‘Cut and paste’ allows users to copy content from the internet and paste it into documents or send it via email.

Networking on the Map Service, a navigation-based social networking service, enables users to see where their friends are while communicating in real time. Advanced multimedia features such as a 5 megapixel camera, MP3 player and action-packed games make this phone a full-featured entertainment device.

At 11.9 mm, this mobile device is available in three colours — black, lime and pale pink. The LG-GM730 will be available globally, with its initial launch in Asia this July.

The LG-GM730′s launch coincides with the opening of LG Application Store, which expand the capabilities of LG’s smartphones.

Now Write On Air With Your Mobile Phone!

Wednesday, June 17, 2009 on http://www.efytimes.com

Engineering students at Duke University, Durham, US have created a new cell phone technology called PhonePoint Pen, that permits users to write short notes in the air with their phone and have that message automatically sent to an e-mail address. To create this first-generation application, the students took advantage of the accelerometers in emerging cell phones.

According to researchers, accelerometers are the devices in phones that not only keep track of the phone’s movements, but make it possible for the display screens to rotate from landscape to portrait modes depending on how the phone is rotated. These devices are always ‘on’, so there is no additional burden on the phone to use this new application.

“We developed an application that uses the built-in accelerometers in cell phones to recognise human writing,” said Sandip Agrawal, electrical and computer engineering senior, Duke’s Pratt School of Engineering, who with Duke graduate student Ionut Constandache developed the PhonePoint Pen. “By holding the phone like a pen, you can write short messages or draw simple diagrams in the air.”

“The accelerometer converts the gestures to images, which can be sent to any e-mail address for future reference,” Constandache said. “Also, say you’re in a class and there is an interesting slide on the screen. We foresee being able to take a photo of the slide and write a quick note on it for future reference. The potential uses are practically limitless. That this prototype works validates the feasibility of such a pen.”

While this first-generation application permits the writing of short messages or simple drawings, it is only a matter of time before this prototype system will be able to handle larger and more complex air-writing capabilities, said Agrawal’s mentor Romit Roy Choudhury, assistant professor, electrical and computer engineering.

“One of the efforts of our group is to take a fresh look at how people get their information into the Internet,” commented Choudhury. “We’re trying to get past the whole idea of typing on a keyboard or using a stylus to enter information into devices. Many people get discouraged with current phones and their small keys. As phones get smaller, this frustration will only grow.”

“And today, especially now in the age of Twitter and micro-blogs, the speed at which you send information becomes more important. To be able to write quickly using only one hand would be very attractive to many people,” Choudhury added.

“It is only a matter of time before we improve the performance of this application,” Agrawal said. “We plan to further augment the pen with real-time feedback, character recognition and better support for drawing diagrams.”

The PhonePoint Pen prototype is expected to be available for download within the next few months.

Nokia, Samsung heat up smartphone contest

16 Jun 2009, 0327 hrs IST, REUTERS on www.economictimes.com

HELSINKI/SEOUL: The world’s two largest cellphone makers, Nokia and Samsung, unveiled new phone models, offering features comparable to iPhone  and Palm’s Pre, but at lower prices.

In the last two weeks Apple’s launch of an updated version of iPhone and Palm’s Pre model have heated up competition in the sweetspot of the otherwise shrinking industry.

The cellphone market volume is expected to fall about 10 per cent this year as recession dampens consumer demand, but the market for so-called smartphone is expected to rise 10 per cent to 20 per cent, boosted by new and attractive models from many of the top vendors.

“Consumer demand for more capable devices seems to be accelerating despite the general economic doom and gloom,” said Ben Wood, a research director at CCS Insight.

“Samsung andNokia are playing smart by offering these sorts of products at punchy price points,” Wood said.

Top cellphone maker Nokia launched three new handsets on Monday, including a new touch-screen model, the 5530 Xpressmusic, which would sell for 199 euros ($280) before subsidies and taxes, starting next quarter.

Samsung unveiled on Monday its “Jet” model, which features full touch screen, a next-generation display and improved processor to deliver speedy mobile Internet access.

Samsung did not reveal the price of the phone, but analysts said it was comparable to most mid-range models.

Samsung called its new phone “smarter than a smartphone,” but noticed it could not officially be considered a smartphone because it lacked the open operating system defining the category.

“Consumers really don’t care about the software platform or operating system — they just want a capable device at a punchy price that lets them do the things they want to do whether that is listen to music, take pictures or update their status on Facebook,” CCS’s Wood said.

