3.4.2 Best Practices

Several countries have opted to eliminate barriers or provide facilities for the development of small social enterprises and social organizations that provide telecommunication services in remote areas. Known in academic circles as micro-telcos, these are small businesses, often organized into associations, which in Argentina (for example) serve about 8 per cent of the domestic market. The groups operating micro-telcos are organized in different ways, either by community inhabitants, local or community governments, or even companies specializing solely in this type of coverage.

A good example of a micro-telco is India's N-Logue, which (among others) received a 2005 WISIS prize. But there is no current information on N-Logue, and even some of the academics in India who have researched the case were unable to indicate whether the company still exists, if it had been taken over, or if it had simply changed its name. Nevertheless, the need to examine its recent performance with greater scope – along with fact that N-Logue represents many of the best practice recommendations made here -- has led to its incorporation in this text.

N-Logue is located in India, the second most populous country in the world, where the state telecommunications company has managed to install fiber optic cable in almost every county (talukas). This, in turn, has laid the foundation for extending telecommunications to close-proximity villages (some 300 to 500) within a 30-km radius. The possibility of finding trunk-line infrastructure with which to connect has, without doubt, facilitated the establishment of a company that has been able to connect the surrounding villages through a wireless network.

Although basic infrastructure is certainly important, it is of little use without an appropriate business model. The starting point for N-Logue's business strategy, which the state telecom company also adopted, was to overcome the problem of providing universal service (even in urban areas) by installing assisted telephone operators in stores located no less than 50 meters from a residential zone. This contributed to the creation of a base of micro-enterprises and telecommunication service users that, at the beginning of the new millennium, represented 25 per cent of national, telephone-based communication income.

The first link in this business chain is the Internet kiosk, equipped with a computer, Internet connection, printer and some other accessories such as a Web camera. The kiosks are administered by an entrepreneur from the community, who is normally a young woman who may, or may not, have prior computing knowledge. The Internet kiosk installations are supported through bank credits that can be covered by the income generated by the micro-enterprise.

The second rung on the service ladder requires a service supplier that meets one of the Internet kiosk´s needs, which might typically be equipment repair and maintenance, virus elimination or service connections. Such actors are known as local service providers (LSPs), which are located in each county so that they can respond to any service request within 90 minutes. The LSP plays an essential role in providing connections and reconnections, maintenance and training to Internet kiosk operators. The LSP is an N-Logue partner and is located at the access tower.

Finally, the last link in the service chain is N-Logue itself, which provides access to the network backbone. It coordinates with application providers and content technology providers, trains LSPs and Internet kiosk operators, supplies Internet kiosks with software and hardware, and collaborates with public policy formulators in order to ensure quality service and to develop the markets that support the LSPs and Internet kiosk operators.

As can be seen in this example, all of the recommended elements are incorporated. There is a business design that contemplates economies of scale. Each operator does its part, community centers have access to financing and technical assistance, and there is access to a backbone network.

Argentine telecommunications cooperatives are also a good best practice example. In most cases, community initiatives offer quality services at lower costs than global communications or national suppliers do.