The article given below has been co-authored Balasubramaian V and Saurabh Agarwal.

"India is a sachet economy." Before the advent of sachets, as common a thing as shampoo was considered a luxury by the majority of Indians. A typical Indian would not have enough money to indulge in bulk purchases. India buys little, consumes it, and only then makes its next little purchase. Information can’t be treated differently than any other product. We have to sell the internet in byte sized portions in order to exploit the emerging market in information.

What we propose is simple. One man riding a motorcycle, giving answers to any question put to him using the power of the internet through a PDA (Simputer) or an internet enabled mobile phone. And he will be doing this for the meager sum of Rs.1 for an answer. The World Wide Web is not only about data from around the world. It is also about data about the street down the road and the world all around us. It is this local information that is most appreciated and useful. In conjunction with providing answers, tie-ups with local banks, it is possible to provide internet banking to the poorest of the poor, reducing cost of transaction for this neglected section. A telecom company can leverage its tremendous reach and network to provide relevant information at prices that would have been unheard of even 5 years ago.

Reality Check

The sad reality about ICT projects today is that the vast majority are doomed to failure and death. We cannot blame all of them on poor implementation. The problem needs to be looked at a macro level. The question that needs to be answered is “Are there any takers for ICT/ICT enabled services at village level in the emerging world.

Though there is tons of literature and talk on how the bridging of “Digital Divide” can uplift the "Bottom of the Pyramid" (BOP) living at the subsistence levels with a market oriented approach by Private corporations and at the same time sustain the profit motive of the latter, in reality it is possible only under the following conditions:

1. The BOP intervention should be in the core products/services that the corporation operates in
2. The BOP intervention should impact the daily life of the person or the revenues he makes

The above two points are key to any successful BOP business.

BOP on a canvas

Understanding BOP and its characteristics is the first step for any strategy to be formulated targeted towards it. These are the typical characteristics of BOP population:

BOP has significant unmet needs
Most of BOP lacks access to otherwise basic needs like organized financial services/banking, healthcare, ICT (Information and Communication Technologies) like telephones, permanent housing and even water.

Informal markets
Most BOP population depends on informal markets to sell labour or produce like crops. This informality entraps them more into poverty with middlemen exploiting them to the core.

BOP Penalty
This is a unique penalty. Most in the BOP pay significantly higher prices than their wealthier counterparts for the basic goods and services they have access to. This penalty is either in monetary or in the form of effort. For instance, BOP population has to travel more to access basic services like healthcare and banking and hence pay more relative to other tiers in economic pyramid. In other instances, they pay exorbitant fees for the credit or the remittances from their dear ones. This penalty is attributed to extra effort required to extend the services to remote locations where most of BOP resides.

Model for success

What?

• Providing a roving salesperson, who collects local information on a mobile communicating device and utilizes this information in conjunction with the world wide web to provide answers and information at a price point of Rupees 1 per question asked.
• Provides banking services via a partnership with an existing bank for local deposits and cash withdrawals by using a biometric Near Field Communication Device and a mobile phone.

Why?

• Provide increased opportunities to distribute local goods and services profitably
• Remove Information inequality and showcase the power of the internet for profit
• The average distance from bank to village is estimated to be 10 kms. This prevents rural masses from accessing banking systems. By using the internet, we bypass the BOP penalty and reduce costs significantly.

How?

• Locally adapted content and context: The roving salesman captures local event information as well as commodity prices of major locally produced commodities. On collecting this information, he updates it in an online database, which will be used to answer local queries
• Building on existing systems: The roving salesman uses existing internet resources such as Wikipedia and Google to answer generic questions on science, nature and technology. Also, for e-banking transactions, using existing SMS based updates and a biometric scanner would be used rather than a new interface and back-end, which would make the operation of the process unviable
• Access and empowerment: Ensuring that information reaches and empowers poor people, and enables them to participate in decision-making processes
• Costs and financial sustainability: This program will have to be committed for by a telecom services provider, thereby ensuring that costs remain under control.

Conclusion

Telecom companies are currently going through a frenetic growth phase. The question of sustainability of this growth however remains. It is clear that the need for increased revenues will push the telecom majors into hitherto virgin markets. We believe that by targeting the vast underclass that lives on the wrong side of the digital divide, a synergistic partnership can be forged. Telecom companies will reap the massive values that unlocking this huge customer base will unleash. At the same time, improved efficiencies due to better access to information and finance makes the formerly underprivileged more capable of competing and succeeding in the flat world of tomorrow.

References

1. Changing the Pyramid, www.changingthepyramid.org
2. V. Kasturi Rangan, Rohithari Rajan, Unilever in India: Hindustan Lever's Project Shakti--Marketing FMCG to the Rural Consumer
3. Dhawan, Rajat, Chris Dorian, Rajat Gupta, and Sasi K. Sunkara. “Connecting the Unconnected.”
4. Cohen, Nevin. “Rural Connectivity: Grameen Telecom’s Village Phones.” World Resources Institute, June 2001 (online at http://www.digitaldividend.org).
5. C.K.Prahalad and Stuart L. Hart, “The Fortune at the Bottom of the Pyramid,” Strategy + Business, Issue 26, January 2002.
6. Best, Michael, and Colin M. Maclay. “Community Internet Access in Rural Areas: Solving the Economic Sustainability Puzzle.”
7. Howard, Joy, Erik Simanis, and Charis Simms. “Sustainable Deployment for Rural Connectivity: The n-Logue Model.” World Resources Institute, July 2001 (online at http://www.digitaldividend.org).
8. “Option on the Future: The Role of Business in Closing the Digital Divide.” Boston Consulting Group, January 2002.
9. Khelladi, Yacine. “Community-Based Content: The Infocentros Telecenter Model.” World Resources Institute, July 2001.