COMMENT: The Business Magnet

Words like 'tele-density'; 'broadband penetration'; and 'cellular
revolution' becoming the buzz are a natural outcome of the telecom revolution
sweeping the country — or at least the urban areas of the country. The rural
areas are less fortunate. As of September 2004, the tele-density of the country
stood at 8.68 percent. That number hides the tremendous diversity. The urban
tele-density was 23.3 percent, as against the rural tele-density of 1.3 percent.
Planners and implementers are well aware of the pitfalls of this digital divide,
particularly when a large percentage of India's population lives in rural
areas. Several plans aimed at increasing the penetration of telecom in rural
areas are chalked out from time to time.

This thinking has led to the evolution of services, which can help more
people get connected. With the advent of mobiles, the STD PCOs in the urban
areas are facing tough times. So along comes the mobile PCO. Pushcarts with
wireless phones that can work within the confines of distance limitations of one
telecom tower move around and people can make phone calls from them. There are
about 1,200 such booths in Delhi and 600 in Andhra Pradesh, and Reliance is
planning to launch such booths in Maharashtra in the near future.

Another variation of these pushcart booths is 'info-carts'. Media Lab
Asia has set up a mobile Internet kiosk mounted on an ordinary bicycle. The 'onboard'
computer is equipped with a unidirectional antenna for Internet service and is
powered by specially designed all day battery. Ten such 'info-carts' are
plying in villages around the campus of IIT in Kanpur. It has been planned to
increase the number of 'info-carts' to 50 soon. These carts are likely to
benefits farmers, who can access the Internet for agricultural problems, check
food grain prices, obtain weather forecasts and even get medical help.

Interesting examples and good reading - but are they enough to create music
from the much beaten drum of 'rural penetration' ? Maybe not. The efforts
being made, at present, have some major drawbacks. One is that experiments do
not always lead to a widespread adoption. They educate, they make people aware
but they do not result in purchase and usage. There are many rural telecom
projects like e-chaupal, N-Logue, Akshaya in Kerela, Bhoomi in Karnataka, Aksh
Broadband, Jagriti in Punjab etc. As part of these projects, the connectivity to
rural areas is through satellite, microwave links, copper, fibre etc. depending
on availability. But an analysis by TRAI (2004) shows that these projects are
not self sustainable and are at best scattered attempts to achieve rural
connectivity.

That will happen when there are real benefits that accrue to a large number
of customers. Pull has to be created by great pricing and greater benefits. And
that would need useful applications. The need for only voice connectivity maybe
limited but coupled with data and video, which can be used for education and
health, it may increase dramatically. Individual users in rural areas may not
want to spend much but twenty families may be a viable unit.

Pull generation is also required at the service provider level. Present
policies are too much stick and too little carrot. The first level where pull
generation is required is at the service provider level. It has to become
worthwhile for suppliers to move into the rural areas at a faster rate. There is
a clear indication that potential exists in the country for 200 to 250 million
telephones. The Government has set 2007 as the target year for achieving this.
This would be guided by 150 million wireless based telephones. This translates
to an average of 4 million connections per month. The current average is
something like 2 million per month.

What is needed is a rural connectivity policy, which can be very different
from the urban one. It should amongst other things dwell on taxation benefits,
low interconnect charges, better financial facilities, use of all means of
communication like VSATs, mobile connectivity and much more. It should encourage
all forms of communication — voice, data and video - and encourage the
creation of useful applications. Cheapest forms of communication like VoIP
should be freely permitted. To the extent possible, the Internet and its useful
applications should be offered by the same service providers to economically
benefit the provider and user of services.

Create the business magnet, and business will follow.

With inputs from Saswati Sinha