global digital inclusion benchmarking study

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I T A c c e s s f o r E v e r y o n e —G l o b a l B e n c h m a r k i n g S t u d y

January 2005

Written By:

Stacey Boyd and Louise Herring

ITAFE Companies:

Accenture

AMD

BMC Software

Cisco

Dell

Global Learning Ventures

Ingram Micro

Institute for Connectivity in the Americas

Intel

Philips Electronics

Synopsys

VeriSign

Table of Contents

Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Context for ITAFEThe ITAFE “Greenhouse” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9ITAFE Objectives for 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Global ScanMap Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11Brief Summary of Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12Design of ITAFE Matrix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15Demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

High Level Observations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16Understanding Demand. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16Building the Whole Ecosystem . . . . . . . . . . . . . . . . . . . . . . . . . 16Appropriateness of the Solution. . . . . . . . . . . . . . . . . . . . . . . . . 17

ITAFE MatrixPower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18Sources of power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18Criteria for assessing power . . . . . . . . . . . . . . . . . . . . . . . . . . . 19Devising solutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21Key lessons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Hardware . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22Types of hardware . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22Criteria for assessing hardware . . . . . . . . . . . . . . . . . . . . . . . . . 24Devising solutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24Key lessons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Connectivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27Connectivity options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28Criteria for assessing connectivity . . . . . . . . . . . . . . . . . . . . . . . 29Devising solutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30Key lessons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Software and Applications. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32Software and Application options . . . . . . . . . . . . . . . . . . . . . . . 32Criteria for assessing software and applications . . . . . . . . . . . . 33Devising solutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34Key lessons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

Training & Support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36Types of training and support . . . . . . . . . . . . . . . . . . . . . . . . . . 36Criteria for assessing training and support. . . . . . . . . . . . . . . . . 37Devising solutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37Key lessons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

Cost Structure and Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . 38Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38Types of cost structure and financing . . . . . . . . . . . . . . . . . . . . 39Criteria for assessing cost structure and financing. . . . . . . . . . . 40Devising solutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41Key lessons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

Case Studiesn-Logue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44E-Choupal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47Voxiva . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50Grameen Village Phones, Bangladesh . . . . . . . . . . . . . . . . . . . . 52

Lessons Learned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

Sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

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I T A F E I N I T I A T I V E

Executive Summary

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W O R L D E C O N O M I C F O R U M

Launching the IT Access For Everyone Initiative

At the World Economic Forum’s 2004 annualmeeting companies from the IT and Telecomsindustry – Accenture, AMD, BMC Software,Cisco, Dell, Global Learning Ventures, IngramMicro, Institute for Connectivity in the Americas,Intel, Philips Electronics, Synopsys and VeriSign –launched the IT Access for Everyone Initiative(ITAFE). The ambition initially was to create anaffordable low-cost internet enabled device. How-ever, early on in the discovery process, ITAFErealized that a hardware device is only a single –though highly important – part of a complex valuechain that must be secured for disenfranchisedpopulations to have access to ICT. Other criticalelements include power, connectivity, relevantsoftware applications, training, support and maintenance, cost structure and financing.

Upon evaluating dozens of case studies of ICTinitiatives in developing countries around theglobe, ITAFE determined that while a device isimportant, the real challenge is to create anecosystem of organizations that could effectivelydeliver on each of those elements of the valuechain in a sustainable and scalable manner.Thus, ITAFE focused its efforts on understandingwhich business models of previous initiatives hadbeen proven effective, leading to sustainabilityand scalability.

The ITAFE framework and the analysis of dozensof case studies around the globe are set forth inthis white paper. The framework has informed thequantitative and qualitative research the ITAFEteam has done in Brazil, ITAFE’s pilot country.The 2004 results of the work conducted by ITAFEin Brazil are included under separate cover.

The ITAFE Framework

• Like a greenhouse which requires the interac-tion of water, soil, sun to reach its end result,ITAFE realizes that the existence of a singlehardware device is insufficient to result in arelevant and meaningful acceleration of Internetadoption worwide. Both supply and demandneed to be taken into consideration.

• ITAFE quickly learned that demand for an ICT initiative is not only understanding thecustomer and their needs and their willingness

and ability to pay forservices, but thinkingcreatively about coststructure and financingarrangements that enablebottom of the pyramidconsumers to gain access to ICT tools.

• The supply elements of theecosystem are equally im-portant, particularly power,connectivity, hardware,relevant software applica-tions, training and support.How each of these factorsinteracts with the othersdetermines both the quality

of the solution for the end-user and the cost. • The interaction between supply and demand

determines the sustainability and scalabilityof the overall solution. While the developingworld is littered with ICT initiatives, few haveachieved balance between supply and demandand thus it is the exceptional initiative thatreaches scale.

• None of the elements of the ITAFE ecosystemcan be considered in isolation. Each has asignificant impact on a potential businessmodel. The full ecosystem and the interplaybetween supply and demand factored into the design of the ITAFE pilot in Brazil.

Global Scan

ITAFE’s research was designed to help the ITAFEteam understand the critical success (and failure)factors in ICT initiatives around the globe. Over50 cases from around the globe were initiallyreviewed. From those fifty plus projects, twodozen were selected for deeper analysis. Theprojects identified for in-depth research wereprimarily selected for one of more of thefollowing reasons:

• Overall applicability to ITAFE’s goal: to provideaccess to IT to those currently denied accessfor infrastructure, financial or other reasons

• Project focus fell into one of the following four areas: economic empowerment, health,education, community

• Illustrative value for the ITAFE framework • Availability of research/information• Mix of developing and emerging country

geographies and economic realties

ITAFE Framework

Executive Summary

Each of the two dozen initiatives was analyzedthrough the lens of the ITAFE framework. Theelements constituting supply and demand –power, connectivity, hardware, software andapplications, training and support and coststructure and financing – were individuallystudied and best-of-breed examples identified,both within each element of the ITAFE frameworkand overall.

Lessons Learned

The global projects researched led to several key lessons for ITAFE’s efforts in 2004:

• Focus relentlessly on end-user needs.The projects that failed most abysmally did not have a focus on the end-user. In thosesituations typically a donor and/or NGO hadconceptualized what they believed the end-user to need and designed a project to thosespecifications. But when the solution wasrolled out, the needs of the end users differedfrom the perception of what their needs were.Rigorous, structured, grass roots research ofend-users needs, to the contrary, has yielded

much higher success rates in ICT4D initiatives.Hand-in-hand with the focus on end-userneeds is the importance of recognizing the potential of the bottom of the pyramidproducers and consumers.

• Build strong consortium that holisticallyincorporates each of the “must-have”elements. Every single successful projectanalyzed went about creating their particularICT4D solution through the creation of aconsortium that systematically addressed both the supply and demand components of the framework: power, connectivity, hard-ware, software and applications, training andsupport, and cost structure and financing.

• Create robust business model for eachpartner. Part and parcel of building a strongand robust consortium is the building of a sus-tainable business model, for each member ofthe consortium. The most successful projectsfrom around the globe understood that theirsuccess was only as strong as the weakestmember of the consortium. Hence, great carewas taken to ensure that the incentives of allbusiness partners are aligned.

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Executive Summary

• Focus on niche market. The most successfulprojects took into account competitive dynam-ics and industry interests and carved out aspecific market for themselves. That allowed a wider breadth of consortia members toparticipate than would have been possible ifpotential partners had felt their “bread andbutter” businesses were at risk of beingcannibalized.

• Capitalize on entrepreneurialism. Theinitiatives that have attained the greatestscalability and replicability have harnessed the entrepreneurial spirit of those in the field.“Ownership” in the form of co-investment orsole investing, oftentimes through the use of micro-finance, has proven to be a key to success. The franchise model has beenparticularly effective in engaging otherwise“disenfranchised” members of society, such as women, in strategies that improve theirlivelihood. Local buy-in and designing initiativeswith local capacity in mind is essential.

• Attack cost structure and financing frommultiple angles. Many ICT4D initiatives havelost momentum or died completely due toreliance on a single cost structure or financingmodel. Those with a multi-pronged approachto thinking creatively about cost structure andfinancing without a reliance exclusively on anyone funding source (particularly government)have enjoyed the greatest success.

• Focus on tackling a specific issue at theoutset with a view to expanding scopeonce the program is up and running.Initiatives the quickest to lapse into failure were ones that were too ambitious at theoutset versus those that started with concrete,modest objectives, worked out any kinks inprocesses and then expanded operations.However, equally important, is starting out with the expectation of the expansion ofscope. Successful, scalable projects startedsmall but designed processes at the outset to accommodate increased capacity in theprojects’ near future. Less successful onescreated a model that worked on a pilot basisbut did not prove scalable.

• Establish sufficient set-up funding andcore investment relations to ensure pilotproject will be fully funded. A key element

of developing this business model wasattracting sufficient funding from corporationsand investment organizations to cover set-upcosts. Successful initiatives built strong rela-tionships with these partners and managedthese relationships well to ensure that fundingfor expansion was forthcoming. Corporaterelationships also enhance the profile andvisibility of a project.

• Build strong government relations whenoperating in a vertical which is heavilyinfluenced by government policy but donot rely solely on government support fora project’s success. ICT initiatives are proneto need certain levels of government support.Hence, gaining government buy-in early in aproject’s life-cycle is critical. Strong govern-ment relationships are key to projects whichuse cellular and switched networks because in many developing countries they remainstate-controlled. It should be noted, however,that working with governments particularly indeveloping world contexts often incurs timelags not experienced in business and requiresthe development of a specific set of negotia-tion and relationship management skills. The most successful projects while gaininggovernment support have built businessmodels that are not reliant solely on on-goingsupport from government.

Local Application of ITAFE: Brazil

Using the global framework and methodology toguide its efforts, ITAFE has been researching theBrazilian market. ITAFE work in Brazil done in2004 includes extensive qualitative and quantita-tive research, particularly on the demand side ofthe equation. Through extensive market surveysand analysis and using the global framework andmethodology, the local Brazil team has done ini-tial economic modeling that begins to demon-strate how the different elements of the ITAFE“greenhouse” might work together in Brazil tocreate a sustainable, viable business model forall organizations involved. ITAFE’s efforts in 2005will focus on honing and refining the Brazilianbusiness model, building the local consortia todeliver on the business solution, launching thepilot and creating the tools necessary to poten-tially expand ITAFE to other locations.

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Context for ITAFE

At a formal session during the World EconomicForum’s 2004 Annual Meeting, leaders from theIT and Telecoms industry concluded that, todate, no government or business entity – or acombination thereof – had delivered a trulyaffordable wireless connectivity computingdevice along with the infrastructure meant tosupport it in the developing areas of the world.As a result, they initiated, through the World Economic Forum, a project to explore the char-acteristics of an access device designed specifi-cally to enable basic computing and Internetaccess in the developing regions of the world.

The objective of the IT Access for Everyone(ITAFE) initiative is to research the relevance and feasibility of developing simple, low-cost,wireless/Internet enabled device(s) with thefeatures of a PC that is truly affordable in thedeveloping regions of the world. The followingorganizations are engaged in the ITAFE initiative:Accenture, AMD, BMC Software, Cisco, Dell,Global Learning Ventures, Ingram Micro, Institute for Connectivity in the Americas, Intel, PhilipsElectronics, Synopsys and VeriSign.

The ITAFE “Greenhouse”

Like a greenhouse which requires the interactionof water, soil, sun to reach its end result, ITAFErealizes that the existence of a single hardwaredevice is insufficient to result in a relevant andmeaningful acceleration of Internet adoptionworldwide. A hardware device is only a single –though highly important – part of a complexvalue chain that must be secured for value to be realized. Other critical elements of the “greenhouse” include:

• Power • Connectivity• Relevant software applications• Training, support and maintenance• Cost structure and financing

How each of these factors interacts with theothers determines both the quality of the solutionfor the end-user and the cost. Moreover, theinteraction among and between these elementswill determine the sustainability and scalability of the overall solution:

Power. Research indicates that 2B of the world’s6B people do not have access to electricity.Therefore, any solution ITAFE creates must con-sider power options that do not rely on usersbeing on the “grid” if ITAFE is to result in arelevant and meaningful acceleration of Internetaccessibility to a third of the world’s population.

Connectivity. A device alone will not workwithout concomitant infrastructure enablingaccess to the Internet. There are several innova-tive technologies with respect to connectivity,such as wireless, that could greatly improve thequality, and reduce the total cost, of the solutionto the end user. ITAFE will consider regulatoryrealities, price, providers and the prevalence of innovative connectivity options in designing its overall solution. If needed, ITAFE will makerecommendations on how the regulatory environ-ment in a particular country or region could be altered to possibly expand IT access.

Software Applications. Hardware without theavailability of applications to run on it is useless.Many IT projects have failed due to lack of con-sideration of software applications. This is partic-ularly true in the developing world. Softwareneeds to be relevant, provided in the local lan-guage and contextualized to local conditions andneeds. Moreover, a software solution designedto solve a particular problem oftentimes man-dates critical “features” of a given hardware solu-tion (e.g. screen size, speakers, etc.). As such,the ITAFE approach will include a careful analysisof software options, both existing and proposed.

Training, Maintenance and Support. Training,support and maintenance go hand-in-hand withsoftware applications as a critical “greenhouse”element. IT initiatives are renowned for failing due to lack of forethought around training andimplementation. The kind of support and traininganticipated for a particular use of a device obvi-ously has a large impact on the design of thedevice itself and will be taken into considerationin the ITAFE process.

Cost Structure and Financing. In reviewingsuccessful IT projects in the developing world,ITAFE has learned that the most successfulmodels structured innovative financing modelsfrom the project’s inception. Many of them allowfor multi-users (versus a model of one device

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Context for ITAFE

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per user). Others employ micro-credit institutionsto help consumers/entrepreneurs fund thepurchase of a solution/device. Others yet havegovernment or other institutions “seed demand.”The willingness and ability of consumers to pay,or for government to fund an initiative, obviouslyhas important implications for the design of aprototype, as might a multi-user approach.

None of these elements of the ITAFE “green-house” can be considered in isolation. Each has a significant impact on ITAFE research and the design of ITAFE project prototype(s).

ITAFE Objectives for 2004

Hence, in 2004 ITAFE focused on both creating an overarching global framework and methodology that can be used for multiplelocations and conducting the local researchneeded to deploy a project in Brazil.

Global framework and methodologyThe focus of the global research on each of theelements of the greenhouse has been to ensurethat ITAFE incorporates any and all key lessonslearned from previous like initiatives and does notrepeat their mistakes. To begin, ITAFE surveyedover fifty IT projects in developing and emergingcountries. Approximately two dozen of those fiftyIT projects, some of which were successful anda number of which did reach their stated aims,were then selected for in-depth analysis. ITAFE’sgoal was to find patterns and key lessonsamong those two dozen projects to guide itsfuture efforts, lest ITAFE fall prey to the samemistakes many initiatives in the developing worldaspiring to the same end have. This white paperis the summary of that research and an outline ofanalytical tools built and designed on the experi-ence of the many IT projects, both failures andsuccesses, which have preceded ITAFE.

Local research and creation of business caseConcurrent to the research being done on bestpractices around the globe, and using the globalframework and methodology, ITAFE has beenresearching the Brazilian market. ITAFE work inBrazil this year includes extensive qualitative andquantitative research. The local Brazil team,using the global framework and methodology,has also created a business plan that will,among other things, articulate how the differentelements of the ITAFE “greenhouse” will worktogether in Brazil to create a sustainable, viablebusiness model for all organizations involved.The business plan identifies preliminary membersof the “greenhouse” or consortia in Brazil whothrough collaboration will be able to deliver onthe business case. Such a consortia mightinclude, for example, a local development shopthat can write the necessary software in locallanguage, a local NGO able to provide trainingand support, a micro-finance institution willing tounderwrite loans to ITAFE’s end-users, as well ashardware and connectivity providers deliveringon the device portion of ITAFE’s solution.

Global Scan

In conducting its research, ITAFE surveyed over50 cases from around the globe spanning everycontinent. From those fifty plus projects, twodozen were selected for deeper analysis. Theprojects identified for in-depth research wereprimarily selected for one of more of thefollowing reasons:

• Overall applicability to ITAFE’s goal: to provideaccess to IT to those currently denied accessfor infrastructure, financial or other reasons

• Relevance of project focus fell into one of thefollowing four areas: economic empowerment,health, education, community

• Illustrative value for the ITAFE framework • Availability of research/information• Represented a mix of developing and emerging

country geographies and economic realities

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Map Overview

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Global Scan

Brief Summary of Projects

Continent Country Project Name Vertical Summary

Africa South Africa Vodacom Community As part of Vodacom’s Community Service program the company sets up entrepreneurs with their own con-tainers from which to provide phone access to remoteareas on South Africa.

Africa Senegal S.A.R.L. Economic Saint Louis Net, S.A.R.L., a for-profit business offeringOpportunity IT-based services to the community.

Africa Senegal Manobi Economic Manobi is a multimedia service operator for profession-Opportunity als in the rural sector and agribusiness. In Senegal,

mobile phones and the Internet have been used toprovide multi-channel business services to farmers, with the T2M market information system providingstrategic information to farmers through WAP enabledphones.

Africa Kenya Price Africa - Economic A project of PRIDE AFRICA (PA) designed to deliver DrumNet Opportunity financial and information services for mainstreaming

resource-poor farmers.

Africa South Africa UUNET Economic The UUNET Bandwidth Barn is an incubator for ICTBandwidth Opportunity start-ups in the Western Cape set up by the Cape Barn Information Technology Initiative, a not-for-profit agency

focused on developing the ICT sector in the WesternCape.

Africa Regional African Education Founded to address the critical needs for increased Virtual access to quality tertiary education in Sub-Saharan University Africa, building capacity and supporting economic

development by leveraging the power of moderntelecoms technology.

Africa Regional Freeplay Education/ Recognizing a need for alternative energy sources Foundation Community amongst the world’s poorest communities, the Freeplay

Foundation was founded as an extension of theFreeplay Energy Group’s commitment to developmentand empowerment.

Africa Uganda Uconnect Education The object of Mission Mobile Education’s UgandaConnect project is the advancement of public education,health, agriculture and other sectors in Uganda, usingICT to improve the quality and efficiency of communica-tions through the provision of necessary hardware andsoftware and the training of teachers and managers.

Africa South Africa The Compliance Health For-profit project set up by a South African doctor toService prevent non-compliance of patients with TB medicine.

Africa Uganda HealthNet Health HealthNet Uganda (HNU) and SATELLIFE haveaddressed the challenges of healthcare in Uganda by supporting a low-cost email network for health professionals in Kampala and beyond, distributing e-mail based information and providing computerliteracy training and technical support. In addition, HNU supports the computer network at Makerere Uni’s Faculty of Medicine where it is housed.

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Global Scan


Africa Senegal Afrique Health Pesinet is a non-profit organization focused onInitiatives/ preventative health care. Its mission is to improvePesinet the health of children less than 5 years of age in the

poor communities of Saint Louis.

Asia Philippines B2BPrice.now Economic E-marketplace for farmers, fisherfolk and SMEs toOpportunity access market prices and trade products. Available

via website or cell phone.

Asia Philippines Bridge IT Economic Global program to deliver digital education materialsOpportunity to schools using mobile technology. Interactive

multimedia learning materials become accessible to local classrooms around the world.

