For two out of last three months, data published by Telecom Regulatory Authority of India (TRAI) has showed that wireless subscriber additions in rural areas decisively exceeded the subscriber additions in urban areas.

In November 2011 TRAI reported 2.13 million net subscription additions in rural areas, compared to a mere 0.83 million net addition in urban areas. In the following month of December 2011 though, urban net additions bounced back, at 4.93 million. However, rural net additions kept pace and were only marginally behind, at 4.54 million.

In January 2012, rural net additions at 5.04 million again exceeded urban net additions that stood at 4.54 million. The important point remains that rural additions have grown month on month, which has not been the case with urban additions that have seesawed.

Also, TRAI data shows rural wireless tele-density stood at more than 37% in January this year, compared to an urban tele-density of just above 162%. In other words, there is much growth left to be catered to in the rural segment, while the urban tele-density, theoretically at least, is hitting a plateau.

To achieve higher growth in rural areas, mobile service providers would need to invest in additional telecom infrastructure. Indeed, doing so has its own set of challenges. The utilization of resources provisioned is much less in rural areas compared to urban centers, where the concentration of population is much higher. This leads to low returns on network investments for service providers in a market where average revenue per user (ARPU) is among the lowest globally.

In many rural markets, service providers spend a significant amount of money on diesel to power their base transceiver stations or the cell sites, since the availability of regular electric supply is not always a given. This calls for a need to explore alternative energy options to power these cell sites. To help give rural telephony a push, governments should be open to subsidizing alternative energy installations also, if required.

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