RAYS OF LIGHT

The cellphone industry saw its worst-ever quarter in January-to-March, with the market shrinking 14 per cent from a year ago, and Nokia reporting its first-ever quarterly pretax loss.

Several companies and analysts have said the worst could well be over for the industry as the fall was partly caused by retailers selling stockpiles of older phones, but only a few have seen any improvement in demand.

The head of sales and marketing at Samsung’s mobile unit said he was hopeful phone sales would fall 8 per cent to 9 per cent this year across the industry, slightly less than the company’s official expectation of a 10 per cent drop, as the global economy begins to recover.

“In the second half … I do not see any special surge in demand. However, there is a small sign of recovery of the general economy. Hopefully, the mobile industry also will recover some,” Lee Donjoo told Reuters in an interview.

“Currently, we’re focusing on around 10 per cent lower,” he said. “I’m expecting a little less, eventually — minus 9, minus 8, hopefully.”

Related stories at

• 
  http://www.ciol.com/technology/news-reports/samsung-nokia-heat-up-smartphone-race/16609121014/0/
  

Handsets: Maharashtra Organised trade to feel the heat

Akhilesh Shukla on Voice&Data, June 15, 2009 Published June 16, 2009

The proposed hike of VAT to 12.5% on mobile handsets in Maharashtra could hit the organised trade in the Maharastra. Organised trade, which is already hit by higher property rates, shirking margins and high trained employee cost and other operational costs, would loose customer to the unorganised trade.

The decision, on the other hand, will force the unorganised retail industry to switch trade in grey to survive. The sale of grey handsets, especially of higher end model will become more profitable for them and help them to maintain footfalls, as well.

In case the decision came into force, the price of handset costing Rs 20,000 will go by Rs 25,000. Buyers will prefer to buy the phone from grey market, as the difference would be phenomenal.

The organised trade contributes to 13% of the over all handset retail market in India. However, as per number of outlets they occupy 3% of the pie. The handset retail market is slowly and gradually moving towards organised trade. But the state government’s decision will hamper the shift.

Maharastra and Mumbai is one of the biggest handset retail market in the country commanding more than 13% of the market share in the country. As per the current market estimates around 120 mn handsets are sold in the country every year, Of which, 15.6 mn are sold in Maharastra alone.

As per Indian Cellular Association the state government, which is eying a huge revenue from VAT on handset, will loose money as well. ICA says that the state stands to loose at least 473.6 crore in the next three years, if the proposed 12.5 per cent VAT is implemented because of increased sale in the grey market.

The pioneer in mobile handset retail in India The Mobile Store is headquartered in Mumbai and have a strong presence in the region. Besides, HotSpot, another market leader, have a strong presence in the country.

See also: VAT hike on handsets may bring in less tax for state at
http://telcobizpedia.wordpress.com/2009/06/08/
vat-hike-on-ha…-tax-for-state/

 

Micromax to invest Rs 250 cr in Himachal Pradesh

14 Jun 2009, 1331 hrs IST, PTI on http://www.economictimes.com

NEW DELHI: Micromax Informatics, a Gurgaon-based mobile handset maker, will invest Rs 300 crore in the current fiscal for setting up a production plant in Himachal Pradesh and brand building exercise.

“We will spend Rs 250 crore in 2009-10 to set up a mobile phone manufacturing plant in Himachal pradesh (Baddi) and another Rs 50 crore on brand-building exercise,” MicroMax Informatics COO Rahul Sharma told media.

He said the plant, which will be operational by March next year, would have a capacity of producing three lakh units of handsets a month, which is scalable to one million units over a period of time.

At present, the company is doing contract manufacturing in China, Korea, Taiwan and Himachal Pradesh (Baddi). The company is also spending Rs 50 crore on advertising, which will be a 360-degree campaign, for brand building.

“Our main target is to enter the urban market now. Till now we have been a tier-II and tier-III player. Soon we are going to open 100 exclusive stores in four metros and tier-I cities,” Sharma said. The company claims to sell about half a million handsets a month and is targetting to sell six million units this year.

Chennai unit top producer for nokia

12 Jun 2009, 0210 hrs IST, Kalyan Parbat, ET Bureau

KOLKATA: Chennai has edged past China as a unit-wise volume producer of Nokia cellphones. In fact, Nokia’s Chennai factory is now the company’s largest cellphone manufacturing facility in the world.

China has two such Nokia factories and Chennai one. But Chennai Nokia has now edged past the larger of the two Chinese factories. While the Finnish cellphone maker is not revealing the annual capacity of its Chennai factory, a senior member of its global planning team said the factory is now indeed its largest manufacturing factory. Unofficial reports suggest Chennai manufactures over 100 million phones every year.