Asia India e-Choupal Economic Web-based initiative offering farmers of India all theOpportunity information, products & services needed to enhance

farm productivity, improve farm-gate price realizationand cut transaction costs.

Asia Bangladesh Grameen Economic Aiming to provide easy access to telephone services, Telecom/ Opportunity all over Bangladesh. To initiate a new income gener-Village Phones ating option for villagers and gradually bring the full

potential of ICT to their doorsteps.

Asia India n-Logue Economic n-Logue has created a franchise model to set-upOpportunity shared-access village kiosks designed to provide

Internet and phone system access to remote areas of India.

Asia India PicoPeta (Amita Economic Aim was to design easy to use software which would Simputer) Opportunity include Indian language software, be cheap to produce

and enable economic, health and education initiativesacross India.

Asia India TARAhaat Economic TARAHaat uses a franchise-based business model Opportunity/ to bring computer and Internet technology to rural Community regions and plans to use these technologies to create

revenue streams leading to financial viability for itselfand its franchises.

Asia Nepal /Global Equal Access/ Education Equal Access focuses on combining two key re-WorldSpace sources - cutting edge Information and Communica-

tions Technologies and the passion of people to make a meaningful difference. Challenge is to “fire uppeople’s imaginations, tap into their potential to makereal differences and engage them as central players in issues concerning their own development.”

Asia Laos Jhai Foundation Education/ Established to provide connectivity in remote areas Economic in Laos with the aim of promoting self-sustainableOpportunity models for education and economic opportunity.

Asia India TeleDoc Health Teledoc uses leading-edge communications capabilitiesto bring high-quality healthcare directly to patientsusing GPRS mobile networks.

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Global Scan


Latin Brazil Computador Community The CP project was sponsored by the Brazilian America Popular government with the aim of providing low-income

Brazilians with access to information technology and to get more people online.

Latin El Salvador Infocentros Community Aims to contribute to the national development of America democratization through providing access to knowl-

edge, publications and the exchange of information.

Latin Bolivia PRODEM FFP Economic The business model was designed to meet the needs America Opportunity of bottom-of-the-pyramid customers by developing

accessible and low-cost banking services. It targetslow-income communities and the entrepreneurs andmicro- to medium-size enterprises that constituteBolivia’s informal economy, offering a wide range of savings, credit and money transfer services.

Latin Brazil ViaSebrae Economic Aims to provide a platform for small businesses America Opportunity to “conduct e-commerce activities that they would

otherwise be unable to afford”. Project was consistentwith Sebrae’s mission of “working in a strategic,innovative and pragmatic way so that small business inBrazil had the best possible conditions for sustainabledevelopment, contributing to the general evolution ofthe country”.

Latin Brazil CDI Education Non-profit NGO that has used IT since 1995 to pro-America mote social inclusion via Information Technology and

Citizens Rights Schools. Provides equipment (hardwareand software), training and administrative and technicalsupport to schools which are self-managed and sustain-able but monitored by regional CDI offices.

Latin Colombia Computadores Education Aims to establish a permanent flow of computers to America para Educar public schools in all regions of the country, offering

new generations and communities access to betteropportunities for education, knowledge and progress.

Latin Argentina educ.ar Education Three-pillar strategy that intends to provide connec-America tivity and computer equipment, teacher training and

high-quality educational content to raise the standard of education for all Argentinean students. Mission is toimprove reach and quality of educational content andtools available to Argentinean students and teacherswhile providing an Internet-based platform forcollaborative learning across the country.

Latin Peru Voxiva Health Voxiva’s public health project in Peru created an inter-America national for-profit organization designed to facilitate

reporting and communication with health professionalsin areas without Internet access and to do so rapidlyand with no investment in new hardware.

Global Scan

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Design of ITAFE Matrix

In surveying projects aroundthe globe, and measuringtheir success, ITAFE quicklyrealized that in many placesthere is great demand forinnovative ICT solutions. Forthe right solution, consumers,even very poor consumers,are willing to pay particularlywith an innovative cost struc-ture and financing structure.However, the supply of ICTsolutions (and scalability) islimited by the lack of power,connectivity, hardware, soft-

ware applications and training and support. Thisobservation – true across all projects studied –gave rise to the creation of an ITAFE matrix,focused on both supply and demand, describingthe elements an initiative focused on ICT4D“must have” in order to succeed.

Success means scalable and sustainable impacton a population that prior to the project’s imple-mentation did not have access to the kind of ITservice now available to them (communication,health, education, etc.) and as a result of theproject the population served will enjoy the bene-fits of IT access for years to come. While thereare certainly other important elements in makingan ICT4D project successful, the inclusion (orlack of inclusion) of these six elements reflectingboth the supply and demand side of the equa-tion – power, connectivity, hardware, softwareand applications, training and support and coststructure and financing – had a dramatic impacta given project’s success, without exception.

Supply

Power: A reliable, sustainable and locallyappropriate source of power is a key element on the demand side of the framework, particu-larly in a world where 2 billion people, mostly inrural areas do not have access to electricity1. An assessment of the criteria required to provide power, as outlined by the ITAFE matrix,highlights a number of key constraints linked

to sustainability, reliability and scalability whichmay significantly impact an initiative’s success or failure. Successful initiatives are those whichunderstand these constraints and design solu-tions which overcome them, building incre-mentally on existing infrastructure and usinginnovative, reliable and cost-effective sources of power.

Connectivity: Reliable, sustainable and cost-effective connectivity – be it landline, mobileGSM or wireless or satellite – is essential for themajority of ICT initiatives. However developingcountries, particularly remote areas, often lackthe infrastructure to provide robust connectivity,in addition to facing regulatory constraintsaround the licensing of networks and access to competitive connectivity options. In a globalpopulation of 6.3 billion there were only 843million main lines in use in 2003 and 604 millionInternet users2. ICT4D initiatives therefore need to focus as much as possible on using existinginfrastructure or on promising new technologiessuch as wireless or satellite to overcome theseconstraints.

Hardware: Hardware forms another key infra-structural element of the ITAFE framework whichmust be considered closely in order to develop asuccessful ICT4D initiative. The chosen hardware– be it a PC, PDA or mobile phone – must be fit-to-purpose not only in its ability to run the rele-vant software and applications but also itscompatibility with an initiative’s power and con-nectivity capabilities. ICT initiatives tend to use oradapt existing hardware or develop new hard-ware for their purposes and each approachattracts different costs and complexities.

Software and Applications: The software and applications used by the ICT initiatives aredesigned to meet the requirements of a specificvertical, such as education, health or economicopportunity. On the whole, different verticalsprovide ample opportunities for a variety of soft-ware solutions but tend to suffer from similarconstraints. Overcoming these constraintsrequires a clear understanding of the criteriaunder which software and applications in ICTinitiatives are successfully used, which includestheir fit to user requirements and the availabletechnical infrastructure and the usability of the

1 UNDP website, 2004, www.undp.org/energy/

2 CIA factbook, 2004 www.cia.gov

Global Scan

solution. The design of an initiative’s softwareand applications and their fit-to-user requirementare essential to ensure success, sustainabilityand scalability.

Training and Support: Consideration of thetypes of training and support available for ICTinitiatives, and the logistics needed to properlydeliver the training and support necessary, is akey measure of sustainability within the ITAFEframework. Both services can be offered as local or remote services or as a combination ofboth. The option chosen will be affected by andimpact upon the existence and development of IT capacity.

Demand

Cost Structure and Financing: The coststructure and financing of ICT initiatives is the key element in their design which ensuresboth start-up and sustainability. The majority of projects adopt a mixed model of financing and most are designed to move towards self-sustainability after a pilot stage. The fundingprogram and business model chosen not only determine the strategic roll out of a projectbut also heavily impact upon elements such aslocal buy-in and ownership and relations with the government. Careful consideration of thetype of cost structure and financing adopted is therefore required given that the decisionstaken have an immediate and long-term impactupon the initiative’s success, its scalability and its sustainability.

High Level Observations

While the last section of this paper details“lessons learned” at a more detailed level, there are three high level observations ITAFEmade through the study of both successful andnon-successful projects and the development ofthe matrix worth noting at the outset.

Understanding Demand

Projects that took a detailed and structuredapproach to understanding the specificproblem they were trying to solve and thenfocused on creating a solution that metthose very specific user needs succeededmore frequently than those solutions createdbased on a perceived need of end users.Understanding your customer and their needs,particularly the needs of those customers at the‘bottom of the pyramid’ and their willingness topay, is essential to the successful implementationof a project. In other words, demand as well assupply matters greatly when planning an ICT4Dinitiative.

Building the Whole Ecosystem

How the must-have elements work together within the larger context of the project is more often than not thedetermining factor in a project’s success or failure than achieving perfection on any one of the individual elements.The “must-haves” interact with one anothermuch like a greenhouse. Soil or sun or wateralone will not give rise to beautiful flowers. Nor will the same combination of soil, sun and water have a like-effect on sunflowers,orchids and ferns. Only when soil, sun and water are carefully meted in the right proportionsand combination for a particular flower will thedesired outcome be met. The same holds truefor ICT4D initiatives. A hardware device alone ina developing world context is useless. As muchcare needs to be given to the availability ofpower and connectivity and to the accessibilityof relevant, useful software applications andtraining. And all of these elements are tiedtogether through proper cost structure andfinancing.

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Global Scan

Appropriateness of the Solution

There is rarely “one right answer” withrespect to a particular choice that an ICT4Dproject makes in any of the of the “must-have” elements. However, the overall busi-ness model must drive the decision makingabout which of the “must-have” elementsshould be included and in what combina-tion. The proper selection of the “must-have”element according to the purpose of the projectand its environmental context is critical. Usingelectric as the source of power, for example,could very well make sense if the project is oper-ating with a population that has access to mainspower. However, if the intent is to reach ruralswaths of the population off the electricity grid, aproject’s decision to work with renewable energysources requiring little to no infrastructure is obvi-ously the wisest choice. The most successfulprojects match the solution to a given problemwith the corresponding “must-haves” weighingthe trade-offs of each option. For example,purchasing a fully equipped, state of the art PCmay seem like a wildly expensive alternative forpoorer parts of the world, yet if there is a coststructure and financing model that supports theuse of such a technology (such as a multi-usermodel) and the software application choicerequires more robust functionality, a higherpriced PC may be a better choice than theselection of a very low-cost handheld computerwith limited functionality, despite the cost differ-ential. But the very same PC might require morepower than a handheld so thought needs to begiven to the population the PC will serve andwhether there are viable power and connectivityoptions to serve that population. PCs are alsorelatively complex so training and support, too,must factor into the decision-making process.Only when all of the “greenhouse” elements areconsidered together, in the context of the partic-ular project, will the right outcome be clear.

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ITAFE Matrix

The ITAFE matrix has six“must-have” components,each of which significantlyinfluences the overall successof an ICT4D initiative.

In the paragraphs that follow,each element of the matrix –power, connectivity, hard-ware, software and applica-tions, training and support and cost structure andfinancing – is explored. Thestructure for each element ofthe matrix is as follows:

• an introductory overview • description of the possible options

(e.g. power options include mains, battery-operated, renewables, etc.)

• exploration of the criteria by which each of op-tions are evaluated in the context of an ICT4Dproject (affordability, reliability, scalability, etc.)

• description of best-of-breed examples ofinnovative and creative solutions for each“must-have” element of the matrix including an indicative assessment of the relativesuccess of each initiative in relation to theparticular “must-have”3

• key lessons learned for each component of the matrix

Broadly speaking the matrix can be thought of as breaking down into technological infra-structure (hardware, power and connectivity);human infrastructure (training and support) andorganizational and financial infrastructure (coststructure and financing) and it is in this order that the specific components of the matrix will be discussed.

Power

IntroductionBy definition, technology lies at the core of ICT4Dand the provision of power, hardware and con-nectivity is frequently a significant challenge indeveloping world contexts. A reliable, sustainableand locally appropriate source of power is,

therefore, a key element on the demand side of the framework, particularly in a world where 2 billion people, mostly in rural areas, do nothave access to electricity 4. An assessment of the criteria required to provide power, as outlinedby the ITAFE matrix, highlights a number of key constraints linked to sustainability, reliabilityand scalability which may significantly impact aninitiative’s success or failure. Successful initiativesare those which understand the constraints anddesign solutions which overcome them, buildingincrementally on existing infrastructure and usinginnovative, reliable and cost-effective sources of power.

Sources of power

Power sources for ICT initiatives can be dividedsimply into mains provision and stand-alone gen-erators of power that exist separately from themains infrastructure. The ITAFE matrix identifiesfive main types of stand-alone power used in ICT initiatives; batteries, generators, solar power,wind-up power, and bicycle cranks. This is notan exhaustive list of the stand-alone optionsavailable on the market but indicative of thosehistorically preferred in ICT4D. Nor is it alwaysthe case that a single source of power is usedfor any one initiative. More frequently, powersources will be combined to ensure a reliablesource of power that meets the volumesrequired by an initiative’s hardware.

Mains powerMains power is the most frequently used sourceof power for the majority of ICT initiatives on thebasis that, where the correct infrastructure is inplace, it is the most cost-effective and efficientmeans of reaching a large number of people.However, it is reliant firstly on the existence and ongoing maintenance of power lines andsecondly on the financial ability of individuals or communities to connect to the grid. For the 2 billion people without access to the electricitynetwork in the rural areas and informal settle-ments in and around cities in much of thedeveloping world, lack of infrastructure and low-incomes are combined to constrainconnection to the grid.

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3 This assessment is based on a subjective judgement of the relative success of initiatives studied for the ITAFE matrix and should not be taken as a definitivejudgement of an initiative’s ability to use each of the matrices “must-haves”. Rather the assessment should serve as a quick guide to inform the reader as tohow well a particular initiative met the criteria on which the must-have is being assessed within this report.

4 UNDP website, 2004, www.undp.org/energy/

ITAFE Matrix

Batteries and generatorsOn the basis of cost and access, therefore, thereare many advantages to stand-alone options forthe generation of power. Non-renewable sourcesof power, such as generators and batteries, arereadily available, allow individuals to overcomegeographical constraints and are therefore oftenused in areas off the grid or as a back-up supplywhere outages are a frequent occurrence. Formany consumers, however, the cost of running agenerator or buying and/or recharging batteriescan also be prohibitive. Nor does either option,however, offer either an environmentally soundalternative to mains power.

Renewable sourcesRenewable sources of power in contrast offer anenvironmentally-sound alternative to extendingthe reach and reliability of power supplies. Whilstoften incurring a higher initial set-up cost, theirreliance on natural renewable sources alsomeans they can be much cheaper to run thanbatteries or generators. Solar power, for exam-ple, has been adopted by a number of initiativesin developing world contexts because its tech-nology is relatively advanced and can be used topower small- and large-scale hardware, connec-tivity and facilities at a relatively low, and falling,cost. Similar options, such as wind turbines orhydroelectricity, also offer renewable sources butare more expensive in set-up costs and oftenrequire large amounts of infrastructure and landto generate power as well as the infrastructure torelay electricity from source to the required pointof usage.

Perhaps the simplest source of renewableenergy harnesses human energy either throughwind-up or bicycle (foot) crank generators. Theresultant power source is independent, flexible,renewable, environmentally friendly and verymobile. Unfortunately it is seldom scalablebeyond powering radios and mobile phones fora limited period of time and as such can seldombe used as a sole power source for an initiative.

The future for powerA number of new sources for generating powerhave been developed and marketed over the lastten to twenty years. Some such as solar powerhave seen widespread adoption and have metrequirements in remote areas extremely effec-

tively. HP, for example, is testing a solar fabricwith itinerant photographers in South Africa thatcosts 80% less than traditional solar panels andwon’t crack5 whilst a number of NGOs are work-ing in developing countries to develop thecapacity to build solar panels and thus spreadtheir usage whilst promoting entrepreneurialism.

Future sources of power, such as fuel cells, alsooffer environmentally-sound compelling alterna-tives, particularly in off-the-grid locations. Fuelcells have the added benefit that, unlike solarenergy, they can store energy until it is neededand can be transported to where power isrequired. In addition to new sources, the ongoingmanufacturing and innovation around existingrenewable technologies such as solar will serveto drive down prices and hopefully to ensure thatthey become a more viable solution for ICT initia-tives with an emphasis on affordability.

Criteria for assessing power

Given the variety of options available for thegeneration of power, a set of criteria are requiredto evaluate the relative pros and cons of eachoption. All ICT initiatives make an assessment at the outset of their power requirements andselect an option or combination of options basedon factors such as the volume of power requiredat present and ongoing, the infrastructure inplace or feasibility of developing infrastructure,the affordability of power, the need for back-upgiven fluctuations in supply etc. On this basis theITAFE matrix has assessed the relative benefitsof different options of powering ICT initiativesbased on the existing infrastructure in place,suitability, affordability, reliability, efficiency andenvironmental impact.

Existing infrastructureCentral to the provision of power is the existenceof infrastructure, whether that is power lines,solar panels connected to a device or the exis-tence of shops in which to purchase batteries.Assessing the success of power generation foran ICT initiative necessitates understanding howexisting infrastructure was used or new infra-structure developed and the suitability of theprovision of power to the geography, populationdensity and infrastructure where the initiative was

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5 Business Week “Tech’s Future”, September 27, 2004, www.businessweek.com/magazine/content/04_39/b3901013.htm

ITAFE Matrix

located. In some cases the choice to use mainselectricity can act as a constraint on initiativesbecause it restricts the geographical reach of aproject. Successful projects in extremely remoteareas might instead choose a power solutionwhich requires no infrastructure and is thereforea much more viable option than reliance upon a mains network.

SuitabilityNot only must the power source chosen becompatible with existing or proposed infrastruc-ture, it must also be compatible with the hard-ware used. The volume and reliability of aninitiatives’ power source must be fit-to-purposefor the hardware required. Equally, powersources need to be easy to use or to trainpeople to use, as well as being accessible to multiple users.

AffordabilityIn using existing infrastructure but particularly indeveloping new infrastructure to provide poweranother key criterion is affordability. As touchedon in the section above, different costs areincurred at different points in the provision ofpower, leaving some options more appropriatethan others. For example, the central cost ofmains electricity for the provider, particularly inremote areas with difficult terrain, is that of build-ing and maintaining the required infrastructure.Where the infrastructure is in place, the cost forconsumers of connecting to the grid and usingmains electricity may be driven down by compe-tition and the number of consumers in the mar-ket. However, although low-cost in relative terms,it may still be prohibitive for bottom of the pyra-mid consumers. In contrast, solar technology,particularly to power small items such as mobilephones or wall-sets, may be more expensive toset-up but self-sustaining on an ongoing basis.ICT initiatives must therefore assess the afford-ability of each solution given their intended con-sumers and decide on a power source ormultiple sources accordingly.

ReliabilityThe reliability of the power supply is also a criticalaspect of the fit-to-purpose of the power usedfor an initiative. Particularly where using PCs andsimilar hardware, a reliable power supply can bea key element which determines an initiative’ssuccess or failure. Ensuring that power supply isreliable is a question of understanding the possi-bility of outages, building in back-up options andguaranteeing that all possible maintenance andrepairs capabilities possible are in place. Thedurability of equipment and its ability to operatein extreme environments may prove key depend-ing on an initiative’s location.

