M. Somasekhar’s piece on Hindu Business Line on mobile payments says:

Experts from Sri Lanka, Pakistan, Kenya, Thailand, the Philippines, Bhutan and Bangladesh among other nations met in Islamabad recently to discuss their experiences in providing mobile phone services for the BoP segment in their respective countries. They agreed that a beginning has been made and the road ahead appeared daunting, but technological progress promised quick results.

Don Sambandaraksa’s  piece “Mobile phones offer hope to ‘bottom of the pyramid” to Bangkok Post focuses on mobile use in farming, transport and banking. Says he:

“ICTs cannot solve all problems, chief of which is land reform, but when it comes to making decisions, lowering transaction costs and going to market and selling, information can make a big difference.

The researched categorised the decision-making process and information value in each from decisions to seed, planting, growing to harvesting and selling.

Information search costs are highest at the beginning of the cycle. Information on deciding what to grow are three times all other costs, and this is where ICTs have a potential role to play.

Sriganesh Lokanathan said that ideally he wanted to change the decision-making chain into a cycle where the decision on what the farmer wants to grow is based on the price when he expects to harvest. For this to happen, prices and supply and demand needed to be predicted and farmers need to get into forward sales contracts which does not often happen in this part of the world.”

Meanwhile we see Pakistan Telecom Authority, the co-organiser takes the message forward. ‘PTA Focuses on Value-Added Services Including E-Commerce, E-Agriculture & E-Education’ was the title of a report from Pakistan Telecom News Bulletin. It says:

Chairman, Pakistan Telecommunication Authority (PTA) Dr. Mohammed Yaseen has said that PTA’s focus is on value added services and with a high penetration level of mobile and low penetration of internet we have to explore the available possibilities which could be gained via mobile 2.0 theories. I very much foresee the further development of presently available technologies and those coming ahead through value added services and content. He was addressing to Connect 2010 ICT Forum – Telecom Session at Expo Centre Karachi and talking to media men on the occasion. He said that our emphasis is on e-commerce, e-agriculture and e-education, it is the time to open doors of opportunities to our young innovative minds and to bridge the unseen gaps between all potentials players of ICT proliferation.

For the full media coverage and presentations,  please see here.

The inaugural Mobile World Cup, hosted by the South Korean cellphone maker LG Electronics, brought together two-person teams from 13 countries who had clinched their national titles by beating a total of six million contestants. Marching behind their national flags, they gathered in New York on Jan. 14 for what was billed as an international clash of dexterous digits.

To ensure a level playing field, LG handed out identical mobile phones — one with a numeric keypad and the other with a keyboardlike QWERTY pad — weeks in advance for practice. The basic rule of the competition: copy phrases streaming across a monitor correctly, with the required capitalization and punctuation, as quickly as possible. Whichever language players chose, words were selected so that each would type the same number of characters.

Sri Lanka’s high regulatory risk score reflects insufficient transparency in the regulatory process combined with the regulator’s strong connection with the political framework.

The total regulatory risk score for each market is derived based on three major sub-categories:

1. Political & Social Policy Risk.
2. Industrial Policy Risk.
3. Inability of Ownership/Management to Offset Regulatory Risk.

Excerpt on Sri Lanka, as stated in the report, is noted bellow:

As in most developing markets, Sri Lanka’s telecom regulator has supported government policy in making telecom services more accessible and affordable. However, without a credible long term road map in place, the TRCSL has allowed far too much competition in the market, especially in the mobile space. Its rationale is still unclear for allowing a fifth mobile operator in an already intensely price‐competitive market with a total population of 20 million people.

Profitability of the operators has seen a marked deterioration over the last two years. For example, in October 2009, Millicom International Cellular SA sold its operations in Sri Lanka (Tigo, the third‐largest mobile operator) to Emirates Telecommunications Corporation (Etisalat, ‘A+’/Stable). Dialog, a subsidiary of Malaysia’s Axiata, which was among the most profitable corporates in Sri Lanka, reported losses in FY08.

Major concerns are a lack of transparency in licensing; allocation of scare resources; and certain regulatory decisions. For example:

1. The non‐transparent process under which the fifth mobile operator licence was issued in 2007.
2. A further non‐transparent process for the award of WiMax licences in 2007. SLT was not awarded a licence while some other established telecom operators and applicants were licensed; no reasons have been identified for the omission of SLT.
3. A directive was issued in 2008 prohibiting telecom operators from charging interconnection fees for a year until November 2009. The timing of this directive is highly questionable.
4. Reaction to anti‐competitive/predatory pricing has not always been equitable.
5. Transparency relating to the universal service obligation (USO) fund managed by the TRCSL has been very weak. No refunds have been made to operators on account of eligible capex.

