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Teleuse@BOP

Teleuse@BOP. Digital Divide  Digital Opportunity. Rohan Samarajiva (samarajiva [at] lirne.net) Session 1: Accelerating the growth of broadband India Telecom 2007 December 13 th , 2007, New Delhi. www.lirneasia.net. Plan of presentation. Relevance of the BOP Methodology

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Teleuse@BOP

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  1. Teleuse@BOP Digital Divide  Digital Opportunity Rohan Samarajiva (samarajiva [at] lirne.net) Session 1: Accelerating the growth of broadband India Telecom 2007 December 13th, 2007, New Delhi www.lirneasia.net

  2. Plan of presentation • Relevance of the BOP • Methodology • Digital opportunity • Digital divide • Bridging the divide and seizing the opportunity • Non-owners  owners: barriers • In sum . . .

  3. Teleuse @ BOP Relevance of the BOP

  4. How big are the markets in emerging Asia: BOP and M & TOP? * ** *excluding FANA/FATA Tribal Areas; **excluding North & East Provinces

  5. Teleuse@BOP Methodology

  6. SEC A, B & C SEC D & E Bottom of the Pyramid(BOP)defined • Many definitions of poverty, but this study uses SEC D and E; between ages 18-60 • SEC does not take into account income, but it is closely related to income levels • BOP segment is representative of the BOP population • Diary respondents also representative of BOP • Small (non-representative sample) taken of SEC groups A, B & C Quantitative sample

  7. Teleuse @ BOP Digital opportunity

  8. What are the opportunities afforded by ICTs? • Ability to communicate • One-to-one • One-to-many • More than voice • Social networking • Ability to retrieve information that will • Improve ability to make money or save money • Enhance ability to coordinate activities across time and space, thereby improving quality of life • Educate, improve know-how • Entertain • Ability to publish • Voice for the voiceless • Niche publishing • Ability to transact • Not only to interact, but to make payments • Remote computing • Use of software and computing power that is elsewhere

  9. What are the prerequisites? • Reliable electricity • A computer • A broadband connection • More than 256 kbps up and down • Always on • Service from an ISP • Familiarity with the interface • Literacy • Language skills . . . . Classic home Internet user? • How many at the BOP?

  10. Teleuse@BOP Digital Divide

  11. Internet at the BOP… Large gender divide, even in South East Asia

  12. What Internet??

  13. Awareness poor, even in urban areas

  14. Teleuse @ BOP But divide can be bridged and opportunity seized

  15. Why not a different starting point: “more-than-voice” uses of mobile? • Access and use implies familiarity with the technology • Access/ownership • Is ownership of the terminal necessary? • Any conditions under which non-voice applications can be used without individual ownership? • How many currently own terminals? • What kinds of terminals? • Are they capable of supporting more than voice? • How many likely to join the ranks of owner-users by 2008? • Use for voice without ownership  use for voice with ownership  more-than-voice applications  digital opportunity?

  16. Access is surprisingly high  familiarity • Most people approached for survey (BOP and other) had used a phone in the last 3 months “Half the world’s population has not made a phone call” was wrong when Kofi Annan said it in 1999; absolutely wrong now

  17. Ownership is not as high • Especially in South Asia…

  18. Easy access needed for more-than-voice . . . • Easy access provided by ownership is important • Unlikely that public/shared phones will be used for anything other than basic voice • Access for more-than-voice, in order of importance • Own mobile • Household member’s mobile • CDMA “fixed” phone

  19. “Fixed” phones at S Asia BOP are mostly CDMA; Mimic GSM features. Also note that 12% in PK, 4% in IN & 6% in LK use the mobile of another household member Access modes among BOP phone users • S Asia BOP mainly used public phones; SE Asia mobiles Except in India, combined BOP household use > BOP public phone use

  20. Sophisticated handsets at the BOP: Average for new is USD70+ • 60-70% of mobile owners at BOP use brand-new handsets • But even simple sets allow mobile payments and such

  21. Mobile access is high … and growing

  22. SMS as the main non-voice application; highest in Philippines, lowest in India (declined in the last quarter)

  23. Mobile as a voting device • “A key advantage of a phone, as seen by participants, is its ability to promote democratic participation. The example presented was a reality TV show . . . to select a ‘Super Star’ . . . based on the SMS/phone voting by the public. . . . Study participants viewed this as a case of telecom enabling the ‘unheard’ to voice their opinion. . . . They felt that their voice was heard; that they have been elevated from the level of mere observers to that of active participants in democratic processes. . . . None of them complained of having to pay five times the regular cost of an SMS to place their votes.” From a focus group on phone use; reference is to an American Idol-type show

  24. Payment systems in place for more-than-voice applications • For example, Sri Lanka’s largest GSM operator (~ 3.6 million subscribers) • 86% prepaid subscribers, overall • Approx. 50% of prepaid top-ups are via electronic reload (50% via card system) • 12,000+ electronic reload outlets • Mobile payment system recently launched for the first time in S Asia • Philippines is the world leader • Personal accident insurance system via mobile connection also recently launched

  25. India’s mobile Internet users growing • As at 30 June 2007 (TRAI, 2007; p.14) • Fixed Internet subscribers: 9.22 million (declined in last quarter!) • Internet subscribers accessing Internet via mobile handsets (GSM/CDMA): 38.02 million and growing • One out of five mobile users in India use their handsets to access Internet  Mobile = 4 x Fixed Foreshadowing the mobile-centric Internet?

  26. Teleuse @ BOP Non-owners  owners: barriers

  27. Key barrier to ownership is affordability

  28. The cost of getting connected…Expectation vs. affordability gap • E.g., 70% of non-owners at BOP in Sri Lanka believe that the cost to get connected will be greater than USD56 • But only 11% can afford more than USD50 • New mobile and connection possible for USD 36; lower with second-hand phone • Greater potential for more-than-voice applications as prices of mobiles with additional capabilities decrease

  29. Use cost: most can afford less than USD5 per month on communication • Expectations and affordability are in line • Most expect the monthly cost to be less than USD 5, which most can afford to pay • Also in line with ARPUs of mobiles (USD 3-4) • 32% of customers of Sri Lanka’s largest mobile operator pay around USD 1 per month

  30. Teleuse @ BOP In sum

  31. In sum • Digital opportunity ≠ the way we use the Internet now • Need think of digital opportunity in terms of functions such as information retrieval • Massive divide exists if we think conventionally about the BOP • But possible to bridge the gap if we start from the mobile • BOP are not necessarily heavy users, but they do use mobiles • Even non-owners are participating in telecom • Potential owners, if connected, would also use phones for more than voice • BOP mobile market is growing; much of the BOP will first experience the Internet via mobiles • Prerequisites for ‘more than voice’ applications are in place • Digital divide can be bridged and digital opportunity can be seized, only if we take a road less traveled by . . . that will make all the difference

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