KonnectIndia

To open up the possibilities of the internet to

the bottom of the pyramid.

Submitted By,

Balasubramanian V
College: VGSOM, IIT Kharagpur
Email: balasubramanian.venkatadri@gmail.com
Mobile: +91-9932571945

Saurabh Agarwal
College: VGSOM, IIT Kharagpur
Email: saurabh789@gmail.com
Mobile: +91-9932571945
 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

Selling Internet in Sachets 2

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 company’s core business activities and should offer a
significant revenue potential for the company
• The product must address a commonly used recurring need for the customer and must
offer significant value which was otherwise absent prior to the BOP initiative

Selling Internet in Sachets 3

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 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.

1.1 Service Offering Objectives

• Build a service that delivers the internet that can be used affordably by anyone, regardless of
age, 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

Selling Internet in Sachets 4

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 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.

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

Selling Internet in Sachets 5

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 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.

4. Successful BOP business strategies

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

Selling Internet in Sachets 6

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.

Selling Internet in Sachets 7

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 among
the have nots of India
• Secondary Research to find the BoP programs that worked, and delivered demonstrable
results.

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 haven’t 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

Selling Internet in Sachets 9

Curriculum/ Training Finding staff (volunteer and Marketing to the community
(Technology) paid)
Curriculum/ Training (General Creating a network of advisors Public relations for
Education) prospective funders
Content Learning best practices from Awareness of resources
other (technology content)
Localization Staff training Awareness with corporations/
local businesses
Security (protection from Retention Networking with government/
scams) 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 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.

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.

Selling Internet in Sachets 10

6.3 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.

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.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.

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