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Commercial Internet Connectivity in every village - Towards Doubling Rural GDP in India Ashok Jhunjhunwala TeNeT Group, IIT Madras, Chennai, India [email protected] The Dream Current Rural GDP in India = $ 130 billion For a Population = 650 million people GDP / Person = $ 200 Rural Prosperity DOUBLING Rural GDP $ 400 / Person Constance F. & Arnold C. Pohs Symposium, Ann Arbor, USA 2 Rural Wheel of Prosperity - The Wealth Creators Agriculture Trade & Commerce Animal Husbandry IT-Based Services Agricultural Processing Industry Constance F. & Arnold C. Pohs Symposium, Ann Arbor, USA 3 Rural Wheel of Prosperity – The Enablers Agriculture Trade & Commerce Animal Husbandry • Finance • Commerce • Training & Information IT-Based Services Agricultural Processing Industry Constance F. & Arnold C. Pohs Symposium, Ann Arbor, USA 4 Enabling Finance, Commerce and Training and Information Agriculture Trade & Commerce Animal Husbandry The Key Enabler is Communications IT-Based Agricultural Services Processing Industry Constance F. & Arnold C. Pohs Symposium, Ann Arbor, USA 5 How does one connect Rural India India has 600,000+ villages 650 million people can Rural India afford Connections? Need Technology Sustainable Business Model Organisation which can think and act Rural Constance F. & Arnold C. Pohs Symposium, Ann Arbor, USA 6 Income and Telecom Spend of Rural Indian households Monthly telecom expenditure (assuming 4% income can be spent on telecom) million households 120 3.2 6 8.8 12 17 25 42 100 3.9 1.9 1.0 0.3 0.3 290 420 630 1040 2510 102.1 100 80 60 40 17.0 20 10.0 0 80 150 220 monthly household income in $ 75% (119 million) households can spend barely $ 3.2 per month on telecom Constance F. & Arnold C. Pohs Symposium, Ann Arbor, USA 7 How does one serve people with incomes of less than a dollar a day? Lower Connectivity cost Aggregate demand Constance F. & Arnold C. Pohs Symposium, Ann Arbor, USA 8 Lower Connectivity cost CAPEX on telephone line in India was $ 600 plus barely two years ago required ARPU of $20 plus per month to break even • affordable to barely two percent of Indian households Innovative Technologies and better buying has reduced CAPEX to around $ 325 per line • moving towards $ 200 per line enabling 50% of Indian homes to afford telecom rural connectivity cost reduced from $1500 to about $ 300 per connection Constance F. & Arnold C. Pohs Symposium, Ann Arbor, USA 9 Technology to connect Rural India BSNL’s Contribution: on the average one fibre connected rural exchange for every 150 sq km • a wireless system with 10 km range at existing fibre connected exchange would cover 80 - 85% of villages in India CorDECT Wireless in Local Loop developed by IITM and Midas Communications, Chennai • provides a telephone line and Internet connection in 30 Km radius Constance F. & Arnold C. Pohs Symposium, Ann Arbor, USA 10 IITM - Midas corDECT Wireless in Local Loop To PSTN To Internet 35/70 kbps Internet plus simultaneous telephone • $ 150 per line price •1 million lines in 03-04 Constance F. & Arnold C. Pohs Symposium, Ann Arbor, USA 11 Aggregate Demand in 1987 less than 5% of urban households had telephones • 7 years wait for a telephone • coin-box street telephones did not work • long distance charges too high even for top income families Entrepreneur-driven telephone booths (STD PCOs) introduced • night-time long distance charges reduced by a factor of 4 Today • 950,000 STD PCOs covering every street of smallest town • generate 25 % of total telecom income • 300 million people use these PCOs Constance F. & Arnold C. Pohs Symposium, Ann Arbor, USA 12 Organisations with Innovative Business Models N-Logue : A Rural Service Provider aggregate demand into a kiosk using • corDECT Wireless in Local Loop • ISP in a box : Minnow • Reliable power back-up $1000 (including taxes) per Kiosk providing telephone, Internet, multimedia PC with web-camera, printer and power back-up for