It’s easy to see why the fishermen of the southern Indian state of Kerala captured the attention of a Harvard economist when they began using mobile phones a few years ago to track prices in the markets where they sold their catch of the day. Observing how these devices can be used to promote economic growth, Robert Jensen, in a 2007 paper titled, “The Visible Hand(set): Mobile Phones and Market Performance in South Indian Fisheries — The Micro and Mackerel Economics of Information,” wrote: “Before mobile phones, deciding which [market] would offer the best price was sheer guesswork.” With mobile phones, however, suddenly it became an information-based decision. What’s more, noted Jensen (who is currently at Brown University in Providence, Rhode Island), “it’s not a zero-sum trade-off.” The fishermen’s customers benefitted from lower prices and greater choice, and there was less waste since the fishermen could easily identify the villages that would have the greatest demand for their fish each day.

Now Jensen’s “visible hand(set)” is reaching further into rural India. Following a nationwide launch this summer of Nokia Life Tools (NLT), India’s farmers can use their mobile phones to access tailored information to help them grow, harvest and sell their crops and manage their livestock. “There is no reason why farmers should not be as successful as fishermen,” says Ravi Bapna, associate professor of information systems at the Carlson School of Management in Minnesota and executive director of the Centre for Information Technology and the Networked Economy at Hyderabad-based Indian School of Business (ISB).

Consider Ravindra Shinde, a farmer in Magardhokada, a village in the Nagpur district of Maharashtra. When he recently harvested 125 quintal (a quintal is 100 kilograms) of soybeans and was about to take the crop to market, the price was US$32 a quintal. But then he received a message on his handset that soybean production in the U.S. and Argentina had fallen, so he held back and later sold his crop for US$48 a quintal.

“Farmers find that getting prices daily on their mobile phones reduces their dependency on agents for basic information,” says Jawahar Kanjilal, Nokia’s global head of emerging market services. “With greater awareness of market conditions, there is newfound confidence in their negotiations with agents.”

As for Nokia and others in the mobile phone industry, it’s no surprise why they’re attracted to an emerging economy such as India. Mobile phones now easily outnumber fixed lines in many developing countries, spurring telecom providers to roll out mobile services tailored to these customers. One of the most striking examples is mobile banking in Africa, particularly after the success of mobile payment services like M-Pesa in Kenya, a country counting some 15 million handsets today compared with only 15,000 ten years ago. India is one of the fastest-growing telecom markets in the world, “making it a hotbed for ideas about consumption and motivation for mobility,” says Kanjilal.

And like other mobile phone companies, Nokia says much of the growth in India is coming from outside the major urban centers. India already is the number-two market for the Finnish company, thanks in large part to the “strong distribution, market share and mindshare in rural and small town markets,” Kanjilal notes. Some 70% of its population of one billion is rural-based, contributing 26% of the country’s GDP, and the purchasing power in rural India is increasing steadily. By 2012, India is expected to have 200 million rural telecom connections, and rural users will account for more than 60% of the total telecom subscriber base at a penetration rate of 25%, according to a report by the Confederation of Indian Industry and Ernst & Young.

“The fast-rising subscriber base, falling airtime rates, the rural thrust by various telecom players and the prevalence of information asymmetry among a large section of farmers make India an ideal place for the development of such services,” observes A.K. Raman, practice head of telecoms, media and technology at consulting firm Tata Strategic Management Group (TSMG). But more than any of those factors, he says, adoption rates will depend on one thing: affordability.

In NLT’s case, a subscription for each of its three services — agriculture as well as education and entertainment — is 60 cents a month, though prices can vary depending on the number of downloads. The premium plan for agriculture — which includes market prices of three crops chosen by the subscriber — costs US$1.20 a month. Of NLT’s three offerings, agriculture is expected to be the biggest hit for one reason: its potentially fast return on investment. As Kanjilal notes: “The time and money saved from not having to make multiple trips to the marketplace to get the latest rates” isn’t lost on customers.

It’s not just the ROI that underpins NLT’s service. Ease of use is also important. For starters, NLT-enabled handsets have an icon-based, graphically rich interface and can display information simultaneously in two languages. Another nice touch is that information is delivered via SMS to ensure that the service works wherever a mobile phone works, without requiring additional settings or the need for GPRS (General Packet Radio Service) coverage. According to Kanjilal, all this sets NLT apart from other services. “At present, there is no one service that aggregates content of such depth and delivers it to the target audience through the intuitive, icon-driven user interface as well as SMS, and in the variety of local languages that NLT will support,” he says. “NLT covers the length and breadth of the country. In total, at launch we have coverage of 18 states across all — around 100 — crops.”

