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Procedia Economics and Finance 11 (2014) 620 625

Symbiosis Institute of Management Studies Annual Research Conference (SIMSARC13)

Socio Economic Impact Of Mobile Phones On the Bottom Of

Pyramid Population- A Pilot Study
Dr. B.R. Londhea *, Srinivasan Radhakrishnanb, Brig. Rajiv Divekar (Retd)c
b

a
Professor, Symbiosis Institute of Management Studies, Symbiosis International University
Academic Research Associate, Symbiosis Institute of Management Studies, Symbiosis International University
c
Director, Symbiosis Institute of Management Studies, Symbiosis International University

Abstract

The proliferation of mobile phones has contributed in reducing the rural urban differential across several developing
nations around the world. India is second to China in terms of mobile phone usage with ever increasing rural
penetration of hardware and mobile service providers. The mobile phone technology has created a positive impact
on, enhancing job prospects, improving literacy and healthcare and thereby contributing in poverty reduction. It has
also enabled superior social network. In this work we report the results of a pilot study executed to understand the
socioeconomic impact of mobile phones on the bottom of pyramid (BOP) population.
2014 Elsevier B.V. This is an open access article under the CC BY-NC-ND license
2013 The Authors. Published by Elsevier B.V.
(http://creativecommons.org/licenses/by-nc-nd/3.0/).
Selection and/or peer-review under responsibility of Symbiosis Institute of Management Studies.
Selection and/or peer-review under responsibility of Symbiosis Institute of Management Studies.
* Corresponding author. Tel.: +0-000-000-0000 ; fax: +0-000-000-0000 .
E-mail address: londhe.br@sims.edu

Keywords: Mobile Phones; Social Network ;Socioeconomic Impact; Bottom of Pyramid

2212-5671 2014 Elsevier B.V. This is an open access article under the CC BY-NC-ND license
(http://creativecommons.org/licenses/by-nc-nd/3.0/).
Selection and/or peer-review under responsibility of Symbiosis Institute of Management Studies.
doi:10.1016/S2212-5671(14)00227-5

B.R. Londhe et al. / Procedia Economics and Finance 11 (2014) 620 625

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1. Introduction
By the end of March 2012, India had 919 million subscribers and was the second largest mobile phone market base
in the world. The tele density (number of mo bile phones per 100 people) has seen a six fold increase from 13
percent in March 2006 to over 75 percent at present (Mehta(20 13)). The rural market being price sensitive in nature
has seen a record increase in mobile phone usage due to falling hardware costs and enhanced penetration of their
associated service providers. Rural tele-density has grown at an impressive rate, rising from 1.9 percent in 2005 to
over 38 percent by March 2012 (TRAI 2012; Mehta (2013)). The mobile technology revolution is unique in a way
since it has achieved unparallel status as an agent of socio economic change where landline telephones or other
communication technology faltered. Rural India which shelters around 69 percent of Indian population (Census
2011) is marred by poor infrastructure, education, healthcare facilities. Mobile phones have emerged as an important
development tool (Islam 2011;Mehta (2013) ) and in some cases considered as a solution to reduce rural-urban
divide by delivering socioeconomic information (Aker and Mbiti 2010; Mehta (2013)). The ability of mobile phone
to act as a change agent is because it can facilitate need-based and user-centric information and services at
affordable costs (Mehta (2013)). Several studies in Sub-Saharan and Asia highlight the usage of mobile for
generating social capital which in turn can create economic opportunities, strengthened social networks, and
organized political mobilization (Sinha (2005, November)).
We conduct a pilot study to investigate the socioeconomic impact of mobile phones on BOP population. In addition
we investigate the sustainable livelihood generated due to the use of mobile phones which attenuates poverty,
malnutrition and unemployment.
2. Data
The pilot study was performed in a low income locality (Gokhle Nagar, Pune). Data from 37 respondents was
collated and the results were analysed. 20 respondents were male and 17 were female. The average weekly earnings
was Rs. 1200/-. 18 respondents had class 5 level education. 10 respondents had class 7 level education. 9
respondents did not indicate their education level. All the 37 respondents had an active mobile phone.
3. Results & Discussion

Intangible benefits: All the respondents agreed that mobile phones have made them happier. In general having
mobile phones does not increase the happiness. In addition 94% of the respondents experienced a positive attitude
towards work due to music and radio services offered by the mobile phones. 51% of respondents witnessed a
reduction in domestic fights and 64% of respondents confirmed that mobile phones do not interfere with their
childrens studies.The positive environment can be attributed to the usage pattern of the mobile phones. Figure 1
shows the time distribution for calls and music consumption. 59% of the respondents approximately use 20 minutes

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each day for voice calls. In addition 38% respondents spend approximately 60 minutes consuming music. We
observe that relatively longer duration of time is spent on consuming music than voice calls. Mobile phones based
music acts as a catalyst for improving domestic life by exploiting the positive relation between cognitive state and
music (Erkkil et al., 2011). The results on enhanced positivity are encouraging since it facilitates the progress to
economic development. Overall the mobile phones were able to create a positive environment with less distraction
that would otherwise affect their earning potential.

