1st prize winner

8/8/2019 1st Prize Winner

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KonnectIndia

To open up the possibilities of the internet to

the bottom of the pyramid.

Submitted By,

Balasubramanian V

College: VGSOM, IIT Kharagpur

Email: [email protected]

Mobile: +91-9932571945

Saurabh Agarwal

College: VGSOM, IIT Kharagpur

Email: [email protected]

Mobile: +91-9932571945


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Selling Internet in Sachets 2

Contents

Executive Summary........................................................................................................................ 3

1. The Idea: Selling Internet in Sachets ......................................................................................... 4

1.1 Service Offering Objectives.................................................................................................. 4

2. Reality Check.............................................................................................................................. 5

3. BOP on a canvas ........................................................................................................................ 5

3.1. BOP has significant unmet needs ........................................................................................ 5

3.2. Informal markets.................................................................................................................. 5

3.3. BOP Penalty......................................................................................................................... 6

4. Successful BOP business strategies............................................................................................ 6

4.1. Strong focus on BOP ........................................................................................................... 7

4.2. Local value creation............................................................................................................. 7

4.3. Providing access................................................................................................................... 7

4.4. Partnering with other stake holders...................................................................................... 8

5. Research Methodology ............................................................................................................... 8

5.1 Primary Research.................................................................................................................. 8

5.2 Secondary Research.............................................................................................................. 8

5.3 Analysis & Findings ............................................................................................................. 9

6. Our Model for success .............................................................................................................. 10

6.1 What? .................................................................................................................................. 10

6.2 Why?................................................................................................................................... 10

6.3 How? ................................................................................................................................... 11

7. Conclusion ................................................................................................................................ 11

Glossary of terms .......................................................................................................................... 12

References..................................................................................................................................... 12


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Executive Summary

We present an idea of Selling Internet in Sachets This will be done by a roving company

representative of a telecom company who will use a mobile communication device in

conjunction with locally updated information to provide information from the internet to the

Bottom of the Pyramid at a cost of Rs 1 per information piece provided.

The telecom company can also partner with a national bank in order to provide internet banking

transactions through the same mobile communication device, thereby opening up a huge

untapped market for banking services by dramatically lowered costs.

We base our strategy for providing the information to the masses on two fundamental conditions

that we state is necessary for any BOP project to succeed

The project must be part of the companys core business activities and should offer asignificant revenue potential for the company

The product must address a commonly used recurring need for the customer and mustoffer significant value which was otherwise absent prior to the BOP initiative


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Selling Internet in Sachets --- Capturing

the BOP Market

1. The Idea: Selling Internet in Sachets

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 cant 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.

1.1 Service Offering Objectives

Build a service that delivers the internet that can be used affordably by anyone, regardless ofage, purchasing power, or level of technical proficiency.

Share knowledge among and between people in different regions Provide content and training that is relevant, localized and readily available Increase local efficiencies, leading to cost savings and improved economic conditions


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2. 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

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 corporationoperates in

2. The BOP intervention should impact the daily life of the person or the revenues he makesThe above two points are key to any successful BOP business.

3. 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:

3.1. 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

3.2. 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


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3.3. 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 accessbasic 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.

4. Successful BOP business strategies

The figure above shows the 4 pronged focuses that a successful BOP business strategy must havein order to succeed in this challenging marketplace.


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4.1. Strong focus on BOP

Enterprises aspiring to be successful in BOP markets should reinvent their products and services

to suit the BOP needs.

Caselet: Smart Padala is the world's first international cash remittance service linked to

the mobile phone. It is the newest way of remitting money from a sender abroad to either

your beneficiary's SMART Money account or SMART cell phone in the Philippines .

4.2. Local value creation

The enterprise should be able to add value to the community it operates in. Strategies like

franchising anddelivering through agents create successful micro enterprises.

Caselet: i-Shakti: In order to impact both livelihood opportunities and living standards

of rural communities 'i-Shakti' - an IT-based rural information service has been

developed by HUL. The premise of the i-Shakti model is to provide need based demand

driven information and services across a large variety of sectors that impact the daily

livelihood opportunities and living standards of the village community.

