PC Kiosk Trends in Rural India

Kentaro Toyama1 Karishma Kiri2 Deepak Menon2 Joyojeet Pal3 Suneet Sethi2 Janaki Srinivasan4
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(niversity of &alifornia# !erkeley# &alifornia# (S)

$n%ian $nstitute of $nformation Technolo"y# !an"alore# $n%ia

Abstract We present a series of preliminary, quantitative results on rural PC kiosks in India. An analysis of the data confirms many expected trends and correlations and shows that kiosks still face the challenge of sustaina ility as a usiness. !his study is ased on questionnaires presented to kiosk operators and customers of kiosks operated or franchised y "rishtee and n#$ogue, two for#profit rural kiosk companies that operate in various geographies throughout India. %ecurring surveys are eing run with three questionnaires concerning the daily operation and demographic context of the kiosks. !he recurring questionnaires will e repeated once a quarter for three years& the results for this paper are from the first two sets only.

Introduction
ural P& kiosks are one manifestation of various attempts to apply information an% communication technolo"y for socio-economic %evelopment .$&T4D/0 Kiosks .sometimes referre% to as telecenters/ can 1e thou"ht of as $nternet cafes for rural villa"es# 2ith one or more connecte% P&s availa1le for share% use 1y villa"e resi%ents0 They %iffer "reatly from ur1an $nternet cafes# ho2ever# in that the operational challen"es an% user nee%s of remote rural villa"es are apprecia1ly %ifferent from that of cities0 ural kiosks typically offer a 1roa% ran"e of services an% applications speciali3e% for rural areas# 2hereas ur1an caf4s ten% to focus purely on $nternet access an% stan%ar% computer applications0 Kiosks are initiate% 1y various kiosk project a"encies# 2hich i%entify one or more people per rural villa"e to act as a kiosk operator0 $n many cases# the kiosk operator is also the kiosk o2ner# in 2hich case the a"ency takes on a franchise mo%el# 2ith operators as franchisees or rural entrepreneurs0 !y some estimates# there are as many as 156 rural P&-kiosk projects across $n%ia# some of 2hich alrea%y have# or are plannin"# thousan%s of installments .Toyama et al0#
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2664/0 Most of these projects 2ere starte% 2ithin the last five years# ri%in" on $n%ia:s 1oomin" $T in%ustry0 eflectin" the nation:s %iversity# these initiatives %iffer in "oals# mo%els# operatin" para%i"ms# an% "eo"raphic %istri1ution0 ;very sector is involve% < lar"e enterprise# entrepreneurs# universities# "overnment# an% =+7s < 2ith motives ran"in" from turnin" a commercial profit# to %rivin" socio-economic "ro2th# to streamlinin" "overnment 1ureaucracy0 ;arly evi%ence in%icates that rural kiosks can help villa"ers improve their economic stan%ar% of livin" 1y e>pan%in" livelihoo% options an% empo2erin" them 2ith information# tools# "oo%s# an% services .such as e%ucation an% healthcare/0 The true challen"e is in fin%in" 2ays to %eliver this 1enefit 1roa%ly an% consistently# 2hile makin" kiosk projects economically sustaina1le in the lon" term0 )s 2oul% 1e e>pecte% 2hen the 2orl%:s most a%vance% technolo"ies are %roppe% in the mi%%le of farmin" communities# "reat innovation is re?uire% at the interface# 1oth technically an% in terms of sustaina1le 1usiness mo%els0 $n this paper# 2e present fin%in"s from a series of ?uestionnaires orally %elivere% to kiosk operators an% customers from kiosks initiate% 1y t2o prominent $n%ian kiosk a"encies# Drishtee an% n-*o"ue0