Interestingly, over 70% of Nokia’s 8,000-strong employee pool at the Chennai plant are women, involved in a mix of running productions lines, maintenance and assembly and testing operations.

Nokia operates state-of-the-art mobile phone manufacturing units in India, Finland, China, Korea, Mexico, Brazil, Romania and Hungary. “The Chennai factory is the largest in Nokia’s global ecosystem, although the dynamics in terms of product line vary in each market. But the international markets that we serve out of Chennai have seen the largest growth in volume terms.

At present, Nokia ships GSM phones from the Chennai factory to over 50 markets spanning South East Asia Pacific (including Australia), India, the Middle East and Africa,” said a senior official who did not wish to be named.

When contacted, a Nokia India spokesman said: “As a company policy, we do not share specific capacity numbers of our factories worldwide. All I can confirm at this stage is that our Chennai operation has seen the fastest ever ramp-up across our nine cellphone manufacturing plants. The ramp-up is in terms of the unprecedented growth in cellphone production volumes within a three-year span.”

The latest development is seen as a milestone of sorts for the Finnish cellphone maker and is in sync with its plans to take big strides to grow the Indian handset turf. It also comes at a time when the world’s top cellphone makers, under the ambit of the Indian Cellular Association, are targeting a national production volume of 250 million mobile handsets by calender 2012.

Several presentations have been recently made to the Department of Telecommunications by the manufacturing advisory committee. The larger objective of players like Nokia, Samsung, Motorola and Spice is the creation of an additional 1 lakh jobs during 2009-14 in cellphone manufacturing, assembly, R&D and design.

While Nokia churns out a dazzling mix of GSM phones in India, the first camera phone to be manufactured at the Chennai works was the Nokia 2630 while the first music phone was the Nokia 5130. It does not manufacture CDMA phones in India as yet.

VAT hike on handsets may bring in less tax for state

8 Jun 2009, 0003 hrs IST, Rashmi Pratap, ET Bureau

MUMBAI: The decision of the Maharashtra government to hike VAT (value-added tax) on mobile handsets could actually result in a drop in the state’s VAT collections, says Indian Cellular Association, the industry body for handset manufacturers.

In the state budget, the government last week proposed to increase VAT to 12.5% from 4% on mobile handsets without making the revenue targets from the move public.

According to ICA, the proposed hike in VAT will result in handset sales falling in the organised retail sector in Maharashtra. It is currently at 1.25 crore units annually and could reduce to as low as 8 lakh units. With reduced sales, the estimated VAT collection will also be down from Rs 168 crore annually to Rs 33.5 crore, as per ICA estimates.

Over a three year period, the Maharashtra government will lose around Rs 475 crore in revenue, if it imposes the proposed hike in VAT on mobile phones. The move will trigger increased grey market sales and could expose customers to phones of dubious quality. “A common man, who buys a Rs 1,500 entry-level phone will now have to pay Rs 127 more.

Our experience shows that Rs 30 is the point at which the consumer turns away from the official market to the grey market. If the proposal is implemented, retail outlets will be under pressure,” ICA national president Pankaj Mohindroo told ET. ICA has also written a letter to Maharastra chief minister Ashok Chavan requesting the government to take a closer look at the issue. Importantly, Maharashtra is the only state in the country to have a 12.5% VAT on mobiles — it is 4% in other parts of India.

According to industry estimates, Maharashtra has about 20,000 retailers and over 450 distributors. Over 1.5 lakh people are employed. “If the grey market resurfaces, the employment in the industry will be hurt, Mr Mohindroo said.

Infiniti Retail CEO & MD Ajit Joshi said at a time when mobile phone penetration was increasing, even in rural areas, such a step would not be viewed as positive.

“The government’s aim of taking broadband to rural areas will not be met, if handset prices go up due to the increase in VAT because Indian consumers are extremely price sensitive,” he said. Infiniti, a 100% subsidiary of Tata Sons, owns and runs the Croma chain of consumer electronics and durables. “Also, the government has clubbed mobiles with liquor and cigarettes, which also attract a 12.5% VAT. However, mobile is a tool for connectivity and not a luxury item,” Mr Joshi said.

Rajiv Agarwal, CEO of Essar-owned The MobileStore, said telecom is an essential part of the India growth story and has a direct connection with development. “One state having a differential VAT will create an anomaly. People will buy from neighbouring states and sell here. It is not beneficial for customers, who want warranties,” he said. He added that the decision was not one that augured well for the industry.

