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Cellphone firms come together to form IT kiosks in rural India

Cellphone firms come together to form IT kiosks in rural India
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First Published: Wed, Apr 18 2007. 12 21 AM IST
Updated: Wed, Apr 18 2007. 12 21 AM IST
An ambitious one lakh computer kiosk project in rural India, intended to draw in participation of the private sector with minimal support from the exchequer, has found interest among leading Indian private technology and telecom companies.
Mobile service companies Bharti Airtel Ltd, Reliance Communications Ltd and Idea Cellular Ltd, tech vendors Wipro Ltd and 3i Infotech Ltd, and others such as Hughes Network Systems Ltd, United Telecom Services Ltd and Srei Infrastructure Finance Ltd are among those selected to partner with the state governments of West Bengal, Jharkhand and Haryana on the project that is expected to cost more than Rs5,740 crore when it is rolled out nationwide by March 2008.
Called the ‘Common Service Centre’ or CSC initiative, the project aims to set up computer kiosks offering a range of government, civic, education, health and tele-medicine, financial and entertainment services to India’s rural citizens, numbering about two-thirds of the country’s more than one billion population.
Private bidders are chosen on the basis of who asks for minimum subsidy in the project. Jharkhand has signed agreements with United Telecom, non-governmental organization Alternative for India Development, and software firm Zoom Developers Pvt. Ltd. West Bengal has two consortia—Reliance Communications, with New Delhi’s Samtech Infonet Ltd, and Srei Infrastructure partnering with Wipro Infotech, a division of Bangalore-based Wipro.
Later this week Haryana will sign agreements with software firm 3i Infotech; a consortium of Comat Technologies Pvt. Ltd, Hughes Communications India Ltd and Hughes Network; and a consortium of the Jaipuria Group and Sark Systems India Ltd. About 12,000 kiosks will be set up in the three states.
“These bidders will set up the infrastructure, including the hardware and software, recruit and train manpower, as well as manage and maintain the centres, and ensure that government and private services are provided smoothly to the citizens for a period of four years,” said Roy Mathew, vice- president of Infrastructure Leasing & Financial Services Ltd (IL&FS), the agency that has been contracted by the ministry of information technology to implement the CSC project. 
IL&FS is in talks with Bharti Airtel to have the firm provide telecom connectivity for the project through satellite hook ups, leased lines and a high-bandwidth cellular service. “We are currently testing these services in some pilot states and should sign a memorandum of understanding (MoU) with Airtel by the month-end,” Mathew said. A Bharti Airtel spokesperson confirmed the company is in talks to provide connectivity in four states. Reliance Communications, Wipro, Idea Cellular and 3i Infotech did not comment on their participation.
Zoom Developers, one of the winning bidders in Haryana that will be setting up 1,000 kiosks, said it had received Rs16 crore support from the government for four years. “Our investment in the state will be Rs25 crore for the same period,” A.K. Tiwari, vice-president for business development for Zoom said. The company has bid in Bihar, Uttarakhand, Rajasthan, Uttar Pradesh and Assam as well, where evaluation of the bids are on, Tiwari said.
Srei Infrastructure said its consortium had a support of Rs12 crore to set up 5,000 kiosks of the total 6,700 kiosks in West Bengal. It is planning to invest around Rs100 crore over four years in setting up the infrastructure, recruit and train 5,000 entrepreneurs. “This is a great opportunity for corporates to sell anything they want to the masses and at the same time provide government services at these kiosks that are strategically located within the villages,” a company spokesperson said.
The first set of 450 kiosks will be ready in Jharkhand by the end of the month. “We are targeting to set up around 50,000 kiosks all over India by the end of this year and are aiming to close the selection process of private bidders in 16-18 major states by this September,” Aruna Sundararajan, chief executive officer of the CSC project at IL&FS said. The governments in Punjab, Bihar, Assam and Tripura have floated requests for proposals (RFPs) from private partners and expect to finalize contracts in the next six to eight weeks, the IL&FS official said.
Some of the states that are in the final stages of preparing RFPs are Himachal Pradesh, Madhya Pradesh, Gujarat and Tamil Nadu. In Uttar Pradesh, with more than 17,000 kiosks, work on the initiative was stalled over the state elections, and is scheduled to begin soon after. Other states considering the issue of RFPs are Uttarakhand, Rajasthan, Chhattisgarh and Sikkim.
Bulk of the funding of the project, which was approved by the Union cabinet in September, will come from the private sector with the Central and state governments agreeing to put in Rs1,649 crore. Each kiosk will have a couple of computers with two to three trained personnel to assist villagers in using the services provided, and is expected to provide employment to over 200,000 people all over India.
Low bids by private bidders have come as a surprise to the CSC managers. “We have seen a trend of private companies asking for low revenue support from the government. From the three states that we have seen so far, West Bengal had zero bidding while in Haryana, 3i Infotech even went in for negative bidding and instead paid the government a nominal Re1,” said Sundararajan.
Several other nationwide deals with partners are also in the process.
The Indian Railways Catering and Tourism Corp. Ltd has signed up with IL&FS to provide online rail ticketing to villagers who can make the bookings through their bank accounts. Financial and insurance services will be provided nationally by the State bank of India and Bajaj Allianz General Insurance Co. respectively, and IL&FS is in talks with ICICI Lombard General Insurance Co. Ltd.
For online education and training services, the agency is in talks with Intel and Microsoft for their education initiatives, NIIT Ltd for its basic computer literacy programme, Indira Gandhi National Open University for a training module, and Gyanx, an online academic exchange built by Bangalore company Liqwid Krystal India Pvt. Ltd. An MoU has already been signed with e-learning portal, GurukulOnline Learning Solutions, which will sell online courses through the kiosks.
The Energy Research Institute will provide solar energy panels for the kiosks in regions suffering from power outages. The Indian Society of Agribusiness Professionals, a group of food and agricultural professionals providing information and technology on crop markets and weather-related topics has also been roped in.
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First Published: Wed, Apr 18 2007. 12 21 AM IST
More Topics: Corporate News | Sector Spotlight |