Background on the Project Agencies

!oth Drishtee an% n-*o"ue are for-profit companies0 They 1oth seek to sustain themselves as franchise 1usinesses# 2hile maintainin" the "oal of %eliverin" relevant services for rural socio-economic %evelopment throu"h connecte% P&s0 Drishtee Drishtee spun off from an $T services company# 2ith the "oal of @connectin" $n%ia villa"e 1y villa"eA .Drishtee# 2665/0 $ts ori"inal focus 2as on provi%in" e-"overnment services to rural villa"es an% to this en%# it has computeri3e% a num1er of "overnment services .e0"0# 1irth certificate applications# vehicle licensin"# etc0/ in the re"ions in 2hich it operates0 $n a%%ition# it forms partnerships 2ith 1ankin"# insurance# an% other in%ustries to 1rin" commercial services to rural villa"es0 Drishtee sells kiosk start-up kits consistin" of necessary har%2are an% provi%es assistance 2ith loans 2here necessary0 Kiosk services are provi%e% throu"h Drishtee:s 2e1 portal# for 2hich kiosk operators are e>pecte% to pay a monthly fee# as 2ell as per-transaction costs for online transactions0 Drishtee spen%s consi%era1le effort on choosin" host villa"es as 2ell as on selectin" an% trainin" the operators 2ho run their kiosks0 Drishtee seeks certain characteristics in the villa"es an% operators 2ith 2hom they 2ork < villa"es shoul% have a population "reater than 5666# operators shoul% have un%er"one 12 years of stan%ar% schoolin"# etc0 $n the past# they have run pro"rams to help kiosk operators increase their revenue an% con%ucte% evaluations of their successful kiosks to %etermine ho2 1est to choose future sites for e>pansion0 Drishtee operates appro>imately 566 kiosks# primarily in the northern an% eastern states of $n%ia0 n-Logue

n-*o"ue 2as foun%e% 1y the faculty of the Telecommunications an% &omputer =et2orks .Te=et/ "roup at the $n%ian $nstitute of Technolo"y# Ma%ras# @to si"nificantly enhance the ?uality of life of every rural $n%ian 1y %rivin" the %i"ital revolution profita1lyA .n-*o"ue# 2665/0 The Te=et "roup %evelope% corDect 2ireless local-loop technolo"y# 2hich remains at the heart of n-*o"ue:s 1usiness of provi%in" rural connectivity0 n-*o"ue seeks entrepreneurs to act as @local service provi%ersA .*SPs/# 2ho run a re"ional kiosk 1usiness 1ase% aroun% a corDect to2er that provi%es phone services an% $nternet connectivity0 ;ach *SP is e>pecte% to set up as many kiosks as it re?uires to sustain itself0 n-*o"ue shares profits an% losses 2ith the *SP0 *ike Drishtee# n-*o"ue sells kiosk start-up kits consistin" of the necessary har%2are an% offers assistance 2ith loans 2here nee%e%0 (nlike Drishtee# its revenue comes from provi%in" phone service an% connectivity# for 2hich it char"es a per-hour fee or a fi>e% monthly fee for unlimite% access0 n-*o"ue operates primarily in $n%ia:s southern an% 2estern states0 Thus far# n-*o"ue has focuse% on rapi% e>pansion across several states# 2ith over 36 *SPs an% appro>imately 2366 kiosks total0 !oth a"encies are firmly committe% to fin%in" a sustaina1le 1usiness mo%el 2hile also impactin" poor rural villa"es0 They have 1een in operation for several years each# an% continue to pursue their ori"inal missions0

Research Methodology
'e are in the process of a%ministerin" recurrin" surveys over t2o years# for a num1er of n-*o"ue an% Drishtee kiosks0 There are three ?uestionnairesB .1/ a 1aseline ?uestionnaire for each kiosk villa"e# %elivere% to the kiosk operatorC .2/ a recurrin" ?uestionnaire for kiosk operatorsC .3/ a recurrin" ?uestionnaire for kiosk customers0 )ll three ?uestionnaires have 1et2een 56-D6 ?uestions# 2ith a close% set of responses for most ?uestions .i0e0# there are very fe2 open-en%e% ?uestions/0 The 1aseline ?uestionnaire 2as %elivere% just once to the kiosk operator in the autumn of 26640 The other t2o are 1ein" %elivere% once every three months# 2ith the first one coinci%ent 2ith the 1aseline ?uestionnaire0 T2o sets of the recurrin" ?uestionnaires have 1een complete% so far0 Sample ?uestions from the ?uestionnaire are provi%e% in the appen%ices0 156 kiosks 2ere chosen for Drishtee an% 156 for n-*o"ue# althou"h Drishtee kiosks have 1een 1roken into t2o 1atches# 2ith t2o sets of D5 kiosks alternatin"0 8or each kiosk# one operator an% five customers 2ere intervie2e%0 Thus# each time the surveys are con%ucte%# 2e complete a total of 225 ?uestionnaires for kiosk operators an% 1125 for kiosk customers0 To our kno2le%"e# this is the only survey thus far %irecte% at rural kiosk operators an% customers at this scale in $n%ia0 8or Drishtee# the first set of surveys 2as un%ertaken in Sirsa %istrict .Earyana state/# Ma%hu1ani .!ihar/# an% Sonitpur .)ssam/C this first set inclu%es kiosks 2hich have 1een in operation for over si> months0 The secon% set 2ere from *akhimpur .)ssam/# +ola"hat .)ssam/# an% Jaipur . ajasthan/# evenly split 1et2een ne2 kiosks less than t2o months ol% an% esta1lishe% kiosks that have 1een in operation for t2o years0 8or n-

