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WEB-ONLY EXCLUSIVE
Conversations: 'I Want to Make a Difference'
Rajesh Jain wants to bring the Internet to the Indian masses
By APARISIM GHOSH

July 5, 2000
Web posted at 4:30 p.m. Hong Kong time, 4:30 a.m. EDT


Rajesh Jain's $120 million sale of his portal IndiaWorld to Satyam Infoway last year set imaginations afire across India. It was the first time a homegrown Web wizard had made that kind of money, and it inspired thousands of young entrepreneurs to hit the dotcom trail. Now something of a national icon, Jain spoke with TIME Asia associate editor Aparisim Ghosh in Bombay recently. Excerpts from their conversation:

 INTERACTIVE  
The Subcontinental Drift message board -- sound-off about the news in South Asia to TIME
 
TIME: Some people hold you responsible for the Indian dotcom boom. Do you feel guilty about it?
Jain:
No. What has happened is a good thing. We saw the emergence of Internet companies in India toward the end of last year. And I think our deal with Satyam Infoway was the kickstart that this trend needed. I think it's good because, for the first time you can have entrepreneurs or people with ideas actually go out and get funding and launch something on their own. This was never possible in India unless you had lots of money or lots of connections. Now people are more willing to take risks to implement some of the ideas that they have.

     ASIA BUZZ
Ashok K. Mehta: 'Another Kargil is Already Occurring'
Exclusive interview with the Indian commentator and retired major general.
- Tuesday, June 27, 2000

Abid Hussain: 'The U.S. Won't Dump Pakistan'
Exclusive interview with the former Indian Ambassador to the U.S.
- Friday, June 9, 2000

Subcontinental Drift: What Really Happened?
Pakistanis deserve an explanation for Kargil
- Thursday, June 15, 2000

Subcontinental Drift: The Tax Test
Musharraf must show he is tougher than Bhutto and Sharif
- Thursday, June 1, 2000

Subcontinental Drift: What's The Deal?

Delhi should tell the world what it can offer Kashmiris
- Thursday, May 18, 2000

   ASIAWEEK
Intelligence
The story behind today's news from the editors of Asiaweek

From Our Correspondent
Personal perspectives on the news
TIME: You went from obscurity to star status. Now kids in small towns want to be like Rajesh Jain. How does that make you feel?
Jain
: I think it makes me feel even more responsible and more determined to do something which can impact India for the better. I made the decision to come back [from the U.S.] 7-8 years ago, to do something positive, something constructive for the country where I grew up. Now I have the opportunity to make a difference. If people can look at me as an example -- if it helps more people start up ventures to try to achieve their dreams, if it makes more people want to come back, makes more people want to become entrepreneurs, makes more people want to look at the Internet and IT in India, then that's very good for India. That's really where the future lies for India.

TIME: When you talk about giving back to India, you're not talking about charity are you?
Jain:
One of the things I'm doing with Satyam putting together an incubator for entrepreneurs. I think time is really the most critical resource -- time and intellectual capital. It's the learning that I've had, the mistakes that I've made, which I'd like to help other entrepreneurs avoid. I'd like to help them through challenging times in their company. I didn't have help from anyone but my family. Now I can give something back by helping other entrepreneurs achieve their dreams.

TIME: You have been working on a new, low-cost Internet-access device for the Indian masses. Can you explain what you have in mind?
Jain:
What we need in India -- and in other emerging markets -- is a low-cost access device which can make the Internet a mass-market service, a utility service. Today, there are three possible options: the PC, television and the cell phone. In India, the personal computer (PC) base is limited to about 4 million. Of this, probably a million, or less than a million, are in homes. As for TVs, there are about 60 million in total; 25 million have cable connections. But TVs are in family rooms, and they are more an entertainment device shared by the entire family. There are about 1.5 million cell phones, and the service is still pretty expensive. What I'm talking about is a service costing just a few hundred rupees a month, and a simple access device which lets people e-mail, chat and get alerts on specific events which happen. You then need to look at access points -- community centers in neighborhoods, almost like cybercafes -- but the difference is these should have high-speed connections to the Internet. I'm talking about a McDonald's-type chain, where you have an ambience conducive to Internet browsing. The cost has to be very, very low. So if you want to send a message, it should probably be a rupee or less for sending an e-mail out. These two things would really help in increasing the base of people using the Internet. You've got to really take it from 1-3 million to 50-100 million people. The third thing you need is a payment system, a mechanism to make payments, either through Smart Cards or pre-paid cash cards. Credit or debit cards won't work because relatively few people have them. I think that if the Internet is to impact the lives of, say 100 million people in this country in the next 2-3 years, you've got to really look at combining all of these things and bringing the cost down quite dramatically.