Furthermore, the telecom sector has been specifically targeted to augment tax revenues. A levy of 10% has applied to usage charges on mobile and fixed‐telephony services since 2007/08. The TRCSL substantially increased spectrum charges in 2008, when operators were struggling with a rapid deterioration in profitability.

The Fitch report has covered Sri Lanka, South Korea, Australia, Indonesia, India, New Zealand, China, Thailand, Taiwan, Philippines, Singapore and Malaysia. Since Bangladesh has not been studied in this survey, the lowest score to Sri Lanka may be questioned.

While there is no separate data on the number of female subscribers in the country, according to a recent Lirneasia Teleuse Survey (a regional ICT policy and regulation think tank), mobile phone ownership is far lower among females than males in South Asia.

Statistical analysis shows that gender has a significant impact on mobile phone adoption at the bottom of the pyramid in Bangladesh, Pakistan and India. Consequently, in this segment, 12 males have access to mobile phones in comparison to five females.

Since the ownership of mobile phones is lower among females than males, women are less likely to have access to the phones unless the government intervenes through policies such as subsidies or free-phone programmes.

What puzzles us is the policy recommendation that handsets be subsidized or given free.

If anyone looks at our research they will find that the male-female gap has been closed in the Philippines, Thailand and Sri Lanka, and that the gap has narrowed in the countries referred to. Does this not suggest that time will close the gap?

Why jump to the conclusion that subsidies are required? The normal lifetime of a mobile is 3 years. Even if mobiles were given free, will the government continue to provide free phones when the old ones die? Will the women sell the phones? And, most importantly, where will the money for subsidy come from? General taxation? Mobile levies?

Presentation began by looking at the potential for M-money.

Why should we use m-money?

Improving efficiency: Improve services, financial services. BOP a target.

BOP (migrants) relies on various forms of remittances

Looking at Filipinos, 9% of BOP had a relative living abroad, and 13% in another part of the country, so there is a vested interest in m-money.

At present about 5% is going through informal channels according to the Filipino central bank. According to respondents about 80% sent through banks.

Workers need access to bank accounts in both the remitting and remitted country for remittances through banks. This is a limitation. M-money may not necessarily need an account in the remitting country.

Filipino workers generally prefere formal channels. Todays presentation will focus on m-money channels such as smart money of g-cash.

ADB: Transaction costs about 2.5%-3.5% of remittances.

For local remittances: Pawn shops used. Roughly remits around Php 500-1000. These are potential targets for m-money.

RS: How does the Pawn shops work? Pawn shops have a wide network, usually works through a call or SMS. A transaction number will be given to the person sending the money. The number will be given to the person who is due to receive the money. Identification is required for acquiring the cash. This is with regards to local remittances.

HG: Do the pawn shops work together, or is there a network that belong to one company. There is one network which has about 12,000 pawn shops.

Vasana: Are they licenced? EA: They are regulated by the central bank to a certain extend.

Central bank regulation is due to Anti Terrorism laws. Pawn shops charge a higher rate of interest. Technology is a catalyst for changing remittance landscape.

M-banking is one component of electronic money according to Circular 649 of Filipino Central Bank. M-Money is E-money stored in a mobile.

Electronic money defined as stored value or pre-paid payment mechanisms.

RS: can money loaded to the a pre-paid mobile account be refunded? EA: It is one of the issues which is going through regulatory process now.

3 modes of e-money issuers in Philippines: Bank (Smart money), Non bank financial institution recognised by BSP (Central Bank), Non bank registered with BSP as a money transfer agent (Example, GLOBE)

Registration is easier with Globe. Can do through SMS.

Looking at potential of M-money at the BOP the following method was used:
Method of access, Material access, skills access, Usage access

Method of access
Using LIRNEasia survey data, re-method of access, 566% of those who didnt use it said didnt know how to use it. According to focus group discussions, even though they were aware, they needed proof of efficiency, price.

With e-loading, familiarity with the Roman script is an advantage. If a person is familiar with transferring e-loads then using m-money will be easier.

Trust issues, Central bank looking at some of the issues. Security mechanisms such as PIN codes. At present Php 100,000 is the limit for any type of e-money. Same for M-money. Even if you have four m-money accounts, the total should be 100,000.

Material Access:
Only 13% of BOP have access to Bank accounts

On avearge there were 1.36 mobiles per household. More access to a mobile phones so there fore more potential for m-money.

Identification documents and physical access to cash in are seen as barriers to M-banking.