*o"ue# all stu%ies 2ere con%ucte% in Thiruvallur# Faniyam1a%i# Thirupattur# )lla"umalai# !havani# Myla# all in Tamil =a%u state# an% Man%ya# in KarnatakaC all kiosks ha% 1een in operation for over si> months at the time of the first ?uestionnaire0 Surveys 2ere con%ucte% 1y employees of Drishtee an% n-*o"ue 2hose primary responsi1ilities are to a%minister these surveys# un%er a contractual a"reement 2ith the t2o a"encies0 'e are usin" the first year of the stu%y to iron out metho%olo"ical issues0 esults presente% in this paper shoul% 1e taken as preliminary results# 2hich 2ill re?uire confirmation in Gear T2o0 Possible sources o bias and noise! Several forms of 1ias or inaccuracy may e>ist un%er the current metho%olo"y0 Some of these pro1lems 2ere %ue to initial %ifficulties puttin" the stu%y in place# an% these shoul% %ecrease in the secon% year of the stu%y0 8irst# 1ecause the ?uestionnaires are 1ein" a%ministere% 1y employees of the project a"ency# there may 1e 1ias 2here the respon%ents "ive ans2ers that they think may 1rin" more favor to them from the kiosk a"encies0 More pro1lematic is that the %ue to the len"th of time it takes to collect the %ata .appro>imately H6-I6 minutes per ?uestionnaire/# 1oth the survey takers an% the respon%ents have some incentive to provi%e ?uick ans2ers 2ithout thinkin" throu"h them0 !ase% on informal %iscussions 2ith those %eliverin" the surveys# this issue %oes appear to 1e a factor for occasional respon%ents0 The kiosks 2ere chosen from %istricts selecte% 1y n-*o"ue an% Drishtee0 Thus# althou"h 2e have a "oo% representation of kiosks in those %istricts# the results may not necessarily 1e representative of n-*o"ue an% Drishtee kiosks overall0 8inally# there may 1e noisiness in the %ata# especially 2here ?uantitative ?uestions are 1ein" aske% of respon%ents 2ho may not 1e accustome% to measurin" the ?uantities in ?uestion0 8or e>ample# one of the survey ?uestions asks ho2 far the kiosk is from the respon%ent:s home# 2ith co%in" to the half-kilometer0 $t is not clear that respon%ents 2oul% 1e a1le to ans2er such ?uestions accurately0 $n spite of these potential issues# spot checks on the %ata su""est that reasona1le %ata is 1ein" collecte% for the most part# 2ith no easily %etecta1le 1iases0 $n a%%ition# for those ?uestionnaires %elivere% to the same respon%ent across the t2o %ata sets "athere% so far .taken 2ith t2o months in 1et2een/ there is consistency in responses0

