Here is his key question:

Or to put the question another way—what do we lose if we (or rural Sri Lankans) only have mobile communications with optional access to the Internet and we by-pass the personal computer completely? What happens if that becomes the communications paradigm for a range of countries such as Sri Lanka who, having not managed to effectively respond to the digital divide to this point, decide basically to give up the fight and leave it all to the ambitions and creativity of the mobile operators.

We can say more, much more (and have, with more evidence than casual observation), but here is the comment I left on his blog:

“Give up the fight and leave it all to the ambition and creativity of the mobile operators?”
Well, isn’t that a smooth rhetorical move? Ceasing to repeat a futile and wasteful act is giving up the fight, and who would want to be labeled a wimp? And which of the critics of the telecenters said anything about the ambition and creativity of mobile operators as being the only alternative?

To talk of mobile networks connecting people to each other and to information and giving them the ability to engage in transactions and remote computing is not to limit the discussion to mobile handsets. The extraordinary takeup of mobile dongles in the developing world suggests that the mobile networks will be used to connect to the Internet by users from various devices: Chanuka has documented that telecenters that do not connect through dongles affixed to desktop computers are throwing money away. Netbooks on the one hand and smartphones on the other are converging the functionalities of computers and mobile phones while also bringing down the costs of connectivity to levels unimaginable just a few years ago. The creativity of more actors than the mobile operators is at play here.

The mistake that is being made is to imagine a highly constricted version of mobile-based connectivity when the manner by which one connects to the Internet via mobile networks is changing very rapidly. This is like trying to discuss travel on an expressway solely in terms of what is feasible on a dirt road.

The other sleight of hand is to say that the aspects of computer use that are not dependent on the Internet (such as typing up resumes) will all be irretrievably lost should the government-subsidized telecenters shut down. Peter Benjamin showed years ago that indeed most S African telecenters ended up as disconnected computer training shops. If there is a demand for resume preparation or whatever, the market will meet it, using subsidized or other computers. And has the writer not heard of OLPC and other low-cost computer solutions that will allow young people to use computers more normally than in virus infested common use settings?

It is highly wasteful to keep pouring millions into subsidized telecenters that people do not use, simply to ensure that young people have the opportunity to type up resumes. If the writer had kept his eye on the roadside signboards in Sri Lanka more closely he would have seen the proliferation of computer skills training centers and courses. Do these establishments not have computers? Do they not allow those computers to be used for a fee?

The opposite of “giving up the fight” is to continue to pour money into telecenters. Seems to me that Einstein describes this behavior well: “The definition of insanity is doing the same thing over and over again and expecting different results.”

Join the debate. Here or on Gurstein’s blog. Those whose children will have to repay the loans taken to subsidize telecenters (low interest or other) are especially welcome.

December 25 was just another working day at OnTime Technologies at Mahavilachchiya and things were going on at full throttle when I stepped-in to this rural BPO, arguably the first such initiative in Sri Lanka.

Here is the good and bad news.

Good news: The wheels are still in motion. Unlike most of the ICT4D projects (especially telecenters) that survive on donors’ oxygen, now it is self sustainable and taken seriously by the employees and villagers, who initially thought it would soon end. Employee turnover is low and what they do is seen as a career, rather than a pause till a better opportunity. Overall, the business prospects look good.

Bad News: The much hyped expansion to 50 seats has never happened. It still has 11.

Why it never took off? Certainly not because there is no work. The demand is still not met. Not the infrastructure issues too. Bandwidth is guaranteed. Capacity? Perhaps. Talent is in short supply in a village that had advanced level classes only in the arts stream, but it cannot be the only reason. It might be a management issue. Running a 50 seat BPO is certainly riskier. That needs strong management skills which someone cannot provide on voluntary basis.

Interestingly, the same issues never blocked Sri Lanka’s entry to apparel industry in the early 1990s. Nearly two decades later, garment factories provide employment for thousands of rural youth. Why only rural BPOs don’t advance? Aren’t we still mature enough or too shy to ride on the waves of digital economy?

