While development aid and political reform are essential components in poverty eradication, equally important are business models that would engage low-income communities as producers and consumers in their own robust economies. Successful business models–inherently versatile, innovative, and driven by the profit motive–can sometimes tackle development challenges more quickly and effectively than government and aid mechanisms, and are the focus of NextBillion.net. Go to nextbillion.net NextBillion.
The Indian government held least cost subsidy auction (lowest bid for subsidy is the winner) in two parts to disburse the world’s second largest Universal Service Obligation Fund (USOF) for rolling out mobile services in rural areas across the country. For the purposes of the auction, India has been divided into 81 clusters. Part A of the auction disbursed funds for passive infrastructure like towers and Part B dealt with the actual deployment of mobile services. The bidding has been intense for deployment of mobile services (Part B) and most of the bids were for zero subsidy fund and in some cases negative bids were made! This strongly indicates that mobile operators in India perceive deploying mobile services in India’s rural areas to be commercially viable.
Sonal Desai | CXOToday.com Mumbai, Mar 27, 2007: Mobile penetration will penetrate the homes of bottom or pyramid (BOP) families in India, Pakistan and Sri Lanka, a study instituted by LIRNEasia has found. Titled, “Teleuse on a Shoestring- A Study of the Financially Constrained in Asia,” it interviewed and maintained diaries of respondents from Thailand and Philippines besides the above mentioned countries. A C Nielsen conducted the fieldwork. International Development Research Center (IDRC), Canada funded the research.
telecomasia.net | Mar 05, 2007 A new report has revealed that monthly ARPU is declining globally, but the gap between operators with the world’s highest and lowest monthly ARPU remains huge. The research study from analyst firm TeleGeography showed that based on a data set of more than 130 mobile operators, ARPU fell by an average of 6.4% between September 2005 and September 2006. “Not surprisingly, providers with higher ARPU tended to be in countries with relatively high incomes — predominately in Western Europe and the US,” the report stated.
Dhaka, March 23 (bdnews24.com) — Grameen Bank’s Muhammad Yunus stunned the world by unveiling a poverty alleviation initiative using mobile phone on March 26, 1997. He buys bulk minutes from Grameenphone’s GSM mobile network and resells among the microcredit borrowers in Bangladesh. The industry now recognises such business model as Mobile Virtual Network Operator or MVNO. Yunus and Grameen shared the Nobel Peace Price in 2006.
At the invitation of the Cellular Operators Association of India (COAI), LIRNEasia’s teleuse@BOP research of relevance to the question of increasing services provided to users in rural areas was presented at a session chaired by Mr Shantanu Consul, Administrator of India’s USO Fund. In response to audience questions Executive Director Samarajiva stated that the higher-than-other-countries percentage of non-owner teleusers at the Bottom of the Pyramid in India showed that there was a real problem these people faced in getting connected. They could afford USD 5 per month for the services (and in some cases paid even more), but the difficulty was with the cost of getting connected (and coverage, of course). The presentation can be downloaded here.
In the old days, telecom operators gouged each other’s customers through excessive termination charges (settlements) for international calls. That went the way of the dodo with bypass and calling cards. Then they came up with the idea of gouging the customers of other operators foolish enough to use roaming facilities. Now the EU is trying to tamp it down, at least for its own citizens: “The price of using a mobile phone in another EU country could be capped at 50 cents ($0.66; 34p) a minute.
By Rohan Samarajiva LBO >> Choices : Priceless Link 08 March 2007 08:26:29 http://www.lbo.lk/fullstory.php?newsID=2020236857&no_view=1&SEARCH_TERM=24 March 08 (LBO) – Indonesia, like Sri Lanka, sends its women to foreign lands to work as housemaids.
Sri Lanka’s telecom sector soared in 2006 to 7.3 million users, led by a 59% jump in new mobile phone connections on competition and falling call rates, an AFP report said. Quoting the industry watchdog Sri Lanka Telecommunications Regulatory Commission, the AFP report said despite a waiting list of around 366,000 for fixed-line phone services, mobile phones, including GSM and CDMA systems, had allowed rural residents to get phone services immediately. The AFP report further said fixed-line subscribers rose to 1.9 million in 2006 from 1.
