In our most recent demand-side ICT study, Teleuse@BOP3, we asked bottom of the pyramid (BOP) phone owners if and how often they used their phone (mobile or fixed) for business purposes or any other financial or work-related purposes. The responses we got were quite encouraging:

Teleuse@BOP4 is almost underway. This time, we have decided to seek out the wisdom of the crowds in designing and fine-tuning some of the questions that we ask in Teleuse@BOP4.

Responses to the question of business use of phones are important in this research cycle, where we are trying to understand , inter alia, what services (including telecom) would better equip SMEs (many of which are owned by or employ people at the BOP) to participate in the knowledge based economy.

Similarly as important are the reasons that prevent greater use of phones for these purposes (trust, alternatives, cost, culture, etc). Here is a draft question to seek out this information; we invite comments, suggestions and feedback on how this question can be improved.

“Q: What prevents you from using the phone for these purposes (business, financial or work related) at all/more than you do currently?

a. It is more convenient communicating on these issues face-to-face than over the phone

b. I am not sure if I can trust the other party when talking about these things over the phone

c. Other people prefer to talk face-to-face

d. I don’t engage in such  activities

e. other”

Last year, I was discussing the possibilities of inviting him to give lectures and interact with business leaders in Colombo and southern India. Our business partner was of the opinion that Professor Prahalad was not known widely in Sri Lanka and that we would have to do extensive marketing. That whole issue became moot because we had difficulty reaching him and because our priorities changed. But the fact that there are columns in his honor in Sinhala newspapers suggests that he is not unfamiliar to opinion leaders in Sri Lanka.

We honor this great thinker because he focused us on thinking of the poor not as objects of charity, but as consumers who had to be wooed and persuaded just like everyone else. Our tribute to him is the Google search for the phrase “bottom pyramid telecom.” It’s mostly LIRNEasia product.

A scholar’s immortality comes from the fact that people cite her/him after she/he had died. By that measure, CK Prahalad will live for a long time.

Now we have a powerful ally: the New York Times.

With the majority of Internet traffic expected to shift to congestion-prone mobile networks, there is growing debate on both sides of the Atlantic about whether operators of the networks should be allowed to treat Web users differently, based on the users’ consumption.

While we were researching the subject, we did not take a position on net neutrality, but we now agree that its blind application in our settings will harm our constituents, the teleusers at the bottom of the pyramid. We do agree with the statement below, also excerpted from the NYT:

But there is a big flaw in the concept, according to the operators: Networks have never been neutral. They have always been actively managed to some extent since their inception in the 1980s to ensure that all customers get a basic “best effort” level of service.

If an operator could not restrain bandwidth hogs, who typically make up 15 percent of customers but who generate 80 percent of the traffic, most Internet users would experience poor service.

While net neutrality is an emotion loaded minefield that is not the most hospitable for evidence based discussion, we are at least happy that the mobile piece of the argument is running parallel with ours.

An online gallery has been created to as a companion to the actual exhibition and can be viewed HERE.

m-HealthSurvey is a mobile application developed by indian Institute of technology Madras’s Rural Technology and Business Incubator (RTBI) for collecting near real-time patient disease, syndrome, and demographic data for rapid detection of disease outbreaks. It is a J2ME midlet that allows users to select categorical data as well as type information to generate patient clinical records to be submitted via GPRS to a central database. The pilot is going on in India and Sri Lanka now.

Observations from the exercise revealed a disparity in the usage and adoption between the age groups of the health workers using the m-HealthSurvey for RTBP data submission – younger Sarvodaya Suwadana Center health workers, between the age of 18 – 35 in Sri Lanka, were able to complete the exercise easily in the allotted time by themselves without any help. While the older Tamil Nadu Health Department Village Health Nurses, between the age of 30 – 50, but with 10 – 20 years field experience, were unable to complete the exercise in time and, except for one or two of them, all others required guidance and assistance. This, adoption and usability, disparity of mobile phone applications between older and younger generations is also evident from LIRNEasia’s BOP findings; where “youngsters are more likely than older to adopt mobile phones beyond voice” (De Silva et al, 2009).

The health workers in Sivagangai and Kurunegala began using the m-HealthSurvey mobile application immediately after the training in June 2009; see blogs -  Village Health Nurse training and Suwadana Center Health Worker training.

View link for field report -

Sivagangai District Field report by Dr. Ganesan Muthaiya (India)

Kurunegala District Field report by Ms. Pubuduni Weerakoon (Sri Lanka)

The study of over 1,500 domestic and overseas migrant workers in six Asian countries (Bangladesh, India, Pakistan, the Philippines, Thailand and Sri Lanka) has yielded some interesting insights in Bangladesh, with important policy implications.

Demand for communication among Bangaldeshi migrants surveyed was particularly high compared to the other countries surveyed; a significant number of overseas migrants even used the Internet to call home. Bangladeshi migrants were sending home around half of their salaries on average, mostly through banks, and hand-carried in cash. Mobiles play a key role in coordinating remittances; a small number of overseas migrants were even sending money home through their mobiles.