EfficiencyThe reliability of power, alongside affordability,feeds into a question of the overall efficiency ofdifferent power sources for ICT initiatives.Efficient consumption of energy is often a built infactor to the hardware used by ICT4D initiatives,based on the fact that power supply may beintermittent or low. In the same way, the ITAFEmatrix regards the efficient production and trans-port of energy as a vital decision-making factorfor ICT initiatives.

Environmental impactThe final criterion upon which power provision forICT initiatives should be assessed is environmen-tal impact. In a developing world context wherethe regulation of power generation may be lesswell enforced, it is important to consider ques-tions of pollution, wastage and the disposal ofthe infrastructure required to generate power. As discussed in the previous section, this can bean important balancing factor when consideringthe benefits of back-up options such as batteriesfor initiatives where outages are likely.

In sum, the criteria for assessing the relativebenefits of power provision for the projectsincluded in the ITAFE matrix are designed to measure the sustainability, scalability andreliability of the power sources, or combination of power sources used by different initiatives.Investigation of how different projects havetackled each of the criteria described abovereveals a number of key constraints and solu-tions, recurring problems with power provisionand innovative solutions to overcome them.

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ITAFE Matrix

Devising solutions

Overcoming the problems associated with powersupply requires the development of two mainstrategies, diversification and innovation. Theseare preferably built in to the design of the projectand are in place at its start-up. However, a num-ber of examples have also incorporated alterna-tive power solutions once the project is underwayin an attempt to overcome the constraints whichhave become evident.

E-choupal, India6

The e-Choupal internet kiosks developed by ITCin India would be one such example of a projectforced to adapt to an initial failure to guaranteepower supply. Faced with frequent power out-ages, in a country where only 56% of homeshave access to electricity7, ITC, an Indian privatecompany, looked first to a battery-powered UPS (Unlimited Power Supply) back-up solution.However, this remained problematic as batterycharging was still reliant on line power, and thecompany has therefore moved towards a diversesolution using solar-powered in conjunction withline power.

n-Logue, India8

A similarly diverse solution was devised by n-Logue, whose kiosks provide; a 16-hour back-up for telephone equipment, four-hour back-upfor computers, and solar-powered wall-sets withbattery stand-by systems in order to cover inter-mittency issues in electrified areas. In addition,kiosks set-up in areas off the electricity grid areprovided with a petrol-start kerosene-run 400VAgenerator. However, whilst overcoming the prob-lem of lack of infrastructure, such generatorscost USD$213 to buy and run at a USD$0.10per hour greater cost than electricity. The realityof providing off-the-grid power solutions is thatthey are often less cost-effective. However, then-Logue case shows, and most initiatives wouldconcur, that a marginal increase in operatingcosts can be justified given that power is criticalfor ICT and the alternative, to extend mains infra-structure, is both more costly and complex.

Freeplay Radio Foundation, Africa9

The second main strategy for overcomingpower-supply constraints would be to design theproject from the outset without a reliance on linepower and infrastructure. One of the best exam-ples of this approach is that of the FreeplayRadio Foundation, whose radios are human-powered through wind-up technology whichrequires no infrastructure to be in place. Theradios can also be powered either by solar-energy or batteries, but by using wind-up theyare maximize accessibility in remote areas andprovide a mobile solution. Wind-up technology isunder utilized in ICT4D projects but this is linkedto the major constraint discussed above that it isless suitable for hardware which requires largevolumes or constant supplies of power.

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6 World Resources institute - Digital Dividend, Michigan Business School http://www.digitaldividend.org/pdf/echoupal_case.pdf August 2003http://www.unitar.org/hiroshima/ief04/Case%20study/eChoupalYoon.pdfC.K.Prahalad (2004) The Fortune at the Bottom of the Pyramid, Wharton School of Publishing

7 According to the 2001 census

8 July 2001 World Resources Institute http://www.digitaldividend.org/pdf/nlogue.pdf, http://www.n-logue.com/M.L. Best & C.M. Maclay. Community Internet Access in Rural Areas: Solving the Economic Sustainability Puzzle. The Global Information Technology Report2001-2002:Readiness for the Networked World. Oxford University Press. 2002. R. Kumar, A. Jhunjhunwala. Taking Internet to Village: A Case Study of Project at Madurai Region. MIT. 2002. C. Blattman, R. Jensen, R. Roman. Assessing the Need and Potential of Community Networking for Developing Countries: A Case Study from India. 2002.

9 http://www.freeplayfoundation.org/

Criteria Score

Fit to infrastructure 4

Affordability 4

Reliability 4

Efficiency 4

Criteria Score


Affordability 3

Reliability 5

Efficiency 4

Criteria Score


Affordability 5

Reliability 4

Efficiency 4

ITAFE Matrix

Jhai Foundation, Laos10

Cases of complete reliance on solar, wind orother renewable sources are rare. More usualwould be the Jhai Foundation, which developedboth an innovative and diverse power solution forlow-energy PCs in remote Laotian villages with-out electricity. The Jhai PC runs on less than 20watts in normal use and less than 70 watts whenprinting and is powered by bicycle (foot) crankgenerators. Solar-powered wireless relay pointsare located on hills close to the village andservers located 20km from the village by roadcontinue to be powered by grid electricity. Theentire solution therefore provides for a reliable,renewable and extremely cheap source of powerin remote areas whilst utilizing mains grid elec-tricity where it is available and where, running the server, it is of greatest value.

Key lessons

The most important lesson which emerges fromstudying power usage across ICT projects in theITAFE framework is the importance of flexibility,sustainability and cost-effectiveness. In combina-tion, these elements determine whether thepower source chosen for an ICT initiative is fit-to-purpose for the project in hand.

Projects which provide innovative sources ofpower to areas with poorly developed or non-existent infrastructure may therefore often rely onrenewable sources of energy but provide two orthree alternatives as back-up to the main sourceof power. In some cases this source may bemarginally more expensive than mains electricitybut if it extends the reach of a project it is judgedworth the additional investment.

In many cases, however, such provisions are notbuilt into the initial design or development ofICT4D initiatives and if they are not added in later

have the potential to impact upon the sustain-ability of an initiative. In many cases, usingrenewable sources is a more feasible solution toguaranteeing power supplies for ICT4D, as wellas promoting environmental sustainability in thelong run.

The final key lesson with regards power is that of cost-effectiveness. Affordability serves as aconstraint for projects like the B2B Commerceinitiative in the Philippines where electricity con-nection rates are relatively high in comparison to most developing countries. Equally, a projectsuch as the Equal Access Foundation whoseradios require 10 AA size batteries in order tofunction, suffer from a constraint in terms ofcost, access, flexibility and sustainability. Findinga solution which meets initiatives power needswithout raising costs beyond the means of themajority of consumers is vital.

Hardware

Introduction

Hardware forms another key infrastructuralelement of the ITAFE framework which must be considered closely in order to develop a successful ICT4D initiative. The chosenhardware must be fit-to-purpose not only in its ability to run the relevant software andapplications but also its compatibility with aninitiative’s power and connectivity capabilities.ICT4D initiatives tend to use or adapt existinghardware or develop new hardware for theirpurposes and each approach attracts different costs and complexities.

Types of hardware

The types of hardware used by ICT initiativestend to be generic and based upon handheld,mobile or static devices available on the market,primarily because of the costs associated withdeveloping new hardware in relation to the bene-fits gained. Each initiative will, however, selectthe hardware used according to the needs of thevertical in which the initiative operates and thesuitability of the respective hardware to thatinitiative. Few initiatives included in the ITAFE

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10 http://www.jhai.org

Criteria Score


Affordability 4

Reliability 3

Efficiency 4

ITAFE Matrix

matrix have undertaken the expense of develop-ing new hardware for their purposes, with themajority choosing instead either to use or adaptexisting hardware. Focus thus far has tended tobe on PCs, PDAs, mobile and land phones asthe main hardware for projects with supportinghardware such as satellites, solar panels andwallsets used for connectivity. As with theoptions for power supply, the list of hardwaredescribed below is not exhaustive but a repre-sentation of the individual types and combina-tions which tend to be favored in ICT4D.

Mobile and static phonesOne of the simplest and most effective solutionsharnessed by ICT initiatives are mobile and land-line phones. Globally there are now over 1.2 mil-lion main telephone lines and 1.4 million mobilecellular subscribers11. Public and personally-owned land-lines phones are often part of theexisting infrastructure and are well understood byusers. In many developing countries, the growthof mobile phones in the last five years has beenexponential and handsets can now be obtainedat relatively low-cost12. Mobile phones offer aparticular benefit to ICT initiatives in the form of Short Message Services (SMS) which canprovide information and facilitate communicationat very low cost to both the service provider and recipient.

Despite growing uptake, mobiles remain particu-larly scarce in remote or poor communities. Insome cases this fact may increase their com-modity value and make them extremely vulnera-ble to theft. However, in many cases sharedusage models are applied which are reliant onsocietal interconnectedness and interdepend-ence and mean that one phone can providebenefits to whole groups within a community.Shared usage models using both static andmobile phones can be used to promote entre-preneurship and keep expenditure on hardwarefor ICT initiatives to a minimum.

Handheld DevicesHandheld devices offer a mobile solution which provides the same basic connectivity

as mobiles but with a more sophisticated userinterface and information-rich software. They cantherefore be used for projects as varied as pro-viding IT support to operating as a diagnostictool between nursing staff in remote villages anddoctors in health-clinics. Significant advance-ments over the past ten years in the develop-ment of PDAs and handheld devices have alsolowered their price, making them more affordablefor many individuals. Their cost remains a con-straint however as do the languages and set-tings to which they are predominantly configuredand which exclude users who are either illiterateor do not speak internationally-used languages.

PCsThe PC remains one of the most significantpieces of hardware used by ICT initiativesbecause, where the correct connectivity is also inplace, it offers the simplest method of accessinga wealth of information through the web andoffering multiple users access to transferable ITskills. In this respect, PCs have been of particularvalue to educational establishments, whoseequipment in turn is often utilized to promote theuse of ICT within the broader community. As withhandhelds, constraints exist for illiterate or locallanguage users although these can be overcomeif the relevant local language and graphic soft-ware is accessible and affordable.

However, levels of PC ownership in thedeveloping world remain low. Globally only 650 million people have PCs13. In thedeveloping world, figures average at about 1/100 people in developing countries but can be as high as 8/100 in Argentina or as low as0.18/100 in Burundi14. Basing ICT4D initiatives on PC usage therefore requires that the hard-ware is sourced imaginatively, for example therecycling of computers from the developedworld, and that their value and usage ismaximized across the community includingschemes for ICT capacity-building.

Kiosks and TelecentresFor a number of initiatives the benefits of the PChave been expanded by shared-usage models

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11 Source: 2003 forecast, International Telecommunications Union available online

12 In countries like Kenya the exponential growth in mobile phone ownership over the last 10 years, from close to 0 per 1000 people in 1996 to 19 per 1000in 2001 (World Bank factsheet, 2003), a total of 200,000 subscribers to in 1999 to 2m in 2004 (Safaricom and Kencell data) means that ownership ofmobile phones now outstrips landlines by 2 to 1.

13 Source: 2003 forecast International Telecommunication Union (ITU) available online at www.itu.org

14 Source: 2003 figures, ITU factsheet, November 2004 – available online.

ITAFE Matrix

such as telecentres and kiosks. In some cases,these models are little more than a group of PCs, servers, printers etc which can beaccessed by multiple users over a period of time but which provide the benefit of anindividual log-in that allows users to maintaintheir own email accounts and store files. In more sophisticated cases, such as the DrumNetkiosks in Kenya, a simplified GUI is specificallydeveloped for the initiative which enables accessto a kiosk for illiterate and local language users.

RadioAnother shared usage model, albeit one whichhas been in existence far longer than telecentresand kiosks, is the radio. It operates predomi-nantly self-sufficient of software and applicationsand, whilst extremely simple and prevalent in thedeveloped world, can provide immediate accessto news and education for many people living inextremely remote areas of the developing worldwho have no alternative methods of accessingsuch information.

Future optionsThe future for hardware in the area of ICT4D isclosely linked to ongoing developments in thewider world of technology. Developing worldconsumers want the same solutions as devel-oped world consumers but in many cases havefar more to gain from accessing informationavailable on the internet and from developing IT skills. The continued development of thin client shared-usage models, smart mobiles,tablet PCs and more advanced mobile phonesolutions and a concomitant decrease in prices,will all enable ICT initiatives to take advantage of better, more affordable and more efficienttechnology as it emerges. HP, for example, has developed the 441 PC that can be set-up in schools or libraries, which connects four key-boards and four screens through one PC so that multiple users can access the Net or sende-mail at the same time15.

More advanced mobile phone hardware alsooffers a number of new opportunities for ICTinitiatives in terms of the potential to improveservice, content provision and reach. One suchexample would be the possibilities which GPRS,General Packet Radio Service, phones offer inthe provision of informational services as theybecome more readily available in developingcountries. GPRS is a non-voice value-added

service that allows information to be sent andreceived across a mobile telephone network,supplementing today’s Circuit Switched Data and SMS services. GPRS has a considerableimpact on the speed and efficiency at whichinformation can be transmitted between phones,bringing down the cost of internet connectivityvia mobiles. It would allow initiatives to providegraphic texts for illiterate users and offer consid-erable scope for services such as automationand money transfer which would potentially bevery valuable to remote communities. At present,however, GPRS phones are either too expensiveor simply unavailable in developing worldmarkets.

Beyond GPRS, the next step which will expand opportunities for ICT4D initiatives will be the enablement of wireless solutionsthrough 3G phones. As 3G licenses begin to begranted in some developing countries, wirelesssolutions will spread accordingly. Asia, for exam-ple, now has 30 million PCs compared with 200million cell phone users who, as of 2004 will beable to purchase 3G phones capable of handlinge-mail and Web surfing16. Such developmentschange the relative benefits of choosing a partic-ular hardware option for an ICT initiative. Takingadvantage of these developments will requirecombining ICT initiatives in the developing world with the creation of new, more advancedsolutions for developed world consumers, rather than viewing hardware requirements forICT4D initiatives as existing separately from theconsumer-driven developed world.

Criteria for assessing hardware

Despite advances in the possibilities whichhardware opportunities offer, the central criterionwhich applies to the choice of hardware chosencontinues to be that it is fit-to-purpose. As a key element of the infrastructure of ICT initiatives,the hardware used is often predetermined by the project’s purpose. In addition to this it mustalso be affordable, compatible with the existingor proposed infrastructure, usable, reliable,efficient and secure.

AffordabilityOne of the key elements for judging the successof the hardware used by ICT initiatives is afford-ability. Hardware is not only a key element of the

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15 Business Week “Tech’s Future”, September 27, 2004, www.businessweek.com/magazine/content/04_39/b3901013.htm

16 ibid

ITAFE Matrix

set-up costs of such initiatives but will determinethe ongoing maintenance costs and the likelycost of training and support. For this reason, it must be fit-to-purpose and provide a flexiblesolution without being overly complex. Solutionswhich can rely on existing landline phones forexample should do so in order to avoid outlay onunnecessary hardware and maintenance costs.In contrast, it will become more cost-effective touse hardware such as PDAs as prices fall andavailability increases and this fact should beexploited as far as possible. Ultimately, the set-up and maintenance costs of an initiative’s hard-ware will have a vital impact on its sustainabilityand scalability.

Infrastructure requirementsAs discussed in detail in the section on power,another key element in assessing the success ofthe hardware used by ICT initiatives is to under-stand the compatibility between the chosendevice and the various infrastructural elementsrequired to make it function to its fullest capabili-ties. Hardware must, for example, be able to runusing the available power supply and, whereconnectivity is required, be compatible with thesolutions available. It must be suitable not onlyfor the existing infrastructure but given futuretrends in power supplies and connectivity.

UsabilityThe concept of usability extends from compati-bility with existing infrastructure to the questionof ease-of-use. Take-up rates on hardware, andits likely adoption and local buy-in will be closelylinked to how usable the system is in terms ofthe technical skills and the level and provision of training required to operate it, as well as its visual appeal and the possibility of sharedusage. Usability is a key area where an initiatives’technological infrastructure links closely withhuman capacity development in the form oftraining and support to ensure the success of an ICT initiative.

ReliabilityUsability is also linked in to the reliability ofequipment. The requirement for maintenanceand repairs is a key element for considerationwhen designing an ICT initiative around a hard-ware solution. Equipment which is very difficult to repair and maintain can be next to useless in remote areas whereas equipment which can easily be supported by local people with a

reasonable level of training offers opportunitiesfor existing projects and for ongoing IT capacitydevelopment. Equally important is the availabilityof spares and the supply chain for equipment. If feasible, the use of local suppliers reduces thelikelihood that hardware will fall into disrepair andalso increases the benefits received by the localcommunity from an ICT initiative.

Efficiency and environmental impactIn order to further ensure that ICT initiativesbenefit the local and wider communities, the use of efficient, environmentally-sound hardwareis also an important consideration. For most ICT initiatives there is scope to use hardwaredesigned either with reduced power require-ments, compatible with renewable sources ofenergy or which can be recycled or disposed of responsibly at the end of its lifespan.

Security and ongoing developmentA final consideration when assessing ICT4D ini-tiatives is the likelihood of misappropriation ofhardware or eclipse by new technology. Securityrequirements may be high in models such asshared-usage telecentres, which local businesspeople are reliant on to run their enterprises.Equally, where disease surveillance or other keyhealth information is being relayed the security ofthe data is a key element in assessing the relia-bility of the solution. The risk of eclipse by newtechnology may, in contrast be much harder toaddress. Whilst irrelevant in contexts where asimple hardware solution forms the basis of aninitiative and meets the requirements adequately,it becomes more of an issue where solutions arebased on high-technology hardware at risk ofquickly becoming obsolete and representing ahigh cost to benefit solution for an ICT initiative.

Devising solutions

Finding the best-fit hardware for an initiativewhich meets the other criteria listed aboveresults, in practice, most frequently in solutionsbased on the use or adaptation of existinghardware. In the majority of cases, it is morecost-effective for technology producers, whetherbased in developing or developed countries, to bear the cost of developing new hardware,whilst ICT initiative focus on using that hardwarecreatively and maximizing its potential.

25


ITAFE Matrix

Uconnect, Uganda17 and CDI, Brazil18

The benefits of using existing hardware are evi-dent in a number of projects akin to Uconnect inUganda or to CDI in Brazil. Both initiatives havereused computers discarded by developedcountries, corporations etc, recycled them andadapted them for use in schools and by localbusiness people. The majority of the costsassociated with this process are in the shippingbut both initiatives have set up sponsors of theprogram who enable these costs to be signifi-cantly reduced. The actual recycling of the com-puters is low cost and can be kept low if licenseagreements with software companies can bereached.

Bridgeit/text2teach, Philippines19

The imaginative combination of a number ofdifferent forms of existing hardware can alsoproduce innovative results for ICT initiatives. The Bridgeit/text2teach project uses satellites,mobile phones, videos and TVs to transmiteducational videos from Pearson to schools inthe Philippines. The hardware itself is used as designed for the commercial market but

it is the use to which the hardware is put, in combination with the connectivity solution, which is innovative.

