Bridging the Digital Divide
Key Government Initiatives: Strategic Proposal
Prepared by
Najmuddin Jabalpurwala
Table of Contents
Project Overview
Digital Divide – Key Indicators
Key Challenges
Broadband Penetration – Building Blocks
Building Rural Demand
Improving Returns on Investment
Mitigating Concerns of Service Providers
Suggested Roadmap
Project Overview
Digital Divide – Key Indicators
Parameters Current State
One of top 5 most populated nations (250 million )
Size & Population GNI approximately $1,100 per capita
Sizable population in age group 25-55 years
Urban v/s Rural 30% in urban areas v/s 70% in rural
Less than 10.5 % broadband penetration across the nation
Broadband Penetration Less than 1 % penetration in rural areas
Only 2.5% broadband connections till May’08
Key Obstacles
Low PC penetration
Supply Side
Inadequate telecom infrastructure
Lack of basic education to adopt advance ICT technology –
Language barriers
Demand Side Lack of effective demand to justify investment by private
players
Lower disposable income-Affordability issues
Sources: World Bank – ICT Snapshot; Government Websites
Three Key Challenges have been
identified
1. Building Demand in Rural Areas
2. Improving Return on Investments
3. Reducing apprehensions of Service Providers
Key challenges need to be resolved to achieve success..
Broadband Penetration – Building Blocks
• Political Sponsorship •Policies & Acts
• Program priority •Technology / Standards
• Autonomous Regulation • Infrastructure
• Training
• Strong need for cheap • Industry Participation
communication options • Skill Sets
• Need for Information • Corporate Incentives
• Increase Agriculture •Innovative Revenue
operational efficiency Models
Improving ROI
Key Factors Hypotheses Potential Action Plan
-Currently demand is weak with a high cost to -Launch a nation wide initiative to
serve create awareness and
Low demand (volumes and pricing) and high communicate the benefits of
level of fragmentation broadband
Scale benefits difficult to achieve -Consolidate ‘points of presence’
Demand Side across rural areas to aggregate
-Due to geographic diversity, unable to meet
demand in remote areas demand
-Employ wireless. Satellite
broadband technologies to
provide remote access
-Infrastructure is not present – most ICT lines -Government owned cable
bypass the rural markets infrastructure projects across
-Low availability of ICT-enabled devices is a rural areas to prepare the platform
major impediment for speedy diffusion -Reduce import duties on ICT
-Significant investment is needed for the rural products such as handhelds/PDAs
markets and involve large pay off periods and to enable faster adoption &
Supply Side high financial risks penetration
-Operating costs such as bandwidth, network -Provide corporate tax benefits &
hardware & maintenance are very high. assured subsidies as incentives for
Service Providers
-Provide access to low interest
capital for operators to expand in
Mitigating Other Concerns of Service
Providers
Key Concerns Potential Causes Potential Mitigation
-Terrorism & related incidents are causing disruption of -Stricter law enforcement in rural areas to
services & potential damage to infrastructure protect core infrastructure during civilian
Volatile Law & outbreaks
-Security of business investments is perceived as risky
Order Situation -Political goons frequently demand favors and financial ransoms
- Adequate government backed insurance in
case of damage due to public unrest
from ICT establishments – perception of easy money
-Significant difficult to find rural labor trained in ICT -Government initiated professional training
technologies (hardware and esp. software) centers to impart basic ICT trainings
Availability of
-High compensation costs for convincing urban professionals to -Local schools to start courses on Internet for
skilled labor in locate to rural centers building talent pool
rural markets
-Enable local businesses with ICT to reduce
migration & boost employment in rural areas
-Kiosks considered as a community resource instead of -Government sponsored Kiosks
personal; hence difficult to frame a sustainable revenue model
-Provide services to promote E-commerce;
Revenue Models -Per capita ICT investment in rural areas higher due to value added services like voice & entertainment
for Rural additional costs such as power and lower capacity of consumers
-E-government services via user fees
payments to pay
-E-education services through local schools
sponsored by local councils
-Keeping pace with innovations in ICT technology can be costly -Involve global ICT players to learn best
Radical Changes in practices in selecting broadband technology
-Avoiding technology obsolescence by periodic upgrades calls
Technology for regular investments -Long term planning for technology
investments to avoid impact of changes
Potential Road Map
Key Action
2009 2010 2011 2012 2013 2014 2015
Areas
Build Rural
Demand
Lay basic cable
infrastructure
& setup kiosks
Improve ROI-
Invest in
Supply Side
Service
Augmentation
