I prepared this presentation for a case interview for a premier consulting firm. Case study background: A government is looking at reducing the digital divide among its urban and rural masses. Among the key actions in meeting this objective is to create demand for broadband services in the rural areas. However there are some inherent challenges in achieving this goal namely apprehension from service providers, return of investment and lack of awareness and need. Goal: Please formulate a strategic proposal on the key initiatives the government can develop to specifically address the gap in ICT adoption in the rural areas.

1. Key Government Initiatives: Strategic Proposal Bridging the Digital Divide Prepared by Najmuddin Jabalpurwala

3. Project Overview

4. Digital Divide – Key Indicators Sources: World Bank – ICT Snapshot; Government Websites Parameters Current State Size & Population One of top 5 most populated nations (250 million ) GNI approximately $1,100 per capita Sizable population in age group 25-55 years Urban v/s Rural 30% in urban areas v/s 70% in rural Broadband Penetration Less than 10.5 % broadband penetration across the nation Less than 1 % penetration in rural areas Only 2.5% broadband connections till May’08 Key Obstacles Supply Side Low PC penetration Inadequate telecom infrastructure Demand Side Lack of basic education to adopt advance ICT technology – Language barriers Lack of effective demand to justify investment by private players Lower disposable income-Affordability issues

8. Mitigating Other Concerns of Service Providers Key Concerns Potential Causes Potential Mitigation Volatile Law & Order Situation -Terrorism & related incidents are causing disruption of services & potential damage to infrastructure -Security of business investments is perceived as risky -Political goons frequently demand favors and financial ransoms from ICT establishments – perception of easy money -Stricter law enforcement in rural areas to protect core infrastructure during civilian outbreaks - Adequate government backed insurance in case of damage due to public unrest Availability of skilled labor in rural markets -Significant difficult to find rural labor trained in ICT technologies (hardware and esp. software) -High compensation costs for convincing urban professionals to locate to rural centers -Government initiated professional training centers to impart basic ICT trainings -Local schools to start courses on Internet for building talent pool -Enable local businesses with ICT to reduce migration & boost employment in rural areas Revenue Models for Rural payments -Kiosks considered as a community resource instead of personal; hence difficult to frame a sustainable revenue model -Per capita ICT investment in rural areas higher due to additional costs such as power and lower capacity of consumers to pay -Government sponsored Kiosks -Provide services to promote E-commerce; value added services like voice & entertainment -E-government services via user fees -E-education services through local schools sponsored by local councils Radical Changes in Technology -Keeping pace with innovations in ICT technology can be costly -Avoiding technology obsolescence by periodic upgrades calls for regular investments -Involve global ICT players to learn best practices in selecting broadband technology -Long term planning for technology investments to avoid impact of changes

9. Potential Road Map Key Action Areas 2009 2010 2011 2012 2013 2014 2015 Build Rural Demand Lay basic cable infrastructure & setup kiosks Improve ROI- Invest in Supply Side Service Augmentation