Below the poverty line

The whole mobile communication industry is now after the next billion customers, the fifth billion (cf. Smart Insights #09-11). These new customers haven undoubtedly a level of income much lower then most of current mobile phone users. Thus mobile network operators are currently developing new business models in which they will have to demonstrate they can be profitable on a few dollars of monthly ARPU.

For instance, in other industries, industrialists like Tata have announced the Nano car, that will soon sell for less than US$ 2,000 (EUR 1,470). Also in India, optical companies are developing processes and models that allow selling eyeglasses for less than US$ 5 (EUR 3.68) a pair. It is generally accepted that the rural population in India represents around 650 million people, half of which are in need of glasses.

Getting back to our industry, the Indian government has announced it will sell MVNO licenses for INR 1.5 billion (EUR 21.6 million), demonstrating a will to make the market more competitive in order to attract a new and less affluent customer group.

Having to deal with new challenges fuels innovation: for instance, the Indian payment industry has developed uses of smart cards that are not witnessed out of the sub-continent. In order to bring a large part of the rural population into a more integrated economic system, in order to boost bancarization the Indian industry has developed biometry based payment smart cards. Cards are used to deliver public subsidies to poor households. The issue is many of them are illiterate. The solution that has been found is to use cardholder’s fingerprint as the preferred authentication method. This way, even illiterate people are able to withdraw money from ATMs.

At the same time, the Indian smart card industry is also working on global ID projects such as the MNIC (Multi-Purpose National Identity Card), in order to bring technology in the hands of every Indian citizen.

The will to include a larger part of the population, even the poorest, into the world economy is an essential source of growth for our industry, not only in terms of income, but also in terms of innovation capability, and citizen recognition.

Thierry Spanjaard
Chief Editor
Smart Insights