National Optical Fibre Network: viable business models for inclusive growth

9 Jun

 

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A report on the role of broadband for inclusive growth in India, ‘Creating viable business models for inclusive growth through the National Optical Fibre Network’ by CII & KPMG, was recently released by Mr MF Farooqui, Secretary, Telecom. 

The report explores how, using the national fibre infrastructure, commercially feasible business models for relevant e-services in areas such as education, healthcare, banking and agriculture can be built on the foundation of a Public-Private-Panchayat ecosystem.  This report is expected to serve as a useful reference for the Government and the industry as they jointly deliberate on how best the national fibre network asset can be leveraged.

Key Highlights:

  • With its promise of delivering speed up to 100 Mbps, the National Optical Fibre Network (NOFN) has significant potential to deliver e-services to India’s six lakh plus villages in the areas of education, healthcare, banking and agriculture. These services can speed up the Government’s inclusive growth agenda while generating rural employment, skill-building and growth.
  • Private players may have been hesitant in certain instances to venture out into the remote areas as the business case of being able to provide scalable, profit-driven services appears uncertain. However, several e-service pilots have been trailed successfully on a limited scale and with a non-profit motive, indicating that there is demand for such services
  • To scale up these e-services, a Public-Private-Panchayat ecosystem – comprising the Central and State Governments the providers of enabling products and services (both public and private), and local governing bodies (Gram Panchayats) – needs to come together and build commercially sustainable business models that provide affordable services to the end-users and also generate adequate commercial and social returns
  • In Healthcare, telemedicine services involving remote consultations using two-way video conferencing can address the dual challenges of low doctor-to-patient ratio and the lack of access to specialist advice in rural healthcare delivery. Such telemedicine units can be set up directly by private healthcare service providers or offered through the Common Service Centres (CSCs)s, with the Village Level Entrepreneur (VLE) leading the service.
  • In Education, NOFN can enable remote learning environments in Government-run rural schools, and thus address the challenge of high pupil to teacher ratio and declining learning quality. Such ICT-enabled environments can be operated by private education service providers. High-speed broadband can also enable online vocational training imparted at the CSCs for a nominal fee
  • Private business correspondents can use connected point-of-transaction terminals to conduct nearer-home cash-in-cash-out banking transactions for the rural population. Such models already exist, but NOFN can further boost these models by resolving connectivity issues. There could also be a model where private sector banks integrate their IT systems with that of the Post Offices to offer a bouquet of banking-related services to rural customers
  • In Agriculture, broadband can address the high information asymmetry existing among farmers by providing them with timely information and advice on relevant topics. There could also be software tools provided by technology companies for farm management, soil analysis, seed analysis, etc. These services could be provided through kiosks run by rural entrepreneurs or through the CSCs at a nominal fee charged to the farmers.
  • While many of these business models could be self-sustaining, a few would require some money to be infused in the hands of the consumer to generate demand. The report proposes the possibility of channeling funds from existing Government programs such as Sarva Siksha Abhiyan and the new National Health Mission (a new program created in FY14 combining the National Rural Health Mission and the National Urban Health Mission) to create this corpus.
  • For many of the priority sectors, the existing network of nearly 1 lakh CSCs can form a good starting point. Equipped with computers, basic peripherals, Internet connectivity, and a VLE owning the centre, these CSCs can act as multi-service delivery points for several e-services. High-speed broadband access is expected to broaden the range and improve the quality of e-services available at these CSCs.
  • Recognizing the potential of coupling the Government’s social imperatives with the private sector’s commercial interests, and appreciating the need to bring together multiple stakeholders from the government and the private sector to this effect, the report proposes a CII-Government Working Group with a well-defined set of objectives and responsibilities. With such a diverse, yet cohesive body at the helm of planning and execution, it will be possible to bring the multiple facets of expertise, decision-making and administrative guidance that will be essential to harness the NOFN into a medium of holistic inclusive growth.

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Click here to download the report

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