Developing a route to market strategy for mobile communications in rural India

Abstract

PurposeThe purpose of this paper is to explore the challenges of reaching low‐income customers in developing markets.Design/methodology/approachSemi‐structured Interview.FindingsThe paper suggests that managers need to go beyond traditional approaches to serving the poor, and innovate by taking into account the unique institutional context of developing markets.Research limitations/implicationsSingle interview.Practical implicationsThe experience of Hutchison Essar in India provides some important lessons for mobile network operators (MNOs) and other firms in other developing markets who are hoping to serve the rural poor: Hutchison has recognized the value of corporate and non‐corporate partners. The company has proactively established relationships with individual entrepreneurs, and has provided has provided development support to other partners such as distributors. The company has recognized the value of leveraging existing local institutions, and has seen gaps in local infrastructure or missing services as potential opportunities rather than barriers to growth. The company has seen the rural market as an opportunity – not just an obligation to be served because of universal service obligations.Originality/valueIn most cases, MNOs have served the poorest consumers through shared‐use models such as GrameenPhone's Village phone concept in Bangladesh, due to the commonly held belief that reaching these consumers is difficult due to two key challenges – affordability and availability. This paper demonstrates that MNOs can deliver availability and affordability to achieve increased individual or household penetration through business model innovation.