Rural Telephony: A Socio-Economic Case Study

Information and communication technology (ICT) has the potential to bring in development to rural areas in the third world. Any deployment of technology however should be backed by a positive economic activity to be sustainable. This paper reports on experience with the economics, as well as the social aspects of Voice-over-IP (VoIP) as a service. In Jan 2003, we established a WiFi link from a site with wired Internet connection to a remote village site. On learning the demand for a telephone facility at the village, we setup a VoIP service. The setup has been running with reasonable success since then. We have collected a wide variety of statistics on the usage of the service. Although we used the relatively low-cost WiFi technology, the expenses have been high. The capital expense is dominated by antenna tower (40m: U.S.$6,600). The WiFi equipment and the solar power system added significantly to the cost too (about U.S. $3,100). The revenue generated from the phone calls has averaged at about $52/month. Hence this service alone may not be sufficient, and other targeted services are necessary to sustain ICT in rural villages. However, on the positive side we think that telephony facility can attract potential ICT users to the setup since people can relate to the service immediately (unlike say, Web browsing)