The retirement of Steve Jobs from active management at Apple has been commented on by many. Paul Saffo’s comment about the reconceptualization of the Internet experience resonates with much that LIRNEasia has been talking about. The other point about not anchoring innovation on how consumers actually live their lives is more problematic. As the NYT says: Mr. Jobs did not so much see around corners; he saw things in plain sight that others did not.
The government has not backed off on the discriminatory and anti-poor “market competition factor” that was subject to a detailed critique when announced. Per Mhz spectrum charge has been set on the basis of their market share or ‘market contribution factor’ (MCF) which was previously known as ‘utilisation factor’ in the draft licensing guideline of the BTRC. According to the policy of the MCF prescribed by the telecom ministry, if an operator has more than 20 percent market share, it will have to pay additionally, while an operator with less than 20 percent share will pay at a reduced rate. The MCF for Grameenphone now stands at 1.48, Banglalink 1.
Irene was far from our areas of interest, but not far from the newspapers we read. Looks like mobile networks performed well; while fixed had trouble. Wireless phone networks held up well against Hurricane Irene despite widespread losses of power. Many people who lost electricity were able to communicate using e-mail and social networks, thanks to battery-powered mobile devices. As cleanup crews and homeowners began to assess the scope of the damage on Sunday, wireless phone companies were reporting that the storm’s effect on their networks was minimal and that most customers did not experience cellular disruptions, despite the high winds and ferocious rains.
We know, from our experience with teleuse@BOP surveys, that getting an accurate fix on levels of income and assets (poverty) is not easy. An experiment in Indonesia suggests that asking the village to decide is superior, because it is almost as accurate as the standard method which uses household assets and generates greater buy-in (less complaints). One thing I did not get from the writeup was relative cost. Convening a community meeting is not costless. Neither is the asset-based method.
Reading Zen and the Art of Motorcycle Maintenance was a rite of passage for college students (should still be). The key point I took away from it was the need to focus on quality. My most favorite economics book is Exit, Voice and Loyalty, by Albert Hirschman. Also a discourse on quality. Perhaps because I read Zen at an impressionable age .
Jeffrey Sachs is a superstar. His advice contributed to the mess in post-Communist Russia, but that did not hinder him in any way from dispensing advice elsewhere (I met him when came to Sri Lanka in 2002; after I told him what we had done or were doing on telecom, he moved on to dispense advice on other topics). His opinion matters much. He has described the mobile as the single most transformative technology for development. He expands on this statement in an interview on AllAfrica.
My colleague who made the previous post had neglected to look at the cause of the so-called spike in inactive SIMs. The cause is a change in definition, plain and simple. The market revaluation has been triggered by rule changes in the activity period allowed for prepaid users and the effect of mandatory SIM registration. Previously, users would see their services terminated if they had not recharged their prepaid cards or placed/received a call within a period of 180 days. In 2010, that period was reduced to 90 days and, recently, the TRAI has reportedly reduced the period to just 20 days.
A research article that will shortly be published in Information Technology and International Development got me thinking about Engel’s Law, which states that as income rises, the proportion of income spent on food falls, even if actual expenditure on food rises. The article is by Aileen Aguero, Harsha de Silva and Juhee Kang. It’s not about food prices, per se, but about some extensions that allow the identification of necessary goods and luxuries. Their interesting finding is that voice telephony is a necessity in Asia (in the six countries covered by LIRNEasia’s teleuse@BOP research), while it is still a luxury in Latin America. How could the same thing be a luxury in one place and a necessity in another?
Everyone has got an opinion on Google’s takeover of Motorola Mobility. But according to a report, it has the blessings of Martin Cooper, the man who invented the mobile phone. We had one post on him, but given all the effort we devote to mobile phones, that surely is not enough. One link led to another and then to a very nice piece that not only tells about Martin Cooper, but also locates the equipment that made the first mobile call possible.
In the 13 years I lived in the US, I saw the postal service change. It was a horrible, rude bureaucracy when I moved there; and I saw the reengineering at work in the last few years. Counter staff were actually trained to smile and be nice to customers (and those who could not be converted, were sent to back offices where they could “go postal”). You stood in a line, staff would come up to the line with handheld devices to serve customers with minor needs such as a sheet of stamps, shortening the line for people with complex problems that had to be dealt with at the counter. They started selling wrapping paper and tape and creating spaces for people to wrap gifts according to USPS rules.
Market share is never the final determinant of market power. It is used as a screen for further investigation and/or to shift the burden of proof. So, for example, an HHI (Herfindahl Hirschman Index) greater than 1700 or 1800 is triggers anti-trust investigations by the US government in the case of mergers and acquisitions. In the case of determining significant market power in telecom regulation (LIRNEasia is quite skeptical about the value of this approach in developing countries), market shares of around 35-45 percent shift the burden on the operator to prove that it does not have market power (the ability to set and maintain prices in simple language). But in Bangladesh 20 percent market share is the magic number.
It’s nice to know we’re in the post-PC world. It’s just two years since we were being asked to participate in debates about mobile vs PCs. And just one year since Steve Jobs called the PC a truck. Now the debate has shifted. We know what world we live in.
It seems that all governments under threat fear communication media. Instead of the kill switch, Cameron of the UK seems to be proposing a narrower ban: social media use by miscreants. How does this work? Does the government know who is planning mayhem and who is not? Does it shut down base stations in affected areas, or does it target specific people?
For those who think spectrum is a headache unique to Bangladesh, here’s relief from Greece: The auction has been discussed and planned for more than a year and predates the country’s financial crisis, said the official, a senior administrator at the Hellenic Telecommunications and Post Commission, the regulator holding the auction. He did not want to be identified, citing his agency’s policy. The auction’s goal, the official said, was to level the playing field in Greece among the three operators going forward as they introduce faster third- and fourth-generation mobile services. Vodafone and Wind already hold licenses for 900-megahertz spectrum, and Cosmote uses the 1.8-gigahertz band.
When I wrote the op ed that was published in Daily Star yesterday, I did not know the anti-competitive “Market Competition Factor” had been decided. Today’s Daily Star gives the numbers. Looks unusually good for Citycell that not only pays 1/5th the price per MHz that Grameenphone pays but can also make do with less frequencies because it is a CDMA operator. According to the definition of the MCF prescribed by the telecom ministry, if an operator has more than 20 percent market share, it will have to pay additionally, while an operator with less than 20 percent share will pay at a reduced rate. The MCF for Grameenphone now stands at 1.
We have been talking about the need to prepare for qualitatively higher volumes of data in Asia as more people start using 3G networks. Our proposals have focused on adding to international backhaul capacity in order to reduce prices of this key input that is now 3-6 times more expensive than capacity in Europe and North America. The New York Times discusses how the data flood is playing out in the US. The projections are that the networks will have to carry the total traffic they carried in all of 2010, in just two months in 2015 in the US. Cellphone plans that let people gobble up data as if they were at an all-you-can eat buffet are disappearing, just as a new crop of data-gobbling Internet services from Netflix, Spotify, Amazon, Apple and the like are hitting the market or catching on with wide audiences.