Expanding internet adoption in rural India

Internet penetration in rural India stands at roughly 29 percent, which means that nearly 700 million citizens are living in digital darkness. To address this challenge, Sterlite Technologies Ltd. (STL), an industry-leading integrator of digital networks, launched a rural development initiative, STL Garv. STL approached MIT Sloan's India Lab for help developing a business model for this for-profit initiative with the goal of expanding high-speed internet connectivity from 14 villages to 300,000 by 2024.

“This project highlighted the role technology could play in bringing access to health care, education, financial services, and other economic services to vastly underserved communities all over India,” says Lecturer Aarabi Balasubramanian, founder and CEO of EmTech Care Labs Inc. and instructor for the India Lab class. “From my perspective, this is something that has the potential to really drive impact—both social impact and sustainability impact.”

To address this challenge, India Lab brought four students from diverse personal and professional backgrounds together—Ali Jumabhoy, MBA ’22, Vladyslav Kondratiuk, MBA ’22, Norally Radas, MBA ’22, and Akshit Singla, SDM ’23. The team explored sustainable business model options for STL Garv, which today offers high-speed internet connectivity through kiosks designed to humanize technology for the underserved rural population and provide access to basic online services. The India Lab team was tasked with finding ways to increase the profitability of the initiative and ensure its scalability.

According to Kondratiuk, one of the biggest challenges of this project was defining its scope. “Our initial approach to the project—research about Indian rural consumers and their context, global trends, and different business models—proved to be useful as a framework to discuss and refine ideas,” he says. “We learned to quickly iterate ideas.”

The team examined the customer base to determine who was already benefiting from STL Garv’s services and sought to identify barriers that limited use frequency and adoption. The students also analyzed the economics of the kiosk-based system and explored alternative revenue schemes.

In the end, the students recommended that STL change the format of STL Garv from a kiosk to a cell-phone “super app”—a package of digital services and offerings—to take advantage of the widespread growth of mobile phone usage across India. They also suggested that the company invest capital in providing phones to rural Indians while partnering with other organizations to enhance its service offerings. Over the long term, the students suggested that STL Garv could capitalize on data collection.

“STL was very happy with how the students engaged and really appreciated what MIT was able to accomplish for them,” Balasubramanian says. “And all four students appreciated having this exposure to a completely different market segment. They have a better understanding both of the business challenges and complexities and of the diversity in India itself—the cultural differences, language differences, and religious differences that make doing business in India fascinating.”

Shweta Agarwal, business head of STL Garv says, “As a company, we are committed to our purpose of transforming billions of lives through digital networks. We have been passionately working toward taking the impact of networks and technology to underserved rural communities. STL Garv actually brings together infrastructure and use cases to create that impact. We are thrilled to have MIT India Lab work with us in developing a globally scalable business model for STL Garv. The students delivered some great results, and we are confident that this effort of connecting the best minds with the toughest problems will benefit millions of rural citizens.”