Free Mobile Phone for Rural Families Below Poverty Line?

A commendable initiative by handset manufacturers – the Indian Cellular Association (ICA, represents handset manufacturers) has sought Rs 5,000 crore from the Universal Services Obligation (USO) fund to give free cellular phone and a connection to families under the below poverty line.

Basically, telecom operators pay 5% of their revenue to USOF fund for DoT to fund telecom infrastructure in rural India – infact, in December 2007, DoT announced $2.5Bn funds to invest in startups (owing to unutilized amount in USO fund).

Rural India Goes Mobile

ICA’s recommendation:

  • Invest in the 50 million BPL families by providing free of cost mobile handsets and connections with 100 free calls per month
  • The mobile handset provided can be a basic phone with an AM radio, which can be useful for listening to relevant local language content.
  • These radio stations should be made interactive and calls to these radio stations should be made free of cost. This investment of approximately Rs 4,000-5,000 crore has the potential of transforming the life of many families and individuals in this category. – source

As per estimates, free calls will enable these families to save around Rs 15-20 a month (in traveling costs etc) – which will enable them consume more services and after 2 years, start paying atleast Rs. 25 per month.

This is a noble idea combined with commercials. Essentially, mobile is just not about talking anymore, and given the right value – rural India is willing to pay for value services (see my earlier presentation on Mobile VAS in India).

What’s your take on this initiative?

Pic credit

Add comment

NextBigWhat brings you curated insights and wisdom on product and growth from the wild web.

Over 2 million people receive our weekly curated insights.