Transcript towards_Doubling_Rural_GDP_May031

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
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Rural Wheel of Prosperity - The
Wealth Creators
Agriculture
Trade &
Commerce
Animal
Husbandry
IT-Based
Services
Agricultural
Processing
Industry
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Rural Wheel of Prosperity – The Enablers
Agriculture
Trade &
Commerce
Animal
Husbandry
• Finance
• Commerce
• Training &
Information
IT-Based
Services
Agricultural
Processing
Industry
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Enabling Finance, Commerce and
Training and Information
Agriculture
Trade &
Commerce
Animal
Husbandry
The Key Enabler
is
Communications
IT-Based
Agricultural
Services
Processing
Industry
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How does one
connect Rural India

India has 600,000+ villages
 650 million people
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can Rural India afford Connections?
Need

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Technology
Sustainable Business Model
Organisation which can think and act Rural
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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
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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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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
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Aggregate Demand

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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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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
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n-Logue Deployment Strategy
Telephone Backbone
Application &
Content Providers
Internet Backbone
•
•
•
•
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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?
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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
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$ 20+
$ 10+
$ 6
$ 6
$ 10+
$4
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Word-processor in Indian Languages
Multi-lingual Office Package
IITM Chennai Kavigal
Mundi . . . .
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A 60 year old from a village near
Melur had lost vision for 2 years

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through tie-up with Aravind eye-care
hospital, vision was restored in one
eye
IITM trying to develop Remote
Diagnostic tools

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Blood Pressure, Sugar & Iron, ECG
Monitor, stethoscope, Temperature
at total cost of $ 200
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Consultancy on Crop Disease
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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 ?
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In Attapati village , Priya’s
chicken was limping
Photo sent to Veterinary college
Identified as Curled toe paralysis
Cost for process
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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?
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TeNeT and n-Logue working with ICICI Bank
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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
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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
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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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C. Pohs Symposium, Ann Arbor, USA
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To Sum Up
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Doubling of Rural GDP will change India

Finance, Commerce, Training & Information are key
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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)
• LSP share
• n-Logue’s share
$ 2000
$ 3000
$ 3000
n-Logue’ expense per AC $ 600 pm
• n-Logue’s gross revenue per year :
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$ 28,800
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