April, 2008

October, 2009

I took the first photo. That was in April 2008 in an informal telecenter visit. The second one appeared in a Sinhala blog recently.

Mangedara Nenasala telecenter at Thulhiriya (less than 2 km from MAS Holdings) is one of the hundreds of defunct Nenasala telecenters. During better times it provided services such as utility bill payments and computer training. Now it remains closed since the operator, who was never paid for his services, left for better opportunities.

The findings of the telecenter operator survey done by LIRNEasia at a workshop organised by Sarvodaya in October 2008 will be useful to understand why Nenasalas fail. (Sample was not representative, but large enough to get a general idea about the telecenter operations in Sri Lanka.)

Do telecenters in Sri Lanka make money? Yes. They report an average monthly income of Rs. 22,119. (=USD 201) This is associated with a relatively large standard deviation of Rs. 21,714 (= USD 197) indicating a variation within a wide range. This means a large number of telecenters are running at a loss.

Providing Internet services ranked only third among telecenter income components (16%). The key sources of income are education and training (43%) and providing fax, photocopy and printing series (21%). They also make money from VoIP (4.5%), utility bill payments (2.5%) telephone calls (2.5%) selling other goods (2%) and VCD/DVD rentals (1%).

Do telecenters make a profit? Yes, but perhaps may not in real terms. They record a monthly average profit of Rs. 6,735 (=USD 61) with a large standard deviation of Rs. 9,504 (=USD 86). This indicates the loss incurred by some of them. This is again without considering the cost of the communication link. (The monthly average cost of a 2 Mbps business broadband connection is USD 46 in Colombo. This might be slightly high in rural areas.)

Telecenters operators are rewarded in different ways. Only 33% are salaried. 22% receive a share of profits. 13% receive an allowanced based on performance. 32% receive no personal income.

The VGKs were to be in areas where traffic patterns allowed for sustainability. Just because people live in villages, it does not mean that they never come to market or that their children do not go to school or tuition classes in rural nodal points. Careful studies were commissioned to identify places where there would be enough foot traffic to make telecenters sustainable. All this was thrown to the wind and telecenters were given to temples primarily at the behest of the President. Obviously, they are unsustainable. No amount of assistance from the computer technician at the local Vidatha center is going to bring foot traffic to fundamentally unsustainable locations. That answer given by the Minister in the interview linked here is a non sequitur. A technician can keep the computers operational, he/she can’t bring customers. And the Minister seems to thinks that charging fees increases the digital divide and that not charging fees and having the center close down narrows it. He makes no mention of the vouchers that were designed and implemented under e Sri Lanka to address the issue without making the centers unsustainable.

Sadly, Professor Vitarana repeats falsehoods and lies by omission. Now we are compelled to blame the former man of science. He is, we now understand, a common or garden politician who cares nothing for evidence.

If he wants evidence, there is plenty. You see, we do not give up hope. All he has to do is get a list of VGKs and Nenasalas from ICTA and check their locations to see who is serving urban areas and who is serving rural. The vouchers were operational, the last time we asked. All he has to do is ask.

The looks may deceive, but this is a radio station. Prabhavi Community Radio - the first Internet community radio in Sri Lanka comes from Prabhavi Resources Center, Weranketagoda, Ampara – the post-conflict district in Eastern province (8 hours travel from Colombo). It operates from a Nenasala, one of the 500 odd telecenters funded by the World Bank under e-Sri Lanka program. A brainchild of Ajith Karunarathne, it runs as a nonprofit venture entirely by volunteers Asiri (red shirt, first photo) and his team.

Strangely, this radio station connects to Internet thru a 128 kbps pipe. That is all available, though both major broadband providers claim they cover the Ampara town – 15 km away. The link is from not any of them. The unidirectional antenna – in a 15 m tall tower – is directed not towards Ampara but far ways Batticaloa – probably the nearest hub.