Results
!elo2 2e hi"hli"ht the more interestin" fin%in"s from the surveys0 Custo"er De"ogra#hics Kiosk customers ten% to 1e youn"# 2ith 36J 1et2een the a"es of 1I-25 an% another 35J 1et2een 2H an% 350 *evels of e%ucation are sprea% rou"hly evenly across %ifferent levels of accomplishment# althou"h those 2ith less than 4 years of primary schoolin" an% those 2ith post-"ra%uate %e"rees are rare0 The pre%ominant users of kiosks are stu%ents0 $n fact# in or%er to "et a reasona1le sample of other customers# our surveys 2ere intentionally restricte% to 1e %elivere% to a

ma>imum of only t2o stu%ents .out of five respon%ents/ per kiosk# an% all kiosks easily saturate% this ?uota0 7ne interestin" fact is that the "en%er of kiosk customers very consistently mirrors that of the operator0 7ver2helmin"ly# more "irls an% 2omen visit kiosks 2hen the operator is female# an% almost no 2omen visit kiosks run 1y men0 This is likely %ue to cultural 1arriers to men an% 2omen interactin" in one-to-one outsi%e of familial relationships0 Kiosk $#eration Kiosk marketin" appears most effective throu"h 2or% of mouth# 2ith over H6J of respon%ents havin" chosen to make their first visit to a kiosk 1ase% on hearin" from frien%s an% family0 )s most kiosk operators make some effort to market services to their communities throu"h villa"e assem1lies or throu"h pamphlets# so this reflects theories of %iffusion of innovation that emphasi3e the importance of personal net2orks in technolo"y a%option0 This is consistent 2ith %ata 2hich su""ests that local champions are necessary to ai% a%option of kiosk use .&olle an% oman# 2661/0 D6J of kiosk customers report that the kiosk operator han%les all transactions on the computer# an% that they remain una1le to use a computer0 %er&ices )lthou"h computer skills e%ucation is hi"hly sou"ht 1y rural kiosks customers .amon" 15J of customers/# more n-*o"ue kiosk customers visit a kiosk for entertainment .35J for e0"0# "ames# music# movies/ an% more Drishtee customers visit their kiosks for e-"overnment applications .35J/# %esktop pu1lishin" .35J/# an% other activities# than either %o for computer trainin"0 These %ifferences are %ue to 2hat the kiosk operators market in the villa"e# as 2ell as# the type of services availa1le from each a"ency0 Drishtee# in particular# 1e"an 2ith a focus on e-"overnment applications# 2hich may 1e reflecte% in this %ata0 Despite the relative fre?uency of use of these applications# computer e%ucation remains a major revenue "enerator as cost for computer courses for a monthly ran"e 1et2een s0 3D5-466 for 4-K hours of classes a month# 2hereas other services typically 1rin" only 1et2een s0 15-36 per transaction0 ) num1er of services are consistently re?ueste%B lan"ua"e courses# income"eneratin" services# services to support a"riculture# 1asic computer e%ucation# an% e"overnment0 %ustainability Most critical for those intereste% in kiosk sustaina1ility# avera"e monthly income at kiosks remains lo2# 2ith 1oth mean an% me%ian at appro>imately s0 2666 per month# an% this is 1elo2 the tar"et 1reak-even income %esire% 1y either company .1et2een s0 3666 an% 5666# %epen%in" on terms of the loan# cost of connectivity# an% the initial capital e>pen%iture on har%2are/0 This %ata is consistent 2ith that o1serve% in other stu%ies .Dha2an# 2664C Srinivasan# 2664/0 )lmost 2ithout e>ception# kiosk operators %o

not see the kiosk as 1ein" the source of their primary revenue0 $t is still unclear 2hether this 2ill chan"e over time as more relevant services 1ecome availa1le0 The num1er of %aily kiosk customers is lo2# 2ith nearly a thir% to a half of the kiosks reportin" less than five customers per %ay0 The rate of return use is hi"h# ho2ever# 2ith nearly half claimin" to 1e certain to revisit kiosks# an% another 26-36J su""estin" they are likely to %o so0 $t is not clear at this point in the stu%y 2hether more time is re?uire% for information a1out the value of the kiosk to sprea%# or 2hether the kiosks simply %o not provi%e sufficient value to their communities0 Despite the lo2 revenue# kiosk operators 2i%ely report satisfaction 2ith their kiosk 1usinesses0 Most appear to run kiosks as a si%e 1usiness that is not their primary occupation .most fre?uently# farmin" on o2ne% lan%/0 )t the same time# e>perience% kiosk operators appear averse to openin" a secon% kiosk# 2ith over KKJ of respon%ents not seekin" another such 1usiness0 7f those 2ho are consi%erin" openin" another kiosk# revenues top s0 3666 per month0

