m Panchayat. The local ISP further sells the bandwidth inside the village as part of its marketing strategy and generates revenue from the connectivity. The Gram Panchayat office pays a fixed price of INR 1,000 (USD 14) for 2 Mbps of bandwidth. This cost includes the bandwidth cost, operation and maintenance of the link and device cost if the device needs replacement due to damage. However, as the Gram Panchayat office does not use the entire bandwidth, the unused bandwidth is sold to the villagers in the form of “pay as you use” daily coupons of a duration of one hour each costing INR 10 (USD 0.14). This connectivity is accessed at the Gram Panchayat office. It has been observed that an average of five to 10 people use the internet at the Gram Panchayat office per day, which totals INR 50 to INR 100 (USD 0.70 to USD 1.40) per day and results in a monthly income of INR 1500 to INR 3000 (USD 21 to USD 42). This contributes to the monthly revenue of the Gram Panchayat. Out of this amount, INR 1,000 (USD 14) is paid to the local ISP, as noted above. The Gram Panchayat office plans to use the accumulated amount for development activities within the village.
The second set of 10 villages has a VLE-focused revenue model, where CSC Wi-Fi Choupal has acquired 30 Mbps bandwidth from a local ISP and distributes the same to different villages depending on internet use and number of customers in each village. The VLEs maintain the network in these villages and sell bandwidth to the villagers in the form of coupons based on the fixed pricing plan. The monthly customer base of the VLEs includes new customers as well as returning customers. The revenue plan of the VLEs has been devised in a way that it maximises profit for the VLE, thereby providing incentive to perform. It has been observed that of the coupons sold per month, 40% of the coupons are of INR 10 (USD 0.14) in value, which gives 500 Mb of data for 10 days. The next most popular coupon amount, accounting for 22% of purchases, is INR 100 (USD 1.40), which is valid for 28 days and gives 12 GB of data.
Revenue information suggests that in those villages where there is a substantial use of internet data and a large customer base, the monthly revenue generated by the VLE is in the range of INR 5,000 to INR 6,000 (USD 70 to USD 84). In other villages, the monthly revenue generated is INR 3,000 to INR 4,000 (USD 42 to USD 56) on average.
In the months to follow, it is expected that the number of broadband subscribers will increase, which will directly have an effect on the revenue generated by the VLEs. A steady growth in revenue generation by the VLEs suggests that the model will perform well and also offers lucrative value for the investment made. A nominal pricing plan for data will facilitate greater usage by rural villagers.
Conclusions and the road ahead
In this report, we address the importance of sustainability of broadband connectivity in rural areas of India. We have discussed Gram Marg's 25 village Palghar test bed and how it has attempted to answer various issues regarding rural connectivity through test bed deployments and setting up community networks in 10 villages in Palghar, Maharashtra. We also discuss the 4-P model which has been developed and successfully validated in the field with regard to sustainability. As the 4-P model takes a bottom-up approach, it is a robust and scalable model which generates revenue, enabling the internet to thrive and grow sustainably.
Even though the 4-P model has been successfully validated in the Gram Marg villages, we need to replicate the model in different village contexts, and with different CAPEX contribution scenarios, to understand the model in its entirety. As of now, the model is based on actual expenditure and real field data on usage, revenue generation and recovery of OPEX. In time we shall come up with a projection model taking into account the growth rate of internet subscribers, expected growth in internet demand, and yearly increases in the monthly cost of internet usage. This will enable predictions of revenue acc