Graham and Doddsville - Issue 1 - Winter 2006 (1).pdf
Mobile phone initiative for agriculture sector (Farmers )_Airtel iCreate Business Case_FMS_BizSmiths
1. Airtel iCreate -Business Plan
Executive Summary
Name Title of the idea : IFFCO
Team Name : BizSmiths
Campus : FMS, Delhi
Members: Abhijit Kirtunia
Ashutosh
Sukesh Ch. Gain
2. INTRODUCTION
Increasing Cellular
Network penetration
in rural India with
availability of
inexpensive
handsets
Rising
disposable
income of
rural
households
Government’s desire
for inclusive growth
through migration to
mobile platforms for
financial and social
empowerment of
rural masses
Desire of BFSI and
health-care
institutions to
expand into rural
sector
The continuing
dependability of
agricultural economy
on vagaries of the
Monsoons driving
an urge to hedge
against crop loss
and subsequent
crisis
Increasing
interactions between
rural and urban
areas fuelling desire
to avail primary
services to the
fullest with minimum
travel and time
consumed
Interest of
PE/VC firms
in rural
ventures
Attractiveness of
rural sector for CSR
initiatives of
Corporate firms
Growth
Drivers
To achieve 100%
acceptance rate among
the customer base of 4
million (presently at
25%)
To increase the pace of
acquisition of IKSL
services to expand the
customer base of IKSL
beyond 4 million
Objectives
To provide directed
information to the
customers through IKSL
To ensure relevance,
adequacy and accuracy of
information provides
through IKSL services
To deliver information to cell-phones of the end
consumers
To provide appropriate
training to prospective
customers on usage of
the service
To establish and maintain
both cross-selling and up-
selling of products
Challenges
3. Stakeholder Engagement-Model
Telecom
Operator / Airtel
Business Market
Associates
IKSL (JV of Bharti
and IFFCO)
Cooperative
Society/IFFCO
Rural Consumers
Buyer’s Market
Supplier’s Market
Database
Professional
Affiliations
Banks/Insurance
Entrepreneurs
Panchayat-Heads
M-Agriculture
M-Health
Animal Husbandry
M-Education
M-Weather
Supply Chain
Focussed Selling
Loyalty Program
Rural Marketing
Voice Message
SMS/Help Line
Discounted Services
Experts
4. IFFCO
1000 Rural
Entrepreneurs
(REs) up from the
current 400 REs
10 Village
representatives
trained by each RE
Each village would
comprise about
400 farmers
Total 4 million
farmers brought
into net directly
The selected villages
are not adjacent;
adjacent villages to be
left out and to be
catered by word-of-
mouth
Thus in total, on
average, 8 million
farmers could be
brought under the
net
IFFCO
1000 REs
Direct Net 4 Mn farmers
Total net 8 Mn farmers Villages directly under RE net
Villages indirectly covered
Growth Strategy
Insurance coverage and financial support to the farmers in
case of natural calamities, pests & disease
To help stabilize farm incomes, particularly in disaster years
Insurance rate and pay-off are based on type of crop, location
and record of previous productivity
Premium Rate: 1.5% to 4 %
Facilitating Crop Insurance Scheme
Commercial/ Horticultureal crop
Rabi Crop Kharip Crop
5. AgriTrade
Land Sale Land OwnerLand Buyer
Equipments Equipment
renting
agency
Farmers who
requires it in
argency
Agri-
products
Local
producers :
Fish,
vegetables
Local rich
people -
categorize
Large scale
products
Cohort
based local
community
Big retailers /
wholesaler in
town
Mapping
BuyerSupply
Mapping of
local seller
Categorize
the buyer
based on
data
Microcredit Bank, MC
organization
Farmers,
small shop
owner
Supplier SideBuyer Side
Promotion
Road show -
Awareness
Weekly
Haat, Baazar
- Meet
Membership
Programme
Peripheral
root of
persuasion -
Retailers
Advertiseme
nt on
recharge
voucher
Agricultural
trade show
Promotional Strategy
Pesticide
Soil Test
Job NewsHealthcare
Value Added Services
AgriTrade – Buyer Supplier Model
6. Sustainability of Engagement Model-IKSL
Airtel
IFFCO
Associates
Rural
Consumers
Business
Market
Free Voice SMS (75 paise pm)
Help Line Call -50 paise pm
Discounted Service-50 paise pm
System Maintenance
Networking Expenses
Research Institutions
Training Costs-Associates
Travelling Expenses
Promotional Expenses
Network/Licensing Costs
Advertising Revenue
Commission from
Associates/Business
Sales
Revenue from Voice
Non Voice Revenue
PROFIT=REVENUE-COSTS
IKSL
(B2B, B2C &
VAS )
Upstream
Sellers,
Producers
Wholesalers
Downstream
Rural
Customers
Buyers
Cooperative
Societies
Sourcing of Contents
and availability of
Services
Mapping of Buyer and
supplier’s preferences
Developing distribution
framework- IFFCO
&Associate Program
Marketing and Sales of
services and products
Revenue collection
from various
stakeholders
Phase
Implementation
Buyer-Supplier
Model
Profit Accumulation
7. Financial Projections
0
50000000
100000000
150000000
200000000
250000000
300000000
2011 2012 2013 2014 2015 2016 2017
Number of Subscribers
0
2000000
4000000
6000000
8000000
10000000
12000000
2010 2012 2014 2016 2018
Rural Customers
0
200
400
600
800
1000
1200
2010 2012 2014 2016 2018
Associates
0
20000000
40000000
60000000
2012 2013 2014 2015 2016
Income from FMCG-Rural Areas
0
10000000
20000000
30000000
40000000
50000000
60000000
2012 2013 2014 2015 2016
Advertising Income
0
500000000
1E+09
1.5E+09
2E+09
2.5E+09
2012 2013 2014 2015 2016
Income from Voice/Nonvoice
0
100000000
200000000
300000000
400000000
500000000
600000000
700000000
800000000
2012 2013 2014 2015 2016
Training and promotional
Expenses
0
200000000
400000000
600000000
800000000
1E+09
1.2E+09
1.4E+09
1.6E+09
2011 2012 2013 2014 2015 2016 2017
Net Income from Operations IKSL