TECH TALK: Mass Market Internet: Building the Mass Market Internet – 1

The Internet in India needs a dramatic rethink if we are going to achieve a penetration which can have significant economic impact on our people. The five components that are required to make this happen: low-cost access to the Internet via cheaper devices, an alternate access network which bypasses the telco and cellco thus eliminating the local call charges, Internet community centres, payment systems to facilitate ecommerce, and applications and services which make a difference to the lives of the masses in India. The cost of access and these services must be no more than Rs 250 per month. If we can achieve this price point, I think we can reach out to 100 million people in 3 years. Let us examine each of these areas further.

We need low-cost access to the Net. We discussed the need earlier for a device which can be rented for Rs 150 per month to homes. This device needs to do just two things: connect to the Internet, run a Web browser. A useful third thing would be to be able to “output” on to a printer or a memory device which can then be printed later.

Economic Model
How can we rent this device out at Rs 150 per month? Assume that the cost will be in the region of USD 50-70 (Rs 3,000). We can charge Rs 2,000 up front, of which Rs 1,000 is a one-time payment, Rs 1,000 is an advance for ecommerce given back to the user in the form of a smart card with the cash loaded on to it. This also bootstraps the ecommerce part of our business. Minimum usage is for 12 months. Thus, in 12 month, at a minimum, we would have recovered Rs 2,800 from the user. This excludes the ecommerce margins that we are likely to have. The only issue here is that people may stop paying us after a few months in which case we lose out. One way to prevent this is to give the ecommerce credit to the user as Rs 100 per month over 12 months. If I know that I need to use it to get that credit, I am more likely to do so.

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Published by

Rajesh Jain

An Entrepreneur based in Mumbai, India.