Individuals can get there m-money (Gcash) out from ATMs and cash in cash out venues. Therefore accessibility is an issue. There are already some Pawn shops being used as cash in cash out venues.

Can register from a distance but need to go to the bank to cash in. No identification cards in Philippines. Propoer identification is a problem in the Philippines.

Skills Access
40% of those surveyed in the LINREasia survey are familiar with e-loading.

99% of surveyed mobile users use SMS.

Filipinos top up small values at shorter time frames. Use to exchanging mobile top ups. This is consistent with remittance patterns.  Comparatively, Filipinos send money often in smaller amounts

GCASH and Smart are accepted as forms of payment in Philippines, but this maybe more common among the more affluent users.

GLOBE (2006): Transacting USD 117 Million on average.

SMART (2006) Transacting USD 257,200 average daily transactions.

HG: How much is charged for Transactions? EA: Basic of SMS cost, plus 1% of transaction cost or minimum of Php 10.

HG: Transmission takes one or multiple SMS? EA: Have to confirm but it maybe a minimum of 2 SMSs.

Challenges and Policy issues:

1) Developing mental access: Increasing awareness, better financial advantages.

2) Developing Material access: Making services that work with the kinds of phones used by BOP, making cash in/cash out more accessible.
Regulating GCASH and SMART:

100% reserve requirement

HG: 100% reserve requirement for just e-money or any transfer? EA: Thats for e-money.

HG: Is there a time limit on the money put in the e-money account? a 100% RR is very high. EA: They do not work as banks. Money is earned through transactions.

Policy Issues:
Security of the systems

prevention of fraud

Interoperability

Tracking users

Increasing access

RS: Comparisson with M-Pesa in Kenya will be useful.

HG: Comaprison with the regular banking transactions will also be useful.

Teleuse@BOP, pioneered by LIRNEasia in 2005, is a unique series of cutting edge demand-side studies on ICT use among the BOP. The 2008 study was conducted across six countries, India, Pakistan, the Philippines, Sri Lanka, Thailand and most recently, Bangladesh, among a sample of 9500+ BOP (SEC D and E) users. Aside from exploring traditional aspects of access and ownership at the BOP, this study focuses on if and how mobile phones are being used for non-voice, or ‘Mobile2.0’ applications.

COAI was constituted in 1995 as a non-profit, non-governmental society dedicated to the advancement of communication, particularly modern communication through cellular mobile telephony.

More information on the study can be found here.

This is what ITU’s Telecommunication/ICT Indicators Report for the Asia-Pacific region 2008 says. It was released at ITU TELECOM ASIA 2008, Bangkok, Thailand yesterday (Sept 2, 2008).

The Report finds evidence that ICTs and broadband uptake foster growth and development, but the question remains as to the optimal speed that should be targeted in view of limited resources.

The area in which the region really stands out is the uptake of advanced Internet technologies, especially broadband Internet access. The Asia-Pacific region is the world’s largest broadband market with a 39 per cent share of the world’s total at the end of 2007. In terms of broadband access, Asia-Pacific has made remarkable progress in the past few years, with subscriber numbers growing almost five-fold in five years: from 27 million at the beginning of 2003 to 133 million at the start of 2008.

In the region’s high-income economies, ubiquitous access is progressing through a competitive race to provide ever faster fixed broadband access. Operators in Hong Kong (China) and Japan have launched one-Gigabits per second (Gbps) broadband and triple-play services aimed at the residential market, featuring applications such as Internet telephony and television. The Republic of Korea leads the world in terms of the percentage of households with fixed broadband access, and no less than five economies in the top ten are from Asia-Pacific. The Republic of Korea, Hong Kong (China), and Japan also lead the world in terms of the proportion of households with fibre optic connections, essential for supporting the next generation of ultra-high speed Internet applications.

These high-income economies are also leaders in terms of third generation (3G) mobile cellular deployment. Fixed and mobile broadband technologies complement each other and users enjoy continuous high-speed Internet access. In Singapore, a ubiquitous Internet access plan combining unlimited 8 Megabits per second (Mbps) fixed broadband, 2 Mbps mobile broadband and access at some 800 Wi-Fi hotspots is available for just USD 35 per month.

At the other extreme, in most of the region’s low and lower-middle income economies, high-speed Internet access is limited to urban areas at best, typically expensive, and often not available at all. The regional broadband divide is striking, with poor economies having a close-to-zero broadband penetration, compared to that of rich economies where one in four persons is a broadband subscriber (Figure 1).