PC • plus Indian language software, video conferencing software set up by a village entrepreneur on the line of STD PCOs • needs only $ 60 per month to break even Constance F. & Arnold C. Pohs Symposium, Ann Arbor, USA 13 n-Logue Deployment Strategy Telephone Backbone Application & Content Providers Internet Backbone • • • • • Scope: 1 –3 Talukas 25 Km radius, 2000 sq km 4 – 500 K population 2 - 5 towns 300 -400 villages 500 + Connections (at least 1 in each village) ACCESS CENTRE Connections: • Individuals • Government — schools and PHCs • Kiosks LSP Banks $ 1000 / Kiosk KIOSK OPERATOR Banks Micro Finance Organisations What is the monthly income? STD PCO Children learn typing all kinds of on-line and off-line education Kiosk is a photography shop also a video parlour on weekend evenings email and browsing voice mail and video mail e-governance access connect to taluka Government office for services and much more Constance F. & Arnold C. Pohs Symposium, Ann Arbor, USA $ 20+ $ 10+ $ 6 $ 6 $ 10+ $4 15 Constance F. & Arnold C. Pohs Symposium, Ann Arbor, USA 16 Word-processor in Indian Languages Multi-lingual Office Package IITM Chennai Kavigal Mundi . . . . A 60 year old from a village near Melur had lost vision for 2 years through tie-up with Aravind eye-care hospital, vision was restored in one eye IITM trying to develop Remote Diagnostic tools Blood Pressure, Sugar & Iron, ECG Monitor, stethoscope, Temperature at total cost of $ 200 Constance F. & Arnold C. Pohs Symposium, Ann Arbor, USA 19 Consultancy on Crop Disease Top: Ladies Finger Diseased with yellow mosaic Below : Post treatment Savings of $ 3000 Cost of information $0:50 Constance F. & Arnold C. Pohs Symposium, Ann Arbor, USA 20 E- Dr Vet ? In Attapati village , Priya’s chicken was limping Photo sent to Veterinary college Identified as Curled toe paralysis Cost for process Earlier $ 4 This case $0:40 Constance F. & Arnold C. Pohs Symposium, Ann Arbor, USA 21 Constance F. & Arnold C. Pohs Symposium, Ann Arbor, USA 22 The Power of multi-party video communication IITM - OOPS Low bit-rate Video Conferencing (audio + video + text at 20 kbps and more) Constance F. & Arnold C. Pohs Symposium, Ann Arbor, USA 23 Constance F. & Arnold C. Pohs Symposium, Ann Arbor, USA 24 Can Kiosks become Micro-banks? TeNeT and n-Logue working with ICICI Bank Remote Bill Payment Rural ATM Micro-finance Remittance Credit and Product Marketing is one of the biggest requirement of Rural India Constance F. & Arnold C. Pohs Symposium, Ann Arbor, USA 25 Knowledge and Training Another Driver of Rural Prosperity Information Dissemination and Knowledge Enhancement Need a Virtual University in every District to enable this Basic Structure would • Consist of a Central Hub • And Knowledge Extension Centres in every village Constance F. & Arnold C. Pohs Symposium, Ann Arbor, USA 26 The Extension Centre • Virtual Extension of the University • Located in Every Village • Enhanced Village Internet Kiosk equipped with •Computer(s) •Internet Connection •Web Camera and Multimedia •Power backup •Local Language Software • Run by a local person who is trained to facilitate the learning process There will about 1000 such Extension Centres in Every District Constance F. & Arnold C. Pohs Symposium, Ann Arbor, USA 27 To Sum Up Doubling of Rural GDP will change India Finance, Commerce, Training & Information are key Wireless Internet can enable these Internet in Rural Area is the key Infrastructure for a prosperous India Constance F. & Arnold C. Pohs Symposium, Ann Arbor, USA 28 N-Logue’s business model per Access Center In a fully built-up situation per Access Center N-Logue’s Investment per Access Center: $ 60,000 • 400 kiosks per AC • Revenue per AC ($20 per month per kiosk) $ 8000 pm • common expenses (including Internet BW) • LSP share • n-Logue’s share $ 2000 $ 3000 $ 3000 n-Logue’ expense per AC $ 600 pm • n-Logue’s gross revenue per year : Constance F. & Arnold C. Pohs Symposium, Ann Arbor, USA $ 28,800 29