beyondbrics

India’s mobile revolution is slowly drawing the curtains on the “yellow revolution”. The once ubiquitous yellow phone kiosks – known as Public Call Office and Subscriber Trunk Dialling  – that changed the lives of millions of people in the world’s biggest democracy when they were introduced in the early 1990s, are undergoing a major makeover.

As India’s mobile market clocks up about 20m customers a month – making it the second largest globally after China, with more than 500m users – several pay phone booths in urban centres, that in the 1990s enabled migrant workers in Mumbai to keep in touch with their families in the rural areas of India for less than one rupee, are now switching businesses.

“Who uses the PCO/STDs [phone booths] any longer?” asks Thomas Joseph Mores, who has a corner kiosk in south Mumbai that used to offer paid-phone services until last year. “Now everybody has at least one mobile, many have even two or three…it made no sense to continue with that business.”

Since January this year Mores – a Mumbaiker of Goan origin – has started using his minuscule store to sell glittery golden-plated jewellery and trinkets. But more interestingly, he has turned what used to be his phone booth’s telephone line into a high-speed broadband connection.

Thanks to the internet he can now play his luck on the market. While he guards his store and deals with the occasional client coming from the Gulf he buys and sells shares on the Bombay Stock Exchange. “I sell cheap jewellery because that is what the customers from the Middle East, the best clients, want…but then when [the] business is quiet I invest on the stock market.”

Mores proudly shows beyondbrics that he made “one lakh sixty-four thousand rupee” in the month of May, which is equivalent to Rs164,000 ($3,527) when converted from the Indian metric system to the western one.

The PCO/STD booths were “invented” and launched by Sam Patroda, an US-based entrepreneur who had been invited in the mid 80s by the then prime minister Indira Gandhi to return to India to head the country’s Center for Development of Telematics.

The deployment of millions of yellow paid-phones came hand in hand with the opening up of India’s economy in the 90s and contributed enormously – as mobiles are doing today – to boost economic growth.

Suddenly, everything seemed easier, recounts one seventy-two year old businessman.

“It became easier to sell and buy over the phone…Trade benefited as the speed of transactions where increased,” said HK Jaipur, who used to own a mill factory in the 1980s and later sold everything to start his own information technology company in Bangalore.

PCO/STD booths helped to increase employment, in particular in the rural areas and among the poorer strata of the population.

Gaganath Babu Goregoakar, a 50 year-old migrant in Mumbai, said that when he started his paid-phone business 15 years ago he made a fortune. His PCO kiosk, one of the more than 6m booths present in India, had a weekly turnover of 4,000 phone calls. That has changed since the wireless handset became the most common tool for communicating.

“Now, the number of users on a weekly basis has gone down to less than 1000 people,” said Goregoakar.

Although the yellow phone booths are still visible in many parts of Mumbai, it is rare to see the queues one would have commonly seen on weekends and during festivals when mobiles were not affordable to all just a decade ago. Now that mobile calling rates are below one cent a minute and handsets cost as little as $25, it makes little sense for people to stand in line to talk to somebody.

“The PCO is in people’s pocket now,” says Goregoaka.

To a great extent this transformation is also visible in the more remote areas of the country. Although the number of phone booths is still growing outside India’s major cities, the rate of growth is considerably lower compared to that of mobiles.

So, as the mobile revolution draws the curtains on the yellow phone box, a new period of transformational change might be round the corner: the mobile internet revolution. However, for that we might have to wait a little longer…

Further reading:
FT analysis: Telecommunications – A tough call