Commercial Internet Connectivity in every

village - Towards Doubling Rural GDP in India

Ashok JhunjhunwalaTeNeT Group, IIT Madras, Chennai, Indiaashok@tenet.res.in

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The Dream

Current Rural GDP in India = $ 130 billion

For a Population = 650 million people

GDP / Person = $ 200

DOUBLING Rural GDP

$ 400 / Person

Rural Prosperity

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Agriculture

AnimalHusbandry

Agricultural Processing

Industry

IT-Based Services

Trade & Commerce

Rural Wheel of Prosperity - The Wealth Creators

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•Finance•Commerce•Training &

Information

Rural Wheel of Prosperity – The Enablers

Agriculture

AnimalHusbandry

Agricultural Processing

Industry

IT-Based Services

Trade & Commerce

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Agriculture

AnimalHusbandry

Agricultural Processing

Industry

IT-Based Services

Trade & Commerce

Enabling Finance, Commerce and Training and Information

The Key Enabler

is

Communications

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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

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Income and Telecom Spend of Rural Indian households

102.1

17.010.0

3.9 1.9 1.0 0.3 0.30

20

40

60

80

100

120

80 150 220 290 420 630 1040 2510

monthly household income in $

mil

lio

n h

ou

seh

old

s

75% (119 million) households can spend barely $ 3.2 per month on telecom

Monthly telecom expenditure (assuming 4% income can be spent on telecom) 3.2 6 8.8 12 17 25 42 100

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How does one serve people with incomes of less than a dollar a day?

Lower Connectivity cost

Aggregate demand

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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

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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

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To PSTN

To Internet35/70 kbps Internet plus simultaneous telephone

• $ 150 per line price

•1 million lines in 03-04

IITM - Midas

corDECT Wireless in Local Loop

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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

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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

Organisations with Innovative Business Models

n-Logue Deployment Strategy

Application & Content Providers

Telephone Backbone

Internet Backbone

Scope:•1 –3 Talukas•25 Km radius, 2000 sq km•4 – 500 K population•2 - 5 towns•300 -400 villages

LSP

Banks

ACCESS CENTRE

500 + Connections (at least 1 in each village)

Connections:•Individuals•Government

— schools and PHCs• Kiosks

$ 1000 / KioskKIOSK

OPERATOR

BanksMicro Finance Organisations

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What is the monthly income?

STD PCO $ 20+ Children learn typing

all kinds of on-line and off-line education $ 10+ Kiosk is a photography shop $ 6

also a video parlour on weekend evenings $ 6 email and browsing

voice mail and video mail $ 10+ e-governance access

connect to taluka Government office for services $ 4 and much more

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Word-processor in Indian Languages

Multi-lingual Office PackageIITM -

Chennai Kavigal

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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

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Consultancy on Crop Disease

Top: Ladies Finger Diseased

with yellow mosaic Below : Post treatment

Savings of $ 3000 Cost of information $0:50

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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

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The Power of multi-party video communication

IITM - OOPS

Low bit-rate Video Conferencing (audio + video + text at 20 kbps and more)

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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

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Knowledge and Training

Another Driver of Rural Prosperity Information Dissemination and Knowledge

Enhancement

Need a Virtual University in every Districtto enable this

Basic Structure would• Consist of a Central Hub • And Knowledge Extension Centres in every village

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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

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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

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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) $ 2000• LSP share $ 3000• n-Logue’s share $ 3000

n-Logue’ expense per AC $ 600 pm

• n-Logue’s gross revenue per year : $ 28,800