Voxiva Alert, Peru20

Adapting existing hardware can also havesignificant results. The Voxiva Alert initiative in Peru uses landlines but has adapted them to create a voicemail and reporting system.Users have individual, virtual voice accountswhich are easy-to-access and allow them to make reports and exchange peer-to-peerinformation. The initiative is differentiated by its creative use of hardware that is simple,widespread and easy-to-use making theresultant solution an immediate success both in Peru and globally.


and Freeplay Foundation, Africa22

However, overcoming more significant con-straints such as climatic extremes or remotelocations can require a solution based aroundthe development of new hardware. The Jhai PC, developed in the US for use in Laos,

26


Criteria Score

Affordability 4

Compatibility with infrastructure 5

Reliability 5

Usability 5

Criteria Score

Affordability 3


Reliability 5

Usability 5

Criteria Score

Affordability 5


Reliability 5

Usability 5

Criteria Score

Affordability 4


Reliability 5

Usability 5

17 http://www.uconnect.org/

18 Info dev Annual report 2003 http://www.infodev.org/library/AR/2003/annual03pt1.pdf

19 http://www.unescobkk.org/education/ict/v2/detail.asp?id=11184www.ayalafoundation.org/news.asphttp://www.iyfnet.org/document.cfm/39/634http://press.nokia.com/PR/200406/950416_5.html

20 Michigan Business School - December 2003 http://www.bus.umich.edu/BottomOfThePyramid/Voxiva.pdfInfoDev 2003http://www.sustainableicts.org/infodev/Voxiva.pdfC.K.Prahalad (2004) The Fortune at the Bottom of the Pyramid, Wharton School of Publishing

21 http://www.jhai.org

22 http://www.freeplayfoundation.org

ITAFE Matrix

was specifically designed to overcome hightemperatures, dust and humidity. Similarly theFreeplay Foundation’s Lifeline radio was specifi-cally designed for use in tough conditions and torequire limited maintenance. With this aim, andease of use, in mind, it features an aerial which isreplaceable with a simple piece of wire if broken,a rainbow-shaped dial and easy-to-read featuresand can be specifically built to meet customerneeds.

Simputer, India23

Not all developments of new technologies serve their purpose as efficiently as the twoexamples above however. The Simputer,developed in India, exemplifies the dangers of over-engineering a solution, and viewing a development initiative in isolation from thewider market, when existing hardware couldhave been used with the same result. Althoughthe Simputer is more powerful than a PDA andhas SmartCard facilities which enable shared-usage, it is not sufficiently differentiated topersuade customers that it is worth its current price of four times that of a PDA. Its main feature is local language software andgraphic software for illiterate users which couldbe extremely useful in a development context. To date, however, the company behind theSimputer has been unwilling to separate hard-ware and software and as a consequence,uptake of the product has been limited.

Key lessons

Hardware usage in the examples researched to develop the ITAFE matrix indicate that theequipment required for many ITAFE initiatives is predominantly based on the use or adaptationof existing technologies, including the recyclingof equipment. Only in a few cases, particularlywhen trying to reach more remote areas, is there

benefit in significant investment in the develop-ment of new technologies.

One of the reasons to support the use oradaptation of existing technologies is the factthat set-up and maintenance costs for hard-ware can constitute a significant constraint on ICT initiatives. This constraint is more easilyovercome where projects are sponsored bycorporations who provide the equipment, asmight be the case for the e-Choupal kiosks or for Grameen Phones but is more complicatedfor smaller scale projects with lower budgetswho may more efficiently rely on using hardwarealready available in the target market. Otherwisethe constraint may be two-fold both in terms of a lack of availability of equipment in the localeand the cost of purchase and/or shipment from another location. Once the equipment hasreached the initiative in contrast, the emphasismust be on reducing constraints linked to itsusage in terms of connectivity, the applicationsand software it runs, how it is powered and how users are trained and supported.

Connectivity

Introduction

Connectivity forms another key element of thetechnological infrastructure on the supply side of the ITAFE matrix. Reliable, sustainable andcost-effective connectivity, whether that be to the Internet, landline or mobile phone networks,is essential for the majority of ICT initiatives.However developing countries, particularlyremote areas, often lack the infrastructure toprovide cellular networks or internet access inaddition to facing regulatory constraints aroundthe licensing of networks and access to compet-itive connectivity options. In a global populationof 6.3bn there were only 1.2 million main lines inuse in 2003 and 650 million Internet users24. Inthe developing world, these users are concen-trated in urban areas where the infrastructure isin place to provide access and are most likelyfound amongst a social class who are able toafford the hardware and the cost of a monthlysubscription required to get connected. In order to broaden reach across developing countriesand into poorer rural areas and informal settle-

27


23 http://www.amidasimputer.com/media/http://www.simputer.org

24 Source: 2003 forecast, International Telecommunications Union

Criteria Score

Affordability 2


Reliability 5

Usability 4

ITAFE Matrix

ments, ICT4D initiatives therefore need to focusas much as possible on developing or usingimaginatively existing infrastructure or technolo-gies which overcome geographical, socio-eco-nomic and regulatory constraints to connectivity.

Connectivity options

Connectivity options for ICT initiatives can bedivided broadly into those reliant on traditionalwire and cellular networks and those reliant onsatellite technology. In some cases the mostsuccessful projects are those that use a combi-nation of a number of sources.

Wire (Public Switched Telephone Network)/Fibre optic solutionsWire and fibre optic technologies are traditionalsources on which the majority of landline tele-phone networks in developed and developingcountries are based. Teledensity, as the totalnumber of fixed lines per 100 of the population isreferred to, is growing in the developing world25

but often today at a slower rate than the growthof mobile subscribers for example. Wire lines areoften controlled by the government and a failureto deregulate acts as a constraint for many initia-tives as do the physical limitations placed by wireand fibre optic networks which restrict access tomore remote areas. The combination of theseconstraints means that many ICT initiatives seekalternative connectivity solutions which enablegreater flexibility, and speed and volume oftraffic.

Cellular/WLL (Wireless Local Loops)A more accessible connectivity solution for manyremote areas is cellular or wireless local loopsystems, which also offer faster connectivity at acheaper price. Wireless technology provides thebasis for mobile phones across both developedand developing countries and both extensivereach and reduced dependency upon govern-ment-sponsored access to traditional networks.Most importantly cellular networks reducedependency upon physical infrastructure whichis good news for remote and poorly served areasthat many ICT initiatives aim to reach.

Satellite/VSAT (Very Small Aperture Terminal)The most flexible connectivity solution currently

available is based on satellite technology. In anumber of initiatives this provides remote areaswith the capability to connect with and distributeinformation via satellite from places as far awayas the US. Satellite technology also enablesconnection to radio stations and in some cases the downloading of digital information. The scope of opportunities which satelliteconnectivity offers to services such as GlobalPositioning System (GPS), a free-to-use global network of 24 satellites run by the USDepartment of Defense which allows users toreceive their satellite position as well as send andreceive data quickly has already been exploitedsuccessfully by initiative aimed at remote users.Overcoming the cost and infrastructural require-ments of satellite reception would allow moreinitiatives to benefit from such services.

Combination options – Wire/VSAT/WLFor many of the ICT initiatives included in theITAFE matrix, the most flexible connectivitysolutions are those that combine a number ofdifferent options, increasing the likelihood of aconnection and its reliability. Such combinationsallow initiatives to base their connectivity on tele-phone lines for example but to install VSAT linkswhich will expand the initiatives’ reach and flexi-bility. Combinations of connectivity options allowinitiatives to overcome existing infrastructuralchallenges and are often key to transitioningprojects towards scalable solutions.

Future sources of connectivity At present the use of satellites for connectivity in ICT4D projects is the most flexible solutionavailable for remote areas and for covering large distances. However, the use of satellites is currently constrained both by the availability of the hardware and the cost of the solution.Over time it is hoped that such problems will be overcome as the technology becomes morewidespread and costs fall. The spread of GSM(Global System for Mobile Communication)networks across regions such as Africa will also prove key to the spread of availability ofcellular networks.

The spread of GPRS and 3G across developingcountries is also likely to offer considerable con-nectivity opportunities to mobile phone and inter-net initiatives. As discussed in the hardwaresection, GPRS, Global Radio Packet Service,

28


25 Developing countries now account for almost half (49%) of total telephone subscribers in the world, up from just 19% in 1990 (Source: Ch 4, ICTs and theMillennium Development Goals, World Telecommunication Development Report 2003, ITU

ITAFE Matrix

facilitates faster, more immediate transmission ofdata than fixed telecommunications networksand Circuit Switched Data services in GSM net-works. The immediacy of the service has signifi-cant potential for reducing the cost of internetconnectivity, for applications such as remotecredit card authorization, for the transmission ofstill and moving images, document sharing andcollaborative working and for the growth of otherfeatures such as remote access email and posi-tioning systems.

However, as discussed, it requires users to owna mobile phone or terminal that supports GPRSand mobile network operators to enable the sys-tem for users. Additional limitations such as therequirement for an Internet addresses rather thananother mobile phone to receive and send infor-mation through GPRS or that, at the moment,GPRS does not support point to multipoint serv-ices which would hinder the distribution of a sin-gle message to a group of people, are likely tohinder initial uptake in the developing worldcontext.

In the longer-term it is likely that GPRS will beovertaken by 3G services provided that the infra-structure required is in place and that licensesare granted by the government or relevantincumbent. However, the limited success of 3Gin developed world contexts indicates, for exam-ple in Europe where it remains only 3% of serv-ice provider revenues26 and considerableinfrastructural constraints in the developed worldcontext, mean that this may not become a majorconsideration for ICT initiatives for some time.

Criteria for assessing connectivity

There are numerous options available for theconnectivity of ICT initiatives, some of which, likeusing landlines, rely heavily on existing infrastruc-ture but at a low-cost and some of which, likesatellite technology, offer extensive reach but at aconsiderably higher cost. The balance in thiscase for any ICT initiative must be between find-ing a solution which maximizes existing connec-tions cheaply or reaches out to many more usersbut at a greater cost.

AffordabilityIn order to achieve this balance a key considera-tion in assessing the success of connectivity inICT initiatives has to be affordability. Projects thatpiggy-back on existing systems are likely to bemuch more affordable that those which arereliant on satellite technology although in thelong-run they may be less successful. Affordabil-ity for individual users is also important. The costof connecting to the internet in remote areas canbe prohibitive to the uptake of an initiative.

InfrastructureA key element which impacts upon affordabilityis the use of existing infrastructure versus thecreation of new infrastructure. ICT initiatives mustasses which is the best solution based on thewhat infrastructure is in place, what the minimumconnectivity requirements of the ICT initiative are,the population density which connectivity mustsupport and the power supply available.

A central part of this decision-making processwill therefore be the intended reach of the pro-ject. Where remote areas are being accessed,the distance from the network connection or theexistence of satellite receivers are key considera-tions which are much lesser concerns in urbanareas.

Telecommunications regulation and liberalizationcan also be included as an infrastructural con-straint or facilitator for ICT4D initiatives. Policyreforms which enforce the end of monopolies,and potentially facilitate a competitive marketwith pressure on service provision, are advancedin many developing countries27 although onlyrecently underway in others.

UsabilityCost and the existence or creation of connectiv-ity infrastructure are, therefore, important consid-erations. However it is worth recognizing thatalthough costs can be reduced by using wire orfibre optic technology this may also have a dra-matic impact upon the usability of a solution byreducing the reach of an initiative, the speed of aconnection or meaning that connectivity is notpossible at all. Hence the high-levels of uptake ofbroadband services in developed world contexts.

29


26 FT online “3G – content provider’s perspective. Big challenge as interests collide” Nairn Oct 20, 2004. Available online

27 The World Economic Forum’s Consultation report on Southern Africa for example lists Botswana, Mauritius, South Africa and Zambia as examples ofadvanced countries in terms of policy reforms to end monopolies in telecommunications. Source WEF: “Southern African Development Community –World Economic Forum Consultation Report on e-Readiness” 2002

ITAFE Matrix

ReliabilityICT initiatives must also be assessed based onthe reliability of their connection, which will varyaccording to the technology which underliesthem and the level of maintenance which isexpect and support required. Where projects arefocused on Internet connectivity, it is importantthat connections are as reliable and secure as possible. This can be constrained by thenumber of ISPs on offer which, as with networkproviders, has in many developing countriesoften historically constrained by government-ownership of the telecommunications infrastruc-ture. For all forms of connectivity, the reliability ofthe solution is essential to ensure that data is notlost and that a secure connection is upheld.

Devising solutions

Connectivity solutions for ICT initiatives chooseare therefore designed using the options andcriteria described above. In many cases,constraints on connectivity require initiatives to combine harnessing existing infrastructurewith innovative solutions to ensure an affordable,reliable and usable solution which fits theinfrastructure available.


The Voxiva Alert initiative in Peru is one example of the former approach, using theexisting landline telephone network inconjunction with Internet access to providedisease surveillance which users access

either through dialing a free phone numberconnected to a secure server or by entering their information over the internet. Reports can be received via email, voicemail or SMS and users can communicate with each otherpeer-to-peer using voice mail. The solution rests on existing technology but uses a number of different solutions to ensure maximum coverage and reach.

Grameen Phone, Bangladesh29

Constraints in the form of government legislationcan also be overcome through the imaginativeuse of existing infrastructure. Grameen Phone’smethod of overcoming lack of access to amonopoly-owned cellular network have been tonegotiate with Bangladesh Railway’s to leasetheir high-capacity fibre-optic digital transmissionnetwork which has been laid beside the railwaytracks and which covers an extensive area ofBangladesh. Only in areas without fibre-opticinfrastructure, such as the southern coast, hasGP built microwave links. The advantages thatthe breadth of this network provides are vitalbecause the majority of Grameen phones nowoperate within the network and not between thenetwork and fixed-line telephones. GrameenPhone has been additionally constrained by theuse of cellular technology for fixed phone centresbecause GSM systems are far more expensivethan the fixed wireless local loop (WLL) systemsused by the companies competitors, have 10times less coverage and provide poor bandwidthfor data transmission.

30


28 Michigan Business School - December 2003 http://www.bus.umich.edu/BottomOfThePyramid/Voxiva.pdfInfoDev 2003http://www.sustainableicts.org/infodev/Voxiva.pdfC.K.Prahalad (2004) The Fortune at the Bottom of the Pyramid, Wharton School of Publishing

29 World Resources Institute 2001 http://www.digitaldividend.org/pdf/grameen.pdf http://www.grameen-info.org/grameen/gtelecom/

Criteria Score

Affordability 4

Reliability 4

Usability 4


Criteria Score

Affordability 5

Reliability 5

Usability 5


ITAFE Matrix

Manobi, Senegal30

The Manobi project in Senegal, operating on a much smaller scale and in a far more difficultoperating environment31 has also opted tomaximize its connectivity options but focusespredominantly on the innovative use of satellitetechnology to reach remote areas. Manobioperates a multi-channel service platformthrough WAP, SMS, MMS, I ‘mode and theInternet. The system relies on satellite technology(GSM) which is much cheaper in this case thanbuilding fixed infrastructure and which can becoupled with GPS systems for the provision of real-time information to remote customerssuch as fishermen.

African Virtual University, regional32

Where satellite technology is feasible, it providesprobably the most versatile solution to connectiv-ity problems in developing countries. In the caseof the African Virtual University (AVU), for exam-ple, VSAT technology has been provided by one of the project’s key partners, Netsat, and

has proved vital for overcoming technologicaland infrastructural constraints. Lectures aretransmitted to AVU’s central uplink facilities in the US and transmitted to learning centresacross Africa. VSAT technology thereforeprovides a cost effective solution to the geo-graphical dispersal of sites. However, it requiresthe existence of receiving and transmittingtechnology which can be expensive.

n-Logue, India33

A more cost effective solution in many cases isthe use of wireless technologies, which providehigher bandwidth at a lower cost. n-Loguekiosks use a fixed WLL solution, corDECT, toprovide voice, voice band fax/data transfer andInternet connectivity at up to 384kpbs whendigitized. Coverage in this case can be extendedup to 25km using a repeater and the solutionprovides a relatively cost-effective means ofconnecting remote areas without the need forbuilding extensive infrastructure.

Key lessons

Constraints to connectivity include infrastructure,cost34 and government policy and can have asignificant effect on projects which are reliant onthe Internet, mobile phones or landlines in orderto provide education, economic or health-basedsolutions. Many ICT initiatives are impacted

31


30 http://www.digitaldividenetwork.org/content/news/index.cfm?key=760http://www.manobi.net/index.php?M=1&SM=1&lang=enhttp://www.alcatel.com/sustainable/fracture/fracture5.htm

31 Only 25% of the Senegalese population has access to electricity for example and an estimated 54% of households live below the poverty line (Source: N.Murooke 2004, Role of Infrastructure in Economic Growth and Poverty Reduction – Lessons learned from PRSPs of 33 countries. OECD conference,Berlin, 27-29 October 2004)

32 http://www.itu.int/osg/spu/wsis-themes/ict_stories/AVUcasestudy.html

33 July 2001 World Resources Institute http://www.digitaldividend.org/pdf/nlogue.pdf, http://www.n-logue.com/M.L. Best & C.M. Maclay. Community Internet Access in Rural Areas: Solving the Economic Sustainability Puzzle. The Global Information TechnologyReport 2001-2002:Readiness for the Networked World. Oxford University Press. 2002. R. Kumar, A. Jhunjhunwala. Taking Internet to Village: A Case Study of Project at Madurai Region. MIT. 2002. C. Blattman, R. Jensen, R. Roman. Assessing the Need and Potential of Community Networking for Developing Countries: A Case Study from India. 2002.

34 In 2001, PC ownership in India was 5.8/1000 people and there were 7,000 internet users. In a country where 35% of the population live on below $1 per day and the GNP per capita is $480, the costs of internet connectivity, for example, $10 per month for service provision and $0.18 per month fortelephone usage, are prohibitive.(Source: World Bank factsheet 2003)

Criteria Score

Affordability 3

Reliability 5

Usability 4


Criteria Score

Affordability 5

Reliability 5

Usability 5


Criteria Score

Affordability 4

Reliability 5

Usability 5


ITAFE Matrix

either by a lack of infrastructure in place toprovide phone networks or internet access orthe fact that the existing infrastructure does not have sufficient reach to provide access to theremotest, and often the neediest areas. Theinstallation of connectivity infrastructure can be beyond the means of many ICT initiatives, anissue which is particularly pertinent for satellitetechnology 35.

The most important lessons which emerge fromstudying the connectivity constraints faced andsolutions devised by ICT initiatives across theITAFE matrix are that, as with the provision ofpower, the best-fit solutions are those thatmaximize existing infrastructure and wherepossible utilize flexible solutions such as wirelessor satellite technology. Success can therefore be achieved at two ends of the connectivityspectrum, by using extremely simple landlinetechnology as is the case for Voxiva in Peru and in projects such as the AVU or Manobiwhich use VSAT technology for extensive reachand high-speed connections. Flexibility is also a key issue for overcoming both infrastructuralconstraints and the issue of restrictive govern-ment regulation.

