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Last Updated Wednesday October 18 2017 04:02 AM IST

Here's how coop sector can give Ambani's Jio a run for its money

Rajeev Sunu, Sridhar Samu and A.R. Rajesh
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Here's how co-operative sector can give Ambani's Jio a run for its money Representative image

More than half of India's population live in off-the-map villages and rural areas that are too remote and geographically isolated to benefit from the nation’s impressive economic infrastructure.

While high-speed Internet is crucial to break these barriers, our villages still lag behind much of the rest of the world when it comes to broadband connectivity - the steadfastly ignored elephant in the room that might render prime minister Narendra Modi’s Digital India a pipe dream.

To build India as a software super power, high-speed Internet should be made accessible for all at a relatively low cost. In addition to increased connectivity, it will also make the functioning of the rural institutions - be it bill payment, ticket booking or banking - much more efficient.

But how do we get the villages connected quickly without solely depending on the capital intensive 4G network expansion program of telecom operators such as Jio and Vodafone?

When we set out to investigate how this can be done, one of the nation-specific strengths that shone like a precious rough diamond was the existing organizations available in each and every village – the cooperatives. Whether it is in banking, dairy or farming, the cooperatives are very well connected to a majority of people in these regions.

E.M. Augusthy, ex-MLA and chairman of Idukki District Cooperative Bank in Kerala, said, “The cooperative is the heart and soul of Idukki district’s socio-economic platform and we have been successful in developing and nurturing a number of co-operatives in banking, agriculture, spices and diary industries. If our cooperatives can act as a catalyst to connect the entire Idukki district on high speed Internet, we could become the model district in India for universal growth across all sections of people”

The co-operative sector in India has been extremely successful in bringing banking and other services to the least connected and less privileged sections in the remote corners of India. Regardless of the political control at the board level, most cooperatives are run by professionals who know the local pulse of the community and their customers. They are present in every panchayat, block, and district. These organizations have done an outstanding job of connecting with customers and converting them into members, and in turn, these members play a key role in the functioning of the cooperatives.

Hence, by virtue of its structure, the cooperative sector offers the perfect touch point for connecting urban and rural India on high-speed Internet access through Wi-Fi connections and Wi-Fi hot spots across panchayats, blocks and district-level homes.

The second uniquely different feature of India compared to many other developing countries is the spin-off effect of movies and television entertainment programs. Why is India the largest film producer in the world? It is because we have over a billion eye balls to watch films. For the same reason, there is a market for a large variety of film 'products' in India, and consequently, most houses - even in the smallest village - receive television services linked through a cable network or satellite dish.

So how can we leverage this existing network to provide high-speed Internet access across India? With 92% cable television penetration in India and with more than 4,50,000 kilometers of fiber laid by government’s own Bharat Broadband Network Limited (BBNL), cooperatives could partner with the cable TV operators-cum-ISPs and BBNL and quickly facilitate the project execution of “connect India on high speed Internet access". This should accompany the central government goal of electrifying all villages and gram panchayats by May 2017. The critical value addition by the cooperatives would be funding the Internet access connection for its member customers and debiting their respective accounts for payments to the ISPs for the Internet access usage.

This model of connecting India through cooperatives becomes critical when we consider that the National Bank for Agriculture and Rural Development (NABARD) and RBI have already put the cart before the horse, by tasking Indian Financial Technology and Allied Services (IFTAS) to develop and provide safe core banking solutions and mobile banking applications for co-operative banks across the country. Rather than depending on the mobile telecom operators to provide highly capital intensive 4G mobile Internet access by mimicking the developed world, we could secure faster result at a comparatively lower cost and providing high-speed Internet access on Wi-Fi to all electrified homes and hot spots, starting from Panchayat level.

Sunny Padacheril, co-founder and CEO of Zeptronics Technology India, specializing in 4G LTE wireless chip design, and previously vice president at Beceem Communications USA that developed world’s first 4G WiMAX wireless chips said, “Every household that has a cable television connection with a digital set top box could add on high speed Internet connection at a relatively low cost and that will be the quickest way to secure reliable high speed Internet access across India.”

Embracing the paradigm shift is important here; if we treat Internet connection as another utility and make it accessible to people, the usage will follow, that is human behavior and it is well understood by Telecom operators like Jio and Vodafone. Rather than promoting e-commerce applications such as mobile banking, provide Internet access at nil cost, and customers will innovate to make money and pay for data usage.

Last week Mukesh Ambani repeated that “Data is the new Oil” and said Reliance would secure the largest piece of the new data business in India. So, cooperatives in India, would you rather take a piece of the new data business Ambani is excitedly talking about, by selling to you what your member customers want or instead, let the Jio of the world take the business from you, including mobile banking and electronic wallets?

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