Serving the next tier Market

1
Serving the next tier Market

• Ashok Jhunjhunwala
• TeNeT Group, IIT Madras, Chennai, India
• ashok_at_tenet.res.in

2
The Next TierIndia with a billion people is a
large market
Monthly telecom expenditure (assuming 4 income
can be spent on telecom) 3.2 6
8.8 12 17 25 42
62 150

• but 60 of Urban households can spend under 6
  /month on Telecom
• can service them only if per line CAPEX is less
  than 200

3
TeNeT Group, IITM took up the challenge

• Incubated/ supported a dozen plus product
  companies and worked with operators to drive down
  CAPEX
• Midas Communications Banyan Networks
• NMSWorks Tejas Networks
• Nilgiri Networks Chennai Kavigal
• OOPS NeuroSynaptic
• Jataayu Nextge
• Benchmark Systems Indus technolgies
• Usha Communications
• Capex per line down from 600 per line three
  years ago to350 per line
• can be driven below 200 in next three years

4
The Third TierRural Indian households can afford
even less
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

5
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
6
Rural Micro-Enterprises are the Wealth Creators

• Micro-enterprises need
• Finance
• Knowledge and Training
• Buying Selling
• Insurance
• Can Communications Enable these ?

7
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

8
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

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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

10
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

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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
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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

14
Consultancy on Crop Disease

• Top Ladies Finger Diseased with yellow
  mosaic
• Below Post treatment
• Savings of 3000
• Cost of information 050

15
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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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