This paper is based on a study conducted over a period of one year (September 2005 – October 2005) at 300 rural kiosks across India, talking to over 3000 customers. For the purposes of this study, we have defined a rural kiosk as follows: “One or more computer(s), with Internet connectivity, offering ICT-enabled services aimed at providing information access, means of communication and developmental mechanisms for the rural population.”

All of the kiosks which are part of this study are run by entrepreneurs as for-profit social enterprises that are members of two leading franchises: n-Logue Communications Pvt. Ltd. and Drishtee Dot Com. These entrepreneurs make capital investments through sources such as their own savings, bank loans, and borrowings from friends / relatives. These kiosks, therefore, have a dual mission: marrying community social development with individual economic gain.

The expected outcomes of the kiosk, which are to be studied, are as follows:

• To make an impact on socio-economic conditions such that the quality of life of the rural community is enhanced
• To specifically provide the more marginalized sections within the community (the very poor, women) with opportunities – educational, vocational, information & services – which they would not have had access to in the absence of the kiosk
• To provide a sustainable business model with the potential to provide entrepreneurial opportunity to the local unemployed & poor, thus strengthening the rural economy.

This study has looked closely at the kiosk owner, kiosk consumer profiles, E-Services offered through the kiosk, the income potential of the kiosk and service usage patterns of the consumer in an attempt to understand the extent to which the above outcomes have been achieved.

Challenges
• Kiosk sustainability: Most kiosks do not show very high levels of consistent profitability and even those that do seem to hit ceiling levels fairly fast. Stagnation or steep drop in revenue are seen within six months to a year of operations
• Lack of viability of development – oriented services, due to infrequent demand and low revenue flow
• Lack of end-to-end services and relevant applications. For example, a farmer definitely needs to know accurate market prices, but he also needs to know soil quality, water table levels, alternate cropping options, etc.
• Skewed focus of existing services

- For example, computer education, which is one of the most popular services, definitely opens the door to opportunities. However, a focus on computer education alone without considering capacity-building needs for jobs which do not require computer usage creates an imbalance
- Increasing consumption of games and browsing means increase in revenue for the kiosk owner; however the flip side is that community earnings and savings are not being spent on services that provide returns such as increased income or job opportunities. The kiosks themselves do not currently provide any means of employment (beyond the odd computer operator), nor do they currently act as a source of information which enables people to improve their livelihood

Avenues for further exploration
• Emerging alternate revenue options:
Kiosk owners believe that they can increase their current monthly income by at least $22 – 44, if only they had higher Internet speeds, more technical support and more new services. They anticipate growth in the following areas: - Services such as games, browsing, and computer education: These would still primarily target existing regular users, getting them to spend more time at the kiosk, but essentially using the same set of services.
- Photocopying, data entry, photography, etc: These would target a different set of users
– owners of small businesses, the village Panchayat office, etc., for whom the kiosk would essentially provide business center services which would otherwise be available only in nearby towns. For example, digital photography is emerging as a high-potential service, with most government schemes, school / college admissions, examination hall tickets, etc. requiring photographs of the applicant

Over a period of a year, 50%+ of the kiosk owners in our study have added equipment at their own cost. This includes one or more of the following: An additional computer, a CD-writer, a printer. Most of those who have not done so yet, plan to at least add another computer within six months to a year. Other preferred additions are a scanner and a photocopier.

• Potential alternate service delivery mechanisms
Some of the development services would perhaps penetrate better if offered through the village office, primary health center, etc., with the kiosk functioning as a facilitator. For example, information on pre-natal care could be made available at the kiosk, but instead of the kiosk owner attempting to market the service, the primary health center could organize awareness sessions at the kiosk.

Taking this idea further, in villages with population below 2000 (where kiosk viability becomes even less due to lower available market volume), the kiosks could just be a computer in one local institution, with a focus on addressing some specific local needs. For example, placing a computer in the local school and using it primarily for extra tutorials for a nominal fee would, in the long-term generate a better return on investment than setting up a full-fledged kiosk. This would also mean training one or more teachers adequately, which would extend the potential of the computer further to improve teaching skills. This facility could even be run as an entrepreneurship - an individual could pay for the computer and even function as a teacher, while the school provided the space and paid for electricity, maintenance, etc.

The appeal of these models lies in the fact that they offer the opportunity to use ICT to enhance existing rural development service delivery mechanisms. There is, however a flip side. The local institution (the school, primary health center, etc.) should exist in the village, in the first place. Secondly, it should be reasonably functional, with some qualified staff available. Fulfilling both of these conditions is itself often a challenge in the rural landscape. Thus, until adequate resources are provided at schools and primary health centers, availability of such services at will continue be inconsistent and infrequent.

• Needs of a wider user community
Currently, kiosks address the needs of less than 10% of the village community. Service content needs to be made more locally relevant. Also, services which offer the potential to enhance existing livelihoods (such as e-commerce for rural arts and crafts) and services which open up new opportunities (vocational training, school curriculum-based education) need to be developed

• Appropriate support mechanisms for kiosk owners
This requires greater involvement by resources such as connectivity providers, financial institutions, domain experts, the private sector, etc. The kiosk owner should focus more on customer needs assessment, business development, customer relationship management, and linkage-building at the local level. Larger issues such as service / application development, infrastructure management, etc. should be owned by external entities.