Background

Aksh Optifibre Limited (AOL) is India’s second largest manufacturer of Optic Fibre Cable (OFC). It was set up in 1986 and has three state-of-the-art manufacturing plants in Rajasthan. Aksh Broadband Limited is an offshoot of Optifibre Limited intended to connect every Gram Panchayat of Rajasthan to the District and State Headquarters. As an integrated solution provider, Aksh provides the hardware, software and allied solutions for total dedicated connectivity. Gramdoot aims to bridge the digital divide between rural India and the rest of the world by providing e-governance and rural convergence through broadband services on OFC, connecting 407 Gram Panchayats in Jaipur district of Rajasthan.

Objectives and Goals

• To help bridge the digital divide between rural India and the rest of the world by creating the infrastructure.
• To provide cable TV, telephony and Internet connectivity to all Gram Panchayats.
• To develop a business model in rural broadband connectivity.

Planning

Gramdoot (meaning “messenger for the villages”) was launched on 3 January 2002 by the Chief Minister of Rajasthan at Rampura Dabri village. The project was launched with three kiosks. A major drive to lay down OFC over electric poles was taken on a war footing; and 3,100 km long OFC had been laid at the time of the study, connecting all 407 Gram Panchayats of Jaipur district. The district has a geographical area of 11,151 sq km and is divided into 13 taluks (or tahsils) and 407 Gram Panchayats for administrative reasons. At the time of the study, 200 Gramdoot centres were operational.

Services Provided

Gramdoot provides numerous services. Complaints to the Tehsil or District Headquarters can be made from the Gramdoot kiosk. With this facility, problems regarding hand pumps, electricity supply and health related services, etc., can be resolved easily at a nominal cost of Rs 10. Villagers can also file applications for obtaining various certificates such as  caste/domicile/income certificates at Rs 20. Presently, 34 types of application forms are available online to the villagers at a cost of Rs 20 with a facility to transmit them electronically to the single window system at the District Collectorate. Land records (jamabandhi) are available from the centre at a cost of Rs 20. The Network Operation Centre (NOC) of the project has a mirror server of the land record server kept at the NIC. The patwari (village revenue official) visits the kiosk twice a week (after a Government Order issued in June 2002) and signs the documents which are then sent to the villager through a courier. Prevailing market rates of agriculture commodities like grains, pulses, vegetables, fruits in the agriculture commodity auction centre (mandi) are available at Rs 5. Gram Daak (Hindi version of e-mail for the villagers), Gram Haat (online buying and selling of the products in rural areas) and Vaivahiki (matrimonial alliances) services are also available at the centres. There is a databank of information about the government’s programmes/schemes, agriculture information and pehchan. An authentic database of villagers with their photographs is also available. High speed non-dialup Internet access at 70  Kbps is available to the villager at a cost of Rs 30 per hour. Web conferencing facility at a rate of Rs 5 for three minutes is also available. A 32-channel cable connection is also made available at a cost of Rs 80 per month. Computer training courses are available along with e-services like photo studio (Rs 10 for four passport size photos and Rs 15 for one  postcard size photos), Janampatri/horoscopes (Rs 51) and computer games (Rs 5 per game).

Target Group and Intended Beneficiaries

The intended target population includes all the villagers residing in 407 Gram Panchayats. At the time of the study, villagers residing in 200 Gram Panchayats (387 villages) were the target population.

Institutional Arrangements

The organization is headed by the Chairman and Managing Director of the Aksh group of companies - AOL, Aksh Networks Limited (ANL) and Aksh Broadband Limited (ABL). Each company is headed by a Director. Aksh Broadband Limited has a Senior Vice President (Jaipur Operations) who heads the Gramdoot project in Jaipur district. Under him are the NOC Incharge (customer care, server room management, VoIP, Cable TV), the Accounts Manager, the Marketing Manager, the HRD Manager and the Manager (Stores and Purchase). There are around 42 employees who work in all these units put together. There are four Gramdoot Managers (salary Rs 10,000 per month) and four Network Maintenance Supervisors (salary Rs 10,000 per month, as well as a support team of three to five technicians. Each of the 200 operational Gramdoot centres is manned by a Gramdoot operator (salary Rs 2,000  per month). The Senior Vice President liaises with the state government and district administration, and Gramdoot Managers with the tahsil-level officials for e-governance services.

