The slide was presented at the International Telecommunications Conference 2012. The slide discusses ways in which internet cafes an be deployed in rural areas to extend internet connectivity

1. ITS 2012
19th – 21st Nov. 2012, BANGKOK, THAILAND
Enhancing Rural Connectivity through an
Extended Internet cafés Business Models
Idongesit Williams, Patrick Ohemeng Gyaase and Morten Falch
Aalborg University Copenhagen

2. 2
OUTLINE
 Introduction
 Method
 Results
 PPP proposition
 Extended Business Model
 Conclusion

3. 3
INTRODUCTION
• This paper explains how the internet café business model available in African cities
can be extended to rural areas by means of a partnership between the public and
Private sector.
• The problem is the lack of internet in rural areas as a result of those areas being
commercially unviable.
• The hypothesis adopted to enable this research was based on the idea; traditional
societies could transform into developed or modern societies if the process of social
change followed the same pattern as that of the developed countries (see Fukuyama,
1995; Inglehart & Baker, 2000; Mark, 2009). This aligns with modernization theory.

4. 4
Hence the Internet café business model if extended to rural areas in Africa can enable
penetration of internet services as experienced in Cities in Africa.

5. 5
The question?
How can the commercial unviability of rural areas be conquered to encourage
Internet Café entrepreneurs to develop internet cafés in rural areas?

6. 6
METHOD
• To answer this research question, the Internet Café business model in Ghana is chosen
as a case. Investigations are made into factors that encourage the development of
Internet cafés in cosmopolitan areas in Accra and Sunyani. Further investigations were
made to understand why the Internet Café business model does not thrive in rural
areas and the availability of Internet network infrastructure in rural areas
• A mixed method approach was adopted for data collection. Data was collected via
interviews, questionnaires, literature review and observations (site visits)
• Snowballing and purposive sampling methods were used to identify the respondents
• 30 responses were gathered. 25 from Internet café operators and 5 from Mobile
Network Operators (MNOs)
• 16 questionnaire responses, 5 face-to-face interviews, 5 telephone interviews and
4 email responses.

7. 7
RESULT 1
Table 1. Present Business Model in the city
Key Partners
Internet Service Provider
Hardware/Software providers
Utility Service Providers
Office landlord
Value Proposition Requirement
Telecoms / IT Network
Value
Propositions
Internet
accessibility
Internet service at
low price
Internet service
either 16 or 24
hours a day
Internet service
with high/low
speed
Customer Relationships
Personal assistance
Customer Segments
Mass Market
Key Resources for Value Proposition
Financial
Physical (components for the cybercafé)
Human
Channels
Hand bills
Banners
Radio Adverts
Cost Structure
Fixed cost: Rent, Utility bills, ISP bills, tax, Salaries, amortization, cost of equipment
Revenue Stream
Usage fee, Subscription fee,
Price is volume dependent (charged per hour)
Osterwalder Business Model Canvas

8. 8
RESULT 2
Table 2.
Reason why
Internet
Cafés boom
in the city
Question SA A I D SD
To what extend did the following influenced your decision to set up Internet Cafe
Availability of Network Infrastructure 20 5 0 0 0
Demand for Internet Service 22 3 0 0 0
Tax Exemptions 0 1 5 7 12
Cheap of Connectivity 2 4 2 8 9
Low start-up capital required 5 6 3 5 6
Low cost of Hardware required 4 2 2 10 7
Constant and reliable Internet Services 7 9 4 2 0
Constant and reliable Power Supply 5 4 6 6 3
Trained ICT specialist, (Profession) 5 5 8 4 3