4.3. Providing access

Most of BOP population does not have access to goods and services that their wealthier

counterparts have. An instance is easy credit where in banks shy away from BOP customers.

Caselet: Bhoomi, the self-sustaining e-governance project for the computerised delivery

of rural land records is a novel project. The increasing revenues from the Bhoomi project

testify not only to its success, but also to the fact that the foundation for e-governance in

the state has been successfully laid.


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4.4. Partnering with other stake holders

Many other stakeholders like NGOs, government, etc., are active participants in BOP space.

Enterprises operating in BOP market should actively partner with these stakeholders simply

because they have huge expertise of this space and will prove to be key partners in success.

Caselet: Grameen Telecom (GTC) is a not-for-profit company in Bangladesh established

by Dr. Muhammad Yunus with a partial stake in Grameen Phone (GP). GTC has driven

the pioneering GP program of Village Phone that enables rural poor to own a cell-phone

and turn it into a profit making venture.

5. Research Methodology

To facilitate the development of an informed strategy of the idea, we engaged in process to

assess the needs of BOP people. In particular, this process involved:

Primary Research of the local area to evaluate what the reality of the digital divide amongthe have nots of India

Secondary Research to find the BoP programs that worked, and delivered demonstrableresults.

5.1 Primary Research

Primary research consisted of over 50 face-to-face and phone interviews with key stakeholders

and regional experts. Each interview lasted approximately 10 minutes and covered key topics of

sustainability, technology and management development.

5.2 Secondary Research

In addition to the primary research interviews, we also undertook a comprehensive secondary

research exercise, identifying and utilizing a combination of print and online resources about

initiatives like iShakti.


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5.3 Analysis & Findings

We found that most of the people are not aware of the change information received from the

internet can bring in their daily lives. Infact many havent even heard of the term Internet.

Demand is highly sensitive to price. The user population often has low literacy and many languages or dialects may coexist

within the serving area.

In synthesizing the needs of BOP, we focused on six major categories of needs:

TECHNOLOGY NEEDS FUNDING NEEDS INFRASTRUCTURE

NEEDS

Software In-kind donations Location/ facilities

Technical assistance Cash donations Hardware

Help desk Financial strategy assistance Printers

Viruses Business planning assistance Connectivity

Downloads Security

Copiers

KNOWLEDGE CAPITAL PEOPLE AWARENESS


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Curriculum/ Training

(Technology)

Finding staff (volunteer and

paid)

Marketing to the community

Curriculum/ Training (General

Education)

Creating a network of advisors Public relations for

prospective funders

Content Learning best practices from

other

Awareness of resources

(technology content)

Localization Staff training Awareness with corporations/

local businesses

Security (protection from

scams)

Retention Networking with government/

policy makers

6. Our Model for success

Below we have summarized what we believe is one way by which we can provide access to the

internet and information to the Bottom of the Pyramid. This is split into 3 major questions.

6.1 What?

Providing a roving salesperson, who collects local information on a mobilecommunicating 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 andcash withdrawals by using a biometric Near Field Communication Device and a mobile

phone.

6.2 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.


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6.3 How?

Locally adapted content and context: The roving salesman captures local eventinformation 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 suchas 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 poorpeople, and enables them to participate in decision-making processes

Costs and financial sustainability: This program will have to be committed for by atelecom services provider, thereby ensuring that costs remain under control.

7. 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.


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Glossary of terms

BOP Base/Bottom of Pyramid

ICT Information and Communication Technologies

GTC - Grameen Telecom

References

1. Changing the Pyramid, www.changingthepyramid.org2. 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 theUnconnected.

4. Cohen, Nevin. Rural Connectivity: Grameen Telecoms Village Phones. WorldResources 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 RuralConnectivity: 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. BostonConsulting Group, January 2002.

9. Khelladi, Yacine. Community-Based Content: The Infocentros Telecenter Model.World Resources Institute, July 2001.

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