Life Beyond the Metro

This month, India crossed a landmark in mobile phone numbers.
While I dont know where the 200 millionth mobile was sold, it was
probably outside of our metropolitan cities.

The market is shifting away from the metros. Over the past two
years, subscribers in the metros have grown at 50% a year; in the A-category
telecom circles, 70%; the B circles, 100%; and the C circles, nearly 200%. Yes,
the circles have smaller bases and ARPU (average revenue per user). But the ARPU
actually grew in the smaller circles, and fell in the metros and A-circles.

And so it is for FMCG products, for services, for banking. Even
foreign banks: of their 13 new branches approved by the RBI over the past year,
11 were in tier-2/3 cities like Jodhpur, Lucknow, Udaipur and Ahmedabad. Small
base29 foreign banks in India have 268 branchesbut it points to where the
growth is.

Our metros are bursting at the seams. And still they grow,
creaking under the strain: apartments, shops, dealers, malls, software
companies, BPOs...

Thus, reversal is a strong word, but the first signs of
change came about from the shifting market, the realization of rural spending
power. Two decades ago, villagers queued up to make overpriced long-distance
calls. Today, theyre a key customer base for telcos. And the bottom of the
pyramid forms a key part of the strategy of FMCG and other sectors.

But the big change, the step to a reverse flow from the
metros, requires infrastructure.

An expressway brought Pune closer to Mumbai, transforming the
small citys fortunes, and providing an alternative to the megapolis.

A revamped NH-8 brought Jaipur closer to the national capital
region, allowing tech and BPO companies to look beyond the NCR. Genpact set up
base, and others followed.

Mumbai got some breathing space in New Bombay. But connect
that to Nariman Point by an expressway over a short sea route and watch the
financial capital transform.

Imagine an eight-lane expressway alongside a fast train
connecting to Mysore, taking the load off Bangalore, and also creating other
townships en route.

Market, development, investment, economic growth...theyre
capped and trapped in the metros. They need to spread beyond: into tier-2/3
cities, and new satellite townships. Services majors such as TCS, Wipro, IBM and
Genpact have been forced to look beyond the metros. Others have stepped into
Kolkata, Indore, Jaipur and elsewhere. Reluctant migrants, maybe, but pioneers
too.

Our metros urgently need good road and rail links to satellite
towns. For a more healthy distribution of the market and buying power. And of
economic, industrial and technology growth. Physical infrastructure, alongside
all the fiber and wireless, is the key.

Prasanto K Roy

pkr@cybermedia.co.in