Figure 1: Fixed broadband Internet subscribers per 100 inhabitants, 2007

The gap in available broadband speeds between rich and poor countries is as wide as broadband penetration. In Japan, the Republic of Korea and Hong Kong (China), the minimum advertised broadband speed is faster than the maximum broadband speed in Cambodia, Tonga, Laos and Bangladesh.

While in low and lower-middle income economies mobile phones have become a substitute for the shortage of fixed lines, they are not yet fulfilling the potential of broadband access. By the end of 2007, only Indonesia, the Maldives, the Philippines and Sri Lanka had commercially deployed WCDMA networks. The region’s two largest mobile markets, China and India, have yet to launch mobile broadband. By the end of 2007, there were over 120 million mobile broadband subscribers in the region (Figure 2), but almost all (97 per cent) were in high income economies.

Figure 2: Mobile cellular broadband subscribers in Asia-Pacific

While the region’s high-income economies are pushing the frontier of broadband bandwidth to a point where applications have yet to catch up, many Asia-Pacific developing economies are bandwidth starved, inhibiting the development of their information societies.

The ITU Report argues that broadband uptake enables a range of socially desirable and valuable online services in areas such as government, education and health. The use of broadband technologies can help overcome many of the basic development challenges faced by poor countries. The Report provides a number of examples where broadband connectivity has acted as a catalyst for development. These include the provision of education through distance learning in the Solomon Islands, the creation of jobs through business incubators for women in China, and the supply of communication services for disaster management in Myanmar.

Read the press release here. Full report is not yet available in the public domain.

(Please click on the images for a better view)

Rohan Samarajiva will present a paper based on LIRNEasia‘s study on the gendered aspects of telecommunications use in emerging Asia, entitled, ‘Who’s Got the Phone? The Gendered Use of Telephones at the Bottom of the Pyramid‘.

Abstract: ‘Much has been said about women’s access to and use of the telephone. Many studies conclude that a significant gender divide in access exists particularly in developing countries. Women are also said to use telephones in a different manner from men –making and receiving more calls, spending more time on calls, and using telephones primarily for ‘relationship maintenance’ purposes, while men make fewer calls, shorter calls and use telephones primarily for instrumental purposes. However, much of this research on usage patterns is based on small-sample studies in affluent developed countries. The article provides evidence that a significant gender divide in access to telephones exists in Pakistan and India , to a lesser extent in Sri Lanka , but is generally absent in the Philippines and Thailand . This article also challenges some of the findings of studies which claim that women’s and men’s use is fundamentally different, shedding light on women’s access to and use of telecom services at the bottom of the pyramid (BOP) in five Emerging Asian markets. The article is based on an 8,600+ sample study of telephone users in Pakistan, India, Sri Lanka, the Philippines and Thailand, focusing on the BOP, but also looking at the ‘middle and top’ of the pyramid to ascertain whether these findings are unique to the BOP or not. ‘

The next highest was Singapore at a surprisingly low 23rd, and Malaysia at 34th. The top 35 countries are otherwise dominated by Europe, Australasia and North America. 

The biggest revelation was that most Asian countries are sliding down the rankings.
Singapore was the most prominent to fall from grace, falling to 22nd from seventh position in 2005. China fell to 65 from 57, India from 87 to 113, Thailand from 46 to 62, the Philippines from 41 to 66 and Indonesia from 96 to 106.  

Other countries to slide included Maldives, Sri Lanka, South Korea, Brunei and Myanmar while Japan, Malaysia, Vietnam and Cambodia improved their rankings. Sweden topped the rankings followed by Denmark, Norway and the United States. Read more.

Although seen as India’s greatest challenger in terms of its potential scale, China fared poorly for language skills, Gartner said.

China, India and Singapore all had strong government support for the promotion of their country as an offshore services location.

The political and economic environment remains a concern for many companies when moving work to offshore locations and so Pakistan, the Philippines, Sri Lanka and Vietnam rated poorly, Gartner said.

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gammalife: BUILDING MOBILE COMMUNITIES

We organised a session of BuzzCity-NUS Digital Media Forum a few weeks ago with presentation by Dr. Rohan Samarajiva, who leads a regional ICT policy group called LIRNEasia. His group had a done a study across five Asian nations – India, Pakistan, The Philippines, Sri Lanka and Thailand – and asked people the main reason why they use a mobile phone.

The pace and style of life in The Philippines is vastly different from Sri Lanka; India and Thailand have little in common other than a taste for spicy foods. Yet across these five countries, the number one reason why people use a mobile phone is the same: to stay connected with friends and family. “Staying connected” ranks consistently ahead of doing business or delivering messages.

