Vodafone, Bharti Airtel and Idea Cellular bring millions of rural customers in their net

KOLKATA: GSM operators added nearly 5.7 million rural customers in January and February 2013, when financially stressed mobile phone companies tweaked distribution models and unveiled customised plans in villages amid slowing sales in the metros. 

Vodafone, 
Bharti AirtelBSE -2.21 % and Idea Cellular, which account for 67% of the sector's revenues, added 3.02 million, 2.95 million and 2.64 million rural customers respectively during the first two months of the year, as per data collated by the Cellular Operators Association of India, the industry body representing GSM operators.

Over the past six months, GSM operators have added 6.78 million rural customers, with the bulk signing up in January and February. Rural India had a total GSM customer base of a shade over 258 million on March 1.

Vodafone, which won maximum rural customers in February, attributed the success to its new rural distribution model. "Our 'son of the soil' distribution model in the villages has paid off and helped us gain the trust of rural customers," said 
Vodafone India chief operating officer Sunil Sood, adding that mobile internet adoption had also been growing in the villages. Instead of using traditional marketing channels, Vodafone is distributing its products through people representing local panchayats with good contacts within a village, said a senior executive, who did not wish to be named.

Two of every three new customers now come from rural India, executives at 
Idea CellularBSE -1.34 % said, pointing out that this prompted the company to push data services in the villages. "Idea is promoting 3G services in the commercial, educational and agricultural heartlands in rural and semi-urban markets by launching more affordable 3G devices and upgrading 2G users to 3G," said a top company executive, requesting anonymity.

Idea has over 22 million data users, a majority of whom reside in rural and semiurban pockets. Bharti Airtel, which notched up the maximum new rural customers in January, declined to respond to ET's specific queries on its principal 
rural market expansion drivers. Sector analysts say subscriber growth will increasingly come from rural pockets since the operators are mainly trying to retain customers in the saturated metros and bigger cities.

"A mix of low-ticket entry points, better rural telecoms infrastructure and initiatives like mobile money has triggered a spurt in rural customer acquisitions," said Mritunjay Kapur, country managing director at Protiviti Consulting, a telecom consultancy firm.