 CONVERSATIONS
Ghosh Subcontinental Drift's Aparisim Ghosh presents Conversations

pt1 | pt2 of the full interview with Abid Hussain

PLUS
'The U.S. Won't Dump Pakistan'
Exclusive interview with former Indian Ambassador to the U.S Abid Hussain   
Distant Memories: The ghosts of Kargil have been buried, says Indian sociologist Ashish Nandy
Two-Faced: India's real threat comes not from Pakistan but China, says defense analyst Brahma Chellaney 
'I Don't Think a Crash Is Imminent': Securities expert Sanjoy Bhattacharya on why the Indian stock market is sizzling hot 
TIME: What would be the price of the device itself?
Jain:
Probably less than $100, with the service charge being 300-400 rupees ($6.70 to $9) a month. It's got to be in that ballpark. It won't happen right away, but we've got to aim at that level if we want to make the Internet a mass utility service in India.

TIME: Can you make money at those prices?
Jain:
Definitely. You've got to look at two revenue models. One is advertising. Think about it: the largest English newspaper in India sells a million copies. If you're talking of having tens of millions of people connected through these kinds of devices to the Internet in the next few years -- and the ability to address each of these individuals on a one-to-one basis -- I think that has huge advertising potential. Second, you can facilitate e-commerce through the device and take a commission. I heard at a seminar the other day that people do 70% of their e-commerce transactions within 2 km of their homes. People can use the device to do simple things, like order groceries.

TIME: Now that the initial madness in the stock market over dotcoms seems to have fizzled out, or at least calmed down, how do you see the industry growing in India?
Jain:
Right now, everyone wants to set up a portal that serves all interests. There's no room in the market for so many of them. Most of these are going to die or will be absorbed by some of the larger players. What we should see in the next phase is companies looking to create innovative technology, and using India as a test bed for other emerging markets. I mean, China, India, Latin America and Africa are very similar. Can we create certain technologies using the Internet that can be relevant to these kinds of audiences?

TIME: Give me an example.
Jain:
The device I've been talking about is one example.

TIME: You know, when PCs first arrived, a number of people tried to create the cheap home PC, which was essentially a keyboard with a little bit of memory that you hooked up to your TV screen and you could do some basic word processing. People thought this would be the way to introduce the middle class to computers. They stripped off most of the functionality of the PC and sold a bare-bones product. As we know, it didn't work out. What's the risk of that happening with your device?
Jain:
Back then, all the functionality and the applications rested in the computers themselves. Stripping away a computer hampered its performance. Now, all you really need to do is provide a mechanism for people to access the Internet. All the applications rest outside your device. A lot of us use the PC almost like a TV remote control to access different channels. The difference is, a TV will give you 50 channels and the Internet has a million channels. So what do you really need? You need a display, you need a keyboard, some support for non-English languages, and I think you need some voice recognition. And it would help if the device could reach the Internet through ordinary phone lines. In India, 4 million people have access to PCs, but then 70-100 million people have access to phones.

TIME: Do you get hundreds of phone calls from people trying to sell you ideas?
Jain:
Not hundreds of calls, but I do get calls and e-mails from people with interesting ideas. I try to talk to most of them, and in most cases they're smart people. What I try to tell them is this: "Look, this is little more than an idea right now. You need to combine an idea with a business model that makes money. How are you going to make money? And are you prepared to run your business for the next five years? It's not like you can create it and there will be somebody six months later waiting to give you money."

TIME: When you look across Asia, do you see dotcom models or dotcom projects that make you think, 'they've got it right?'
Jain:
Yes. i-mode [a mobile Internet service which allows customers to use their mobile phones to exchange e-mails] in Japan is basically a low-cost service. Who would have thought a year ago that i-mode would be the largest Internet service provider in Japan? I think what has worked in Japan may very well work in India. I also like the PC rooms in Korea. I think India needs those types of rooms -- where you have a collection of computers connected to the Internet with high-speed connectivity. I was recently talking to someone in China and he was saying that person-to-person auctions have done well there. Buyers and sellers will agree on something through the Internet and agree to meet off-line -- perhaps at a railway station -- and conclude the transaction. That could work in India, too.

TIME: So you've got this device and your incubator service. Do these two things satisfy your own entrepreneurial urge?
Jain:
I'm a member of the advisory board at Satyam Infoway, and I spend all my time looking at new business initiatives. I want to make the Internet a utility service in India and I want to work with entrepreneurs. That, for me, is very satisfying. I have an opportunity to make a difference to these peoples' lives and, if I can do both of these, I will have done very well.

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