These findings as well as the important policy implications (e.g. on IPLC policy, as well as mobile payments policy) were elaborated on by Dr. Rohan Samarajiva, LIRNEasia Chair and CEO at the event. The presentation sides can be downloaded here.

The migrant study is a part of a large multi-country survey of telecom use at the bottom of the pyramid, Teleuse@BOP3. Teleuse@BOP is conducted by LIRNEasia every two years. The study looks at how the lowest socioeconomic groups or the bottom of the pyramid (BOP) make use of telecom and other ICTs in their lives. Teleuse@BOP3, the third of these studies was conducted between October 2008 and March 2009 and included Bangladesh for the first time. Teleuse@BOP3 also included a survey of BOP overseas and domestic migrant workers from the same six countries (Bangladesh, India, Pakistan, the Philippines, Thailand and Sri Lanka). Over 1,500 migrant workers were surveyed in late 2008. In Bangladesh, 180 recently returned overseas migrants and 170 domestic migrants were surveyed. In-depth qualitative research with similar migrant workers as well as their families was conducted in the six countries in early 2009.

The Bangladeshi findings from the main Teleuse@BOP3 study can be downloaded here: Teleuse@BOP3 Bangladesh findings 26Jun09

The current issue of Nokia’s Expanding Horizons quarterly magazine highlights LIRNEasia’s Teleuse@BOP3 study findings from India, illustrating this point.

Mobiles are now the most common form of communication, pushing public phones into second place… The rapid evolution of the mobile into a multi-purpose communications and knowledge tool combined with its fast adoption by the BOP, means they and the majority of people in the developing world are likely to have their first Internet experience via a mobile.

Although use of “Mobile 2.0” services such as payments and  e-government services is low, these are the ‘doors’ through which people are likely to enter these services. Governments and industry in South Asia need to understand potential barriers to usage and to identify what will motivate use of ‘non-voice’ applications among the BOP.

Key results can be previewed here. The full article can be viewed here.

But now, the picture is different.  Last October, Minister A. Raja stated that there were 11 access paths per 100 rural inhabitants, compared to 30 for urbanites.   Massive progress has been achieved, but is it making an impact at the bottom of the pyramid (BOP)?

LIRNEasia’s Teleuse@BOP3 study has yielded some intriguing answers.

Forty five percent of Indian BOP teleuser households had a phone in late 2008.  Thirty seven percent had a mobile only; five percent had a fixed phone only; three percent had both.  This is massive progress from the 19 percent of BOP homes with a phone just two years ago.

In 2006, public phones of various kinds were the most frequently used; of the BOP teleusers, 71 percent relied on them.  By 2008, 36 percent said “my own mobile” was the most frequently used mode, over the 33 percent using public phones.

The most recent quantitative findings of the Teleuse@BOP3 study are now available. The findings were released at a presentation to the Cellular Operators Association of India in February 2009. The study looks at teleuse at the ‘bottom of the pyramid,’ or the lowest socio-economic classes across six Asian countries: Bangladesh, India, Pakistan, the Philippines, Sri Lanka, and Thailand. The quantitative component involved a detailed face-to-face survey of 9,750 sample representative of the BOP in the six countries.

Though across all six countries it appears that the access challenge has been met, there is still huge potential for more‐than voice services. Awareness levels are still low and usage even lower. Download findings to see more.

An article published by the Business Standard, India, states that telecom operators should focus on their most profitable customers, those at the top of the pyramid or TOP, instead of following bottom of the pyramid (BOP)-focused strategies. The article cites a study by BDA, a consulting firm in India, which finds that the TOP contributes a greater percentage to revenue than their lower-income counterparts. 

An interesting debate has ensued, here and here,  on the economics of serving the BOP. Although such figures appear to economically justify abandoning BOP-focused telecom strategies, some argue that there seems to be more to the picture than first meets the eye. 

Rob Katz of Nextbillion.net argues that while the BOP might not be higher-end consumers just yet, they very well could represent the future middle class, and hence, bringing customers into the fold now, could make more sense than ignoring them altogether. 

Furthermore, Rohan Samarajiva argues that a new set of business models to serving the BOP market is emerging which rests less on ARPU than on maximizing revenue-yielding minutes. Such models have enabled operators to achieve falling unit costs and hence higher mobile use, more so than might have been achieved with models serving the TOP. 

More on the TOP vs. BOP discussion is available here.

One seemingly less important budget proposal made yesterday by President Mahinda Rajapakse – many might have missed it – is the eligibility extension of the popular ‘low cost’ UPAHARA package by Mobitel to clergy and employees of co-op societies. Only public sector employees plus retirees had the privilege before.

No doubt, a private company, even a one with govt hand in it, can offer special rates for a niche market, which it finds lucrative. However, when that is recognized more as govt policy, and spelled in a budget speech, inevitably eyebrows go up and questions arise.

The most deserving beneficiaries of low cost teleuse are the poor – or the so called ‘Bottom of the Pyramid’ (BoP). That we all agree.

As LIRNEasia found from its previous Teleuse at BoP studies, contrary to the popular belief, 92% Sri Lankans in BoP use phones, though not necessarily own them. The ownership was 41% in 2006, but certainly more now.