Software and Applications

Introduction

The software and applications used by the ICT initiatives constitute the final technologicalelement of the ITAFE matrix and are designed as an interface between technology and userswhich meets the requirements of a specificvertical, such as education, health or economicopportunity. On the whole, different verticalsprovide ample opportunities for a variety ofsoftware solutions but tend to suffer from similar constraints. Overcoming these constraintsrequires a clear understanding of the criteriaunder which software and applications in ICTinitiatives are successfully used, which includestheir fit to user requirements, the available techni-cal infrastructure and the usability of the solution.The design of an initiative’s software and applica-tions and their fit-to requirement are essential toensure success, sustainability and scalability.

Software and Application options

All ICT initiatives, irrespective of their scale andthe hardware in use, require some form of soft-ware or application in order to operate. Whetherinternationally recognized and licensed or open-source, an initiatives’ software or application isoften the most user-specific element of the initia-tive. As the interface between the user and theICT solution, it therefore requires the mostdesign and planning in order that the specificrequirements of the vertical it serves are met.The principle verticals for software and applica-tions to support which were investigated by theITAFE matrix are education, economic opportu-nity, health, environment and empowerment andparticipation. It is recognized that additional verti-cals exist, but the focus for the ITAFE matrix arethose considered to have the greatest potentialfor developmental impact and the involvement ofthe private sector.

EducationThe primary benefit of ICT for educational initia-tives is the wealth of information and learningmaterials which technology enables them toaccess. The software and applications whichsupport this aim are key in the provision ofaccess to education materials, the internet ande-learning tools, the creation of inter-school net-works and the use of ICTs to improve processefficiency in schools. Whilst all software andapplication requires the correct design and con-figuration where it aims to reach a mass, diverseaudience with the aim of education this is espe-cially important. Given the breadth of informationavailable, the potential for ICT initiatives toenhance education in developing countries inenormous but this can only take place where thesoftware and applications used are usable aspossible.

Economic OpportunityAccess to information is also key for the promo-tion of entrepreneurialism, The provision of mar-ket information, job opportunities or e-tradingcan all serve as a means of elevating bottom ofthe pyramid farmers or business people andenabling them to improve their operating marginsand profits. Just as businesses in the developedworld are reliant on an understanding of their

32


35 ITC’s decision, for example, in supporting the e-Choupal initiative to move towards VSAT technology in order to enable a better throughput of information(256Kbps as opposed to 40Kbps through telecom infrastructure) costs US$2,560 per installation.

ITAFE Matrix

competitors and the markets they operate in, so too do developing world businesses benefitfrom making informed decisions to improve theirstrategies and processes. The software andapplications which enable users to access thisinformation are therefore critical. As in education,they must overcome constraints of illiteracy orunfamiliarity with the traditional internet lan-guages if they are to meet the requirements ofthe market in which they operate.

HealthThe software and applications which support ICTinitiatives focused on health are designed to pro-mote access to and the dissemination of infor-mation as well as the increased proficiency ofreporting and diagnostic processes. Designingusable interfaces for users in remote areas, forexample, enables linkages to remote health serv-ices and other clinics which not only promoteefficiency but have the potential to save lives.

EnvironmentThe benefits for environmental initiatives of usingICT lie in the facilitation of awareness and under-standing of environmental impact, encouragingcross-border participation through networking,and the spread of lessons about beneficialprocesses, management ideas and cooperativeresource management. As for the other verticals,the key benefits of ICTs in this area are in theaccess to information, the ability to share infor-mation, and to communicate with previouslyinaccessible individuals and communities. Forremote areas under environmental stress, suchaccess can be key to publicizing the benefits ofenvironmental management and the problemsfaced by particular communities. Supporting allof these aims are software and applicationswhich enable information management andoperate as tools for the sustainable managementof natural resources. In some cases these canbe developed specifically for the initiative but theuse of generic word-processing or spreadsheetpackages can equally provide a platform forsharing information.

Empowerment and participationIn both developed and developing world con-texts the possibilities of using ICTs as a means toimprove participatory processes and promotegood governance have also expanded consider-ably over the last ten years. Both as a means to

regulate and improve the transparency of elec-tions, or to promote information sharing and pro-vide community services, ICT initiatives offerbenefits which go beyond financial efficiency.Access to information via the web can broadenindividual’s horizons, better people’s knowledgeand understanding of political, social and eco-nomic issues as well as providing a means ofhighlighting the work of local initiatives to aglobal audience. One particular area of empow-erment is gender. Access to information acrossborders offers women, in particular, networks forempowerment, virtual communities for support,access to training and support modules and theability to develop strategic international alliances.

Criteria for assessing software and applications

The software and applications used by ICT initia-tives must therefore serve a broad variety of ver-ticals and within those verticals a number ofdifferent purposes. Despite their differences how-ever, they can all be assessed by their ability tomeet user requirements and to do so in anaffordable and sustainable manner and in linewith available infrastructure options.

ApplicabilityThe applicability of a software or applicationsolution determines how well it fits user require-ments, the hardware on which an initiative isbased and other applications with which it mustwork. Successful solutions are those designedwith specific user requirements in mind butwhich are also flexible should new uses be builtinto an initiative or new hardware or devicesintroduced. It is not only the content of softwareor application which determines its applicabilitybut also the languages and graphics which itsupports and which make up the user interface.

AffordabilityThe cost of software and applications is a keyelement of any initiative. The provision of licensesencompasses both a one-off and ongoing main-tenance costs which can often be prohibitive forsmall-scale initiatives. Solutions which are afford-able are also more likely to be sustainable, scala-ble and reliable. Initiatives must bear in mind thatoffers of reduced price software or licenses,whilst compelling in the short term, may not be

33


ITAFE Matrix

ongoing and may affect an upward trend on thecosts of software and application provision whichultimately constrains the project.

InfrastructureAll software and applications will have specifichardware, power and connectivity requirementsin order to function correctly. The infrastructureof the initiative therefore needs to be understoodand designed from a holistic viewpoint in orderthat the best-fit solutions infrastructure is to beput in place.

UsabilityIn conjunction with applicability, affordability andinfrastructural needs, it is the usability of softwareand applications which will determine its ongoinguse. This factor works in conjunction with theprovision of training and support to ensure thatusers of varying skill levels, and often with noprevious IT experience, are able to get the mostout of the applications and software used by ICT initiatives.

Devising solutions

The most successful solutions in the provision ofsoftware and applications for initiatives are thosethat successfully balance the need for affordablesolutions with software that meets specific userrequirements and is compatible with the infra-structure in place.

African Virtual University, regional36

In some cases the prohibitive cost of licensingsoftware and applications is overcome throughsponsorship from the software company itself or

from a donor related to the ICT initiative. AVU, forexample participates in the Microsoft AcademicVolume Licensing agreement designed to reducecosts of acquiring, upgrading, maintaining andmanaging software for multiple computers whichallows AVU to equip all of their learning centreswith Microsoft products.


In direct contrast, another method of tacklingboth cost, licensing and access constraints is to use open-source software in local languages.This is the approach adopted by the JhaiFoundation to work in conjunction with the Jhai PC in remote areas of Laos, providingaccess to the Internet for schools and busi-nesses. The Jhai PC runs on a Laos-languageversion of the free, Linux-based KDE graphicaldesktop and runs Laos-language office tools.

Uconnect, Uganda38

A key consideration for software and applications is that they fit the requirements of the project and are not excessively complex to meet the solution. Uconnect in Uganda, for example, runs on Windows 95 softwareinstalled on PCs. The software is very slow but is considered more user-friendly by theinitiative than more up-to-date versions.

34


Criteria Score

Applicability 5

Affordability 4


Usability 5

Criteria Score

Applicability 5

Affordability 5


Usability 5

Criteria Score

Applicability 4

Affordability 5


Usability 5

36 http://www.itu.int/osg/spu/wsis-themes/ict_stories/AVUcasestudy.html

37 http://www.jhai.org/economist.htm


ITAFE Matrix

n-Logue, India39

Another important consideration for ICT initiativesis that the software and applications they use areaccessible to individuals who are illiterate or whodo not speak international languages in whichsuch technology tends to be configured. The n-Logue project, taking these constraints onboard, uses local language software developedwith a local software firm, Chennai Kaviggal forits word-processing, spreadsheets and email. In addition it runs local language contentdeveloped in conjunction with another localpartner, Webduniya.com.

Simputer, India40

Another initiative which emphasizes the need forapplicable software is the Simputer developed in India. Much of the software available on theapplication was tailored specifically to meets its key functions and included Doodle n’Mail,motion sensor software which responds to ges-tures, Indian language software, text-to-speechsoftware and a smartcard reader/writer forintegrated identification, sharing and security.The applications were designed in InformationMarkup Language, which is more versatile thanXML, follows internet standards and allows stan-dards to be controlled. However, despite theconsiderable effort put into the software on theSimputer, there was not enough focus on the

end-user in the design of the product, resultingin a higher price than had been anticipated andthat was feasible given the existence of PDAs in the market. The software available on theSimputer cannot currently be unbundled fromthe hardware, meaning the potential winningcombination with a PDA has yet to be tested.

Key lessons

The potential for ICT initiatives in this area can beconstrained unless the required hardware, powerand connectivity are in place to support softwareand applications. Ensuring that these elementsare in place is all part of the holistic approachrequired to designing and implementing thetechnological infrastructure of ICT initiatives,which is emphasized by the ITAFE framework.

Even with the right infrastructure in place how-ever, the cost of purchasing and installing soft-ware and applications can still be prohibitive. Inpart this is a problem of licensing, many of whichare beyond the means of ICT initiatives. Whilstthis can be overcome by the use of open-sourcesoftware, the resultant solutions may then beconstrained in their compatibility with other usersas well as reliant upon local technical knowledgefor the ongoing support, maintenance and devel-opment of their software.

Another major constraint is that the majority ofmulti-user software which is compatible withhardware and frequently used tends to requireboth literacy and knowledge of international lan-guages, both of which act as an automatic filterto restrict access. Overcoming the issues ofaccess to software is often vitally important forprojects which need to reach audiences inremote areas. Examples such as the e-Choupaland n-Logue kiosks, the Jhai PC and theSimputer have all emphasized the need for locallanguage software in order to meet the needs ofthe people they are reaching.

Overall, software and applications need to bemeet user requirements, be affordable andusable as well as compatible with the hardware

35


Criteria Score

Applicability 3

Affordability 2


Usability 5


40 http://www.amidasimputer.com/media/http://www.simputer.org

Criteria Score

Applicability 5

Affordability 5


Usability 5

ITAFE Matrix

and infrastructure in place. They form a vital linkbetween the user and technology which makesan initiative usable and therefore ensures uptakeand sustainability. Software and applicationstherefore need to be designed or chosen withcare, their purchase and maintenance costs builtinto an initiative’s business model and their hard-ware, infrastructure and training and supportrequirements understood as part of an initiative’sholistic infrastructure design.

Training & Support

Introduction

Just as technology has been shown to be acrucial component of any ICT initiative, so toois the development of human capacity vital toensure the ongoing success of ICT4D. Withoutthe required skills to configure, maintain andrepair the technology upon which ICT initiativesare based, to support software and hardwareand to train users, such schemes have a limitedlifespan and are likely to be of limited long-termvalue to the communities in which they areimplemented.

The most successful ICT projects take intoaccount the human capacity and technicalrequirements for training and support before theproject has started. There are multiple optionsfor the design and provision of training and sup-port, from remote access to local services, andboth must meet the local requirements of an ini-tiative and be designed to be sustainable. Whilstthe limited information available about the train-ing and support of ICT project suggests that it isseldom an area of focus for many organizations,there exist real opportunities in this area toexpand IT capacity within and across therecipient population and to create a lastingimpression and sustainable business model in the communities impacted upon.

Types of training and support

Consideration of the types of training andsupport available for ICT initiatives is a keymeasure of sustainability within the ITAFE frame-work. Both services can be offered as local orremote services or as a combination of both.The option chosen will be affected by andimpact upon the existence and development of IT capacity.

Training – face-to-faceThe most traditional model for training is face-to-face (F2F) delivery, whether one-on-one at thesite of the initiative or class-room based at atraining centre. F2F training is both an efficientand effective method of relaying information fromexisting to new users that can be further devel-oped by schemes such as “train-the-trainer”.However F2F training will be significantly con-strained by the availability of staff to conducttraining sessions, as well as cost, accessibility to users and infrastructural requirements.

Training – remoteRemote options, in contrast, offer a means toovercome the need for staff on the ground toprovide training as well as offering reduced costswhen operating at scale. Whether in the form ofself-help software or internet-based training,courses which users can access independently,and which can reach multiple users offer a num-ber of benefits. However, by their very nature,they require a prerequisite level of skill which isoften absent and for that reason may be unsuit-able in areas where basic IT skills do not exist.

Support – localSupport models for ICT initiatives can also besplit by those located on the same site as theinitiative and those accessed remotely. Theprimary benefit of locally provided support is also its primary constraint. Projects which arelocally supported are likely to be much moresustainable than initiatives where local peoplehave limited knowledge of the equipment onwhich the project is based. However, developingongoing support and IT capacity requires willingand capable local people to be trained up tofulfill these roles. This in turn requires that theinitiative is willing to spend time and energy tomake such an investment in local people.

Support – remoteRemote support, in contrast, relies on nationally-or internationally-based staff in order to over-come the constraints of a lack of local skills andto offer cost-savings through scaled operations.This may in the short-term be a more efficientmethod of providing support to ICT initiatives.However, it is firstly no substitute for the pres-ence of IT support at the site of the initiative and secondly does nothing to build localcapacity, ownership and self-sustainability.Initiatives which receive ongoing support fromtheir corporate sponsors, in the form of technicalhelp, maintenance etc, benefit from a set-up

36


ITAFE Matrix

which is well-organized and well-trained.However, unless knowledge transfer takes place at the local level, initiatives are unlikely to be of ongoing benefit to a community.

Criteria for assessing training and support

The primary criterion for assessing training and support is, therefore, sustainability. All othercriteria upon which training and support areassessed in the ITAFE framework; affordability,reliability and usability, feed into an assessmentof an initiative’s sustainability.

AffordabilityInformation on the cost of training is hard toascertain from ICT initiatives. The most cost-effective methods of training are likely to be face-to-face delivery by operatives on the ground where local training staff can beengaged. Courses carried out away from the location of an initiative constitute a moreexpensive option. Equally, remote training andself-taught courses all require an initial invest-ment in IT infrastructure in order to functionalthough once set up their cost per user fallsconsiderably. The most cost-effective methods of providing support are also local solutions.Remote support whether by telephone orinternet requires a set-up cost and works at scale but may not be appropriate for small-scale initiatives.

ReliabilityThe reliability of ICT training courses will beessential to ensure that quality training withongoing benefits is delivered to consumers and users. More importantly, a reliable supportmodel is essential for ICT initiatives to work onan ongoing basis. Whether the requirement is for 24/7 PC support or simply for accessiblesupport over the phone for mobile phonehandsets, users need to be sure that the support model is available when required.

UsabilityPerhaps the most important element for trainingoptions is their usability, Training needs to reachout to individuals with limited IT skills but also tohave the capacity to enable users with differentskill sets. Whether taught or self-learnt it needsto follow a model to which users can easilyadapt and learn and retain the maximum amountof information. Similarly, support and mainte-nance options need to be usable and accessible.Options such as email-based or telephone helplines are frequently used in the developed worldto provide a swift and usable support service. Itmay be, however, that the most usable solutionis in fact one which adopts multiple options for ITtraining and support in order to make it as viableas possible.

Devising solutions

The key to overcoming constraints to trainingand support is to build both factors into any ini-tiative as a key element of its start-up and ongo-ing maintenance.

Uconnect, Uganda41

A good example of such an initiative is Uconnectin Uganda. As a condition of the provision of aserver, the organization requires schools toundergo the required training to configure andmaintain the equipment. Training constitutes akey element of the entire project and those who undergo self-taught training courses areencouraged to train others once they havecompleted their course. Schools are taught how to maintain and support their own equip-ment with the intention of promoting a sense ofownership and confidence amongst local staff.

37


Criteria Score

Affordability 4

Reliability 5

Usability 5

Sustainability 4


ITAFE Matrix

Educ.ar, Argentina42

Another vital element of any training and supportprogram is to offer a flexible solution which userscan take up over a variety of timescales. In theeduc-ar initiative in Argentina, the training modeloffers capacity-building workshops, TV-baseddistance learning and virtual campuses as wellas distance courses through a portal, all of whichusers are able to take-up at a time which bestsuits them.

Grameen Village Phone, Bangladesh43

A similarly flexible yet comprehensive model ofsupport and training is provided by the GrameenPhone initiative. Training is provided to all VillagePhone (VP) operators as to how to set-up anduse their equipment and limited additional train-ing is then expected. Grameen Telecom, thenon-profit organization which supports the proj-ect, tracks trends in phone use and identifiesVillage Phone operators who are having difficultymarketing or collecting payments. Support andhelp is provided during weekly face-to-facemeetings to collect phone revenues. Grameenalso provides a direct customer service facility,available 24 hours a day, 7 days a week.

Key lessons

The key constraint for the provision of trainingand support to ICT initiatives in developing

countries tends to be a lack of existing technicalknowledge and the infrastructure in place todevelop training schemes or support operations.As a consequence some projects, as with theSimputer in India, rely on external and expensivesupport models. Although the support is avail-able both online and by phone, at a cost ofbetween US$125 and US$749 per month44 it isprohibitive for the majority of low income users.

The provision of training and support are key tothe sustainability of ICT projects and yet they areseldom elements which are focused upon whenprojects are being designed and initiated. Themost successful methods of training and supporttherefore appear to be those that offer a numberof options as well as self-sustaining options suchas train-the-trainer with a view that capacity isbetter developed if individuals have the initiativeto pass on what they learn. A number of initia-tives have retained a model of external supportand provision of training which, although itensures quality service in the short term or maywork to support the CSR aims of internationalorganizations for example, does little to developlocal-level IT capacity. The long-term sustainabil-ity of IT initiatives might therefore be betterfocused on developing local skills with a viewthat local provision of training and support arekey elements of any initiatives sustainability.

Cost Structure and Financing

Introduction

The final defining component of any ICT initiativeis the means by and structure within which aninitiative is set-up and its ongoing financial andbusiness strategy, A sound business plan andorganization are key elements whether theinitiative is to be run as a non-profit short-termscheme or is designed to be self-sustaining or profit making.

The cost structure and financing of ICT initiativesis therefore a key element in ensuring the cre-ation and sustainability of any ICT initiative. Themajority of projects investigated for the ITAFEmatrix adopt a mixed model of financing and

38


Criteria Score

Affordability 4

Reliability 5

Usability 5

Sustainability 5

Criteria Score

Affordability 5

Reliability 5

Usability 5

Sustainability 5

42 World Resources Institute July 2001 http://www.digitaldividend.org/pdf/educar.pdf


44 http://www.simputer.org

ITAFE Matrix

most are designed to move towards self-sustain-ability after a pilot stage. The funding programand business model chosen not only determinethe strategic roll out of a project but also heavilyimpact upon elements such as local buy-in andownership and relations with the government.Careful consideration of the type of cost struc-ture and financing adopted is required given thatthe decisions taken have an immediate and long-term impact upon the initiative’s success, itsscalability and its sustainability.

