The contribution of user-based subsidies to the impact and sustainability of telecenters - the eCenter project in Kyrgyzstan

We examine the extent to which user-based subsidies can promote the sustainability and development impact of telecenters, where sustainability is defined in financial and social terms. We do this by looking at a coupon scheme used by the USAID funded eCenter network in Kyrgyzstan. The network consisted of partnerships with existing commercial computer centers which provided fee-based ICT services to their communities. The eCenter program temporarily provided subsidized coupons for Internet access and computer training to users of these centers. Using a mixed-method approach, we found that user-based subsidies have to a certain degree aided financial sustainability by bringing new users to the centers, some of who will, conceivably, become long-term customers bringing ongoing revenues. The subsidies also helped to "kick-start" operations during the initial stage of the project. However we found that the distribution of the coupons did not lead to any significant enhancements to social sustainability by, for instance, encouraging users from underrepresented social groups (though we did find that women were marginally more likely to take advantage of the program). Moreover, we found that the distribution of both Internet and training coupons favored more regular users of the eCenters. Finally, looking beyond sustainability to impact within the community, we found that the coupon program had a limited development impact on participating communities. For example, the population of users who reported economic benefits from using the eCenter (eg. subsequent employment or starting a new business), did not make more use of the coupon program than the user population at large, suggesting that the coupon program itself did not account for this benefit. We argue that, even in the presence of such modest positive effects, user-based subsidies still offer an intriguing model. We believe that if the eCenters had narrowly targeted particular participants for the coupon programs it - is likely that the benefits of the program can be enhanced. For example, better social targeting of the coupons could have brought in more women or under represented groups. From a financial sustainability point of view, explicitly targeting new users (as opposed to people already using the center) could have also been more effective. In terms of impact, coupons could have been distributed, for example, specifically to entrepreneurs looking to start a new business. A method of incentivizing eCenter management to perform such targeting is probably required.