Discussion
Sustaina1ility as a 1usiness for kiosks currently remains %ifficult0 There is a fun%amental challen"e pose% 1y the fact that the poorest communities# 2here socioeconomic %evelopment is most %esire%# are e>actly the communities 2hose economies are too small to sustain a connecte% P&0 $n%ee%# in many of the lar"er villa"es in rural $n%ia# $nternet cafes sprout up spontaneously# as local entrepreneurs see clear value in settin" up shop0 The ?uestion is 2hether kiosks in villa"es 2ith smaller economies can 1e ma%e to %eliver enou"h a%%itional value to support themselves0 This also raises an important ?uestion in the short-term on 2hether kiosk projects shoul% 1e seen as an entrepreneurial space# or 2hether a su1si%i3e%# pu1lic-utility mo%el is a reasona1le alternative vie20 7n the ethno"raphic si%e# the hi"hly varie% re"ional conte>ts un%er 2hich kiosks operate create critical invisi1le 1ias elements that can un%ermine any serious statistical 2ork0 There is further 2ork to 1e %one in a %etaile% re"ional analysis of rural locations 2here kiosks are successful0 $n the mean2hile# Drishtee an% n-*o"ue continue to 2ork har% to fin% a via1le 1usiness mo%el0 eali3in" that a com1ination of computer-relate% services com1ine% 2ith non-computer-relate% services can sustain a kiosk as a 2hole# they encoura"e services that "o 1eyon% the connecte% P&# such as vocational trainin" an% petty tra%e0 !oth also continue to seek applications an% services that help "enerate "reater income for villa"e resi%ents 2hile also savin" them money in every%ay activities0 8or kiosk operators# the com1ination of reasona1ly hi"h satisfaction# even 2hile 1reak-even revenue is not 1ein" "enerate% su""ests that non-economic 1enefits are 1ein" felt0 )nec%otal evi%ence# as 2ell as evi%ence from ethno"raphic stu%ies .Srinivasan# 2664/# su""ests that kiosk operators often "ain self-confi%ence an% stature in the community 2hen they are associate% 2ith computers0 Ackno'ledge"ents! 'e 2oul% like to thank *isa 7lfert for provi%in" "enerous inputs into the ?uestionnaire0 The staff at n-*o"ue an% Drishtee has 1een a1solutely invalua1leC this stu%y coul% not have 1een performe% 2ithout their help an% tireless efforts0

Re erences
&olle# 0# an% 0 oman0 .2661/0 Telecenter ;nvironment in 26620 'ournal of "evelopment &ommunication 12.2/B 1-150 Dha2an# F0 .2664/0 &ritical Success 8actors for ural $&T Projects in $n%iaB ) stu%y of n-*o"ue projects at Pa1al an% !aramati0 Masters Thesis# Mehta School of Mana"ement# $n%ian $nstitute of Technolo"y# !om1ay0 Drishtee .2665/0 httpB,,2220%rishtee0com0 n-*o"ue .2665/0 httpB,,2220n-lo"ue0com0 Srinivasan# J0 .2664/0 The effects of e-"overnance implementation on 2omenB a stu%y of the Sustaina1le )ccess in ural $n%ia .S) $/ project# Ma%urai0 Masters Thesis# $n%ian $nstitute of $nformation Technolo"y# !an"alore0 Toyama# K0# K0 Kiri# M0 *akshmi atan# )0 =ilesh2ar# 0 Fe%ashree# 0 80 Mac+re"or0 .2665/0 ural Kiosks in $n%ia0 Microsoft esearch Technical eport# MS -T -2664-14H0