Types of cost structure and financing

The options for the cost structure and financingof initiatives split primarily into funding fromdonors, public sources, private investment and a combination of public/private investment.Within each option, initiatives are able to operateon a for-profit or non-profit basis. In the case offor-profit initiatives, different approaches are alsoadopted as to the split of profits and liabilities,often with the aim of ensuring buy-in andownership at the local level.

Donor grantsThe provision of funding from donor grants isfrequently used to ensure up-front funding forinitiatives from a mixture of public and privateinvestors. Grants received are not necessarilytied in to the need to generate profits and forthat reason can be extremely beneficial toinitiatives during their pilot phases whilst they are operating on a non-profit basis. In manycases, ICT initiatives receive grants in the form of equipment which allows the initiative to beset-up and upon which the donor expects noreturn. Grants are also used beyond pilot phasesin order to subsidize the rollout of initiatives orwhere the structure of the initiative is such thatlocal level operations operate sustainably but the non-profit founding company is reliant ongrants in order to continue to operate.

Public investmentAlthough seldom the single source of funding, a key source of investment comes from interna-tional, federal, state and local governments.Such investment usually takes place in conjunc-tion with private sector investment and with a view that the projects funded will becomesustainable and will generate social or economicdevelopment in return for public investment.Particularly in the developing world where

government stability and transparency is oftenquestionable, using public investment can be aninsecure method of ongoing operations. In addi-tion, public investment is constantly under reviewand may not therefore constitute a secure andsustainable method of financing initiatives.

Public/private investmentFeasibly a more sustainable and transparentmethod of harnessing available public funding isto tie it in with private investment. Most devel-oped world governments have a budget forinvestment in development initiatives, often fun-neled through organizations such as USAID,DFID or the IDRC, as do federal, state and localgovernments. Gaining government support forinitiatives and building partnerships between pri-vate investors enables ICT initiatives to positionpublic funders as key stakeholders, which islikely to encourage buy-in at a national and locallevel and cooperation. In some cases, govern-ments even act as the major partner in initiatives,with the specific purpose of promoting economicopportunity, education and health. On the whole,the cross-over between the role of governmentand the social development aims of ICT initia-tives means that they are a key stakeholder andbeneficiary of such projects and that all effortspossible should be made to tie them in andensure mutual benefits.

Private investmentMany initiatives, however, choose to build strongrelationships with governments without relying onfunding for buy-in. In most cases, such initiativestend to be financed by national or internationalcorporations building for-profit initiatives, oftenwith established relationships with governments.In such cases, corporations have pre-existingfunding for initiatives which they choose to investfor a mixture of philanthropic, revenue generatingand market-seeding reasons. Strong relation-ships with banking partners must be developedor exploited to ensure financing for local opera-tives, with marketing partners to ensure promo-tion of the initiative and with external partners to ensure ongoing funding whilst the projectachieves profitability. Private investment inbottom of the pyramid initiatives has become agrowing phenomenon in recent years as corpo-rations recognize the revenue generating possi-bilities of this customer segment, as well as thesocial and economic development which can be generated through responsible investment.

39


ITAFE Matrix

Criteria for assessing cost structure and financing

Assessing the pros and cons of the differenttypes of cost structure and financing of ICTinitiatives requires an understanding of how well the business model for each initiative hasbeen designed, the source and structure ofstart-up and ongoing financing and the reliability,transparency and sustainability of the fundingoptions chosen.

ViabilityThe viability of ICT initiatives can be assessedaccording the proven business case for a marketfor their services and the sound design of a roll-out plan for a sustainable initiative. Irrespective of the scale of the project, all initiatives requireevidence that a market exists for their servicesand the development of a roll-out plan whichoutlines the proposed financing, pricing, market-ing, technology and customer loyalty plan whichwill ensure that the initiative operates eithersustainably or is profit-making. Initiatives whichfail to understand the market they are enteringand the requirement for services will, irrespectiveof the funding available and the cost structureput in place, fail to succeed.

Start-up funding and cost structureThe establishment of founding investment is key for any initiative but particularly for ICTinitiatives where start-up costs for equipmentcan be high. Included in the start-up costs must be consideration of investment required to overcome constraints in areas such as powersupply and connectivity, without which projectswill not be able to function. Many initiatives relyon donated equipment at their inception as ameans to keeping down start-up costs andtherefore moving as quickly as possible towardsa sustainable business model. This tends to beless of an issue where the initiative is supportedby a private investor or corporation who canafford the up-front capital required to invest ininfrastructure. Such cases often enable moreambitious business plans including infrastructuraloptions such as satellite connectivity which,whilst expensive, are invaluable for reachingremote areas and maximizing social andeconomic development.

Ongoing financing and cost structureStart-up costs and financing are essential for getting an ICT initiative off the ground andrunning. However, it is the ongoing financing and business model of an initiative whichenables it to transition from a cash-absorbing to self-sustaining model with the ability to deliverlong term benefits. The majority of successfulICT initiatives establish from the outset a cleartimetable over which returns on investment and profitability are expected. Whilst ongoingdonations can serve to support the non-profitfounding organization or to enable the ongoingroll-out of the initiative, sustainable projects need to indicate that they can move towardsbreak even or profitability soon after the pilotstage of the project is completed.

There are a number of options for ensuring that this is the case. The first is stakeholder buy-in which ensures that partners in the initia-tive have a key interest in its successful transitionto profitability. Even with small-scale initiatives,designing the financing model so that it becomesself-sustaining as soon as possible is importantfor ensuring that all stakeholders are bought in tothe success of the project. Another key elementfor ensuring self-sustainability or profitability is an upfront understanding of the running costs ofa project and a business model which accountsfor ongoing support costs and the revenuesrequired to balance these out. As at start up,business models need to understand therequired take-up of their services and accountfor marketing and promotional costs to ensurethis in order to create a sustainable businessmodel. Finally, a key element for a sustainablemodel is one which can ensure ongoingfinancing as required. The sustainability offinancing options and renegotiation of fundingopportunities will be critical to the ongoingsuccess and scalability of any ICT initiative.

TransparencyLinked in to the idea of sustainability of funding is a requirement that the sources of funding arereliable and that the likelihood of the misappro-priation of funding is limited as far as possible.Transparent operations ensure that the likelihoodof misappropriation remains low and considera-tion of conflicts of interest and ethical conflicts in funding are also important for reducing finan-cial concerns around possible business models.

40


ITAFE Matrix

Devising solutions

The sustainability of cost-structure and financingis, therefore, a key part of any ICT initiative. A number of successful examples in the ITAFEmatrix have operated in their pilot stage as non-profitable enterprises however most havemoved towards sustainable operations as a means to ensure that they have ongoingdevelopmental impact.


The Voxiva Alert initiative in Peru, funded initially by philanthropic investments from majorcorporations and the Peruvian government, was mandated by the company’s CEO to reachbreakeven 2 years after its set up in March 2001.Having set up profitable and self-sustaining busi-nesses in each country they operate in, Voxiva’sfounding company, based in the US is able tofocus on securing significant ongoing fundingfrom angel investors and top-tier investmentfirms in order to continue to expand globally.

Some constraints in the operating modelcontinue to exist however. As Lima remains thecost-centre of operations it carries a significantproportion of Voxiva’s cost-burden whichrestricts its ability to operate profitably. Theongoing sustainability of Voxiva’s operations will also be dependent upon them overcomingchallenges such as the long sales-cycle associ-ated with working with the government and the complexities of balancing social benefits and business opportunities whilst operatingacross five continents.

E-Choupal, India46

Another example of all round success in terms offunding, cost structure and business model arethe e-Choupal information kiosks. Backing fromITC, one of India’s major private companies,played a key role in the initiative’s set-up, payingthe upfront funding costs to cover the $3,000-6,000 set-up cost of each e-Choupal. However,the e-Choupals are designed to generate operat-ing profits for individuals at all three-tiers of theoperating model. ICT predicts that it recovers its costs within the first year of the e-Choupal’soperations. The model receives local supportbecause it raises the incomes of local farmersand commission agents. Finally, in absoluteterms saves both ICT and local farmers close to US$6 per metric ton in comparison to theprevious method of operating.

n-Logue, India47

Another example of a three-tiered franchisingmodel that generates revenues at the local level,for the LSP and for the founding company is n-Logue’s village kiosk initiative in India. The roleof n-Logue in setting up the project is key toestablishing and maintaining relationships withwide range of service providers, supporters and, crucially, the government. In addition, n-Logue has partnered with the National Bank

41


Criteria Score

Financial success 5

Scalability 5

Sustainability 4

Criteria Score

Financial success 4

Scalability 3

Sustainability 3

Criteria Score

Financial success 5

Scalability 4

Sustainability 4

45 Michigan Business School - December 2003 http://www.bus.umich.edu/BottomOfThePyramid/Voxiva.pdfInfoDev 2003http://www.sustainableicts.org/infodev/Voxiva.pdf, C.K.Prahalad (2004) The Fortune at the Bottom of the Pyramid, Wharton School ofPublishing

46 World Resources institute - Digital Dividend, Michigan Business School, http://www.digitaldividend.org/pdf/echoupal_case.pdf August 2003,http://www.unitar.org/hiroshima/ief04/Case%20study/eChoupalYoon.pdf, C.K.Prahalad (2004) The Fortune at the Bottom of the Pyramid, Wharton Schoolof Publishing


ITAFE Matrix

of Agricultural and Rural Development and the Indian bank to provide its projects andentrepreneurs with operating capital. A regionalnetwork of franchised Local Service Partnerswork in tandem with the company to set-up the access nodes for the kiosks and local entre-preneurs are recruited to establish village-levelfranchises.

The initiatives operating approach concentrateson high cash flows by securing 50,000 cus-tomers per node and offers LSPs a number of different franchising options. The first is a full deposit model where the LSP makes arefundable deposit of $20,000 and splitsrevenues 50:50 with n-Logue without owning any of its assets. The second model is astaggered investment model where the LSPmakes a refundable deposit of $4,500 in yearone and obtains $9,000 worth of access centreequipment in its name and a bank guarantee to pay n-loge $13,500 in year 2. Revenues aresplit 60:40 between n-Logue and the LSP andoperating costs are evenly divided. n-Logueexpects the initiative to break even in 5 years,generating $62m profits by year 5 on grossrevenues of $235m, with LSPs breaking even in3.5 years and kiosk operators in year one. Thecompany will need to meet these goals and itsexisting relationships with the government andsupporting organizations if it is to secure the$15m in capital (debt and equity, no grants)which it needs to reach its expansion goals.

CDI, Brazil48

An organization which has taken a very differentapproach to its cost structure and financing, buthas still realized success in development terms is the CDI initiative in Peru. CDI was set up withrelatively little operating capital and now runs

with operating expenses of only $300,000 a year to support an 863 autonomous InformationTechnology and Citizen’s Rights schools whichhave trained over 630,000 children and youngpeople across Brazil to date. The initiative hascreated self-sustained models at each schoolwhich are maintained through revenue generatedfrom charging for after-school activities – apopular practice in the creation of ICT centers inschools where there is also a wider communityneed for ICT access. Whilst the original fundingfor the model came from volunteers and NGOS,CDI has secured ongoing funding from majorcorporations and continues to rely on interna-tional organizations for the donation of equip-ment. None of the elements are designed to beprofitable in the short-term but an importantemphasis has been put on operations in eachschool functioning in a self-sustained, self-man-aged, self-advertised manner.

Computador Popular, Brazil49

In contrast to the success of CDI, theComputador Popular project in Brazil exemplifiesproject failure, despite sufficient set-up fundingand an apparently sound business plan for theproduction and retail of PCs. The businessmodel was designed to include a low-costproduct, loan provision to ensure affordabilityand tax incentives from the government forbusinesses willing to manufacture the computer.Yet, despite an up front investment of $75,000from the government the project failed to movebeyond the research stage. Failure is attributedto insufficient private funding, a crash in theBrazilian economy but predominantly insufficientunderstanding of the cheap PC market, itsprogression over time and the likelihood forongoing support from manufacturers.

42


Criteria Score

Financial success 4

Scalability 3

Sustainability 3

Criteria Score

Financial success 0

Scalability 0

Sustainability 0

48 Info dev Annual report 2003 http://www.infodev.org/library/AR/2003/annual03pt1.pdf

49 http://www.icamericas.net/modules/DownloadsPlus/uploads/Awards_Application/Computadores-Documento_Integrado.pdf, http://www.computadoresparaeducar.gov.co/quienes_somos.html

ITAFE Matrix

Key lessons

The key message which emerges from the ITAFE matrix is that a strong and sustainablefunding program and business model areimportant to make an initiative both financiallyviable and sustainable. Equally, successful andsustainable models are those which are prof-itable at all levels of operating, ensuring buy-infrom investors, middle-men and local operators.For many projects local or national governmentsare key stakeholders, either for the provision offinance, for tax relief or for legislative support forICT initiatives. Given the complexities of states in the developing world, this factor can often bea complication and require considerable thoughtand planning to be overcome.

A number of the successful examples studiedhave operated in their pilot stages as non-profitenterprises and some continue to operate basedon ongoing philanthropic funding from majorcorporations which requires annual requests forfunding, the development of close corporaterelationships and inevitably impacts upon aproject’s ability to operate independently. For this reason, most non-profit initiatives movetowards the aim of self-sustainability after a short pilot period. The benefits for the initiativeitself include the ability to be self-governed and managed, the flexibility to diversify andexpand operations, freedom to grow and, most importantly, the buy-in of individuals at all levels of operations into the ongoingprofitability of the initiative.

43


Case Studies

The preceding section has explained the ITAFEmatrix and each of its “must-have” elements interms of the criteria which must be consideredwhen starting up or running an initiative and keylessons which have been learnt from theresearch and creation of the matrix.

This section will now to discuss in greater detailfour case studies of ICT initiatives which captureas a whole the real challenges and opportunitiesof ICT in the developing world. The four ICT4Dinitiatives are therefore evaluated below based onhow each of the individual components of theITAFE greenhouse – power, connectivity, hard-ware, software and applications, training andsupport, and cost structure and financing – inter-act with one another to create scalable, sustain-able outcomes.

n-Logue50

Mission: n-Logue’s mission is to provide access to services such as computer training, e-government, health care, etc. to those that do not currently have access, namely the ruralpoor, at a price point they can afford.

Brief History ofInitiative: n-Logue was started in 2000 and incubated by theTelecommunicationsand Computer Network(TeNet) Group of theIndian Institute ofTechnology in Madras.

Tamil Nadu, a state in Southern India, is thebeachhead for n-Logue’s operations. N-Logueprovides services to the rural poor throughkiosks run by local entrepreneurs and by provid-ing training and equipment/connectivity. Kiosksinclude, at a minimum, an Internet-enabledcomputer with some local language software, a printer and power back-up. There are over1000 kiosk operators now up and running. 47% of those kiosks are run by women.

ITAFE Matrix:

Connectivity: TeNet designedwireless local loop technology(WLL) as the basis for villagelevel communications. TheTeNet solution provides voice,voice band fax/data transferand Internet connectivity at25-70 kbps to 384 kbps. Theaverage with this solution is 35kbps (allowing for video-con-ferencing, but not for stream-ing). The subscriber wall set(WS-IP) can transmit bothvoice and data signals simulta-neously to an access center

which must be located within 10-12km (line sightof distance; hilly terrain will interfere). Coveragecan be extended to 25km using a repeater. Theinfrastructure costs are kept very low as fixedWLL does not require extensive digging.

In taking into consideration the cost structureand financing part of the matrix in evaluating theconnectivity choice of n-Logue, this solution isparticularly elegant due to its ability to reachprofitability with a small subscriber base. Mosttraditional land line or cell systems require a verylarge subscriber base to obtain profitability hin-dering their ability/desire to work in rural commu-nities. This solution, however, has a central baseunit/direct interface unit that handles traffic from200-1000 subscribers. Hence, it works ideally in small, dispersed markets.

Hardware: Kiosks vary in the hardware eachhas on location. However, a typical kiosk wouldhave the following components:

• CorDECT wireless system• Telephone• A 600 Mhz Celeron PC with 14” monitor• Speakers, microphone, sound card and

CD-Rom• 16-hour back-up for telephone and 4 hour

back-up for computer• An STD PCO meter (if the kiosk is a public one)• Dot matrix printer• Local language software (word processing,

spreadsheet, email, etc.)

44



Case Studies

Typically, kiosk operators purchase all of theabove equipment for less than $1000.Approximately $135 to $250 of the $1000 ispurchased with their own capital. The remainderis financed through small loans administered by“partner” banks arranged by n-Logue.

Power: In evaluating power options for n-Logue,consideration needs to be given to both thesolution for base stations and for the kiosks aseach have varying power needs and are essen-tial to the end-to-end solution.

The power choice for the base station has twointeresting design features. First, the stations usea solar panel for energy. Many of the base sta-tion locations are off of the electricity grid, a notuncommon phenomenon in India where onlyapproximately 56% of homes are electrified(according to a census conducted in 2001).Second, base stations are designed to notrequire air-conditioning, a power-hungry featurein many connectivity solutions, minimizing thepower requirements of the base station andallowing it to run fully on solar power.

The kiosk power solution additionally takes intoaccount the reality of intermittent power at bestfor places on the “grid” and no electric power inmost of the rest of the country. Each entrepre-neur is given a 16-hour power back-up for tele-phone and a four hour back-up solution for thecomputer. For those off the grid, there is theoptional inclusion of a petrol start kerosene-run400VA generator. The generator, however, isexpensive at approximately US$210 dollars andis approximately $.10 per hour more to use thanelectricity. Those increased rates certainly cutinto the margins of the entrepreneurs.

Software and Applications: To bring contentand software to the rural market57, n-Logue hasdeveloped strategic alliances with contentproviders. There has been an explicit focus ondeveloping the software applications in the locallanguage. The types of services offered variesgreatly from educational software such as com-puter training to e-government applicationsallowing citizens to submit petitions to govern-ment, obtain birth and death certificates togeneral communication applications enabling

villagers to exchange emails and voicemails. As the kiosks take hold, the applications arebecoming increasingly market driven andcustomized to the local market.

Training and Support: n-Logue has taken onthe business of recruiting the kiosk operatorsthemselves as they see the entrepreneurs’ roleas absolutely fundamental to the kiosks’ suc-cess. They recruit from the large pool of gradu-ates from India’s many technical institutes. Oncethe operators are recruited n-Logue then, in turn,offers training and business advisory services.They do business advisory work with not onlythe operators at the kiosk level but also with theLocal Service Providers (LSPs) which are dis-cussed more in the next section on cost struc-ture and financing. The LSPs also provideadditional support to the kiosk operators.

Cost Structure and Financing: n-Logue’sbusiness model is particularly innovative, espe-cially given all of the moving parts and partnersneeded to make their mission – to provideaccess to services such as computer training, e-government, health care, etc. to those that donot currently have access, namely the rural poor,at a price point they can afford – succeed. Hereare some of the core components of their coststructure and financing model:

• To facilitate entrepreneurs access to capital, it has partnered with financial institutions such as National Bank of Agriculture and RuralDevelopment (NABARD) and India Bank whohave “fast-tracked” n-Logue loans

• Also creating incentives for entrepreneurs to open kiosks, the government has providedentrepreneurs a 15% subsidy on the principalloan amount

• To lower cost of hardware, it has partneredwith ITT-incubated R&D and manufacturingcompanies and by obtaining volume discountsfrom suppliers

• To lower implementation costs, it has part-nered with LSPs who maintain access centers,recruit kiosk operators, collect revenues

• To ensure incentives are aligned and profitabil-ity maximized, kiosk operators are also ownersresponsible for developing and marketing theirown business offerings

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51 In 2002, India’s rural population constituted 72% of the total population of over a billion people. (Source: World Bank factsheet, 2003)

Case Studies

Kiosk operators make approximately $100 to$175 per month with around 85% of entrepre-neurs making at least $65 a month within thethird month of operation. Typically, entrepreneurshit the breakeven point within one year. And,perhaps most impressively, as of April 2004according to the company there has been 100%repayment of loans.