Nelan Dayarathne, the current manager of the center (inset) has no complaints. Yes, sometimes the link fails when it rains heavily, but otherwise it is adequate to link the station to the net simultaneously providing the rest of the telecenter services. Perhaps the low sharing increases throughput – a phenomenon observed in testing the links of the same operator in Colombo. Please wait AT-Tester will tell us in due course – in the next phase of LIRNEasia’s broadband benchmarking project.

Ambuluwawa, about 1,100 m above sea level, is probably the highest point in the vicinity of Gampola. Not surprisingly, all telecom operators exploit the geography. Transmission stations/towers encircle the summit. (See above) That is what one calls infrastructure.

Just 10 km away, Sirimalwatte Ananda thero, a young and energetic Buddhist monk, runs a Nenasala, a telecenter established under the World Bank funded e-Sri Lanka program. He is not content with the Internet facilities. He pays Rs. 11,250 (about USD 100) per month for a 128 kbps link of inconsistent speed. This is twice more what a user in Colombo pay for her, not 128 k but 2 Mbps link – from the same operator.

Use simple maths. Ananda thero pays THIRTY TWO (32) times more per kbps than a user in Colombo. Why such a large gap? Don’t tell me lack of infrastructure is the culprit.

Here are the summarised results from the telecenter operator survey done by LIRNEasia at the weCan workshop in October 2008. Sample was not representative, but large enough to get a general idea about the telecenter operations in Sri Lanka.

Out of a total of 147 operators surveyed, the bulk, 101 were from Nenasalas, the 500 odd telecenter network created under the World Bank funded e-Sri Lanka programme. 10 were from Sarvodaya multi-purpose telecenters and 6 from others (eg. public libraries) 30 have not specified the type of the telecenter.

Do telecenters in Sri Lanka make money? Yes. They report an average monthly income of Rs. 22,119. (=USD 201) This is associated with a relatively large standard deviation of Rs. 21,714 (= USD 197) indicating a variation within a wide range. Not a surprise since some telecenters are running at a loss (presumably temporarily) and few reporting a monthly income of over Rs. 100,000 (= USD 900).

However, providing Internet services ranked only third among telecenter income components (16%). The key sources of income are education and training (43%) and providing fax, photocopy and printing series (21%). They also make money from VoIP (4.5%), bill payments (2.5%) telephone calls (2.5%) selling other goods (2%) and VCD/DVD rentals (1%).

Asked for the preferred income profile, the results were not too different. They still want 33% income from training, 21% from fax photocopy and print services and 17% from Internet services. Is this an indication of being more realistic or less ambitious? You decide.

Average monthly expenditure of a telecenter is Rs. 15,837. (USD 144) This may not reflect the real costs as the Internet charges for Nenasalas are borne by ICT Agency from the money comes from e-Sri Lanka programme. Salaries is the highest cost component (39%). Then comes electricity (25%). About 10% each for telephone and rent.

On average basis a telecenter has 5 PCs and employs four staff members – two permanent, two temporary. Correlation between the income and the permanent staff strength was 0.56; the income and the number of PCs, 0.62.

Do telecenters make a profit? Yes, but perhaps may not in real terms. They record a monthly average profit of Rs. 6,735 (=USD 61) with a large standard deviation of Rs. 9,504 (=USD 86). This indicates the loss incurred by some of them. This is again without considering the cost of the communication link. (The monthly average cost of a 2 Mbps business broadband connection is USD 46 in Colombo. This might be slightly high in rural areas.)

Telecenters operators are rewarded in different ways. Only 33% are salaried. 22% receive a share of profits. 13% receive an allowanced based on performance. 32% receive no personal income. How they prefer to be rewarded? 51% wants a monthly salary; 26% a share of profits and 18% a performance based allowance. Doesn’t sound too entrepreneurial but in Sri Lanka culture job security plays an important role.