2.4.3 Financing and revenue models to ensure affordable and accessible pricing
Several factors, such as low population density, low income and high operating costs, have been identified as challenges in sustaining community ICT programmes. The most commonly underestimated community ICT center costs are related to staff training, security (physical and data security), and the costs of updating and maintaining equipment. The forward-looking community ICT center needs to consider how best to balance its capital costs and its revenue potential, while ensuring affordability for its users.
Financing a community ICT center can be achieved through in-kind contributions and/or funds and revenue. Revenue and financing may be a composite of the following:
- Subsidies - Governments may decide to subsidize (fully or partially) a community ICT center, particularly in poor areas with vulnerable population groups, who cannot afford to pay user fees. The government’s initiative may be needed to launch the process, establish the legal and institutional framework, start up pilot projects, and develop national or regional support. As the idea proves itself, the government may be able to reduce its support role to a support function.
- Donations/grants - Public and private institutions, as well as national and international organizations, can provide donations or grants to ICT projects
- Pay-for-use services - The provision of other services or products in the community ICT center may also generate resources to pay their costs. In some cases, revenue comes mainly from the sale of computer and Internet time; in others, from telephony, photocopying, and entertainment. Other potentially important sources of revenue are providing domestic and international telephone service and retailing phone cards. Whether or not user fees should be collected will depend on several factors, and the question should be decided on a case-by-case basis. A minimal fee to attend a training course often motivates people to attend and benefit from the course more than when it is free. However, in certain circumstances even a minimal fee can be unaffordable for poor women and girls, acting as a disincentive to attendance.
Fact of interest: a cost-sharing model in Uganda
In Uganda, a nation-wide, school-based telecenter (SBT) network, established by World Links through support from the Bill and Melinda Gates Foundation, involves 15 SBTs. Of these, 11 use Very Small Aperture Terminal (VSAT) satellite technology to link the Internet with at least eight computers on a Local Area Network (LAN). The cost is accordingly shared among the schools, through a payment of USD 200 per month. (World Links is contributing the other USD 200 per month, per site for a two-year period).21 Lowering the student user cost is one of the principal objectives. The schools raise funds by charging students term tuition fees and other community user fees. On average, each student pays USD 18 per year. A typical secondary school has between 800 and 1,000 students a year.
In-kind contributions could include:
- ICT hardware, including technical maintenance and renewal;
- Training for managerial and technical staff. One of the core objectives in setting up an ICT community center is for it to be managed by local people. Therefore, contributions that seek to train the trainers and the center´s administrators are both useful and necessary.
- Content. Production of content is generally costly and may be time-consuming. However, replicating and delivering content can be done at a relatively low cost.22
- Location and infrastructure. It is important to choose a location and ICT infrastructure for the ICT community center that takes into account women’s and girls’ constraints. For example, a school can offer a computer lab or a room for installing the ICT devices to be used by the center.
- Tax incentives. Governments can provide tax incentives to enterprises or persons that create an ICT community center and provide ICT courses aimed at women’s and girls’ empowerment. Governments can also give tax exemptions on ICT equipment provided to schools.
Fact of interest: rural innovation fund in India
Telecenter.org and Microsoft India jointly launched the Mission 2007 Rural Innovation Fund, with an objective of empowering the local software industry by promoting individual or organizational endeavours toward developing low-cost, innovative applications, customized to the needs of local community leaders. A committee set up under the Grameen Gyan Abhiyan initiative of MSSRF,23 which includes representatives from industry, academia and government, manages the fund.
22See for example an online database managed by the Educational Software Selector (EPIE Institute). This searchable database includes reviews of 19,0000 instructional software packages which can be searched by computer type, subject, grade level, the teaching/learning approach used, key works and price, at http://www.epie.org/epie_tess.htm. Materials have also been developed by the Commonwealth of Learning – see http://www.col.org/resources/publications/Pages/listing.aspx?CID=9
23M S Swaminathan Research Foundation http://www.mssrf.org/