Rural Development

This summary is part of a research project carried out between March and October 2006 in support of the International Institute for Communication and Development (IICD), one of The Communication Initiative (The CI)'s partners.

According to this case study, rural telecommunications infrastructure in India is typically only installed through contractual licensing obligations to the government. N-Logue Communications Ltd., however, has developed a for-profit business model for establishing rural connectivity based on demand. N-Logue’s mission is to enhance the quality of life of rural Indians, which it aims to fulfill through the installation of a profitable network of wireless internet kiosks throughout rural villages in India.

Through its three-tiered business model, local entrepreneurs play a key role by investing in and helping to manage the network. At the top tier, n-Logue has responsibility for managing overall operations; at the second tier, local service providers (LSPs) set up the infrastructure providing connectivity; and at the third tier is the village, where local kiosk owners supply the rural population with information-based services.

n-Logue has developed this business model to be scaleable, financially viable, and sustainable, in contrast with government and non-governmental organisation (NGO) efforts to provide rural connectivity which are vulnerable to changes in political will and funding availability. Through ensuring its own and its partners’ profitability, n-Logue plans to build a sustainable rural internet network and thus help to bridge the digital divide.

Key aspects to n-Logue’s business model are:

• Appropriateness of technology;
• Relevance of services;
• Income generation;
• Strategic partnerships.

To provide its internet protocol (IP) network backbone, n-Logue uses a cost-effective fixed Wireless Local Loop (WLL) technology called corDECT, developed by the Telecommunications and Computer Networks (TeNeT) Group at the Indian Institute of Technology in Madras. Supporting simultaneous data and voice channels to subscribers within 10 kilometres of the broadcast location, the range of this point-to-multipoint wireless radio frequency technology can be extended to 25 kilometres by using a repeater. corDECT is particularly well-suited for use in rural areas due to its affordable costs, low maintenance requirements, and ease of deployment.

n-Logue plays the role of a full-service provider, as it facilitates a range of relationships between its partners at all levels. In addition to having responsibility for licensing and regulatory issues, the company often partners with hardware supplies and banks in order to provide kiosk owners with more accessible loans and equipment. n-Logue also develops local language content with the aim of increasing kiosk usefulness for societal sectors.

There are several challenges that n-Logue faces in developing a kiosk-based network that allows the benefits of information technology (IT) to be leveraged for rural development and in maintaining its aggressive rate of growth.

Human Capacity

The capability of the kiosk operator is perhaps the greatest determinant of kiosk profitability. This person must perform the roles of salesperson, teacher, computer professional, service provider, and marketer. The LSP must also understand the business thoroughly and be prepared to market aggressively in order to expand the subscriber base. Additionally, n-Logue must be able to retain qualified employees to keep pace with the company’s growth.

Managing Growth

n-Logue’s success in managing its growth depends on its ability to rapidly put into place management systems and processes. The effect of external factors such as village size and the availability of electricity that could impede the company’s growth must also be minimised. The threat of competition is minimal, as local telecommunication companies are electing not to aggressively expand into rural areas. Additionally, n-Logue has an advantage over competitors due to its partnership-building experience and capabilities, and its ability to scale.

As the company moves forward and scales, n-Logue is in a position to leverage new and existing technology to better support rural development in the fields of finance, agriculture, health, civil society, and e-government. The creation of new partnerships with corporations, government, and NGOs could also leverage n-Logue networks to further develop rural areas.