Transcript Rural Prosperity

Serving the next tier
Market
Ashok Jhunjhunwala
TeNeT Group, IIT Madras, Chennai, India
[email protected]
The Next Tier
India with a billion people is a large market
Monthly telecom expenditure (assuming 4% income can be spent on telecom)
25
3.2
6
8.8
12
17
25
42
62
150
0.8
0.3
0.6
1040
1560
3730
million households
21.2
20
15.8
15
12.8
10
5.8
3.2
5
2.0
0
80
150
220
290
420
630
monthly household income in $

but 60% of Urban households can spend under $6 /month on Telecom

can service them only if per line CAPEX is less than $ 200
TIE Talk, San Jose, May 03
2
TeNeT Group, IITM took up the challenge

Incubated/ supported a dozen plus product companies and
worked with operators to drive down CAPEX
•
•
•
•
•
•
•

Midas Communications
NMSWorks
Nilgiri Networks
OOPS
Jataayu
Benchmark Systems
Usha Communications
Banyan Networks
Tejas Networks
Chennai Kavigal
NeuroSynaptic
Nextge
Indus technolgies
Capex per line down from $ 600 per line three years ago to
$350 per line
 can be driven below $ 200 in next three years
TIE Talk, San Jose, May 03
3
The Third Tier
Rural Indian households can afford even less
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 $

TIE Talk, San Jose, May 03
75% (119 million) households can spend barely $ 3.2 per
month on telecom
4
And Why ICT in Rural Areas?
Current Rural GDP in India = $ 130 billion
For a Population
= 650 million people
GDP / Person
= $ 200
Rural Prosperity
DOUBLING Rural GDP
$ 400 / Person
TIE Talk, San Jose, May 03
5
Rural Micro-Enterprises are the
Wealth Creators

Micro-enterprises need
 Finance
 Knowledge and Training
 Buying & Selling
 Insurance

Can Communications Enable
these ?
Agriculture
Trade &
Commerce
Animal
Husbandry
IT-Based
Services
Agricultural
Processing
Industry
TIE Talk, San Jose, May 03
6
n-Logue incubated to
connect Rural India

India has 600,000+ villages
 650 million people

Need



Technology
Sustainable Business Model
Organisation which can think and act Rural
• Lower Connectivity Cost
• Aggregate Demand
TIE Talk, San Jose, May 03
7
n-Logue uses innovative Technology to
connect Rural India

BSNL has fibre connectivity to most Talukas

CorDECT WLL developed at IITM
• provides a telephone line and Internet connection in 30 Km radius
• can connect 85% of Indian villages
• start-up costs very low

To PSTN
To Internet
35/70 kbps Internet plus
simultaneous telephone
• $ 150 per line price
•1 million lines in 03-04
TIE Talk, San Jose, May 03
8
Aggregate Demand

Entrepreneur-driven telephone booths (STD PCOs) introduced in
1987
• 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
TIE Talk, San Jose, May 03
9
Organisations with
Innovative Business Models

N-Logue : A Rural Service Provider

aggregate demand into a kiosk using

$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
TIE Talk, San Jose, May 03
10
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
TIE Talk, San Jose, May 03
$ 20+
$ 10+
$ 6
$ 6
$ 10+
$4
11
Word-processor in Indian Languages
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
TIE Talk, San Jose, May 03
13
Consultancy on Crop Disease




Top:
Ladies Finger Diseased
with yellow mosaic
Below : Post treatment
Savings of $ 3000
Cost of information $0:50
TIE Talk, San Jose, May 03
14
The Power of multi-party video
communication
IITM - OOPS
Low bit-rate Video Conferencing (audio + video +
text at 20 kbps and more)
TIE Talk, San Jose, May 03
15
TIE Talk, San Jose, May 03
16
Driving Enterprises in Rural Areas

Micro- Enterprise would require

micro-finance and loans
• TeNeT and n-Logue working with ICICI Bank
• Remote Bill Payment, Rural ATM, Micro-finance & Remittance


training and information
commerce and trading
• coupled with a courier service for goods delivery

Insurance
• small enterprises have limited risk taking abilities
TIE Talk, San Jose, May 03
17