A##endi( A! Kiosk $#erator )uestionnaire

The follo2in" are the kin% of ?uestions aske% of kiosk operators0 The actual ?uestionnaire 2as %elivere% orally after 1ein" consi%era1ly re2or%e% an% translate% to the local lan"ua"e .for clarity/C some ?uestions 2ere 1roken into several su1-?uestions# an% almost all responses 2ere co%e% into a close% set of potential responses0 7pen-en%e% ?uestions are in italics0 Demo"raphic 1ack"roun%B Eo2 lon" have you live% in the villa"eL 'hat is the hi"hest level of e%ucation you have complete%L 'hat is your a"e "roupL Do you live in a joint family or a nuclear familyL 'ho is the chief 2a"e earner .&';/ in your family# an% 2hat is your relation to him,herL !esi%es the &';# 2ho are all of the other family mem1ers permanently resi%in" 2ith you in your househol%# an% 2hat is your relationship 2ith themL 'hat is the main source of income for your househol%L 'hat is the com1ine% monthly househol% incomeL 'hat is the make-up of professions in your villa"eL 'hat amenities are availa1le in your villa"e .i0e0# phone# school# etc0/L

Kiosk operationB

Does anyone in the family help you 2ith the operation of the kioskL 'ho are theyL 'hat is the %istance from your house to the kioskL Eo2 %o you travel to the kioskL Does anyone in your family also o2n a kioskL Eo2 lon" have you 1een runnin" the kioskL 'hat are the kiosk operatin" hoursL 'here is the kiosk locate%L Eo2 far is it from Mnearest major roa%# nearest 1lock office# etc0NL Eo2 lon" %i% it take for you to learn a1out operatin" the computerL Do you allo2 customers to operate the computer on their o2nL 'hat computer services %o you offer at your kioskL 'hat %o you char"e for each serviceL Do you offer non-computer services at your kioskL $f so# 2hatL )re you satisfie% overall 2ith your kiosk 1usinessL Eo2 %i% you pay for the initial cost of the kioskL 'hat costs %o you incur on a monthly 1asis for the kioskL 'hat %o you earn monthly from operation of the kiosk aloneL 'hat is your har%2are,soft2are confi"urationL

&ustomersB Eo2 many customers %o you "et a %ay .separate 2eeken%s , 2eek%ays/L 'hat are the peak timesL 'here %o the customers come from .kiosk villa"e or else2here/L 'hat %emo"raphics typify your customersL o 7ccupation o )"e o +en%er 'hat are the main services that customers useL 'hat services are most re?ueste% 1y customers .even if they are not offere%/L 'hat mo%e of payment %o the customers useL

7therB 'hat prompte% you to open the kioskL What support, if any, does the local government afford to you for operation of the kiosk( 'oul% you consi%er openin" another kioskL What difficulties do you face with the kiosk(

A##endi( B! Kiosk Custo"er )uestionnaire

The follo2in" are the kin% of ?uestions aske% of kiosk customers0 )s 2ith the operator ?uestionnaire# the actual ?uestionnaire 2as a%apte% from these ?uestions0 Demo"raphic 1ack"roun%B 'hat is your professionL Eo2 much e%ucation have you complete%L 'hat is your a"e "roupL Do you live in a joint family or a nuclear familyL 'ho is the chief 2a"e earner .&';/ in your family# an% 2hat is your relation to him,herL !esi%es the &';# 2ho are all of the other family mem1ers permanently resi%in" 2ith you in your househol%# an% 2hat is your relationship 2ith themL 'hat is the main source of income for your househol%L 'hat is the com1ine% monthly househol% incomeL 'hich of the follo2in" appliances %o you o2nL Telephone# refri"erator# t2o2heeler# etc0

Kiosk visitsB Eo2 %i% you learn a1out the kioskL 'ho else from your family has visite% the kioskL Eo2 far %o you live from the kioskL Eo2 %o you travel to the kioskL Eo2 often %o you visit the kioskL Eo2 many times have you visite% the kiosk# in totalL Do you plan visits to the kiosk or "o spontaneouslyL 'hat %ays,time-of-%ays %o you typically visit the kioskL Do you allocate a monthly 1u%"et for kiosk servicesL

Kiosk servicesB 'hat services have you use% at the kioskL 'hat services %o you use the most fre?uentlyL )re you satisfie% 2ith the follo2in"L o Service char"es o an"e of services provi%e% o Ouality of services .1roken %o2n 1y services use%/ Eo2 have the services ai%e% youL .lar"e "ri% of a close% set of possi1le ans2ers/ Do you operate the computer yourself# or %oes the operatorL Are there any additional services you would like to see at the kiosk(