2010-07-12

Truly Competitive Cell Phone Markets

I visited a village in India recently and was astonished to find that while the water quality was still as poor as it was 35 years ago (according to other traveling companions whom I shall not name here) and the general state of the village has not changed, almost every house has a satellite TV dish and at least 1 cell phone. It just goes to show that the technology revolution has started to reach even the remotest corners of the world.
The question is, why is this true of villages in India and not quite true (yet) in the US?
A few of my relatives have said that before, the Indian government controlled all telephones (landlines), so people would often have to wait years to be able to get a phone line. Now, however, cell phone companies are private and numerous, so anyone with the money to get a cell phone can get one immediately. The difference between the US market and the Indian market is that there are 3 times as many people in India versus the US, so the market is obviously much bigger; also, there are a lot of cell phone manufacturers in India (as in the US) but there are also many more cell phone carriers (unlike the US, where the market is essentially controlled by 4 or 5 major carriers), so the prices of hardware and plans are much lower and the variety of each is much greater in India versus the US. In the US, it is very rare to be able to buy a phone that is not tied to a particular carrier; in India, though such options do exist, it is more common to buy any phone and then tie it to a carrier later. All of this competition drives prices down, so the customer wins.
Now, if only the computer market could be like that...