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Should telcos abandon the BOP market?

Posted on February 3, 2009  /  5 Comments

An article published by the Business Standard, India, states that telecom operators should focus on their most profitable customers, those at the top of the pyramid or TOP, instead of following bottom of the pyramid (BOP)-focused strategies. The article cites a study by BDA, a consulting firm in India, which finds that the TOP contributes a greater percentage to revenue than their lower-income counterparts.  An interesting debate has ensued, here and here,  on the economics of serving the BOP. Although such figures appear to economically justify abandoning BOP-focused telecom strategies, some argue that there seems to be more to the picture than first meets the eye.  Rob Katz of Nextbillion.
The world is awash in telecenter pilots.  I thought all the lessons that could be learned, have been learned.  Apparently not.  Google is bankrolling another pilot in Kenya, including a USD 700/month broadband bill.  So, for sustainability we’d need around 700 users spending a tad more than USD 2 per visit?
India is planning to produce a laptop computer for the knockdown price of about $20, having pioneered last year the Tata Nano, the world’s cheapest car, for $2,050 a vehicle, reported the Fiancial Times today. As the access to FT website is limited to its subscribers, I have posted the entire news bellow: The project, backed by New Delhi, would considerably undercut the so-called “$100 laptop”, otherwise known as the Children’s Machine or XO, which was designed by the Massachusetts Institute of Technology of the US. That laptop is the centrepiece of the One Laptop Per Child charity initiative launched by Nicholas Negroponte, the computer scientist and former director of MIT’s Media Lab. Intel launched a similar product, called Classmate, in response. But the Children’s Machine received a cool reception in India.
The stimulus packages being worked up by governments the world over all seem to have a broadband component.  Even the Sri Lanka government which barely has enough money to pay its bills, is thinking of launching a USD 100 million satellite for high speed Internet (I guess this means broadband?).   Leaving aside the insanity of the Government of Sri Lanka operating satellites, even the other proposals to provide government subsidies to rollout fiber networks can have bad effects that need to be thought about, before taxpayer money is doled out.  As the Economist points out: Another drawback with big state subsidies for broadband is that they could distort the market and create regulatory problems.
Dialog Telekom PLC in collaboration with its partners Dialog University of Moratuwa Mobile Communications Research Laboratory and Microimage Technologies together with the Disaster Management Centre (DMC) of Sri Lanka launched Sri Lanka’s first ever mass alert warning system; the ‘Disaster and Emergency Warning Network’ (DEWN) yesterday under the patronage of Disaster Management and Human Rights Minister, Mahinda Samarasinghe. Speaking on the launch of DEWN Group Chief Executive Officer, Dialog Telekom PLC, Dr. Hans Wijayasuriya said that “There are 10 million people in this country who have access to telecommunication and mobile services. Now the mobile has become a powerful tool which could be called as a ‘Digital Empowerment Device’ and our citizens are digitally empowered into the digital network”. Dr.

UK: Broadband in every home by 2012 ?

