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Mobile phones linked to literacy, prosperity: TISS report

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Mumbai: Households owning mobile phones enjoy a higher level of economic prosperity and literacy compared to those which do not, claims a new report released here on Monday.

The ‘Mobile Multiplier Study’ conducted by Tata Institute of Social Sciences (TISS) and Tata Docomo revealed that while 98 percent of postgraduate households in Maharashtra owned a mobile, the figure dropped steeply to 39.1 percent in homes of non-literates.

Sixty-seven percent of mobile-owning homes enjoyed a higher level of economic prosperity, compared to others, with 90 percent of those in the urban areas, revealing a clear correlation between mobile phone ownership and both economic and wider measures of social wellbeing.

On a national scale, 62 percent of mobile-owning households enjoyed economic prosperity with this figure at 50 percent in the rural areas, claims the study which aggregated India’s largest Census data covering nearly 100,000 responses.

“Mobile telephony displays all characteristics of a genuine public good, its use is associated with economic prosperity or higher consumption, besides higher literacy, life expectancy, educational attainment and overall living standards as captured through Human Development Index, especially in an urban context,” said TISS’s Prof. Bino Paul.

Commenting on literacy, Paul said mobile ownership in households of graduates was 93.2 percent and 98 percent in homes of postgraduates, but fell sharply to 39.1 percent in illiterate households.

Mobile ownership increased by 10 percentage points once a household became just literate, meaning the family head can merely read and write and the probability of owning a mobile was more than 1.5 times compared to an illiterate household.

On the other hand, in rural illiterate households, the proportion of mobile owners was 40 percent, but only 20 percent in urban illiterate households.

There is a significant number of households in India where the millennial generation (a person who became an adult in 2000) is heading the family.

The millennial generation is the most sophisticated user of technology, aware and having access to ‘new money’ and they want to use technology to make the difference in their lives.

In Maharashtra, the proportion of households owning a mobile is 64.8 percent where a millennial heads the family, but this extends to more than 80 percent in Himachal Pradesh, Uttarakhand and Kerala, but below 50 percent in West Bengal, Odisha, Jharkhand and the north-eastern states.

The overall mobile phone ownership in the state stands at 83.6 percent in urban households and 52.6 percent in rural households.

In fact, the national average of proportion of households headed by a millennial and owning a mobile is marginally higher than the households where the family head is a senior citizen.

“It is evident that the power of mobiles is leapfrogging with progression of technology and communication… The second wave of mobile revolution in India has already begun, but will reach its full potential only if access can be extended even further and deeper,” said Tata Teleservices Ltd. president (mobility) Elango Thambiah.

(IANS)

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How telecom has become driver of economic change in India

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The country's hyper-competitive telecom sector has led the revolution from the front.
The country's hyper-competitive telecom sector has led the revolution from the front. Wikimedia Commons
  • India has done well to stay ahead of the curve in the technological revolution
  • The sectoral change in productivity has been the highest in the telecommunications sector since the reforms of 1991
  • India has managed to provide the cheapest telephony services around the world

For the most part of human history, the change was glacial in pace. It was quite safe to assume that the world at the time of your death would look pretty much similar to the one at the time of your birth. That is no longer the case, and the pace of change seems to be growing exponentially. Futurist Ray Kurzweil put it succinctly when he wrote in 2001: “We won’t experience 100 years of progress in the 21st century – it will be more like 20,000 years of progress (at today’s rate).” Since the time of his writing, a lot has changed, especially with the advent of the internet.

India has done well to stay ahead of the curve in the technological revolution. The country’s hyper-competitive telecom sector has led the revolution from the front. In fact, according to Reserve Bank of India data, the sectoral change in productivity has been the highest in the telecommunications sector since the reforms of 1991, growing by over 10 percent. On the other hand, no other sector has had a productivity growth of above five percent during the same period. It is no wonder that it has also been one of the fastest-growing sectors of the Indian economy, growing at over seven percent in the last decade itself.

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Such an unprecedented pace of growth has been brought about the precise levels of change that Kurzweil was so enthusiastic about. Today’s smartphones have the power of computers that took an entire room in the 1990s, and the telecom sector has had to keep up with a provision of commensurate internet speeds and services. Meanwhile, India has managed to provide the cheapest telephony services around the world, which has hit rock bottom after the entry of Reliance Jio. This has ensured access to those even at the bottom of the pyramid.

A rise in internet penetration has distinct positive effects on economic growth of a country.
A rise in internet penetration has distinct positive effects on economic growth of a country. Wikimedia Commons

Even though consumers have come to be accustomed to fast-paced changes within the telecom sector, the entry of Jio altered the face of the industry like never before by changing the very basis of competition. Data became the focal point of competition for an industry that derived over 75 percent of its revenue from voice. It was quite obvious that there would be immediate economic effects due to it. Now that we’re nearing a year of Jio’s paid operations, during which time it has even become profitable, we saw it fit to quantify its socio-economic impact on the country. Three broad takeaways need to be highlighted.

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First, the most evident effect has been the rise in affordability of calling and data services. Voice services have become practically costless while data prices have dropped from an average of Rs 152 per GB to lower than Rs 10 per GB. Such a drastic reduction in data prices has not only brought the internet within the reach of a larger proportion of the Indian population but has also allowed newer segments of society to use and experience it for the first time. Since the monthly saving of an average internet user came out to be Rs 142 per month (taking a conservative estimate that the consumer is still using 1 GB of data each month) and there are about 350 million mobile internet users in the country (Telecom Regulatory Authority of India data), the yearly financial savings for the entire country comes out to be Rs 60,000 crore.

To put things in perspective, this amount is more than four times the entire GDP of Bhutan. Therefore, mere savings by the consumer on data has been at astonishing proportions.

Today's smartphones have the power of computers that took an entire room in the 1990s, and the telecom sector has had to keep up with a provision of commensurate internet speeds and services. Wikimedia Commons
Today’s smartphones have the power of computers that took an entire room in the 1990s, and the telecom sector has had to keep up with a provision of commensurate internet speeds and services. Wikimedia Commons

Now, this data has been used for services that have brought to life a thriving app economy within the country. So, the second level of impact has been in the redressal of a variety of consumer needs — ranging from education, health and entertainment to banking. For instance, students in remote areas can now access online courseware and small businesses can access newer markets. Information asymmetry has been considerably reduced.

Third, a rise in internet penetration has distinct positive effects on economic growth of a country. These effects arise not merely from the creation of an internet economy, but also due to the synergy effects it generates. Information becomes more accessible and communication a lot easier. Businesses find it easier to operate and access consumers. Labour working in cities has to make less frequent trips home and becomes more productive as a result. Education and health services become available in inaccessible locations. Multiple avenues open up for knowledge and skill enhancement.

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An econometric analysis for the Indian economy showed that the 15 percent increase in internet penetration due to Jio and the spill-over effects it creates will raise the per capita levels of the country’s GDP by 5.85 percent, provided all else remains constant.

Thus, India’s telecom sector will continue to drive the economy forward, at least in the short run, and hopefully catapult India into 20,000 years of progress within this century, as Kurzweil postulated. The best approach for the state would be to ensure the environment of unfettered competition within the industry. Maybe other sectors of the economy ought to take a leaf out of the telecom growth story. The Indian banking sector comes to mind. However, that is a topic for another day. (IANS)

(Amit Kapoor is Chair, Institute for Competitiveness, India. He can be contacted at Amit. Kapoor@competitiveness.in and tweets @kautiliya. Chirag Yadav, a senior researcher at the institute, has contributed to the article.)