The Hindu : Business : Unique business models will help mobile operators reach rural areas

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Thursday, Nov 12, 2009
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Unique business models will help mobile operators reach rural areas

Special Correspondent

Accenture releases research report on rural expansion

— PHOTO: SHIV KUMAR PUSHPAKAR

INNOVATE: Sam Pitroda (right), Advisor to Prime Minister on Public Information Infrastructure and Innovations, and Bill Green, Chairman & CEO, Accenture, at a conference in New Delhi on Wednesday.

NEW DELHI: Indian mobile service providers will have to innovate unique business models to expand their reach to the rural customers, besides understanding better their customers’ need, said a report released by global management consulting, technology services and outsourcing company Accenture.

Accenture report, which was released at its Global Convergence Forum here on Wednesday, has asked telecom operators to think beyond the typical business model to achieve success in India’s rural geographic markets.

The research found that telecom operators underestimate the complexity and maturity of the rural consumer base and the rationale that rural consumers use to make buying decisions.

The report, ‘Wanted: business models for profitable rural expansion,’ points out that handset and services costs were key impediments for person in rural areas to becoming a mobile customer. It has asked mobile operators to gain a deeper appreciation of the distinctive service needs of rural customers, engage in detailed customer segmentation, adapt technologies and processes to the rural environment, and develop rural-centric marketing capabilities and innovative value-added services to drive adoption.

According to Accenture’s Group Chief Executive (Communications and High Tech) Martin Cole: “The growth of the telecom sector would be driven by innovation and product offerings. While major revenues in developed world are coming from data services, in developing nations it is still voice services. To tap the potential of rural areas in India and other developing nations, operators need to come out with innovative product offerings and better after-sales service.

It will be very challenging for telecom companies to maintain their profitability while offering services in rural areas.”

Similarly, Kumar Ranjan, Executive Partner, India Lead Communications and High Tech Operating Group for Accenture, said: “Telecom providers are yet to create and implement business models capable of driving sustained profitable growth through rural expansion strategy.

An important prerequisite in the creation of successful business models is the implicit understanding of the needs and buyer values of one’s consumers.”

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