Is this a problem for us in South Asia. Yes, for the TOP (top of the pyramid) customers who actually receive bills. But for our clients, the bottom of the pyramid teleusers, there will be no shock; just disconnect. Because 99.7 percent of Indian BOP customers are on prepaid plans and 94.6 percent of Sri Lankan BOP customers are on prepaid. How can we address their problems? Lower priced data plans would be a good start.

A 2010 study by the F.C.C. found that one in six mobile device users had experienced bill shock, with 23 percent of those users facing unexpected charges of $100 or more. A separate F.C.C. report noted that 20 percent of the bill shock complaints it received during the first half of 2010 were for $1,000 or more in overage charges. Expensive charges can also be incurred for roaming, when a user travels out of a company’s defined area of coverage or, as often occurs, when traveling overseas.

Even so-called unlimited data plans often have a cap limiting downloads each month to a certain number of megabytes — a technical measure that, unlike a number of calls or minutes, cannot easily be tracked by the uninitiated. Last October, the F.C.C. highlighted the case of a 66-year-old retiree in Dover, Mass., who received an $18,000 bill after a promotional no-limit data plan expired without warning.

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.

“The challenge for mobile operators is to make a remittance service as simple as handing over the money and a slip, with hand-written transfer details, to a bank clerk,” said the study. On average, a Sri Lankan migrant sends home US $ 137 per month. The most common method of remittance is through the banking system. In addition, some either carried money home as cash, or sent cash or cheques, in the post. However, these methods were used by less than 25% of migrants. As much as 84% of Sri Lankan migrants had bank accounts. Over half of Sri Lankan recent migrants surveyed (54 %), also owned a mobile phone.

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.

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.