Local Partners

Much of the service’s development has happened through partnerships that Nokia has forged locally. This includes a content-sharing agreement with Reuters Market Light (RML), a mobile phone-based information service owned by Thomson Reuters of the U.S. and the UK. Since RML’s launch in Maharashtra in 2007, it has sold more than 250,000 quarterly subscriptions to nearly 100,000 farmers in 12,000 villages, according to Amit Mehra, managing director of RML. He reckons that the main attraction of mobile phone-based services over traditional media (crop prices have been available over the radio for decades) is the personalization. With mobile phones, “you get the crop prices you want, the markets you want and the language you want,” he says.

With a staff of several hundred cranking out content for its audience across India, RML says it has a loyal following, reporting that some farmers have saved thousands of dollars after using its mobile information service for just a few weeks.

RML is so confident that the demand for its agriculture service will grow rapidly, it is planning to expand the range of coverage to include spot prices, warehouses and pledge loans, among other information. It also has launched an SMS service similar to NLT’s and at similar rates. This raises questions about the risk of cannibalization or creating confusion in the marketplace, but neither Reuters nor Nokia seems concerned. Mehra says Reuters isn’t distributing and marketing the service aggressively, relying instead on channel partners like banks. And Nokia’s view is that “there is enough room for both services to coexist,” says Kanjilal. “In some states, we will cooperate with Reuters while in others, where they are not present, we will work with multiple content providers.”

Nokia’s partnering strategy isn’t confined to agriculture. In education and entertainment, for example, it has set up partnerships with Pearson Education and mobile content management firm OnMobile. “But it’s in agriculture that the entire ecosystem is coming together,” as D. Shivakumar, vice president and general manager of Nokia India, puts it. In June, Nokia and the Maharashtra State Agricultural Marketing Board (MSAMB) signed a memorandum of understanding to share content. Under the agreement, the MSAMB will provide expertise in commodity prices from its network of local mandis (market yards), and could eventually deliver news, alerts on schemes and other information directly to grassroots consumers.

“It is working very well,” says M.L. Lokhande, manager of information technology at the MSAMB, noting that some 1,000 subscribers signed up in a matter of weeks. Given the potential, however, it’s surprising to many that the MSAMB is charging Nokia only US$200 a month for its services. But Lokhande points out the public-sector organization is more interested in providing a service to farmers than making money from the deal, and adds that the arrangement is not exclusive. In fact, he says, “We have a website, too, where the information is available,” yet he quickly concedes that “it is rather cumbersome for farmers to access. It needs infrastructure.”

The service will certainly be more lucrative for Nokia and partners like RML. “With our scale we can make it economically viable and rewarding for the ecosystem players engaged with NLT,” says Kanjilal. Though he declines to disclose the company’s revenue forecast, he grants that “this is clearly a profit center for Nokia.”

It’s not just Nokia and Reuters that have high hopes for this new business. Syngenta, a Basel, Switzerland-based agribusiness company, is another company watching NLT closely. “In India, the productivity of most of the crops is much lower than in other countries,” says Kuldeep Kaul, Syngenta’s vice president of marketing. Along with various initiatives for enhancing productivity with new types of seeds and crop-protection products, Kaul says Syngenta sees a benefit to educating farmers about crop agronomy. But to do that currently, Syngenta relies on on-site seminars and demonstrations. Mobile phone services make such education faster and more efficient. By teaming up with NLT, Syngenta will be able to provide a range of information to enhance crop productivity, from simple daily tips to environmentally friendly business plans, while offering location-specific, personalized information to individual farmers.

Agriculture information services are certainly not new in India. For instance, e-Choupal, an information, procurement and distribution system set up by Calcutta-based conglomerate ITC, has been providing farmers with crop prices for the past 10 years (see Marketing to Rural India: Making the Ends Meet). Its network of “kiosks,” each equipped with an Internet-enabled computer run by trained farmers, has grown, with some kiosks operating as consumer goods and agri-product retailers as well.

