December 2009 — Page 4 of 5 — LIRNEasia


Mobile Money: Harsha De Silva

Posted on December 10, 2009  /  1 Comments

Understanding the volatility of cash flow of poor people is important in assessing the mass appeal of Mobile Money. M transfers must be used to smoothen consumption and expense. We need to consider how a poor person who skips meals can use technology to avoid it. The urban poor live in congestion while another group lives in rural isolation. The estate poor are institutionally dependent i.
Harsha de Silva I’m looking at mobile payments from an economics angle. The idea here is to understand the volatility of cash flow of the poor. Then the prevalence of m-commerce to smoothen consumption. Then finally how to increase use of m-commerce solutions. As a logic for this, you’re looking at people with irregular income streams.
After reading the historical studies of telecom in the United State, my grad student said don’t pay too much attention to interconnection. The standard answer, what are the three priorities of regulation -interconnection, interconnection and interconnection. Now, later, I have to kind of say Divakar was right. This is such a radical statement that the guy from the FCC is cringing here. My example is Bangladesh.
Timothy Gonsalves Telecom networks are highly technical and public review is usually cursory. Recommendations primarily come from the industry. In broadband the metrics traditionally come from the industry and there’s a mismatch with the subscribers expectations. Regulators specify last mile access speed, the provider is concerned with the access node, but the subscriber is concerned with the speed of accessing the content server. Under the customer driven approach we’ve defined test metrics, and tested them against three different servers, repeated at different times of day, and different days.
Adam Smith said  that the invisible hand rules the market. That may be true in a world of perfect competition but it doesn’t hold in the world we live in. Markets arise spontaneously from the institutional framework. There are three main transitions that happen when markets change or develop; Feudal to industrial, communist to post-communist, emerging to developed. Capacity must be built through creating efficient institutions.
Chair, Sherille Ismail: I’m with the FCC and here but here in a personal capacity, not representing the FCC. I’d like to start by quoting Adam Smith, who made the argument that there’s an invisible hand that rules markets.I don’t believe that’s true of the world we live in. It’s not enough to destroy what was before, it’s important to create something to new. Even if you take someone like Margaret Thatcher, a foremost champion of the free market, when she brought forth reforms she actually created 12 regulatory agencies.
This features excerpts from presentations by Rajat Kathuria, Per Hemlersen, and audience question. You can read more by following the live blog posts from that time. Rajat Kathuria On Indonesia Per Helmersen On Speaking To Decision Makers How can researchers speak to the corporate world? Question From Bill Melody On Prediction
In India 5% of gross revenue went into an (undisbursed) fund. This was for reaching the rural poor, but they were already being effectively reached by mobile. LIRNEasia found that many consumers were planning on buying a mobile for their rural connection. LIRNEasia made multiple, evidence-based policy interventions ranging from papers, presentations, Op-Ed articles, etc to rationalize this Universal Service Fund issue. Post policy change, we measured perception measures.
The presentation on mobile price benchmarking is available for download here. (PowerPoint). There is a considerable amount of data in the presentation and it may be more conducive to download on your personal laptop. The other presentations from this session are also available Alison Gillwald, RIA, South Africa – Gillwald LIRNEasia@5 2009 Helani Galpaya, LIRNEasia – Galpaya_MeasuringSectorPerformance
How do we get the attention of policy makers? It’s very simple, use national rankings. These are very good at actually grabbing attention. Back in the late 1980s we did some work at the OECD on how to develop performance indicators for public telecom operators. The work we did comparing countries, etc, got the interest and I think spurred reform.
Sujata Gamage Let me define informal. Glenda talked about knowledge in universities, that’s formal knowledge. Rasheed talked about intermediate organizations that take it to farmers. Maybe we should focus on the informal. Innovation is part of the human condition, we’re always trying to make our life easy.
Bill Melody: Over the last five years the world has seen the explosion of prepaid cell phones. Neither policy makers nor researchers understood the prepaid model. The development was an unexpected one promoted by poor people. I’d be interested in the panels interpretation. Emmanuel Lallana: In the Philippines that’s the case.
The challenges of conveying research results to corporate leaders are substantial. Questions that need to be asked are; how to better communicate the importance of research results to senior managers? Does in fact evidence get used within companies? and if so what type of evidence considered to be evidence? and how are decision with regard to strategy/policy really made?
Let me give you a small glimpse into corporate reality, where I’m free. We discussed the challenges of conveying research results to corporate people. They’re very busy people and the distance is enormous. Rohan then asked me to suggest how to target these decision makers in the corporate setting with relevant evidence. This is something I’ve been struggling with for 18-20 years.
I will talk about the Indonesian example. The trigger for the study was a study published by LIRNEasia in 2005. This found that leased line prices in Indonesia were multiples of those in Asia. Leased lines are large capacity pipes. In some cases the prices were 48 times those in India.
Minister Milinda Moragoda taking question from audience Mehta: The Governor General Of Hong Kong said, the danger if they gather statistics someone might use them. I think the deeper problem is not data. The kind of data you need has to be in the context of interventions. It’s in the context of the program that data makes sense. The issue is, can you design programs that can do course correction as the data comes in.