9. 9
RESULT 3
Table 3.
Why the rural
area is not attractive
to set Up internet
cafés
Question SA A I D SD
Absence of Internet Café in the rural areas and reasons
I intend setting up similar enterprise in the Rural areas 0 0 3 2 20
Absence of Connectivity infrastructure 23 2 0 0 0
It is expensive to set up due to Technology required 22 3 0 0 0
High cost bandwidth 20 3 2 0 0
High running cost 12 8 5 0 0
High Cost of CPE 9 8 3 4 1
Low Demand for Internet Services 18 5 2 0 0
Tax pressures from Local governments 2 2 8 8 5
Lack of Constant and reliable power supply 3 5 5 6 6
0
5
10
15
20
25
SA
SA

10. 10
RESULT 4
Table 4.
What incentives
will make these
investors develop
Internet Cafés in
rural areas
Question SA A I D SD
To what extend would the following influence your decision to set up Internet
café in the rural area.
Cheaper rates for Bandwidth to rural areas 9 7 2 4 2
Provision of Network Infrastructure 8 8 1 5 3
Cheaper hardware (CPE) through subsidies 10 6 0 6 3
Presence of demand for Internet services 0 2 5 10 8
Provision of equipment and start up by
government
9 8 3 3 2
Tax Incentives 7 7 3 5 3

11. 11
RESULT 5 Questions A I D
Our services cover large part of rural areas 5
We provide Internet services in the rural areas 3 2
Our network infrastructure in the rural areas support high speed Internet
connectivity
5
There low demand for fast Internet in the rural areas 5
Cost of equipment does not make it economical to deploy fast Internet in the
rural areas
5
Deliberate public support could facilitate the deployment of high speed
Internet connectivity
3 2
There is no tax incentives for deploying fast Internet connectivity 4 1
Tax incentives would facilitate the deployment of fast Internet connectivity 3 2
Table 5.
Availability of
Internet
Infrastructure in rural
Areas
There is Internet infrastructure in rural areas but not broadband. So there
Is connectivity . But the cost to accessing this connectivity as seen in result 3
is high.

12. 12
PROPOSITIONS
Based on the results received it is glaring that for the internet café business model
to be developed in Rural areas, there is the need for government intervention through
Public Private Partnerships (PPP).
The Build Operate Own (BOO) model of PPP is proposed. The organization of the model
is seen in figure 1 below
Removal of market entry
barriers
Tax reduction for ISPs who
deliver data rates a cheaper
rate to investors in rural
areas
Removal of import tariffs
for CPEs
Decision of the
entrepreneur to
start an Internet
café in rural areas
Actual
development of the
Internet cafe
Subsidy provision for the cost of access of
the service
End user
BOO
Supply
Cheaper cost of access to service
Public
Initiative
Demand

13. 13
Table 6. EXTENDED BUSINESS MODEL
Key Partners
Internet Service Provider
Hardware/Software providers
Utility Service Providers
Office landlord
Network operators
Public sector**
Value Proposition Require
Telecoms / IT Network
Value Propositions
Internet accessibility
Internet service at low price
Internet service either 16 or 24
hours a day
Internet service with high/low
speed
Customer Relationships
Personal assistance
Customer
Segments
Mass MarketKey Resources for Value Proposition
Financial
Physical (components for the cybercafé)
Human
Market incentive from public sector**
Channels
Hand bills
Banners
Radio Adverts
E-government programmes**
Cost Structure
Fixed cost: Rent, Utility bills, ISP bills, tax, Salaries, amortization, cost of equipment
Revenue Stream
Usage fee, Subscription fee,
Price is volume dependent (charged per hour)
Limited Subsidy from the Public sector**

14. 14
CONCLUSION
• With the present cost of connectivity, economic and social situations in rural
areas, it is impossible to establish the Internet café business model.
• Market incentives are needed to prop the demand and supply side in the delivery
of internet café . The BOO model of PPP can enable this as seen in the results.
• The public sector cannot be left out and there is need for e-government
programmes to prop demand while subsidies and regulation incentives to prop
supply.
• If the BOO model of PPP is in adopted with the corresponding supply and demand
incentive mechanism’s the Internet café operators are willing to extend this
business model into rural areas.
• It is possible to extend the Internet café business model into rural areas.