The Hindu Business Line : When it clicked!

From small seeds grow big trees. The humble Internet kiosk, given half a chance, can transform India's rural landscape at a little cost. For the second week running, eWorld tracks tech initiatives that hold out much promise for the ordi nary guy.

IT was an extraordinary day for Mangalakshmi. The crumpled currency notes in the drawer totalled a nice Rs 700, justifying the big smile on the woman's face. She knew it was a windfall that happened when her Internet kiosk morphed into a photo studio.

"I charged only Rs 20, sir," Mangalakshmi recalled when a month ago, 35 villagers sat in front of a web camera at her kiosk in Tirupachur village to have their picture taken for a bank loan. Each villager saved at least the Rs 12 that it would have cost to go from the village to the town of Tiruvallur, eight km away, to get the two mug shots required for the loan.

Mangalakshmi's doubling as the village photographer gives one an idea of what all can be done at a simple Internet kiosk. Creating new revenue streams for kiosk operators is critical to the spread of the "kiosk culture," which appears to be on the point of takeoff.

V. Varadarajan

There are some 5,000 Internet kiosks in rural India today — a minuscule part of what is waiting to be covered. And, the coverage will depend upon how viable the business model is. "Our target is that a kiosk must be able to generate Rs 3,000 per month from the sixth month onwards," says V. Varadarajan, Managing Partner, Minvalai, a local service provider (LSP) for n-Logue Communications (P) Ltd.

Minvalai provides people like Mangalakshmi the powerful Internet connection that is currently not available in rural areas. This is possible through the wireless-in-local-loop (WLL) technology that companies such as n-Logue have developed. Minvalai sells her the hardware and software that will bring this powerful connection to Tirupachur and other villages through a series of towers.

In addition, local service providers like Minvalai — who is the n-Logue franchisee for Tiruvallur district — train kiosk owners, maintain the kiosks and arrange for bank finance.

While the technology flows top-down, revenues flow bottom-up: Villagers use the Internet café and pay the kiosk operator. The operator pays connection and maintenance charges to Minvalai, who pays a franchise fee to technology provider n-Logue.

So, how can the kiosk earn more? If the Mangalakshmis can earn Rs 700 every day, or, several days a month, it becomes viable to cover the six lakh villages of India. After all, the LSP has to spend something like Rs 50 lakh to set up the kiosks. The money is spent on tapping bandwidth from the bandwidth provider (BSNL, Reliance, etc), the base tower and the relay towers for connecting with the hundreds of kiosks under the LSP's area, and a plethora of hardware for data transmission. The LSP will break even at 200 Internet connections. Incidentally, one estimate indicates that some 1,500 LSPs can cover the whole country and, at Rs 50 lakh for each, it calls for a total outlay of Rs 750 crore for pan-country coverage.

Back to the question — how to make every Mangalakshmi earn more from her shop? Again, technology has a solution.

Pioneering work at the Indian Institute of Technology, Madras, (which incubated n-Logue) has seen the development of some useful machines:

An ATM that does not cost more than Rs 40,000 (the ones you see at bank premises cost upwards of Rs 7 lakh).

A diagnostic kit for telemedicine, which a doctor sitting miles away can use to measure things such as the temperature and blood pressure of a patient who comes to the kiosk.

A software that can conference 35 people at as many places, which requires as low a bandwidth as 16.5 kbps.

Falling short on marketing

The technology is there, but the trick is to get people to use it. Marketing, which in this model is left almost entirely in the hands of the villagers, appears to be wanting. Here is an illustration. Minvalai, having mobilised funds from philanthropic organisations, has given the kiosk owners a simple message: "Get people in your village to take up the adult education programme for which Tata Consultancy Services has developed a software. For each person who takes up the 40-day course, we will give you, the owner, Rs 100." But to no avail. Illiterate adult villagers just don't come. But an enterprising kiosk-owner should somehow get them to come. "They should spend a part of the Rs 100 we give them to coax the villagers to take the course. Why can't they provide, say, some snacks and tea to course-takers each day?" asks Varadarajan, a question that he is also asking of the kiosk owners.

But even with poor marketing, village Internet kiosks appear to be an idea whose time has come. What is ticking is a combination of the Self-Help Group (SHG) movement and Internet kiosks.

In Tamil Nadu, the Government is giving a 50 per cent capital subsidy for setting up a kiosk, or around Rs 30,000. Banks loan the other Rs 30,000 to SHGs. The manager of the Tiruvallur branch of Indian Bank said that the bank lends at 8.5 per cent.

So, an SHG needs to bring nothing upfront to start a kiosk. Of course, individuals also can set up kiosks, but the entrepreneur will not get the subsidy.

Mangalakshmi is a part of a 13-member SHG in Tirupachur village. Her kiosk is a nondescript shack by the side of a dusty by-lane, scarcely a place that could be suspected to house computers and web cameras.

When eWorld visited the place, a young man from the village was browsing the Web for job opportunities.

No sooner had he finished his work than a bunch of kids grabbed the computer for playing a `car game.'

"Lot of kids come here to play games," says Mangalakshmi. On a good day, she earns Rs 100 from games alone.

But that doesn't translate into Rs 3,000 a month, for there are days when business is slack.

Mangalakshmi puts her monthly revenue at Rs 2,000, roughly the break-even point.

For, Rs 1,080 goes for the Internet connection (to the LSP), another Rs 500 towards repaying the bank loan, and the rest towards other overheads.

But there will come a time when the bank loan would have been paid off and more revenues would flow in, so that a profit is netted.

Who knows, photographs could be regularly taken using Web cameras and villagers will use the Net for sending voice messages.

Success stories abound such as how a village was able to save a crop from pests by getting timely advice over the Net from experts, and how a youth got his job back by sending an e-mail to the authorities about his unfair sacking.

When these stories, indeed in their exaggerated versions, spread across villages, use of the humble-looking Internet kiosk will be seen as a compelling need.

Which is a consummation devoutly to be desired.

Pictures: Shaju John Imaging: J.A. Premkumar

ramesh@thehindu.co.in

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