A Review by Frederick Noronha. MobileActive.org

August 18, 2008 | KatrinVerclas

Civil society can play a large role in getting people digitally connected, say the co-editors of  the new book ‘ICT Infrastructure in Emerging Asia: Policy and Regulatory Roadblocks’.

“However, in order to reap the full benefits from connectivity in a long-lasting manner, underlying issues of policy, affordability and technology need to be addressed,” LIRNAsia’s Executive Director Rohan Samarajiva and co-editor of the book with Ayesha Zainudeen, told Mobileactive.org in an email interview.

Currently Asia is the fastest growing region in the world in terms of connectivity. Between 1984 and 1993, the Asia Pacific as a region overtook the other regions of the world (mainly due to mobiles), and it continues to grow, he noted.

“The book looks at the recent experiences of some countries in emerging Asia that are improving connectivity. The central argument is that connectivity is held back not by technology, but by policy and regulatory barriers,” Samarajiva told us.  In some cases though, despite poor policy and regulatory conditions, technology and business innovations have permitted ‘work-around’ solutions.

The book argues that the full benefits of connectivity cannot be realized unless the policy and regulatory barriers are removed.  “Our work on regulation (in South Asia) is driven by the idea that what is appropriate for our countries are simple, easy-to-implement, low-cost methodologies. That is one reason we are developing alternative methods of regulation, based on benchmarks. The comparative data that we have developed can be used for benchmark regulation,” says Samarajiva.

“There is still a large gap between rural and urban telephone growth, as highlighted in the book, due to flawed policy implementation (at the time of writing),” said Samarajiva, referring to the Indian context. In South Asia, Bangladesh and Sri Lanka “are not as bad off in terms of rural telecom use”, he said.

“The five (South Asian) countries that we looked at have seen growth in their GSM sectors of more than 40% between September 2006 and January 2008,” he told Mobileactive.org. South Asia — covering Bangladesh, Pakistan, India and Sri Lanka — also has the lowest mobile prices in the world, LIRNAsia found.

Prices are kept low “through a new business model that we describe as the budget telecom network model (akin to the budget airline business model),” said researcher Ayesha Zainudeen, one of the co-authors of the book.

She explained that this involved “connecting more poor people than any number of pilot projects”. But there are problems: now that handset prices and operator prices are coming down, governments are stepping in to extract more and more taxes.

“We resist this, and more (organisations) in the civil society sector should too. For example, we have the ridiculous situation in Sri Lanka where the government is taxing mobile users while exempting diesel vehicles in the name of conservation. Conservation organization must speak up to defend transport-substituting telecom,” she added.

In Bangladesh, because of the population density, the incentives created by the refusal to interconenct by the incumbent operator and even to the initiative of the Village Phone program in the early years. (Village Phone is an idea that enables rural poor to own a cell-phone and turn it into a profit-making venture.)

“Indonesia is ahead of India in terms of penetration, but not growth, while Nepal is the only country out of those covered in the book which is far behind India in terms of penetration,” said Samarajiva, known for his arguments to press for making modern communications more effective in South Asia. Mobile phones play a key role among ICTs in South Asia.

“Some of the inhibiting policy factors that have contributed to this large urban-rural divide are changing now, however,” he notes. “For example, the Access Deficit Charge has been eliminated,” he said.  (ADC is a form of cross-subsidisation, given to state-run companies on the grounds that they were taking telephony solutions, including mobiles, to low-revenue -yielding rural areas.)

“Overall, we think India has a more robust policy and regulatory system than others, though of course it could be better.  The very powerful role of the Department of Telecom is problematic,” the researcher added.

POLICY INTERVENTIONS

“‘Evidence-based policy intervention’ is something that LIRNEasia lives by. Our approach has been successful in influencing policy changes leading to outcomes such as leased line prices dropping substantially in Indonesia and the removal of the regressive component of a proposed mobile tax in Sri Lanka, for example. This has finally enable more people to get connected to ICTs,” Prof Samarajiva says.

Samarajiva said civil society organizations should focus more on “evidence-based policy intervention”, to have truly long-lasting impacts. Simply arguing for the most obvious things like lower prices is not enough, he said.  “Pleading for free or subsidized services for their projects is counterproductive.  Multiple suppliers are the best long-term option for civil-society organizations as well as consumers.”

LIRNEAsia’s TAKE ON MOBILE APPLICATIONS

LIRNEasia’s research focus has been on the use of emerging “more-than-voice” applications, what they call Mobile 2.0 applications for bottom-of-the-pyramid users. This includes the kind of applications which perform the functions conventionally done through the Internet, such as information retrieval, information publication, and financial transactions.

With rapidly spreading mobile phones, the absence of good Internet connectivity, and the limited penetration of computers in much of emerging Asia, these kinds of functions are much more likely be performed via mobiles rather than the Internet, LIRNEasia argues.

LIRNEasia says their studies show that those at “the bottom-of-the-pyramid in emerging countries in Asia are keen users” of telecommunication services in fact.  In 2006, one study showed that across the five countries studied — India, Pakistan, the Philippines, Sri Lanka, and Thailand — there was a large share of excluded people on the wrong side of the digital divide who planned to get connected, mostly via a mobile phone.  This, he argued, has direct implications for civil society, which have so far played large roles in the spread of tele-centers.

“People have a finite amount of money in their communication budgets.  If that is taken up be cheap mobile services, there is less left for other things,” he said.  “(This is something Bangladesh’s) Grameen Village Phone ladies have found, now that phone ownership is catching on at the bottom of the pyramid.  What CSOs need to do is develop new products and services that will allow access to a larger share of the budget not just the communication portion.”

What’s needed for mobile phones to actually play a bigger role in South Asia?

“Given the growing number of services becoming available on mobiles, particularly with regards to mobile payments — which has huge potential for socio-economic development — what needs to be addressed is a regulatory framework for the same,” said Samarajiva.

India’s central bank, the Reserve Bank, recently issued draft guidelines for mobile payments, which LIRNEasia sees as a step forward. Unlike parts of Africa, countries like India and others in South Asia, still have few effective models of transfering money or making micro-payments via mobile phones.

The key point though, is that the regulatory framework or guidelines need to enable use, not hinder it, Prof Samarajiva noted.

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The book “ICT INFRASTRUCTURE IN EMERGING ASIA: Policy and Regulatory Roadblocks” can be downloaded on the IDRC website here.