Technologies

AOL has provided the Optical Fibre and ANL has laid down 3,100 kms of OFC, covering all 407 Gram Panchayats of Jaipur district. OFC carries four fibres (for Cable TV, for computer network, for telephony and for redundancy). The OFC are laid over electrical poles for which ABL pays Rs 100 per month per pole to the Rajasthan State Electricity Board. At the Gramdoot centre level, connectivity is provided to Cable TV connections through an RF cable. The network uses Optic Node (used for Cable TV transmission), Media Converters and Switches (used for computer network) and VOIP (used for telephony) at Gramdoot kiosks. At all major branches, a Fibre Distribution Management System (FDMS) is used. Seetapura has a NOC for the whole project. Jethpura has another parallel head-end NOC. 1.2 Terra Bytes per second speed is possible in the network in each of 407 Gram Panchayats. At the time of the study, the system was restricting the broad band to 100 Mbps. The network provides intranet connectivity to 200 operational Gramdoot centres through Random Access Server (RAS) and LAN. Seetapura NOC has taken a leased line (64 Kbps) from STPI. ABL provides another leased line to district administration. The network uses software produced by Dristee Foundation. The software runs on Windows NT and the client end works on Windows Explorer. Seetapura NOC servers are linked through leased line to the Land Record Server maintained by NIC in the district headquarters. ABL has provided Pentium III computer, ink jet printer, web camera, head phone, UPS backup and telephone connections to each of the 200 operational Gramdoot centres. The whole network is maintained by the sister company ANL. All the services are maintained by ABL.

Primary Access Points

e-Governance services and other e-services are accessible to residents of 200 Gram Panchayats from the Gramdoot centres. These centres also provide Internet browsing and video conferencing/chatting facilities. Cable TV facilities (32 channels) are accessible to 7,000 villagers from their household TV sets in 187 villages. Telephony had not been made operational as at the time of the study.

Capacity Building

All 200 Gramdoots have been given seven-day training on hardware, networking, e-governance services, and cable TV operational aspects at the time of induction. Gramdoot managers and Network Maintenance Supervisors are provided with on-the-job training.

Constraints and Implementation Challenges

The project faces some challenges, even after 20 months of operation. The project has laid down 3,100 km long OFC (with 100 Mbps bandwidth) to all 407 Gram Panchayats without any need assessment and economical feasibility assessment. ABL has bought 3,100 km OFC from AOL and the cable laying work is done by ANL. The most important constraint was its finances. ABL has mobilized its own resources to the tune of Rs 260 million. The decision to lay OFC underground was discarded even though it would have resulted in OFC and network safety and security. In place, OFC has been laid on electric poles as it was four times cheaper than underground cabling and 10 times faster to lay down. But this has resulted in a catastrophic scale of cable cutting by disgruntled cable TV operators already working in rural areas, by thieves to sell it in the black market and by dissatisfied cable TV consumers in rural areas. The OFC over the electric poles is also prone to damage by vehicles and external forces. The situation has become so critical that of 200 Gramdoot centres, at any point of time, only 80-85 have connectivity. The laying of OFC on electric poles has also incurred enormous recurring costs due to payment of annual rent to RSEB and maintenance cost.

ANL maintains the network, but their four teams have proven ineffective. The average time taken by ANL to rectify damaged cables (through splicing machines) is two to four days. ANL and ABL are at loggerheads about poor maintenance. Now, there is a possibility of merging ANL into ABL. Initially, Gramdoot centres were allocated and marketed by Dristee Foundation. ABL claims 61 of these Gramdoots were unwanted and anti-social elements. Thirty-one have been dismissed after negotiation and compensation. ABL also claims Rs 1.6 million from Dristee. The wrongful selection of Gramdoots in the initial phase of the project has created antagonism in the rural areas, and people have been damaging the OFC since then. Initially, cable TV subscribers were provided with pay channels also (like STAR, Zee and Sony) but these popular channels have been discontinued since March, 2003 due to a hike in pay channel charges. This has resulted in dissatisfaction among the consumers.

