Thursday, December 12, 2002
A Vision for a Digitally Bridged India

I wrote a paper and gave a presentation at the seminar on "ICTs and Indian Development" in Bangalore earlier this week.

The seminar brought together technologists, economists, social scientists, government officials and funding agencies and intermediaries. The primary theme was on the use of information and communication technologies (ICTs) to bridge the digital divide.

Listening to some of the presentations and discussions, I couldn't help thinking that the first digital divide which needs to be bridged is between the talk and implementation. We are not short of ideas. What is needed is for these ideas to be implemented in the field - not for pilots or demos, but to create sustainable and replicable solutions.

That is easier said than done - the ones who have the power to authorise execution and put up the money have a limited understanding of technology, while the ones who understand what technology can do and where it is headed have very limited experience in the realities of the "other India". One way to bridge this gap is for some "crossover people" - people with an expertise area in one area willing to spend the time and effort to learn about the other areas.

Separately, I suggested the creation of a community weblog to keep the discussion alive after the seminar. The aim must be to build an "emergent discussion forum" - like Slashdot - to complement the meetings and ideas which were exchanged during the seminar.

Emerging Markets | PermaLink | Comments (6)


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TECH TALK: Disruptive Bridges: Tech 7-11: Business Model

The key to making the Tech 7-11 a commercial success lies in its business model. The Tech 7-11 occupies space. So, any “space owner” who is looking to franchise this needs returns which are better than alternative uses of the space. Consider first a cybercafe with 10 computers charging Rs 30 an hour (USD 0.60). Assuming 12 hours of operation, the maximum daily revenue that it can generate is 10 computers * Rs 30 / hour * 12 hours = Rs 3,600. Contrast this with a Barista outlet in India which has a footfall of about 400 a day and generates average billing of Rs 60 per person for a daily revenue of Rs 24,000. While we definitely need to look at costs of operation and the net margins, the clear message is that unless we are able to ramp up the revenues of the cybercafe by a factor of 7-10, it is not a viable model for franchising.

Of course, one could rely on the generosity of “space owners”, especially government and quasi-government institutions. As a result, cybercafes could (and some have) spring up in post offices, railway stations, bus stations, and other such places where the notional cost of space can be taken as close to zero. But that is not a model which can scale up to one in every neighbourhood – and stay in the face of other commercial options. The small-business entrepreneur in the private sector holds the key to success – if he sees value in the concept, then he will set it up. We have to make it worthwhile for this private entrepreneur – just the way a McDonalds has done across the world.

So, back to the question: how can we transform a cybercafe earning a maximum of Rs 3,600 a day to a Tech 7-11 earning Rs 24,000 or more a day? The answer lies in leveraging the two innovations of the Tech 7-11: the thick server and the wireless access point.

The thick server makes it possible to offer various services locally. This means faster access and less dependency on a slow Internet connection. Yes, there will be broadband wide-area networks, but we should not be dependent on them. In the foreseeable future, I still do not see cost-effective LAN-like speeds (10-100 Mbps) happening over a wide area network. By offering storage for the user’s mail and documents, and making content and applications available locally, the Tech 7-11 can now do two things: increase the earnings from a single user, and charge more per unit of time.

For example, mail can be downloaded automatically to the local thick server, thus enabling speedy access to email. It also means offline access for email and documents, in case the Internet connection is not available at that instant of time (as may be the case in many rural areas). In addition, training courses can be offered from the local thick server, and the charges for these could be Rs 50-100 per hour, or more. The value lies in the content, and not the time spent. This is what the Tech 7-11 is leveraging.

The Tech 7-11 could even charge for printouts – Rs 10 for a land record, Rs 5 for a ticket, and so on. These are like the “beverages” in a McDonalds – cheap in terms of raw materials used, and with very high profit margins!

Taken together, these ideas create the platform for a Tech 7-11 to offer value-added services which go far beyond the time-based charging that a cybercafe of today does. This is good for the users who come to the Tech 7-11. Can we also leverage the others in the neighbourhood?

Tomorrow: Tech 7-11: Hub-and-Spoke Extension

Related Entries:  [All]
TECH TALK: Disruptive Bridges: My First Computer: Scaling Up [December 20, 2002]
TECH TALK: Disruptive Bridges: My First Computer: Economics (Part 2) [December 19, 2002]
TECH TALK: Disruptive Bridges: My First Computer: Economics [December 18, 2002]
TECH TALK: Disruptive Bridges: My First Computer (Part 2) [December 17, 2002]
TECH TALK: Disruptive Bridges: My First Computer [December 16, 2002]

Tech Talk | PermaLink | Comments (14)

Hi Rajesh,

I fully agree with you that the value of Tech 7-11 lies in content and how it leverages it. They will need offer applications presented as a digital dashboard (KM + BI + ERP + ...). These applications need to be tailor made for each profession (Teacher, Student, Farmer, Servant maid ....)i.e. you need custom applications for each segment and sub-segment of the society. Something similar to the industry solutions offered by the major software vendors. These applications being hosted by the Tech 7-11 (offcourse with bigger vendors behind them - may be somebody like emergic) can bring a client critical mass that can make the business model viable. I do see a need for something like this for 'tech utility' to become a reality.

Regards
Srinivas

Posted by Srinivas

Hi Rajesh

Indian cybercafe Association would like to invite you on our advisory board.

yogesh ahire
president
Indian Cybercafe Association
http://www.cyber-cafes.org

Posted by yogesh ahire

Hi Rajesh

Indian cybercafe Association would like to invite you on our advisory board.

yogesh ahire
president
Indian Cybercafe Association
http://www.cyber-cafes.org

Posted by yogesh ahire

Hi Rajesh

Indian cybercafe Association would like to invite you on our advisory board.

yogesh ahire
president
Indian Cybercafe Association
http://www.cyber-cafes.org

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