This seems a little flaky, but there is cutting-edge economic theory behind the idea of creating incentives for the private creation of public goods. Not that we’ll apply quite yet, but it would be interesting to speculate on how one could package some of the work that is being done in telecom to qualify for the poverty reduction prize from X Prize. Silicon Valley Meets ‘American Idol’ With Prizes to Inspire Inventors – New York Times Venture capital firms are considering contests that offer competing engineers and entrepreneurs multimillion-dollar prize purses if they come up with innovative technologies in various industries. The concept is getting an introduction on March 3 at a fund-raiser at Google. The event is intended to raise a chunk of $50 million to operate the X Prize Foundation, a nonprofit group that already has awarded $10 million to designers of a private spacecraft.
Another story that reinforces our emphasis on the emerging Asia-Pacific and the Bottom of the Pyramid: LANKA BUSINESS ONLINE – LBO Making affordable phones and targeting consumers with smaller budgets have now become priorities for the largest companies in the sector who were all present at this week’s 3GSM trade show in Barcelona. “There are between 2.5 and 2.8 billion people who have a mobile phone: the next billion will come from the high-growth market,” said David Taylor, strategy director for Motorola. The areas representing the most opportunity are Asia, Africa and the Middle East, he said.
Inside the LIRNE.NET community, we have for some time been discussing a program of research centered on what we all mobile multiple play, a convergence of services around the transactional capabilities of the mobile phone and its unparallelled connectivity. Our friend and colleague Abu Saeed Khan is reporting on a major development on these lines from the GSM Congress in Barcelona: :: bdnews24.com :: Spearheaded by a special group of 19 mobile operators with networks in over 100 countries and representing over 600 million customers, GSMA believes the programme could double the number of recipients of international remittances to more than 1.5 billion, while helping to quadruple the size of the international remittances market to more than one trillion dollars by 2012.
Hutchison exits India and Vodafone enters. Will this accelerate Indian mobile growth to Indonesia and Pakistan levels? No clear evidence of increased investment; new pricing strategies, etc. yet. BBC NEWS | Business | Vodafone buys Indian mobile firm Vodafone has bought a controlling stake in Indian mobile phone firm Hutchison Essar for $11.
With new acronyms (NGN) being introduced instead of better service (ADSL that actually gives the 2 mbps or 512 kbps we paid for), our thoughts had begun to wander to WiMax, but sadly, cold water is being poured on that hope too. On continuing discussion of municipal wireless there is a great quote in here: ‘Using municipal Wi-Fi for residential coverage, [Sanjit Biswas] said, was “the equivalent of expecting street lamps to light everyone’s homes.” ‘ Wireless Internet for All, Without the Towers – New York Times WiMax, which will be a high-power version of the tower approach, comes in two flavors: mobile, which has not yet been certified, and fixed, which is theoretically well suited for residential deployment. Unfortunately, it’s pricey. Peter Bell, a research analyst at TeleGeography Research in Washington, said fixed WiMax would not be able to compete against cable and DSL service: “It makes more economic sense in semirural areas that have no broadband coverage.
How will John Gage’s proposal play out in the telecom eco-system of developing countries? Who will operate them? Will they suffer the same fate as ICTA’s VSAT based connectivity for telecenters, where you can do Internet but cannot call the next village? Can you just drop technology in, without addressing the overall institutional setting? At Davos, the Squabble Resumes on How to Wire the Third World – New York Times Separately at the meeting on Saturday, John Gage, the chief researcher at Sun Microsystems, proposed an industry plan to deploy advanced data networks in developing economies with contributions of engineering staff time of 1 percent.
LBO reports of the release of a low-budget handset for the Sri Lankan market by Motorola, the MotoFone F3. Some of the features include two week stand-by time, high quality speaker, voice prompts, etc. Motorola even hopes to bring localised phones with Sinhalese script into the market soon. It hopes that the MotoFone F3, available for as little as LKR5,000 (approx. USD46) will boost its share in the local handset market with the new low cost handset.