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Commercial Internet Connectivity in every village - Towards Doubling Rural GDP in India

Commercial Internet Connectivity in every village - Towards Doubling Rural GDP in India. Ashok Jhunjhunwala TeNeT Group, IIT Madras, Chennai, India ashok@tenet.res.in. The Dream. Current Rural GDP in India = $ 130 billion For a Population = 650 million people GDP / Person = $ 200.

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Commercial Internet Connectivity in every village - Towards Doubling Rural GDP in India

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  1. Commercial Internet Connectivity in every village- Towards Doubling Rural GDP in India Ashok Jhunjhunwala TeNeT Group, IIT Madras, Chennai, India ashok@tenet.res.in

  2. 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

  3. Agriculture Trade & Commerce Animal Husbandry IT-Based Services Agricultural Processing Industry Rural Wheel of Prosperity - The Wealth Creators

  4. Rural Wheel of Prosperity – The Enablers Agriculture Trade & Commerce Animal Husbandry • Finance • Commerce • Training & Information IT-Based Services Agricultural Processing Industry

  5. Agriculture Trade & Commerce Animal Husbandry IT-Based Services Agricultural Processing Industry Enabling Finance, Commerce and Training and Information The Key Enabler is Communications

  6. 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

  7. Income and Telecom Spend of Rural Indian households Monthly telecom expenditure(assuming 4% income can be spent on telecom) 3.2 6 8.8 12 17 25 42 100 • 75% (119 million) households can spend barely $ 3.2 per month on telecom

  8. How does one serve people with incomes of less than a dollar a day? • Lower Connectivity cost • Aggregate demand

  9. 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

  10. 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

  11. To PSTN • 35/70 kbps Internet plus simultaneous telephone • $ 150 per line price • 1 million lines in 03-04 To Internet corDECT Wireless in Local Loop IITM - Midas

  12. 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

  13. 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 Kioskproviding 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

  14. 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 n-Logue Deployment Strategy

  15. 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

  16. Word-processor in Indian Languages

  17. Multi-lingual Office Package IITM - Chennai Kavigal

  18. 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

  19. Consultancy on Crop Disease • Top: Ladies Finger Diseased with yellow mosaic • Below : Post treatment • Savings of $ 3000 • Cost of information $0:50

  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

  21. The Power of multi-party video communication IITM - OOPS Low bit-rate Video Conferencing (audio + video + text at 20 kbps and more)

  22. 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

  23. 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

  24. 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

  25. 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

  26. 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

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