Telecom use on a Shoestring: a Study of Financially Constrained People in South Asia
The aim of this research is to understand the use of telecom services by the ‘financially constrained’ people, or bottom of the pyramid (BOP) in three countries in South Asia, namely Bangladesh, India and Sri Lanka. The findings on Bangladesh are based on a meta-analysis based on the wealth of information already available, and are available in a seperate paper (available below ). The findings on India and Sri Lanka are the result of a survey that was conducted in the two countries in April and May of 2005, and are available below(Scroll down for downloads ). A brief introduction to the survey and its findings is below.
The survey seeks to answer questions such as how do the financially constrained communicate? why they choose to use the form of access that they use, i.e., fixed, mobile or public? how do they use telecom services? what benefits do they gain from use?
The survey was implemented in seven different localities in India and four in Sri Lanka; the different localities were selected, not to get a representative sample of either of the two countries, but to capture the diversity within the two countries, taking snapshots of eleven very different markets, in terms of telecommunications access, economy, population and geography.
The results of the research have revealed a striking finding, that amongst the ‘financially constrained’ (defined by income level and socio-economic classification) users sampled, almost two thirds do not even own the phone that they use. This means that in the conventional indicator used to gauge telecom access, teledensity –the number of telecom subscribers per one hundred inhabitants – this segment of users are not accounted for.
Additionally, 31 per cent of fixed owners and seven per cent of mobile users allow other people (non-family) to use their phones. Most often, owners did not charge for use, but where respondents do charge others for using their phones, the amount charged was either below or at cost. This has compelling implications for operators, given that one connection serves more than one user’s needs.
Respondents were found to be using the phone more for ‘relationship maintenance’ (e.g., keeping in touch, etc) rather than instrumental purposes (e.g., business transactions). At first glance this seems counter-intuitive, given that these ‘financially constrained’ users as defined, have monthly incomes of less than USD100 (as defined by the methodology used); however it is very plausible that the distinction between relationship maintenance and instrumental calls is not clear, for instance where small businessmen do business with relatives.
It was found that in choosing a mode of access (i.e., fixed, vs. mobile vs. public access), convenience factors (for e.g., ease of access, mobility, ease of use) played as important a role as cost factors.
Although mobile users perceive the service to be expensive, they still are willing to spend a considerable amount of their incomes on it. Seventy per cent of mobile users perceive the cost of mobile communication to be either ‘high,’ ‘very high’ or ‘extremely high.’ Yet 64 per cent of mobile users spend at least USD4 per month on mobile communication; amongst these users, whose monthly household income is no more than USD100 this yields a conservative estimate of at least 4 per cent of monthly income being spent on telecommunication. This percentage was found to be even higher in places like Jaffna, where one third of mobile users were found to be spending over 12 per cent of monthly income on telecommunication, much of which is spent on international calls.
There is clearly a great unmet demand amongst financially constrained people, with many stating that they would increase use should prices come down by half, particularly amongst mobile users (49 per cent, compared to 26 per cent of fixed users and 26 per cent of public access users).
Another key set of findings relate to gender patterns in the use of telecom services. There is extensive literature that supports the thesis that women and men differ significantly in their use of telecom services; women are said to use the phone more than men, spending more time on the phone, and more for ‘relationship maintenance’ purposes rather than instrumental purposes. The findings in both India and Sri Lanka show no significant differences on these factors other than for a few. For example, 17 per cent of male mobile users use mobiles for business transactions and enquiries, while the corresponding figure for females is four per cent; this might be explained by the occupation of these males, being traders and businessmen.
Several detailed studies’ have been developed from the vast source of data that has been obtained. Some of these look at:
- ‘Strategies’ in the use of telecom services (paper avalaible for download below)
- Expenditure and cost perceptions (paper avalaible for download below)
- Case-study of telecommunication use in Jaffna, a post-conflict society
Sample size: 3199 (India: 2,099; Sri Lanka: 1,100); Indian localities: Cuttack, Dehradoon, Gorakhpur, Kasargod, Mumbai, Neemuch, Sivaganga; Sri Lankan localities: Badulla, Colombo, Jaffna and Hambantota; with the exceptions of Mumbai and Colombo, both rural and urban areas of each locality were covered; the survey was translated into, and conducted in, five local languages: Hindi, Oriya, Malayalam, Tamil and Sinhala; ‘users’ were defined as those who had used a phone in the last three months; the ‘financially constrained’ were defined by two parameters: (1) those with household income levels of approximately USD 100 (INR 5,000 in India and LKR 10,000 in Sri Lanka) & (2) those belonging to socio-economic classification (SEC) groups B, C, D & E in Sri Lankan and urban Indian respondents; R1, R2, R3 & R4 in rural Indian respondents.The survey instrument was developed by the LIRNEasia team in collaboration with TNS Lanka. TNS, which is the second largest market survey company in the world, implemented the survey in both India and Sri Lanka in April & May of 2005.The survey was completed end May 2005. April 2006
Project team : Ayesha Zainudeen (team leader), Rohan Samarajiva , Ayoma Abeysuriya (TNS Lanka), Harsha de Silva , Divakar Goswami , Mariam Hameed, Tahani Iqbal , Malathy Knight-John , Sriganesh Lokanathan , Avanti Moonesinghe,Neluka Silva, Chanuka Wattegama , Prashanthi Weragoda .
The findings from this research project have been presented at the following events:
- Catalyzing Change: Strategies to Achieve Connectivity and Convergence , 10th LIRNE.NET/LIRNEasia training course on telecom reform, 25-30 September 2005, The Elizabeth, Singapore
- WDR Expert Forum, 30 September 2005, The Elizabeth, Singapore
- LIRNEasia Networking Meeting, 2 October 2005, Jakarta Hilton, Indonesia
- Pro-Poor, Pro-Market ICT Policy and Regulation forum at the WSIS , 17 November 2005, Kram Center, Tunis, Tunisia | Presentation slides
- Usable Knowledge for Growing the Sector: ICT Policy and Regulation Research from LIRNEasia , 19 December 2005, Galle Face Hotel, Colombo, Sri Lanka | Presentation slides
- Usable Knowledge for Growing the Sector: ICT Policy & Regulation Research from LIRNEasia, 6 March 2006, The Park Hotel, New Delhi, India |Presentation Slides
- Association for Progressive Communication (APC) Asia ICT Policy Consultation Meeting, 19-21 April 2006, Dhaka, Bangladesh | Presentation slides
In R. Samarajiva and A. Zainudeen (Eds.), 2008, ICT infrastructure in Emerging Asia: Policy and Regulatory Roadblocks. New Delhi & Ottawa: SAGE & IDRC :
What do users at Bottom of the Pyramid want? By A. Zainudeen
Strategies on a shoestring. By A. Zainudeen and T. Iqbal
I just called to say . . . Teleuse under a ceasefire. By R. Samarajiva, M. Hameed and A. Zainudeen
In W.H. Melody and A. Mahan (Eds.), 2007, Diversifying Participation in Network Development: Case studies and research from WDR Research Cycle 3 (73-87) . Montevideo: LIRNE.NET:
An Investigation of the Replicability of a Microfinance Approach for Extending Telecom Access to Marginal Customers. By M. Knight-John, A.Zainudeen and A.S. Khan
TelecomUse on a Shoestring: Expenditure and perceptions of affordability amongst the financially constrained. By A. Moonesinghe, H. de Silva, N. Silva & A. Abeysuriya
This project was funded by IDRC of Canada .