Why Small is Beautiful



In the last few issues, we have talked new technologies, and Wi-Fi has stood
out tall. Worldwide, the number of wireless access points is rising
exponentially, and what’s perceived today as a luxury for a few laptop-toting
gentry will soon be a utility that’ll be tough to do without–similar to what
mobile telephony did with communications. In the next few issues, we will talk
Top 20–revenue-based rankings of the country’s top IT groups and companies;
analyses of key segments that ruled the infotech space; financial performance of
listed IT companies; the growth drivers that stood out; and forecasts for the
ongoing year.

"Thinking
IT for the masses is tough–we have a billion people, but barely 25
million phones, under 2 million Net connections…"

For the moment, let’s shelve this focus on the high-end, and take time out–to
speak of the impact of IT where it matters most… Of projects ambitious and
bold, seeking to redefine not just the lives of millions in rural India, but to
make a marked difference to their contribution to the country’s GDP. If that
appears optimistic, get a load of this–a good portion of the impact is already
being made… For published proof of this, check out the Digital Divide series
being carried in Dataquest these past few issues (Part V in this issue, Pages
22-29).

Think India, think tough… 1-billion tough

Anyone thinking ICT-for-the-masses has daunting numbers to contend with–the
second-largest population on the planet, well over a billion people; barely 25
million telephones; fewer than 2 million Internet connections (most confined to
a hundred of the largest cities). BSNL and private sector ISPs are just about
breaking even in providing services in their circles–stretching the same
outside major metropolitan areas would mean heavy losses. This leaves a majority
of the country’s expansive countryside with negligible connectivity.

The basic cost of providing conventional telephone and Internet connections
comes to Rs 35,000 per line, implying that the service provider would require
monthly revenues of about Rs 1,000 per line to break even. As a monthly payment,
this is affordable to barely 2-3% of Indian homes, and that in cosmopolitan
areas. In contrast, cable TV connections have jumped to about 50 million in
barely a decade–attributable to low monthly subscription fees and an active
market for low-cost TVs.

The upshot–televisions and cable TV are affordable to 60% of Indian homes,
not only in metropolitan areas, but also in small towns and rural areas.

Against this backdrop, organizations like IIT Madras–which has spawned
ventures like Midas Communications, TeNeT and Analog Devices–have been among
the few to pick up the gauntlet, creating and adapting economical technologies
like WLL.

The result–the proliferation of over 500 kiosks across smaller cities and
rural India, with Prof Ashok Jhunjhunwala projecting an explosion of growth; to
100,000 such kiosks in a few years.

These kiosks service a wide spectrum of requirements–basic telephony;
information on educational courses; mandi rates; rail bookings and confirmation
checks, facilitation of birth/death certificates and other government-facing
paperwork, online classrooms and education; entertainment with film shows on
weekends… it’s a long list. And one that is growing–as people understand
the Net more, and the impact and usage of its application on their daily lives.
Watch this space for the next few fortnights for details of some outstanding
projects.

Rajeev Narayan
The author is the Executive Editor of Dataquest 

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