Various e-governance services took a long time to start up. Three of the services (land record copy, complaint registration, and submission of applications) have become possible. But ABL remained unable to launch an effective publicity campaign to popularize these services in the rural areas. The back-end processing of all these services remains manual. Land records or jamabandi are physically taken by Gramdoots to village revenue officials for counter signatures. Similarly, complaints to the district administration are handled physically by the concerned officials and Gramdoots visit tahsil offices to deposit applications for caste/income/domicile certificates. There was an organizational crisis in ABL. The Senior Vice President was replaced in May 2003 and three deputy general managers’ services have been discontinued. Many staff members have left the project at different points of time.

The Intranet in 407 Gram Panchayats provides 100 Mbps connectivity. The network has a bottleneck when it comes to Internet browsing as leased lines taken for the network are only 64 kbps. ABL has not come out with any structured computer courses, thereby losing a huge potential of computer education in rural areas. Rural telephony over this infrastructure should have been a priority. ABL has been considering a tie up with Shyam Telnet (a basic telephone service provider) for some time.

Project Outcomes

ABL has invested heavily in Gramdoot without having any specific business model. Rs 185 million have been invested on the OFC (at a cost of Rs 60,000 per km); Rs 20 million have been spent on other equipment (ADFA, amplifiers, etc.); and Rs 35 million have been spent on buying computer equipment for 120 Gramdoot centres (around 80 centres are using rented computer equipment). Around Rs 260 million have been spent on establishing the project. Around Rs 20 million is paid in salaries every year to 350 staff working in the project. The annual recurring cost on rent payable to electric poles is around Rs 10 million. Similarly, ABL is paying millions of rupees annually on the rental of shops for all 407 centers, rent on computer equipment in 80 centers, and electricity and telephone bills at 200 centers. The financial returns on these capital investments and recurring costs are less than what they should ideally be.

Transactions volumes are also low. There were only 447 complaints, 450 certificates and 1,040 land record copies issued in the 20 months prior to the study from 200 Gramdoot centres. This provided earnings of only of Rs 0.5 million to ABL in 20 months from the whole network. There are 7,000 cable connections (each paying Rs 990 annually). This has provided an income of around Rs 10 million since inception to the time of the study. The project’s early outcomes were disappointing and its  financial viability remains questionable. However, during the two years up to the time of the study, the project has achieved more. The number of services offered increased, the bandwidth to the NOC increased to 2 Mbps from the initial 64 Kbps, and the project has also conducted discussions with the Andra Pradesh government in an attempt to extend its scope.

Key Lessons Learnt

An important lesson from Gramdoot is that the provision of only volume bandwidth without a business model could be a losing proposition. Nevertheless, the project has also taught an important lesson that OFC laid down to villages could be used for entertainment (cable TV), information (intranet/Internet connectivity), and communication (telephony). Feasibility studies should always be carried out before investing huge amounts in creating infrastructure in rural areas. To a certain extent, the project also shows that e-governance services are difficult to manage in business-owned (or for that matter NGO-owned) projects. Gramdoot has employed kiosk operators (paying them an honorarium of Rs 2,000 per month besides paying rent, electricity and telephone bills and stationery charges), which discourages enterprise in managing these centres. Salaried employees at centres always result in poor performance. A franchisee model at the telecentre level is a better option.

Sustainability

The financial sustainability of Gramdoot is doubtful. The project has invested heavily in infrastructure and is spending considerably on annual recurring costs. On the other hand, the returns are less than Rs 15 million annually (which is even less than the recurring costs). Half of the infrastructure is unused, 207 Gram Panchayats have not been using any kind of service, even though four-fibre OFC has been laid in the villages. Unproductive expenditure on paying rent to hire space in these locations was still going on at the time of the study. Additionally, internal conflicts of the organizations, frequent changes at senior management levels, under-utilization of the capacity and lack of consumer satisfaction are likely to compromise the project’s sustainability further.