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Pre-publication version available for download. The paper was presented at the Centre for Poverty Analysis Annual Symposium on Poverty Research in Sri Lanka (6-7 December 2007, Colombo)

Introduction:
Much has been said of the benefits of access to telecommunication especially at the ‘Bottom of the Pyramid’. The economic as well as social benefits from such access can, in theory enable people to graduate from poverty and also contribute more widely to development. Thus it can be argued that inequality in access to telecom services can lead to limitations in fighting poverty.

Many in the ‘ICT for development’ movement highlight the benefits that telecommunication, the Internet and other information and communication technologies (broadly put, ICTs) can bring to the table in the fight against poverty. A number of studies have attempted to demonstrate the impacts of access on income at the macro-level. However supporting evidence for these arguments at the household level is limited at best.

This paper takes a unique look at telecom access and studies the perceived impacts of direct access to telecom services, that is, telephone ownership at a household level at the ‘Bottom of the Pyramid’ in five developing Asian countries. It focuses on the perceived economic impact (positive or negative) of telecom ownership in terms of the potential to increase indirect income generation capacity or save on expenditure or transactions costs. The findings reveal that some telecom users do perceive the economic benefits of direct access to be high, but this finding is not seen across the board for a number of reasons explained.

The paper is based on a large sample survey of telecom users at the BOP in Pakistan, India, Sri Lanka, the Philippines and Thailand. Section 2 reviews the existing literature on the impacts of telecommunication. Section 3 explains the study design and methodology, and examines the difficulties faced in conducting a study of this nature and the methodological innovations undertaken. Section 4 explores in detail the impacts of telecom services at the BOP in the five countries. Section 5 concludes, looking at the policy implications from the study.

Phones at the bottom of the pyramid: Telecom Accessibility – i4d Magazine

In a 2006 five-country study, which was conducted by LIRNEasia, researchers asked 6,269 respondents in Pakistan, India, Sri Lanka, the Philippines, and Thailand about their access to, and use of telephones. Those surveyed were all users at the lowest socio-economic strata in the countries, at ‘the bottom of the pyramid’ (BOP). Their responses revealed many differences between users in the five countries, but more interestingly, inter-country inequalities in phone use between men and women. Indeed, the data indicates that a gender divide in mobile access clearly exists in India and Pakistan, which is less prevalent in Sri Lanka, and is generally absent in the Philippines and Thailand.

Here are some reviews of the book:

“This is a lively, comprehensive, and illuminating investigation of telecommunications policy in Malaysia and the Philippines. Much has been written about the processes and outcomes of reform in these countries but, employing a rich and eclectic political economy framework, few researchers have managed to distil as much information with as much authority as Dr Salazar. Moreover, and to further underline the complexity of the issues, the Philippines emerges as a relatively successful reformer, contrary to widespread perceptions that reform in that country is extremely difficult.”

Hal Hill
H.W. Arndt Professor of Southeast Asian Economies
Australian National University

“This original and pioneering comparison of privatisation in Malaysia and the Philippines is an incisive and compelling study of the outcome of the nexus between the state and capital in developing economies. This book is essential reading for those seeking insights into the discourse on democracy and development and the political economy of privatisation in Southeast Asia.”

Edmund Terence Gomez
Coordinator
United Nations Research Institute for Social Development (UNRISD)

“Salazar’s work is an important contribution to the scholarship on Southeast Asian political economy. Her book addresses the dynamics of reform in the telecommunications sector, examining the puzzle of why greater success was achieved in the Philippines under a “weak and captured” state than in Malaysia under a “strong and developmental” state. Salazar provides a convincing and well-argued explanation, pointing the Philippine case to the advocacy efforts of a reform coalition that enjoyed the vigorous support of President Fidel Ramos. The comparison between the two countries is skillfully executed and based on rich, historically grounded analysis of their respective political economies.”

Paul D. Hutchcroft
Associate Professor and Associate Chair
Department of Political Science
University of Wisconsin-Madison

To see flyer, please click HERE

To purchase, please go to http://bookshop.iseas.edu.sg/

The agreement could have a big impact on global cross-border remittances, worth an estimated $500bn a year, and provide a springboard for mobile carriers and Western Union to offer other mobile banking services using “mobile wallet” technology. Cross-border money transfers valued at up to $100 in countries such as India, the Philippines, Mexico and China – which have large volumes of remittances from migrant workers – will be an early priority of the deal.

Thirty-five mobile operators with 800m customers in more than 100 countries have signed up to take part in the GSMA Mobile Money Transfer pilot scheme led by Sunil Mittal, managing director of Bharti Airtel. Other participants include MTN, Orange, Orascom, Smart, Telenor and VimpelCom.

Read full story here