Minutes spent on calls

5 min

15 min

20 min

60 min

5% 3% 11%

120 min

Minutes Spent on Music

Consumption
0 min

15 min

20 min

60 min

120 min

180 min

11%

22%

3% 11%
13%

59%

38% 24%

Figure 1: Time distribution for calls and music consumption

Employment:All the respondents agreed that it was easier to find employment using mobile phones and work related
stress was reduced significantly. Our results on employment are consistent with studies in Sub-Saharan Africa
(Niger) where day labourers are able to call acquaintances in Benin to find out about job opportunities without
making the US$40 trip (Aker &Mbiti(2010)). The ability of mobile phones to reduce job search related issues and
create a means for sustainable employment is a major asset for inclusive growth. For daily employment the
concerned people travel far from their home to a common point where they are assigned job for that day. However
on many occasions the workers fail to get their daily employment and the notification is given only after they reach
the common point and coordinate with the job provider. The phenomenon of mobile phones aiding employment is
observed in several developing nations around the world. Mobile phones and its related services are adding to
employment in the formal sector. Mobile phone repair services along with selling prepaid calling cards have given
employment to thousands of people for example formal sector employment in private transport and communications
sector in Kenya rose by 130 percent between 2003 and2007 (CCK, 2008; Aker &Mbiti(2010)).In addition the
contribution of mobile phone towards informal employment is also worth appreciating. Business and
entrepreneurship activities are immensely benefited by mobile phone technology which in turn is responsible for
creating informal jobs. Although the relationship between mobile phones and job creation is positive in nature, there
is dearth of studies highlighting the impact of mobile phones in creating formal and informal job.

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Use of Mobile Phones: With advent of low cost mobile phones coupled with utility based design it is interesting to
investigate how mobile phones are used by individuals. Figure 2 shows the major use of mobile phones as agreed by
percentage of respondents. We see that the primary functions of mobile phones are used to maximum potential
(incoming and outgoing calls). The music, pictures and the SMS segments find relatively less usage as compared to
the primary functions. The less usage of SMS services as compared to call facilities can be attributed to less
operation knowledge of mobile phones and illiteracy. The interesting observation is that 86% of the respondents use
their mobile phones as torch. Either the mobile screen light or the mobile phones with exclusive LED torch light are
used during night time.

Use of Mobile Phones

105
100
95
90
85
80
75

Figure 2: Use of Mobile Phones

Brand and Service Penetration: Figure 3 and Figure 4 show the distribution of mobile phone hardware and mobile
phone service provider. Most preferred brand in terms of hardware was found to be Nokia. Being positioned itself as
low cost and rugged phones with essential functionalities and having the first mover advantage, Nokia are
considerable rural penetration over its competitors. The acceptance of local Chinese hardware was less compared to
the branded mobile phones due to negligible cost differential accompanied by superior quality. Similarly Airtel was
the most preferred brand as service provider followed by Vodafone.

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Figure 3: Mobile phone brand distribution

Mobile Phone Service Provider

30.00
25.00
20.00
15.00
10.00
5.00
0.00

Figure 4: Mobile phone service provider distribution

Mobile brands used by respondents

60.00
40.00
20.00
0.00

Perceived Issues: 91% respondents felt that they are disturbed by unnecessary incoming calls and 84% respondents
expressed their concerns on unnecessary outgoing calls and increase in expenditure.
Overall we observe a positive impact of mobile phones on the employment and general wellbeing of individuals in
lower income strata. We also observe that the mobile phones have found a utility other than the primary function of
voice calling. The mobile phones have become a disruptive technology which enables society to progress via form
fundamental social network.

4. Limitations & Future Work

The study being a pilot study suffers from low sample size. In future we intend to conduct large scale field
experiments with substantial sample size. In addition we will focus our attention on direct and indirect as well as
formal and informal job creation due to mobile phones.

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References
Aker, J., &Mbiti, I. (2010).Mobile phones and economic development in Africa.Center for Global Development
Working Paper, (211).
Erkkil, J., Punkanen, M., Fachner, J., Ala-Ruona, E., Pnti, I., Tervaniemi, M., ...& Gold, C. (2011). Individual
music therapy for depression: randomised controlled trial. The British Journal of Psychiatry, 199(2), 132-139.
Mehta, B. S. (2013). Capabilities, costs, networks and innovations: impact of mobile phones in rural India. Available
at SSRN 2259650.
Sinha, C. (2005, November). Effect of mobile telephony on empowering rural communities in developing
countries.In International Research Foundation for Development (IRFD) Conference on Digital Divide, Global
Development and Information Society (pp. 4-8).

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