More Than Just Crop Prices and Weather

And competition is heating up in mobile circles. Earlier this year, the Indian Farmers Fertilizer Cooperative and telecom service provider Bharti Airtel set up a joint venture called lffco Kisan Sanchar, which is hoping to use Airtel’s telecom network to send information associated with agriculture and animal husbandry to as many as 50 million farmers. Another company with a similar mandate is a joint venture between Reliance Communications and Krishak Bharati Cooperative (Kribhco), while farmers in Uttar Pradesh can now call state-owned telecom service provider Bharat Sanchar Nigam Ltd. (BSNL) on their mobile phones to find out the price of any vegetable, grain, pulse or fruit in any mandi across the state.

Information systems being set up in rural India are not confined to just crop prices and weather. The Andhra Pradesh Farmer Managed Groundwater Systems project is launching a rural information kiosk initiative with the United Nations’ Rome-based Food and Agriculture Organization to collect and disseminate water-usage information in various drought-stricken districts. “It is a two-way information system,” says project leader K.A.S. Mani. The kiosks present the data they’ve collected in villages to farmers using animated graphics and audiovisual tools, helping farmers — even those who are unable to read — to make decisions about which variety of crops to produce. Individual kiosks are standalone hubs, sorting and storing information from individual hydrological units, or watershed boundaries, in various villages. The information kiosks are based entirely on touch-based screens with large icons displaying limited but focused data, while the language, Telugu, is kept basic.

One small drawback is the inability of the units to communicate with each other. “Connectivity with other kiosks may not be a technical issue, but it is highly demanding on resources, especially finances,” explains Mani.

But the lower-tech alternatives aren’t ideal either. Mani, like others, says that while “radio and TV are mass communication devices of reasonably easy access, low in cost and of prime importance,” there are big drawbacks: Information cannot be customized or retrieved when desired, and as in the case of TVs, they also aren’t portable. In addition, there are infrastructure issues such as availability of electricity. As for Internet-based systems, they have even lower reach and require significant capital expenditure. “I am sure [mobile telephony] offers the best opportunity for dissemination of appropriate knowledge.” Nokia’s work, he adds, “is a step in the right direction, as it provides value-add to a service that is already sought after.”

While Raman of TSMG concurs that “the mobile phone as a device is better placed for the dissemination of market prices in comparison to traditional media,” he doesn’t believe NLT will win hands down. “Nokia Life Tools relies on the literacy levels of the user and is available only on certain Nokia models,” says Raman. “This could limit the reach of this application. Second, it cannot be considered as a competitor to a service such as e-Choupal, which goes beyond providing information.”

The jury is still out for others, too. “At this stage, it is not clear what the value proposition over and above e-Choupal and other competing services is,” says Bapna of the ISB. “While competition in this space can generally be expected to benefit the rural consumer, the medium-term challenge of building a substantial user base seems to place the odds in favor of the incumbent players, such as e-Choupal.” In the long run, he predicts, “it will be about who can provide relevant personalized information and enable the application ecosystem for value-added services based on the platform.”

No matter how the battle for mobile customers in rural India plays out, other emerging markets have an interest in its success. “The launch of NLT is the beginning of an historic journey that will take mobility to the grassroots and make a positive difference to the lives of people in markets around the world,” says Kanjilal. To that end, Nokia plans to launch NLT in other emerging markets in Southeast Asia by the second half of this year.

NLT does indeed have a key role to play for Nokia’s bigger vision. Its development is in part a reflection of a group-wide strategic shift, as it moves away from a manufacturer of handsets to become more of a provider of services. In transforming itself from a pure-play devices company to a services and solutions entity, says Shivakumar, “[Nokia has] pioneered many initiatives to proliferate the benefits of mobility to more and more segments of society.” Further into the future, he adds, NLT will “help bridge the digital divide in emerging markets and empower people with the right tools to help them make informed decisions in their daily lives.”

In many ways, India’s farming community has been an ideal place to start. With agriculture employing more than 60% of the workforce in India, “this sector of the economy needs fresh inputs via technology for higher growth,” says Shivakumar.

Bapna of the ISB agrees. “It is natural that many of these services have their origin in India, given the huge untapped potential to increase agricultural efficiency and the coming of age of our information infrastructure,” he says. “As the old saying goes, necessity is the mother of invention.”