Rural Mobile Use in Sri Lanka

Posted on October 4, 2004 / 5 Comments

This serves, perhaps, as a response to the most recent comment:

Almost all the efforts of elites like Prof Samarajeewa has been a farce. The rural -urban gap has widened as clearly indicative of offerings made in wireless

Chamintha Thilakarathna (Reuters)
Colombo, October 1

After 25 years selling fruit and vegetables at a market in downtown Colombo, Sri Lankan trader MW Ranjith made an investment that to his amazement transformed his life and his business — he bought a mobile phone.

For years Ranjith, and thousands of traders and farmers like him, went without phones, discouraged by high land line charges and lengthy installation delays.

But now a boom in the mobile telecoms market is pulling the informal sector into the economy and even influencing food prices.

“Before I got the phone, if I ran out of vegetables I had no way of getting in touch with farmers,” said the 50-year-old trader, sitting with his phone in one hand and calculating his profits for the day with the other.

“Now all I have to do is to give the farmer a call when demand is low or high to tell him when to send the vegetables.”

Two years ago, there were few mobile handsets visible at Colombo’s Pettah market, Sri Lanka’s fresh produce hub. Today, around 75 per cent of market workers — from stall holders to workers lugging sacks of carrots — have one.

A mobile line rental costs around a fifth of that of a land line, and a sharp fall in handset prices has spurred sales.

“There is a rise in mobile usage in rural areas because of the low cost and because they can carry it with them,” said secretary of the Telecommunications Ministry C Maliyadde.

In 2003, the telecom sector was one of the fastest growing industries in Sri Lanka. Operators and the Central Bank expect it to surge again in 2004 and 2005, especially in the war-torn north, where a two-year truce has silenced the guns of the Tamil Tiger rebels’ two-decade war for autonomy.

5 Comments

Harsha
October 5, 2004, 12:55 am
Notwithstanding Luxmans comment that equality will follow growth, why is it that some of us are still stuck in a useless technology debate? Let whoever has the best technology at a given time take the ball and run. Why should you or I dictate what technology to use? In Sri Lanka what people like Prof Samarajiva did to bring about inter alia technology neutral licensing has seriously helped the entire sector grow. Based on the foresight of him and others who envisioned e-Sri Lanka, the ICT Agency will soon get the regional telecom networks established to seriously connect the rural folk using technology neutral licenses. Then the VGF rural subsidy scheme is also on line [assuming political interference will not derail the same] to all operators, wire-line and wireless. On top of all this, the operators themselves are expanding in to rural areas rapidly. In my view [I am sure many in this country would agree with me] recent changes in telecom policy and regulation have in fact helped reduce the rural-urban gap than widen it. Not every move is right and yes, there have been hiccups along the way, but as clearly indicated in the Central Bank GDP figures announced last week, the industry is most definitely headed in the right direction.

Now in reducing this rural-urban gap, connectivity is only part of the solution as you know. Content [economically useful content] is equally or more important. In rural areas farmers use mobile phones to get price information. Even though this may sound like a simple thing [for the elite] it is critical for the farmer. I quote from the same 1 October Reuters story quoted on the LIRNEasia site null Sri Lanka’s Central Bank says prices of key commodities such as paddy and vegetables have gone up because of better access to demand and price information thanks to mobile telephones. said Anila Dias Bandaranaike, Head of the Bank’s statistics department. “What you see is an improvement in the efficiency of the markets… We can’t yet quantify the impact but certainly in terms of access to market information this is a significant improvement”.
“Pre-paid is ideal for rural areas because they ask for low prices and less commitment,” said Hans Wijayasuriya, chief executive of Dialog GSM, Sri Lanka’s largest mobile network operator with over 60 percent of the market. He expects mobile subscriptions in rural areas to grow by between 40 percent and 45 percent over the next two years. According to the article Dialog is devoting half of its planned investment in the next two years to rural services, and says customers will soon be able to access wholesale fruit, vegetable and grain prices via voice and messaging by simply dialing in a product code. “Information to enter into forward sales contracts will also be available to (customers) through this in future,” said Harsha de Silva, managing director of E Development Labs, which is developing the project.

So, the gist of the story is that facilitated by right policy and a helpful telecom regulatory environment supported by innovative content development, Sri Lanka is moving rapidly to bridge the digital divide; be it urban-rural, rich-poor and north-south powered by large private investments and multilateral support.
Chanuka
October 17, 2004, 7:37 am
Recently ICTA has done a survey in the Southern province of Sri Lanka on the present use of ICT tools. 242 participants in this survey have never used a telephone in their lives. The reasons for not using a phone are as follows: 80% nobody to call, 10% do not know how to use a phone, 4% no phones, 1% phones too far. (For details please see http://209.10.53.13/Insidepages/downloadDocs/VGKendra/RFP/English/DemandAnalysisSouth.pdf) So the total percentage that has not used a phone because they do not have access to one is as low as 5%. (I am not sure whether there were any questions regarding the affordability of a phone call. This could have been another concern as about 20% of the participants were earning $ 1 per day.) At least this proves the lack of demand itself a key reason for the low telecom penetration in the rural areas. This can be a chiken and egg situation. Low supply because there is low demand; and low demand because people are not familiar with phones due to low supply!

(Chanuka Wattegama, Colombo, SL)
Harsha
October 17, 2004, 7:39 am
Gobbledygook

i read the demand analysis you referred to. i thought it was of pretty ameturish quality with hardly any analysis. icta should demand for better output. in any case, the 194 [80% of 242] people who had not used a phone because they did not have anyone to call in the rural areas are from a sample of 1,438 people. so it is actually not as bad you [and the chaps who did the study] make it sound and i dont think you can come to the conclusion that “this proves the lack of demand itself a key reason for the low telecom penetration in the rural areas”! one could use the same numbers and argue that 87% used the phones to call friends and family and exchange information; thus huge demand!

interestingly, the study found that it is agriculture information that these rural folk require the most on a daily basis. i hope icta noted that point!
Chanuka
October 17, 2004, 7:42 am
Well, yes…

Harsha, probably you are right. However, I am not entirely going by the results of the survey. At least I do not see an exceptional demand for telecom facilities in the rural areas (as opposed to urban areas) well, again I may be wrong. In addition, just because a high demand for telecom and Internet facilities is not so obvious in the rural areas of Sri Lanka (and in other South Asian countries) it need not necessarily mean a lack of demand. It can be something what we call hidden needs in marketing i.e. the consumer might have a need, but even she is not aware of it. Anyway, if there is a massive demand I myself will be a very happy person. I am currently involved in the first wireless community network project in Sri Lanka and we plan to provide Internet / phone access to a remote village, which is far away from the reach of any of the fixed line / WLL / mobile phone networks, using the mesh networking concept. So if there is a high demand definitely we will be able to cater to that. (Chanuka Wattegama, Sri Lanka)
madhusha
October 22, 2008, 12:06 pm
i am an undergraduate student in final year. i want to know household demand fot telecommunication in sri lankan urban area. if you all have detais aware of this pls send me an e-mail.and this discussion also very important to me.