India is emerging as a laboratory for testing out new technologies and business models for narrowing the digital divide between urban and rural people in a developing economy.

Inadequate Internet and telephone connectivity to India's rural areas, where more than 70 percent of India's population lives, is a key challenge for a number of government agencies, NGOs (nongovernment organizations), and multilateral aid agencies. The corporate sector too is discovering that bridging this digital divide could translate into new market opportunities.

For example, HP Labs India, which was set up in Bangalore earlier this year by Palo Alto, California, Hewlett-Packard Co., is developing products appropriate for India's rural markets. "Our technological focus has been on three areas -- making information technology available to those who use Indian languages, improving the connectivity options for those outside the big cities who do not currently have satisfactory access to the Internet, and affordable devices," said Srinivasan Ramani, director of HP Labs India.

"For instance, we are working to create Indian language support for an experimental PC that can be used by four users simultaneously," Ramani said.

HP Labs India is also examining ways in which digital photography can add a second revenue stream to village kiosks that provide access to computer facilities and the Internet, and is also experimenting with techniques developed by its parent lab in Palo Alto to provide low-bandwidth multimedia communication. "Teachers and students can create their own stories and presentations using such a system," Ramani said.

Private sector involvement in projects to build the digital divide in India is likely to increase, according to Ved Prakash Sharma, head of information technology (IT), and computers and communications specialist in the National Agricultural Technology Project of the National Institute of Agricultural Extension Management in Hyderabad. "Each one of the facilitators has seen a business opportunity in these initiatives, and rightly so," added Sharma. "The growth of the Indian rural economy will provide a large number of customers for technology companies."

Public sector projects are also looking at creative ways of building up the communications infrastructure. Media Lab Asia (MLA), based in Mumbai, is setting up a wireless, 802.11 standard-compliant network to take Internet and voice connectivity to India's rural masses. Set up by the Massachusetts Institute of Technology (MIT)'s Media Laboratory in Cambridge, Massachusetts, in tandem with the Indian government, MLA is focused on developing and deploying technology solutions appropriate to bridging the digital divide in developing economies.

The project to evaluate 802.11 for rural connectivity is anchored by MLA's research hub at the Indian Institute of Technology (IIT) in Kanpur. Starting with four villages near Kanpur, the project plans to create an "information corridor" between Kanpur and Lucknow cities in North India, covering about 25 villages along the route. MLA plans to deploy 802.11, which has so far not been used in rural connectivity in India, because of its lower cost, according to Dheeraj Sanghi, MLA scientist at the IIT Kanpur research hub.

While it is premature to evaluate the impact of the recent MLA and HP initiatives, earlier

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