The Local Service Providers typically meet theirbreakeven within 3.5 years. An LSP typicallycovers one “project area” which includes 30-200villages. Typically, year one will see an LSP bringon-line 100 installations and year two an addi-tional 100.

n-Logue is a business as well and they anticipatebreakeven within a 5 year timeframe.

Lessons Learned:

Several key lessons can be learned from n-Logue’s approach.

1. Build strong and robust consortium thatincorporates each of the “must-have”elements. n-Logue very early on in theirproject planning understood that “going italone” was not an option. While n-Logue hada very innovative technology allowing for con-nectivity to parts of India previously unreach-able, they needed strong partners in manyother areas, partners that could providefinancing for the entrepreneurs (banks, gov-ernment), supply local connectivity (LSPs),engineer innovative power solutions (solar andgenerator companies), design software forlocal use in education, e-government, health,etc.(software companies) and provide the nec-essary local training to very “green” entrepre-neurs. n-Logue therefore went about pullingeach of these different members into its con-sortium to be able to provide value to the end-user. In ITAFE parlance, they carefullyconsidered which partners could best con-tribute to each of the “must-haves” – connec-tivity, hardware, power, software andapplications, training and support and coststructure and financing – and ensured thatthese entities were present early on in theplanning process fully understanding the“greenhouse” dynamic at play.

2. Create robust business model for eachpartner. n-Logue also created a sustainablebusiness model, not just for themselves, butfor each member of the consortium. Theincentives of all business partners are aligned.The LSPs, content providers, banks, entrepre-neurs, n-Logue themselves all have a busi-ness proposition that encourages them tohelp expand the mission of n-Logue. This isnot a philanthropic venture for any one of thepartners. n-Logue has developed compellingbusiness logic for not only attracting initialpartners, but for those very same partners toscale and grow the number of kiosks in ruralareas.

3. Focus on niche market. n-Logue did anexcellent job of taking into account competi-tive dynamics and industry interests. Theycarved out a niche market – rural villages –that others had left behind enabling a widerbreadth of consortia members to participatethan would have been possible if potentialpartners had felt their “bread and butter” businesses were at risk of being cannibalized.

4. Capitalize on entrepreneurialism. No partof the n-Logue model is about “hand-outs”which contributes to its scalability and suc-cess. Even the government subsidy is aimedat simply lowering the hurdle for young menand women to become n-Logue entrepre-neurs. But the owner/entrepreneurs still needto put their own capital into the kiosk. Assuch, they feel (and act) much more vested inthe outcome. A small number of kiosks arenot run by self-employed individual entrepre-neurs, but by an NGO called the DhanFoundation. The Dhan Foundation pays theoperators a salary and covers all up frontcosts. These kiosks have been dramaticallyless successful than those run by the opera-tors who are responsible for paying back initialfinancing and who are eligible to receive aprofit on the rest.

5. Focus relentlessly on end-user needs.n-Logue has done an adequate job at this,particularly considering their current positionand size. However, it is also one of the areasthat research has indicated could beimproved. Currently, most kiosk users areunder 20 years old, most users are male andmost users belong to the mid- to upper-income categories. n-Logue has a better

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chance of reaching more of their target popu-lation with greater focus on the identificationof end-user needs and the provision of appli-cations that meet those needs.

6. Attack cost structure and financing frommultiple angles. Many ICT4D initiatives havelost momentum or died completely due toreliance on a single cost structure or financingmodel. In contrast, n-Logue had a multi-pronged approach to thinking creatively aboutcost structure and financing and did not relyexclusively on any one funding source, partic-ularly government.

E-Choupal52

Mission: E-Choupal’s mission is to re-engineerthe procurement process for crops in rural areas of India by providing bottom of thepyramid farmers with access to marketinformation and improved services which allow them to cut out the middleman, increase their profit margins and take greatercontrol over their production and sales.

Brief History ofInitiative: E-Choupalwas conceived in May1999 and launched in June 2000 by theInternational BusinessDivision of ITC, one ofIndia’s leading privatecompanies. The

E-Choupal are set up in villages under the guid-ance of a Sanchalak (lead farmer) and providedwith PCs and the infrastructure to allow connec-tivity to the internet in order to access informa-tion on prices, the weather, best practice etc.The aim is to offer farmers all the information,products and services needed to enhance farmproductivity, improve farm gate realization andcut transaction costs. By mid-2003, more thanone million farmers in 11,000 villages had beenreached by 1,900 kiosks across four states ofIndia, Madhya Pradesh, Karnataka, AndraPradesh and Uttar Pradesh.

ITAFE Matrix:

Connectivity: The existingtelecom infrastructure in placein the villages where e-Choupals are located was notcapable of supporting the datatraffic needed by the initiative.A solution was therefore devel-oped with the Centre for theDevelopment of Telematics,which improved output to40Kbps but still faced prob-lems with sporadic power sup-ply. ITC have therefore decidedto move to satellite-basedtechnology (VSAT) which

enables a throughput of 256 Kbps, despiteinstallation costs of US$2,560.

This decision indicates the importance of makingstrategic decisions which balance costs againstthe benefits gained from using more advancedtechnology to ensure connectivity. Satellite tech-nology overcomes many of the infrastructuralconstraints of traditional wire and landlineoptions and ensures reliable, flexible and high-speed connections to even the most remoteareas. In the E-Choupal case, the solution wasonly feasible because of ITC’s support and theircommitment to investing in and maintaining theirown IT network in rural areas.

Hardware: A typical e-Choupal kiosk, located ina farmer’s house, consists of a PC with an IntelCeleron processor and printer and is linked tothe internet via phone lines, or increasingly VSATconnection. Each PC will serve an average of600 farmers in 10 surrounding villages withinabout a 5km radius.

Each e-Choupal costs ITC between US$3,000and US$6,000 to set-up, of which on average$3,700 represents the cost of equipment. Whilstthe capital outlay for the company is high, thebenefits gained, for example a reported saving ofUS$6 per metric ton of soy produce for both thefarmer and ITC, mean that the venture for thecompany as a whole is profitable.

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52 World Resources institute - Digital Dividend, Michigan Business School http://www.digitaldividend.org/pdf/echoupal_case.pdf August 2003http://www.unitar.org/hiroshima/ief04/Case%20study/eChoupalYoon.pdfC.K.Prahalad (2004) The Fortune at the Bottom of the Pyramid, Wharton School of Publishing

Case Studies

Power: A reliable power supply remains one ofthe key constraints for the e-Choupal initiative,given the weak infrastructure in place in ruralareas of India. The initiative was designed to runoff mains electricity however, given known prob-lems with the reliability of this source, a battery-based UPS (uninterrupted power supplyincluding isolation transformer and spike sup-pressor) was built in to each e-Choupal. Thesolution means that the PCs remain effectivebetween 90 and 300v. However, the back-upsupply is still reliant on line power to charge it. In order to overcome this problem and improveboth the flexibility and reliability of the powersupply, ITC has therefore decided to movetowards installing solar battery chargers at each location.

The power choice for the e-Choupal thereforetakes into account two key elements. The first isthe necessity of building a back-up power solu-tion into the initial design of ICT projects, espe-cially those located in areas which are poorlyserviced by the electricity grid. The second is tobase that back-up on renewable sources whichrequire little existing infrastructure. However, pro-viding such a flexible solution can be costly andITC’s buy-in to the initiative and willingness bothto put in place the infrastructure required for areliable power supply and to provide continuousinvestment to reach a solution has thereforebeen vital.

Software and Applications: The role of soft-ware in the e-Choupal initiative has predomi-nantly been to support farmer’s access to theinternet. In areas where IT literacy may be lowand knowledge of international languages poor,the e-Choupal PCs currently run on a Windows‘98 operating system and, crucially, carry anIndian language word processing program(Ankur). In addition, each PC is provided with a short educational video on the e-Choupal andinformational video clips on best-practice tech-niques such as soil testing. The opportunities forexpanding on the software available through thee-Choupals are limited by their multi-user natureand time constraints on farmers to develop ITcapacity. However, in addition to the promotionof educational efforts for farmers, kiosks are alsobeing used by the community for educational,entertainment and wider business supportservices which is a further incentive to provide a simple software solution with multiple language options.

Training and Support: ITC has recognized the key role that training and support plays increating a sustainable initiative and put in place a sound training program which develops localcapability as well as providing flexible and afford-able IT support. Sanchalaks receive day-longtraining before they are provided with equipmentat the nearest ITC plant covering the fundamen-tals of IT and basic equipment and softwaresupport training. In addition, they are trained in quality inspection and pricing to support the processes which underlie the e-Choupalinitiative.

At the time of installation a coordinator usuallyaccompanies the vendor who installs the sys-tem. Sanchalaks are given one week to experi-ment with the computer and then invited toreturn to the hub or plant for a second phase of training which is individually tailored accordingto their comfort with the computer. A third andfinal phase of training takes place after a monthand covers troubleshooting and basic mainte-nance. For most Sanchalaks the majority of thetraining, however, will be on the job and for thisreasons only farmers with a natural drive areselected to undertake this role.

ITC has a pool of around 15 engineers whoprovide field infrastructure support, averagingbetween 1-2 callers per day at a cost ofapproximately US$6.60 per visit. In addition,each e-Choupal is visited about twice a monthfor infrastructure support. Support staff use one of 25 motorcycles purchased by ITC toovercome the problem of weak infrastructure in rural areas. ITC incorporates Samyojaks (local agents) into the system as providers oflocal support and also maintains the e-Choupalwebsite and data uplink through its subsidiary,ITC Infotech India Limited.

Cost Structure and Financing: The e-Choupalbusiness model is aimed at breaking down theexisting mandi market structure which takespower away from small producers, cuts theiroperating margins and restricts the overallefficiency of the procurement process. Corecomponents of their cost structure and financingmodel are as follows:

• ITC, as a major Indian corporation, has under-taken to develop the e-Choupals as a prof-itable enterprise which will be fully funded andsupported by the company

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• As such, all upfront equipment and infrastruc-tural costs are met by the company. The costof each e-Choupal averages at aboutUS$3,760 for equipment and US$2,200 on staff, travel, communications, software and training.

• Ongoing maintenance of aboutUS$100/year/e-Choupal is also supported byITC's existing infrastructure and the companycontinues to pay for farmer’s transport costs to the procurement hub in order to drive down costs

Farmers selling to ITC through an e-Choupaltypically receive a 2.5% higher price for theircrops than through the mandi system as well as benefiting from lower prices to inputs andother goods and higher yields.

Samyojaks earn an income in the form of a 0.5% commission from ITC for providinglogistical services that substitute for a lack of rural infrastructure, including information and market signals.

In absolute terms, both farmers and the ITC save about US$6 per metric ton of product. ITCreports that it recovers its equipment costs froman e-Choupal in the first year of operation andthat the venture as a whole is profitable. Thecompany has identified 3 sources of value which will help to scale the model in future:

• Crop-specific intervention• Low-cost last-mile transport• Intelligent first-mile for product and service

development by farmers

Lessons Learned:

Several key lessons can be learned from the e-Choupal initiative.

1. Recognize the potential of bottom of the pyramid producers and consumers.As a major Indian agricultural corporation, ITC identified issues with the existing methodof procurement and strove to design a solu-tion that would empower bottom of the pyra-mid producers and provide them with theinformation to improve their processes andprofit margins. A good understanding of theproblems with the mandi system and faith thatlocal farmers, if provided with the right infra-

structure, could work within a new process,meant that ITC were able to create an ICTinitiative which treats bottom of the pyramidfarmers as legitimate partners and benefitsconsumers and the wider community.

2. Devise a business model which benefitsall partners involved. Based on the under-standing described above and the drive toset-up the e-Choupals, ITC were able to cre-ate a system which has proved profitable forthe corporation, the Samyojaks, Sanchalaksand local farmers. This structure promotessustainability by ensuring that there arebenefits for all involved in making each of the e-Choupal kiosks operate efficiently,transparently and profitably.

3. Focus on tackling a specific issue at theoutset with a view to expanding scopeonce the program is up and running. Thee-Choupals were set up initially to deal solelywith soy produce, effectively acting as a pilotprogram to ensure that the model worked andwas scalable. Having achieved this success-fully, ITC have since been able to developplans for the expansion of the model to othercrops, regions in India and countries.

4. Create a model with local buy-in, basedon existing initiative and capacity. ITC hadthe infrastructure and capital required to cre-ate the e-Choupals independently but withoutlocal buy-in and ownership the initiative wouldnot have got off the ground. With this in mind,local farmers and agents were chosen basedon their existing capabilities and experienceand the likelihood that they would thereforeact as entrepreneurs to develop each e-Choupal.

5. Tackle infrastructural constraints frommultiple angles. Overcoming the infrastruc-tural constraints of rural India has been vital to making the e-Choupal initiative successful.ITC have the resources, the determination and the technical capabilities to consistentlydevelop solutions which overcome theseconstraints.

6. Build a strong training and support model with a view to creating asustainable initiative. Again, ITC as a major corporation has the capabilities and infrastructure required to put in place a

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training and support program which can bedesigned around user’s needs. They havebeen innovative in developing solutions to overcome infrastructural problems and have built programs which promote the self-sustainability of the e-Choupals.

Voxiva53

Mission: Voxiva’s mission is to create an inter-national for-profit organization designed to facili-tate the reporting and communication of publichealth information with health professionals inareas without Internet access and to do so rap-idly and with no investment in new hardware.

Brief History of Initiative:Voxiva was founded inMarch 2001 as a UScompany with funding from the Markle Foundationand other major corporatebackers. Peru was chosenas the pilot site because

the existing telecommunications infrastructurehad sufficient reach into rural areas and becauseof a strong partnership with Peru’s Ministry ofHealth. The pilot connected c204,000 individualsin 2 sparsely populated districts south of Lima to the national health surveillance system, incor-porating 76 health clinics and centers. By 2002the Alerta system had submitted 4,269 reportsand 28,269 cases electronically. It has sincebeen adopted for use by the Peruvian Navy and has been asked to expand its cover from 76 to 188 additional health facilities in 2 addi-tional areas, one of which is predominantly rural and the second urban.

ITAFE Matrix:

ConnectivityThe Alerta service in Peruallows users either to dial afree phone number in order toconnect to a secure server viathe existing telephone networkor to enter their informationover the internet. Users receivean account number, PIN andplastic card with simpleinstructions and a code for allthe diseases they need toaccess the system. Additionalinformation can be attached invoice files. Use of the existing

Peruvian telephone infrastructure network hasbeen a key factor for the success of the Voxivaproject, ensuring that additional infrastructuredoes not need to be built54. Only in a few areaswithout telephone networks is connectivity con-strained. In these areas where Voxiva is beingused in remote military operations, integration of radio waves as a form of reporting is required.

Hardware: Voxiva uses existing hardware in theform of phones, PCs and radios to allow usersto connect to the Internet or access their voiceaccounts.

Power: Voxiva’s power requirements are met by existing infrastructure used to power phonesand the internet.

Software and Applications: Disease reportsreceived by health authorities can be exported tovarious programs for analysis and presentation.GIS systems can also be used to view the datausing dynamic maps. Users access the Voxivareporting system directly via the Voxiva website.Health authorities can monitor incoming casesthrough a Web interface through which individualdisease reports arrive in real time. The system isan open one which makes integration with theexisting IT health system used by the Ministry of Health as simple as possible.

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53 Michigan Business School - December 2003, http://www.bus.umich.edu/BottomOfThePyramid/Voxiva.pdf, InfoDev2003http://www.sustainableicts.org/infodev/Voxiva.pdfC.K.Prahalad (2004) The Fortune at the Bottom of the Pyramid, Wharton School of Publishing

54 At 78 telephone mainlines per 1000 people, the Peruvian telephone infrastructure is relatively more developed than other developing countries.Bangladesh, in contrast, had 4 telephone mainlines per 1000 people in 2001 and India 38 per 1000. Source: World Bank factsheet “ICT at t glance” 2003

Case Studies

Training and Support: By 2003, Voxiva hadtrained 149 health personnel to use the Alertasystem in Peru. Training included administrationof user and group accounts, how to submitreports and retrieve voice mail. Many of the endusers who work at either health posts or in theNavy are not familiar with the use of IVR andvoicemail, therefore ongoing training is required.

Cost Structure and Financing: Voxiva Peru is currently owned by the foundingcompany, Voxiva, in the US and operations ineach country are designed to be profit-making.The initial investment for Voxiva came fromsocially minded corporations, $250,000 fromBen and Jerry’s Ice Cream and $500,000 fromthe Markle Foundation. An additional $250,000of funding for deployment in Peru cam from theWorld Bank’s Infodev program. Voxiva has sinceraised more than US$8m from angel investorsand top-tier investment firms like Allen &Company in New York. Lima currently operatesas the cost centre of the company’s operationsand carries significant proportion of the cost bur-den which puts pressure on it becoming a profitcentre.

The main elements of the Alerta project whichmade it simple to finance were; insignificantstart-up costs due to piggybacking on existingtelecoms infrastructure, a close working relation-ship with the Peruvian government and localhealth officials and corporate partnership withTelefonica, Peru’s largest phone company.

For the Peruvian government, the Alerta systemoperates on a fee per user per month basis witha minimum 1,000 user model. An evaluation ofthe pilot in Peru by the San Marcos Universityfound that Alerta required a substantially lowerallocation of resources, lowered operating costsby 40% compared with a traditional paper sys-tem and resulted in a 3-fold increase in reportingcoverage.

At a company level, Voxiva faces the challengeof continuing to deliver quality service acrossprojects in five continents. It must balance busi-ness opportunities over social benefits andshort-term results over long-term impact.Another main challenge for Voxiva is the longsales cycles involved in working with govern-ments and international development agencies.The company’s current strategy for overcoming the problem is to work

with government-approved contractors who are better set-up to initiate and quickly implement technology projects.

Lessons Learned:

Several key lessons can be learned from the Voxiva initiative:

1. Build a sound business model whichmeets a specific purpose but is replicableacross many locations. Voxiva’s US-basedfounding company designed the Alertascheme around a concept that met a specificneed in Peru but which they believed wasbased on a more broadly applicable and scal-able model. The pilot program proved that thismodel was workable in a suitable environmentand has provided a springboard for expansionto other purposes and locations across theworld.

2. Establish sufficient set-up funding andcore investment relations to ensure pilotproject will be fully funded. A key elementof developing this business model was attract-ing sufficient funding from corporations andinvestment organizations to cover set-upcosts. Voxiva has built strong relationshipswith these partners and managed these relationships well to ensure that funding forexpansion is forthcoming. Corporate relation-ships also enhance the profile and visibility of a project.

