NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

“For many years, people working to enhance telecommunication infrastructure and applications have referred to rural communities as being at the “last mile of connectivity.” The concept of the “last mile” carries a lot of negative connotations and compels us to assume the perspective of an urbanite looking down at the rural margins. Titus Moetsabi was the first to turn this statement on its head and help us think instead of rural communities as being at the “first mile of connectivity.” This term expresses a more equitable and far less urban-centric view of the challenge of providing everyone with the option of connecting themselves to the rest of the world and all it has to offer.”

–Lynnita Paisley and Don Richardson

Moetsabi’s desire to redefine “last mile” customers as a primary source of revenue and thus a strategic priority is what spurred Amir Hasson and his colleagues to create the original “DonkeyNet.” This innovative proposal to create a wireless network that has the capacity to provide asynchronous internet access to rural residents won the 2002 MIT Entrepreneurship Competition and led Amir to use the technology as a basis for his current company, FirstMile Solutions (FMS). This unique system based on store-and-forward technology has proven to be a major success. FMS now serves 40,000 villagers in five countries, with operations moving steadily away from reliance on donor funding to being a fully for-profit endeavor. You can read more about the original technology in our activity capsule or USAID commissioned case study; the gist of FMS’ expansion is that as it left the MIT campus and entered the rural villages of India and Cambodia, motorcycles and buses have replaced donkeys as the wireless relay points, transferring information from village kiosks to a central hub.

Since the last time we checked in with FirstMile a year and a half ago, the team has made great advances in improving their technology and making it more widely available. FMS has added phone services to its internet package, allowing customers to pay per minute of talking time or per message just as they had previously paid per email sent. Providing phone service over asynchronous networks may seem counterintuitive, but the concept works seamlessly with existing DakNet technology. Essentially, a customer can pick up the phone and get a dialtone- they then call their relative in Bombay, for example and leave a message or an SMS text. When the FMS motorcycle drives by and picks up that day’s web searches, it also transfers outgoing and incoming voicemails, eventually notifying the intended recipient and allowing them to hear the message.

With the inclusion of phone services, Firstmile is increasingly moving toward a self-sustaining model with digital refillable identity cards serving as the backbone of the system. With this feature, the company is working to increase its customer base rapidly because, as SMART Communications representative Ramon Isberto has said, the IT business is all about scale. In order to offer low enough prices to service the BOP, FMS is expanding rapidly. It’s ISP sister company, United Villages has been established in India after severe regulatory headaches and FMS is aiming to hit its full market potential in the country of 220,000 villages in addition to a franchise system it has recently setup. With this model, Amir estimates that the company’s break even point is a mere 80 cents per user per month from about 5% of a given village- more or less 75 users.

The real key to the FirstMile business strategy is that it is at heart a BOP company, viewing the underserved masses primarily as a favored potential clientele, not as merely aid recipients. Amir and I discussed BOP issues in some detail, and he makes clear his belief that this is still a hypothesis in the “data-collection” stages, but one that has enormous potential as a useful tool in fighting poverty. With this in mind, the FMS team designs and implements technology as a “stepping stone to universal broadband connectivity” and therefore to broader prosperity. United Villages ID cards create a digital identity for rural Indians that gives them some documentation and access in places even the government has not reached.

FMS partners with large cellular companies such as Reliant which mainly serve urban areas to connect their customers with United Villages subscribers. This not only gives rural villagers access to the broader cellular market, it reorients Reliant and its competitors to recognize the profit potential in these previously ignored areas. In fact, FMS has to be careful with how successfully it pitches cellular companies; Amir predicts that as cash-rich providers are crowding out urban areas they will begin seeking rural audiences, making them FirstMile’s chief competitors. This is one of the motivational factors behind the enterprise’s push for rapid scalability and it ensures that as BOP consumers become more prominent in boardroom discussions, FirstMile will serve as a gateway for access to those communities.

Amir’s future plans for the company are essentially aimed at proving the BOP hypothesis he discusses by tailoring new services to his rural clientele and drawing them further into the digital arena. New projects include high-powered offline internet capabilities provided by a major search engine, a cheaper remittance service and linking villages into cellular data networks. FirstMile’s continued growth and success is not only making the BOP case stronger with each new villager connected to global flows of information, it is empowering a previously unnoticed segment of the population to raise its standard of living and improve its quality of life. Look here for additional information about the company.