On a scale of 1-5 (1= worsened, 5=improved) BoP teleusers in Sri Lanka marked their perceptions of the ability of a telephone at 4.58 to act in an emergency, 4.35 to build family and social relations, 3.98 to increase the efficiency of daily activities, and 3.19 to earn more or spend less on their day to day activities. Bottom line: Telecom is not a luxury for poor – but an essential part in their livelihoods.

So why doesn’t the govt offer the advantage of low cost communication to the poor?

Most in the two newly introduced categories – clergy and cooperative society employees, just like most govt employees – do not fall to the two categories D and E – the bottom-most layers in the social pyramid. They are placed at the top layers. They are not the ones who need financial support most.

Is there any logic in preventing a poor farmer the benefit of low cost communication which, for instance, the Secretary of the Ministry of Finance himself enjoys?

Why support the better-off, ignoring the poor?

(Catroon is by Anjana Indrajith of Lakbima)

The Interview – Rohan Samarajiva from CPA on Vimeo.

In the end, Microsoft’s best intentions may not satisfy what locals want. The company surveyed 8,000 people in emerging markets and found their most pressing needs for technology often revolved around entertainment and surfing the Internet.

“It reinforced for us that the emerging middle classes are sort of like the middle classes here except they don’t have as much money,” Mr. Toyama said. “It’s sometimes easy for us to get caught up in things and forget we are serving the needs of real people.”

The above comes from a story on Microsoft’s social research unit in Bangalore, an organization LIRNEasia has had many interactions with, and hopes to work with in the future as well.

We were under the impression that they did mostly qualitative research, and that we were the only people doing quantitative research in the region, but the story refers to an 8,000 person survey. Well, you learn something new everyday.

Appearing in the journal’s second issue for 2008, aptly titled, ‘Emerging Markets in Telecommunications’, the article explores the extent to which “universal access” to telecommunications has been achieved  in Asia, based on findings from LIRNEasia’s five-country study of the use of telecommunication services at the ‘Bottom of the Pyramid’, namely in India, Pakistan, Philippines, Sri Lanka and Thailand.

Very high levels of access, but low levels of ownership are found. The paper then looks at the potential benefits that these non-owner users are missing out on, and then goes on to look at the key barriers to ownership that are faced by them. The paper estimates that there could be close to 150 million new subscribers at the BOP in these five countries by mid-2008. However, a distinct affordability gap is found. Possible ways to deal with this affordability gap are proposed in the final section with emphasis on multiple stakeholder efforts.

Mobile phones are becoming increasingly important in bringing people into the Information Society.  It is widely accepted that the inhabitants of the future household will carry mobile devices that will be capable of voice and data communication, information retrieval and forms of entertainment consumption. Mobiles are now (and will increasingly become) payment devices that can also send, process and receive voice, text as well as images; in the next few years they will also be capable of information-retrieval and publishing functions normally associated with the Internet. Through such services and applications, industry experts predict that many in emerging markets will experience the Internet, or ‘elements’ of the Internet for the first time through a mobile phone, rather than a PC; mobile payments, mobile social networking, SMS voting are just a few examples of some of these services and applications.

Emerging markets appear to be following a different trajectory from developed markets; while the latter are moving forward via triple- and quadruple-play scenarios, the former are moving on paths that involve mobile phones as the key platform for bringing people affordably into the Information Society; something we describe as “2.0.”

This preconference will draw together research constituting evidence for and against this emerging Mobile2.0 narrative in the context of the larger social-science understanding of mobile-use behavior.  We welcome abstracts which will contribute to understanding emerging mobile use patterns, under the following areas of interest:

• Current trends in mobile connectivity and applications
• The potential of mobiles (and other ICTs) for bridging digital, gender as well as other socio-economic divides
• Mobiles (and other ICTs) making markets more efficient
• Mobile as a platform for Mobile2.0 services (e.g., payment, banking, government, etc)
• Policy and regulatory challenges for the new era of Mobile2.0
• Mobiles and social networking
• Mobile2.0 and shared access Comparisons between emerging and ‘emerged’ markets

The workshop will not be limited to papers dealing with the mobile as the path to the Information Society or to research dealing with the developing world, but we do expect these themes to be represented. We encourage papers that draw comparisons with other ICTs also. Up to five sessions will be accommodated.

In order to examine this question as well as other dimensions in mobile communication we are issuing a call for papers for a pre-conference at the 2009 meeting of the International Communication Association. Abstracts of no more than 500 words are due by October 31, 2008.  Please send them, along with your name and contact information to zainudeen{at}lirne{dot}net. Accepted abstracts will be notified by 21 November 2008. Final papers will be due by April 1, 2009.

The pre-conference is being organized by LIRNEasia. It will be held in Chicago.

Cost:
ICA Members: USD 90
ICA Student Members: USD 60

Please check http://www.icahdq.org for updates)

Organized by
Dr. Rohan Samarajiva, Executive Director, LIRNEasia
Ayesha Zainudeen, Senior Researcher, LIRNEasia

Comcast, a leading US ISP, has just announced caps on downloads.  If this is the future for rich country users, can there be any doubt about what the future for BOP users in poor countries?