3. Build strong government relations whenoperating in a vertical which is heavilyinfluenced by government policy. Withoutgovernment support in Peru, the Alerta projectwould not have been viable. Voxiva needed tobuild and prove a sound business case for thePeruvian government and then work closelywith them to ensure that the pilot worked suc-cessfully and resulted in an ongoing relation-ship. Working with governments, particularly indeveloping world contexts, often incurs timelags not experienced in business and requiresthe development of a specific set of negotia-tion and relationship management skills.

4. Use existing infrastructure wherepossible to provide connectivity,hardware and power for initiatives.A key success factor for the Alerta project

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was the use of the existing telephone net-works to allow users to create disease surveil-lance reports. The innovation was in the useof the networks themselves, allowing users toaccess the system individually via phone orthe internet and allocating each user a voicemail account which can be accesses whenthe log on and which allows them to receivehealth alerts, information about diseases, vac-cination programs and training opportunities.Automatic notification of reports is received viaemail, voice mail or SMS and users can com-municates with each other peer to peer usingvoice mail, SMS or the web.

5. Ensure that the company and its in-country operations have the correct cost structure in place to support aglobal enterprise on an ongoing basis.One of the ongoing problems faced by Voxivais the challenge of operating a rapidly expand-ing business across a number of different con-tinents. Their ability to scale the model hasbeen challenged by the variety of locations inwhich they have undertaken the work andcost structural constraints such as the loca-tion of the companies cost centre being inPeru at present.

Grameen Village Phones, Bangladesh55

Mission: Grameen Village Phone’s mission is topromote rural entrepreneurialism in rural areas ofBangladesh through the creation of franchiseswhich provide easy access to telephone servicesacross the country, gradually bringing the full po-tential of ITC to the doorsteps of consumers whohave never before had access to such services.

Brief History ofInitiative: TheGrameen Village Phoneinitiative was started in1995 by GrameenBank, an organizationwhich has promotedeconomic developmentthrough the provisionof microfinance loans

in rural areas of Bangladesh for many years.Grameen Bank formed Grameen Telecom, awholly non-profit organization, to provide the

service to rural areas, in conjunction withGrameen Phone Ltd, a for-profit cellular-phoneservice provider in which the bank holds a 35%share. By 2001, the project had 5000 VillagePhone operatives, providing telephone access to12.5m people with an average of 70 customersa month using each phone.

ITAFE Matrix:

Connectivity: Faced with the control of the switchednetwork by a governmentmonopoly operator, BTTB,Grameen Phone made astrategic decision to enter into a long-term agreementwith Bangladesh Railways tolease the railways underutilizedhigh capacity fiber optic digitaltransmission network to serveas the backbone of the tele-phone system. Only in areaswithout fiber optic infrastruc-tures, such as the southern

coast, has the company built microwave links.

Given that connectivity is a key element of theVP project, the decision to create an innovativesolution using existing infrastructure was vital for the project’s set up. More recently, GrameenPhone Limited has seen the benefits of its strongrelationship with the government and has beenawarded a national license for GSM 900 cellularmobile phone services, making it the country’sdominant mobile carrier. The initiative is now ableto use GSM cellular technology as the networktechnology and, with 227 base stations and 634 cells, has coverage of nearly 30% of thepopulation.

GP has also recently introduced external HG antenna which both ensures smooth callcompletion in areas of weak signal and extendscoverage for VP operations. Other futuresolutions may include fixed wireless terminals,which would extend coverage with good qualitysignals but at a relatively high-cost, and masthead amplifiers used close to villages to increasethe coverage of the network solution. Consider-ation of both solutions highlights how importantconnectivity is to the initiative and the company’s

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ongoing commitment to continue to developinnovative solutions that expand their reach and service. However, given the strengthening of GPs competitors in the market, all of whomuse wireless local loop systems which covermore distance from the masts and provide better bandwidth for data transmission, thecompany will need to make headway in this area if they are to remain ahead of their competitors.

Hardware: The basic package provided by GT for a Village Phone operator includes a Nokia 5110 transceiver, battery, fast-charger,sign-board, user guide in Bangla and a price list for different destinations. As of March 2001,VP had 4,543 phones in service which typicallyremain grounded in public phone offices and do not move from place to place.

Power: Power for charging phone batteriesremains a problem for the Village Phone project.There are villages in Bangladesh with networkcoverage but without electricity which makesmobile phones in that area unusable. Despite the existence of wind-up technology, for examplea wind-up phone charger developed by theFreeplay Foundation, this and other renewablesources have not so far been harnessed by theinitiative, possibly because costs are prohibitive.

Software and Applications: All the NokiaPhones provided by the initiative, come withstandard applications. However, given the natureof the initiative, there is limited requirement for acomplex phone package, although this maydevelop as the market matures.

Training and Support: Given the basic natureof the hardware and software which underliesthe VP initiative, training has tended not to be amajor element of the initiative. GT provides basictraining to each Village Phone operator on howto use the phone and it is assumed that thisknowledge will then be passed on by theoperator to their customers.

More important for the sustainability of theinitiative has been the provision of support, both technical and business. Support is providedby the GT unit office nearest to each operator,whose responsibilities include identifying newareas of signal coverage, selecting new VPoperators and training and maintenance.

GT also tracks trends in phone usage andidentifies operators who are having difficultymarketing or collecting payments for theirservices. Additional support and help is providedduring weekly meetings to collect phone revenueand a direct customer service phone line isavailable to cover problems with phone usage 24 hours a day, 7 days a week.

Cost Structure and Financing: The coststructure and financing of the Village Phoneinitiative has been a key element of its success.For the non-profit GT organization, ownership by the Grameen Bank, and a 35% share inGrameenPhone Limited has meant 50% dis-counts on phone rates and access to micro-loans for all of its operators. More importantly, it means that all three companies have a com-bined interest in the success of the VP initiativeand in building a sustainable and scalablebusiness model.

The use of a franchising model has also beenessential for ensuring buy-in at operator level.Village phone operators are selected by localGrameen Bank branches on the basis of a good repayment record, ownership of a goodbusiness and the spare time to run a VP, literacyand residence near to the village centre. GT buys a cellular phone subscription from GP foreach entrepreneur and provides the necessaryhardware and training. GB lends GT the price of a phone and connection fee, which is repaidin installments within a stipulated 2-3 year period with typical repayment rates of 90-95%.The typical price of a basic set-up package is Tk12,000 (US$220).

VP operators pay a minimum monthly bill ofTk154 which includes monthly line rental, VATand service charge along with Tk100 towards an annual government license/royalty fee.Telephone rates are generally twice the whole-sale rate charged by GP plus taxes and an air-time fee whilst incoming calls incur a flat charge.To compensate for administrative costs incurredby GT and GB, 15% service charge is added to the total GP bill. Individual operators of VPsmake a profit of about Tk2,500-5,000/month(US$50-$100).

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Lessons Learned:

Several key lessons can be learned from Grameen Phone:

1. Create a business model which operateswith commercial principles. Key to the suc-cess of the Grameen Phone initiative has beenthe company’s unusual hybrid organizationalstructure. The support of the Grameen Bankand Grameen Telecom organizations, andGP’s tie ins with both of these companies, notonly provides benefits such as loan provisionand cheap services but a pool of businessexperience and capital for the project. Thesize of the Bangladeshi population, 136 millionin 200256, and potential reach of a project intopreviously unexploited bottom of the pyramidmarkets provide a unique incentive forcorporations and NGOs to wok together to promote similar attempts to developeconomic opportunity.

2. Use a franchising model to ensure local buy-in, sustainability and scalability.The creation of VP franchises has ensured the promotion of local entrepreneurialism byallowing operators effectively to run their ownbusinesses. This has had a particular impacton women, who make up the majority of the operators, and who do not traditionallyhave access to the capital and infrastructurerequired to set up businesses like the VillagePhone.

3. Build strong government relationships toensure legislatory support. Strong govern-ment relationships are key to projects whichuse cellular and switched networks because in many developing countries they remainstate-controlled. Despite a challenging begin-ning to the project, the combined weight ofthe GP and GB organizations and their rela-tionships with the government has enabledGT to benefit from the granting of a cellularnetwork contract to Grameen Phone Ltd.

4. Continually strive to overcome infrastructural issues with innovatesolutions. As the example above illustrates,GT operates in an environment where thereare few guarantees about the availability orflexibility of infrastructure. The initiative hasproved that it is able to devise innovativesolutions to overcome connectivity problemsbut has had less success in tackling weakpower infrastructure through the use ofrenewable sources. This is a major constrainton the project and indicates the importance of viewing the infrastructural “must-haves” of ICT projects holistically.

5. Select entrepreneurs with a goodbusiness history and the potential todevelop their businesses. Pre-selection of candidates to become VP operators wasmade possible through links with the GrameenBank and has ensured that entrepreneurs withdrive, experience and good skills are runningeach of the phone operations. This reducesthe requirement to invest in training andcapability development and means that themodel is more likely to be self-sustainable.

6. Provide strong business and technicalsupport to the business model. Despite the existence of pre-selected candidates, GT has remained focus on developing each of its operators to the fullest of theircapabilities by providing on-hand support and in some cases going as far as to insertcompetitors into markets where they do notfeel the entrepreneurs are maximizing theirprofits. An ongoing support model promotessustainability and provides incentives foroperators to continually improve their businesses.

54



Lessons Learned

The four case studies ITAFE analyzed, as well as the two dozen other projects researched from around the globe, have led to several keylessons guiding both ITAFE’s efforts in Brazil and in its potential expansion to other countries:

1. Focus relentlessly on end-user needs.The projects that failed most abysmally didnot have a focus on the end-user. In thosesituations typically a donor and/or NGO hadconceptualized what they believed the end-user to need and designed a project to thosespecifications. But when the solution wasrolled out, the needs of the end users differedfrom the perception of what their needs were.Rigorous, structured, grass roots research ofend-users needs, to the contrary, has yieldedmuch higher success rates in ICT4D initiatives.Hand-in-hand with the focus on end-userneeds is the importance of recognizing thepotential of the bottom of the pyramidproducers and consumers.

2. Build strong consortium that holisticallyincorporates each of the “must-have”elements. Every single successful projectanalyzed went about creating their particularICT4D solution through the creation of a con-sortium that systematically addressed eachpower, connectivity, hardware, software andapplications, training and support, and coststructure and financing.

3. Create robust business model for eachpartner. Part and parcel of building a strongand robust consortium is the building of asustainable business model, for each memberof the consortium. The most successful proj-ects from around the globe understood thattheir success was only as strong as the weak-est member of the consortium. Hence, greatcare was taken to ensure that the incentivesof all business partners were aligned.

4. Focus on niche market. The most success-ful projects took into account competitivedynamics and industry interests and carvedout a specific market for themselves. Thatallowed a wider breadth of consortia membersto participate than would have been possibleif potential partners had felt their “bread andbutter” businesses were at risk of beingcannibalized.

5. Capitalize on entrepreneurialism. Theinitiatives that have attained the greatestscalability and replicability have harnessed the entrepreneurial spirit of those in the field.“Ownership” in the form of co-investment or sole investing, oftentimes through the use of micro-finance, has proven to be a key to success. The franchise model has beenparticularly effective in engaging otherwise“disenfranchised” members of society, suchas women, in strategies that improve theirlivelihood. Local buy-in and designing initia-tives with local capacity in mind is essential.

6. Attack cost structure and financing frommultiple angles. Many ICT4D initiatives havelost momentum or died completely due toreliance on a single cost structure or financingmodel. Those with a multi-pronged approachto thinking creatively about cost structure andfinancing without a reliance exclusively on anyone funding source (particularly government)have enjoyed the greatest success.

7. Focus on tackling a specific issue at theoutset with a view to expanding scopeonce the program is up and running.Initiatives the quickest to lapse into failurewere ones that were too ambitious at the outset versus those that started with concrete,modest objectives, worked out any kinks inprocesses and then expanded operations.However, equally important, is starting outwith the expectation of the expansion ofscope. Successful, scalable projects startedsmall but designed processes at the outset to accommodate increased capacity in theprojects’ near future. Less successful onescreated a model that worked on a pilot basis but did not prove scalable.

8. Establish sufficient set-up funding andcore investment relations to ensure pilotproject will be fully funded. A key elementof developing effective business models wasattracting sufficient funding from corporationsand investment organizations to cover set-upcosts. Successful enterprises built strongrelationships with financial partners andmanaged these relationships well to ensurethat funding for expansion is forthcoming.Corporate relationships also can enhance the profile and visibility of a project.

55


Lessons Learned

9. Build strong government relations whenoperating in a vertical which is heavilyinfluenced by government policy but donot rely solely on government support fora project’s success. ICT initiatives are proneto need certain levels of government support.Hence, gaining government buy-in early in aproject’s life-cycle is critical. Strong govern-ment relationships are key to projects whichuse cellular and switched networks because in many developing countries they remainstate-controlled. It should be noted, however,that working with governments particularly in developing world contexts often incurs time lags not experienced in business andrequires the development of a specific set of negotiation and relationship managementskills. The most successful projects whilegaining government support have builtbusiness models that are not reliant solely on on-going support from government.

56


Sources

57


Continent Country Project Name Vertical Sources

Africa South Africa Vodacom Community World Resources Institute - August 2003http://www.digitaldividend.org/pdf/vodacom.pdf

Africa Senegal S.A.R.L. Economic World Resources Institute - August 2003 Opportunity http://www.digitaldividend.org/pdf/afrique_initiatives.pdf

Africa Senegal Manobi Economic Digital Divide Network websiteOpportunity http://www.digitaldividenetwork.org/content/news/index.cfm?key=760

Manobi website http://www.manobi.net/index.php?M=1&SM=1&lang=enAlcatel website http://www.alcatel.com/sustainable/fracture/fracture5.htm

Africa Kenya Price Africa - Economic Pride Africa Website http://www.prideafrica.com/partners.htmDrumNet Opportunity Wisconsin University website http://www.basis.wisc.edu/live/rfc/cs_02b.pdf"

Africa South Africa UUNET Economic South African information service Bandwidth Opportunity http://www.southafrica.info/doing_business/investment/Barn oppurtunities/bandwidthbarn.htm

Africa Regional African Education Information and Telecommunications Union website Virtual http://www.itu.int/osg/spu/wsis-themes/ict_stories/AVUcasestudy.htmlUniversity

Africa Regional Freeplay Education/ Freeplay foundation & Freeplay corporation websites Foundation Community http://www.freeplayenergy.com/

index.php?section=news&subsection=inthenews&page=18http://www.freeplayfoundation.org/

Africa Uganda Uconnect Education Uconnect website http://www.uconnect.org/

Africa South Africa The Compliance Health http://www.bridges.org/iicd_casestudies/compliance/Service

Africa Uganda HealthNet Health World Resources Institute, - August 2003http://www.digitaldividend.org/case/case_healthnet.htmHealthnet website http://www.healthnet.org/hnuganda.phpDevelopment gateway website http://www.developmentgateway.org/download/221026/Satellife.pdfFeb 2003, Bridges evaluation http://www.bridges.org/satellife/evaluation_pda_project_28_February_2003.pdf

Africa Senegal Afrique Health World Resources Institute - August 2003 Initiatives/ http://www.digitaldividend.org/pdf/afrique_initiatives.pdfPesinet

Asia Philippines B2BPrice.now Economic B2BPricenow website http://www.b2bpricenow.com/pr/inq_102901.htmOpportunity Development gateway website

http://topics.developmentgateway.org.org/ict/rc/ItemDetail.do?itemId=279299Infodev website http://www.sustainableicts.org/infodev/B2B.pdf

Asia Philippines Bridge IT Economic UNESCO website http://www.unescobkk.org/education/ict/v2/detail.asp?id=11184Opportunity AYALA Foundation website www.ayalafoundation.org/news.asp

IYF net website http://www.iyfnet.org/document.cfm/39/634Nokia Corporate website http://press.nokia.com/PR/200406/950416_5.html

Asia India e-Choupal Economic World Resources Institute - Digital Dividend, Michigan Business School Opportunity http://www.digitaldividend.org/pdf/echoupal_case.pdf August 2003

Unitar websitehttp://www.unitar.org/hiroshima/ief04/Case%20study/eChoupalYoon.pdfC.K.Prahalad (2004) The Fortune at the Bottom of the Pyramid, Wharton School of Publishing

Sources

58


Continent Country Project Name Vertical Sources

Asia Bangladesh Grameen Economic World Resources Institute 2001 http://www.digitaldividend.org/pdf/grameen.pdf Telecom/ Opportunity http://www.grameen-info.org/grameen/gtelecom/Village Phones

Asia India n-Logue Economic World Resources Institute - July 2001 Opportunity http://www.digitaldividend.org/pdf/nlogue.pdf

N-logue website http://www.n-logue.com/

Asia India PicoPeta Economic Simputer corporate website - http://www.amidasimputer.com/media/(Amita Simputer) Opportunity http://www.simputer.org

Asia India TARAhaat Economic World Resources Institute - July 2001 Opportunity/ http://www.digitaldividend.org/pdf/tarahaat.pdfCommunity

Asia India Equal Access/ Education Equal Access website http://www.equalaccess.org/challenge/index.htmWorldSpace http://www.equalaccess.org/documents/nepal_report_071204.pdf

Asia Laos Jhai Foundation Education/ Jhai Foundation website http://www.jhai.org/technology.htmEconomic http://www.jhai.org/economist.htmOpportunity

Asia India TeleDoc Health Jiva Institute http://www.jiva.org/Health/teledoc.asphttp://www.jiva.org/health/associates.asp

Latin Brazil Computador Community Chase S (2001) America Popular http://globeandmail.workopolis.com/servlet/News/fasttrack/20010522/RVOLK

Digital dividend websitehttp://www.digitaldividend.org/pubs/pubs_06_overview_technology1.htmBBC News 2/12/2004 http://news.bbc.co.uk/1/hi/technology/3250876.stm

Latin El Salvador Infocentros Community World Resources Institute - July 2001 America http://www.digitaldividend.org/pdf/infocentros.pdf

Latin Bolivia PRODEM FFP Economic Digital Dividend website http://www.digitaldividend.org/pdf/prodem.pdfAmerica Opportunity

Latin Brazil ViaSebrae Economic World Resources Institute - June 2001 America Opportunity http://www.digitaldividend.org/pdf/viasebrae.pdf

Latin Brazil CDI Education Infodev Annual Report 2003 America http://www.infodev.org/library/AR/2003/annual03pt1.pdf

Latin Colombia Computadores Education ICA website America para Educar http://www.icamericas.net/modules/DownloadsPlus/uploads/Awards_Applica-

tion/Computadores-Documento_Integrado.pdfCPE website http://www.computadoresparaeducar.gov.co/quienes_somos.html

Latin Argentina educ.ar Education World Resources Institute - July 2001 America http://www.digitaldividend.org/pdf/educar.pdf

Latin Peru Voxiva Health Michigan Business School - December 2003 America http://www.bus.umich.edu/BottomOfThePyramid/Voxiva.pdf

InfoDev 2003 http://www.sustainableicts.org/infodev/Voxiva.pdfC.K.Prahalad (2004) The Fortune at the Bottom of the Pyramid, Wharton Schoolof Publishing

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