See also: Handsets: Maharashtra Organised trade to feel the heat at
http://telcobizpedia.wordpress.com/2009/06/15/
handsets-mahar…-feel-the-heat/

 

Hand in old phone, Nokia will plant a tree

The Hindu Business Line on June 06, 2009

Chennai, June 5 Three tonnes of electronic waste consisting of 68,000 old devices including 10,000 mobile handsets, 10,000 batteries, 32,000 chargers, 1,000 headsets, body covers and accessories…

Nokia collected these over 45 days when it launched its ‘take-back’ programme in four cities to support e-waste recycling.

The manufacturer of mobile handsets will now expand this recycling initiative across the country from July 1, said Mr Ambrish Bakaya, Director, Corporate Affairs, Nokia India Pvt Ltd. The company has tied up with NGOs to plant one tree for every handset that is handed in for recycling.

The pilot programme in Bangalore, Delhi, Gurgaon and Ludhiana launched on January 1 was backed up with a consumer awareness programme. The programme is now being expanded to all the major cities.

Announcing the initiative here on the World Environment Day, Mr Bakaya said the company adopted a three-pronged approach to environment conservation. Apart from enabling proper disposal of electronic waste, the company is looking at the lifecycle of the product from sourcing materials and substances that go into the making of the cell phone and achieving energy efficiency (its chargers use less power) to recycling when the product falls into disuse.

On saving on materials and conservation, he said the company saved 100,000 tonnes of packaging material over two years when it decided to cut back on the size of packaging for a few of its models. It is not looking at bringing down packaging material use for a greater range of models, he said.

On take-back and recycling, Mr Bakaya said mobile phone users saddled with old handsets of any make need not leave them lying around the house or, worse, dispose them in the garbage to end up in land-fills. They just have to go to the nearest Nokia Priority Dealers or Nokia Care Centres and drop them in the recycling bin. Nokia will them pass this on to an authorised recycler, Mr Bakaya said.

More than 80 per cent of the materials in cell phones and accessories can be recycled to make a wide range of products — the plastics can be made into a wide range of products including household furniture.

When people hand in an old phone for recycling, apart from helping in proper disposal of waste they will have the satisfaction of taking part in greening the environment.

Cameras, cell phones to be dearer in State (Mah)

Excerpt from The Hindu Business Line on June 5, 2009

Prices of mobile, cordless, video phones as well as digital and video cameras are set to increase in Maharashtra with the Government hiking VAT (value-added tax) from four per cent to 12.5 per cent in its additional Budget presented here on Thursday. The interim was passed in March.

Mr Dilip Walse Patil, Finance Minister, also announced doubling of stamp duty on advertising contracts, rights of telecasting and copyrights. The maximum limit of Rs 25 crore on amalgamation deeds of companies has been done away with.

Ultra low-cost handset segment poised to explode

25 May 2009, 1307 hrs IST, Writankar Mukherjee, ET Bureau

KOLKATA: The ultra low-cost handset (ULCH) segment is poised to explode as operators expand their presence in smaller cities and the rural turf. A recent tudy claims the sales of such dirt-cheap phones will jump from 68 million units in 2008 to 129 million by calender 2013.

Some of the prominent vendors in the ULCH space include Nokia, Motorola, ZTE, LG, Samsung, Huawei, Kyocera

and operator branded handsets like Reliance ‘Classic’ and Vodafone.

The study — conducted by US-based ICT consulting and research firm Strategy Analytics — notes that ULCH category is the fastest growing segment in emerging markets like India due to the huge base of low income subscribers. ULCH are mobiles positioned below the entry-level segment and sold at a wholesale price of $35 or less.

However, the contribution of ULCH in the Indian mobile phone market is projected to eventually fall after four years. The ULCHs constituted some 38% of total handset sales in India in 2008 and is expected to contribute around 34% by 2013. Globally, ULCH handset contribution to total handset shipments will rise from 15% in 2008 to over 20% by 2013.

“ULCHs will continue to be a dominant factor in mobile telephony in emerging markets and will be an important tool to drive penetration in rural areas. Around 300 million ULCHs are expected to be sold across the globe in 2013 with major contribution coming from India and China,” Strategy Analytics manager (emerging market communication service – global wireless practice) Rahul Gupta told ET.

The study noted that consumer preference of low income subscribers are undergoing change and they want handsets which sports exciting features, design and style. “The vendors and operators should also provide some freebies such as airtime, digital content and accessories along with the handsets,” said Mr Gupta.