Replication and Scaling Up

This project has not been replicated in any other part of India. ABL is trying for loans from financial institutions/banks for expanding the services and network. The project aims to make the remaining 207 Gramdoot centres operational in six months. The project is also striving to add telephony to all 407 Gram Panchayats. The project has initiated a scaling up in Rajmundri district of Rajasthan and discussions were underway at the time of the study to develop a partnership with Lupin Pharamaceutical Ltd to take up another district. ABL was aiming to provide broadband services through OFC to all 32 districts of Rajasthan by 2005.

Recommendations

Immediate intervention for modification of the project model is required as it is undergoing a financial, organizational and managerial crisis. ABL should try to start the remaining 207 Gramdoot centres at the earliest (on a franchisee model). If only 50 percent of the centres are operational and if only 50 percent of the existing centres are struggling to ascertain network connectivity, than there are troubling times ahead. The maintenance of the cable network requires technically and managerially experienced staff for handling cable work in rural areas. ABL should try to make profit-sharing partnerships with existing cable operators in the rural areas of Jaipur (there are more than 15,000 cable connections in the hands of 20 cable operators). The management of network maintenance, especially efficient catering of cable cutting and amplifier stealing complaints, in an efficient manner has to be built up. The project should try to increase cable connections from 7,000 to 20,000 in one year and to 40,000 in two years by including popular TV channels in the package for the consumers.

Organizational restructuring is also required, as presently everybody is doing everybody else’s job. Role definitions at different management tiers have to be ensured, as they did not exist at the time of the study. Recurring expenditure should be reduced by cost-cutting methods. The project should stop emphasizing e-governance services, as they take time for become functional such that they can contribute returns on the initial investment. Instead, the project could develop e-health (telemedicine) and e-education (distance learning) through partnerships with educational institutions and hospitals.

The leased line of 64 Kbps between Seetapura head-end and STPI is not serving any purpose. It should be at least 2 Mbps (considering that OFC provide 100 Mbps speed in the Intranet). Through partnerships with Internt Service Providers (ISPs), the project should try to promote Internet connectivity to the villages through a subsidized cost structure. Computer education has been left aside as a revenue stream. The Gramdoot centres are not catering to the full potential of the opportunities provided by the tremendous demand to provide computer training courses in the rural areas. ABL should formalize various computer training courses and should promote them in Gramdoot centres. Telephony should be started in the project as early as possible, as there is a huge potential in rural areas.

Human Interest Stories

“My Dhaba is Equipped with Cable TV”

 Mohanlal Prajapati runs a small dhaba in Mohana village. In a corner of the dhaba he has opened a provision store and in another corner there is an STD-PCO booth. A lot of truck drivers pass by the dhaba. To attract customers, he took a cable TV connection from Mohana Gramdoot centre. He pays Rs 80 per month for the connection. He is very proud of the Cable TV and has placed it over the cooler in the dhaba. He says, “My Cable TV was a major attraction during World Cup cricket matches in February-March 2003. At that time, all major TV channels were telecast. But now, most of the popular TV channels (like Discovery and Star Plus) are not being shown. I am ready to pay Rs 100-125 per month, but they have to show me all these popular channels. Otherwise, I will be forced to discontinue the cable connection.”

The Addiction to Video-conferencing

Mohana village had poor telephone connectivity before the OFC by Gramdoot was laid down. It was difficult to even make local calls. But now, things have changed. Video-conferencing facilities are available at Gramdoot centres at a cost of Rs 5 for every three minutes. At Rampura Dabri Gramdoot centre, Omprakash, age 20, comes every week for video-conferencing with his friends who stay 30 km away. He is only educated to class XII and his family has an income of less than Rs 3,000 per month. But he is addicted to video-conferencing. The centre operator even gives him a concessional on the fee.

Contact Information

Lokesh Khandelwal
M18, Flatted Software Complex, EPIP Sitapura, Jaipur, India 
Tel: +91 141 507 0999; Fax: +91 141 512 2999

Email: lokesh@akshbroadband.com

Website

http://www.akshbroadband.com