Posted on January 30, 2009  /  0 Comments

All UK homes should have access to broadband and faster download speeds by 2012, the government has said. An interim report on the UK’s digital future also looked at plans for public service broadcasting. Prime Minister Gordon Brown said digital technology was as important today as “roads, bridges and trains were in the 20th Century”. But the Conservatives said the report promised “no new action”. The Lib Dems said it was a “complete damp squib”.
An administrative misadventure has wiped out the possibility of regulatory independence within near future in Bangladesh. BTRC is celebrating its seventh birthday tomorrow (January 30). The regulator has, however, failed to deliver effective regulation. It has been, legally, structured like that from day one. The country was run by a military-backed interim government during entire 2007-08.
When I first met Isuru Seneviratne in late 90s (in cyberspace) he was a twelve year old student. Life was not always sympathetic to this eldest of a family of three. Flickr still has a photo showing young Isuru and his sister assisting their parents in poultry. His father was a famer – then the only breadwinner of the family. Most farmers do not have a fixed income.
How does the economic crisis ripple out? Like this: Texas Instruments posted a smaller-than-expected decline in fourth-quarter profit Monday, but said it might post a loss in the current quarter and announced a 12 percent cut in jobs as demand for cellphone chips fell. Full report.
The Business Standard, 27 January 2009 The Department of Telecommunications (DoT) has signed a memorandum of understanding (MoU) with state-owned telecom operator Bharat Sanchar Nigam Ltd (BSNL) to provide wireless broadband in rural areas. Under the MoU, BSNL will provide wireless broadband at 29,000 rural exchanges throughout the country. Each exchange will have 31 connections along with one kiosk for public use. A DoT official said, “Out of these 31 connections, 6 will be used by institutions like schools, while the rest will be for individual users.” The implementation of the entire project is expected to be completed by 2011.
The number of people going online has passed one billion for the first time, according to comScore, an online metrics company. Almost 180m internet users—over one in six of the world’s online population—live in China, more than any other country. Until a few months ago America had most web users, but with 163m people online, or over half of its total population, it has reached saturation point. More populous countries such as China, Brazil and India have many more potential users and will eventually overtake those western countries with already high penetration rates. ComScore counts only unique users above the age of 15 and excludes access in internet cafes and via mobile devices.
Barack Obama used his first weekly address as U.S. president to provide more details of his proposed US$825 billion American Recovery and Reinvestment Plan that, among other things, will upgrade classrooms, invest in renewable energy and expand broadband Internet access. Obama stated his intention to invest in these areas during the presidential debates in September and came back to the issue in a December address that he issued as president-elect, but over the weekend he added concrete goals to the plan. But on one aspect of the recovery plan — expanding broadband access — he offered no concrete goals and a supporting document issued by the White House doesn’t mention the word “broadband” once.
A little bit of authoritarianism from a government can sometimes be a good thing – especially if it means getting your country’s telecoms industry in working order. That sentiment goes against the grain, but when you contrast the telecoms regulations in the region’s megamarkets of China and India, you can hardly help but conclude that the iron fist is preferable to the velvet glove when it comes to delivering clear-cut regulatory outcomes. India is praised for being the world’s largest democracy, but there is little doubt that its admirable ethos of allowing every man to have a say on every issue – including critical regulatory ones – is holding back its telecoms market in many respects. If there is one industry that needs a fast-moving regulatory process in which decisions are handed down smoothly and with minimum delay, it is the telecoms industry. Few industries can compare to the telecoms industry, where technologies are constantly evolving and competition in a country can be seriously compromised if a regulator does not ensure a timely and orderly deployment of new services, such as 3G or high-speed broadband.
Except for the last of the three items described below, the proposed stimulus package now before the US Congress seeks to apply the intelligence of ICTs to improve other things. This is the way to go. The $825 billion stimulus plan presented this month by House Democrats called for $37 billion in spending in three high-tech areas: $20 billion to computerize medical records, $11 billion to create smarter electrical grids and $6 billion to expand high-speed Internet access in rural and underserved communities. A study published this month, which was prepared for the Obama transition team, concluded that putting $30 billion into those three fields could produce more than 900,000 jobs in the first year. The mix of proposed spending is different in the House plan, but the results would be similar, said Robert D.
The Telecom Authority of the Maldives was functioning under a presidential decree all this time. The Law which had been drafted, is now moving under the new administration: The Civil Aviation Minister Jameel who announced that the bill was being sent for legal review at a press conference said that the country is now at a stage where such legislation is urgently required. The bill covers all aspects of postal services, telecommunications and info communications including licensing, establishing standards and implementation. The Minister also stated that the government will establish a Communications Authority of Maldives for the purposes of regulating and implementing the Communications Act.
Over the coming months, there will be much talk about ICTs and global climate change and e waste. There will be bad and good research and tricks to raise taxes in the name of the environment. Here is a nice balanced report by the Economist: So computing does indeed have a role in fighting climate change, but that role mainly involves using computers in new ways, rather than making the machines themselves more efficient. It is time for the industry to start thinking outside the box, as it were.