Vendors and operators will need separate marketing approach for the ULCH segment to attract rural consumers. “The first time users will need to see a substantial return from the investment they make in mobiles,” Mr Gupta added.

Recovery tough for cellphone cos

From www.economictimes.com 20 May 2009, 2019 hrs IST, REUTERS

A recovery in cellphone demand will not happen until well into 2010, researcher Gartner said on Wednesday, while Reuters data showed the industry could suffer it’s worst quarter ever in April-June.

The handset market fell 9.4 percent in the first quarter of 2009, Gartner said, adding it saw demand stabilising but it would not be until next year before demand would grow again. “We do not expect demand to get better before second half of 2010,” said Gartner analyst Carolina Milanesi.

A Reuters poll of 34 analysts forecast handset vendor phone sales in the April-June quarter to slump 14.5 percent, with 2009 sales forecast to slide 10.3 percent. Several companies and analysts have said the worst could well be over for the industry after the first quarter drop, as the fall was partly caused by retailers selling stockpiles of older phones.

In the first quarter, handset vendors sold 14.3 percent fewer phones than a year ago, according to research firm CCS Insight, with the world’s top cellphone maker Nokia reporting its first-ever quarterly pretax loss. Gartner, which tracks changes in inventory and actual sales to consumers, said retailers sold some 25 million phones from inventories in the first quarter.

It said it expects inventory reduction to continue in the second quarter, but at a pace of some of 10-12 million phones. “Although inventory has diminished there are still no clear signs of an improvement in consumer demand,” said CCS Insight analyst Geoff Blaber.

Global Crown analyst Tero Kuittinen said he expects phone sales in the second quarter to rise 5 percent from the first, but mostly due to the inventory change. “Trends in the key UK and Spanish markets remain worrisome; and consumer behaviour across Europe continues shifting. People exiting 18- or 24-month plans drift towards prepaid phones or cheap monthly plans,” Kuittinen said.

Wireless wonders

January 23, 2009
Even by the standards of the scorching pace set in the past five years, the next five years of India’s telecom history promise to be good, if a report just released by Ficci and BDA, a telecom consulting firm, is anything to go by. According to BDA-Ficci, 308 million wireless phone users were added in the last five years (starting from 28 million in 2003), and another 410 million will be added in the next five years.
The total number of broadband-speed Internet connections will rise from the current 5 million (all fixed line, and all installed in the last five years) to around 46 million through 3G modems, broadband wireless access and fixed lines; the share of value-added services (primarily SMS and ringtone downloads just now) will rise from 9 per cent of total telecom revenue today to around 23 per cent in five years (once broadband-speed 3G mobiles allow serious Internet downloads to happen).
So what, you might be tempted to ask — apart from what it means for various telcos and others in the eco-system like mobile handset manufacturers, sellers of Internet-ready devices like netbooks, application providers creating special software including games, media firms with mobile solutions, and so on.
Another report on telecom, coincidentally released the same day by the think tank Icrier in partnership with Vodafone, has some answers. According to analysis done by Icrier, the teledensity of a country/state plays a big role in determining its economic growth.
As is obvious, the relationship is two-way, but the researchers use accepted methods to isolate the impact of telephony on GDP growth; other methods are used to eliminate the impact of variables like length of roads and power supply on GDP growth. The relationship they come up with estimates that, beyond a certain threshold penetration level of 25 per cent, a 10 per cent hike in mobile phone penetration leads to a 1.2 percentage point hike in growth rates.
If that seems high, it is worth mentioning that other studies show an even greater impact of mobile phones on GDP growth in the rich, OECD countries. How wireless penetration translates into higher GDP growth is easy to figure — there is increased efficiency and a reduction in transaction costs.
The study cites several examples. Qualcomm’s work with the MS Swaminathan Research Foundation in Pondicherry has resulted in fishermen in the region getting, on their Tata Indicom mobile phones, data on wave heights, the best fishing zones for various types of fish, retail prices in various neighbouring markets, and so on — the fishermen, naturally, are more productive and can retail their catch at higher prices.
Doing banking transactions through mobile phones and using bio-metric information dramatically lowers the cost of bank operations in the rural areas. Few therefore can doubt the impact of mobile phones on growth.
What are the policy implications? The first has to be the need for stability in policy — if government policy on telecom keeps yo-yoing from one extreme to the other, or is biased, it will hit the growth of telecom and of the economy. And since the mobile phone is just an enabler, sub-sector policies have to be conducive too.