rs indiatelecom07 final
TRANSCRIPT
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Teleuse@BOP
Digital Divide Digital Opportunity
Rohan Samarajiva (samarajiva [at] lirne.net)
Session 1: Accelerating the growth of broadband
India Telecom 2007
December 13th, 2007, New Delhi
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Plan of presentation
Relevance of the BOP
Methodology
Digital opportunity
Digital divide
Bridging the divide and seizing the opportunity
Non-owners owners: barriers
In sum . . .
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Teleuse @ BOP
Relevance of the BOP
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12
436
10 1232
85
282
5
44
16
0
50
100
150
200
250
300
350
400
450
500
Pakistan India Sri Lanka Philippines Thailand
P o p u l a t i o n a g e d 1 5 - 6
0 ( m i l l i o n s )
Middle & top' of the pyramid (SEC A, B, C) Bottom of the pyramid (SEC D, E)
How big are the markets in emerging Asia: BOP and M & TOP?
*
*excluding FANA/FATA Tribal Areas; **excluding North & East Provinces
**
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Teleuse@BOP
Methodology
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Bottom of the Pyramid (BOP) defined
Many definitions of poverty, but this studyuses SEC D and E; between ages 18-60
SEC does not take into account income, but it isclosely related to income levels
BOP segment is representative of the BOPpopulation Diary respondents also representative of BOP
Small (non-representative sample) taken of
SEC groups A, B & C
SEC D & E
SEC A, B & C
8,6897001,1001,0774,0001,812Total
6,269
2,420
TOTAL
7.0%3.0%3.0%1.5%2.7%Error margin at 95
percent CI
3521,0084813,3481,081BOP(SEC D & E)
34892596652731TOP(SEC A, B & C)
ThailandPhilippinesSri LankaIndiaPakistan
South East AsiaSouth Asia
SAMPLE
Quantitative sample
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Teleuse @ BOP
Digital opportunity
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What are the opportunities afforded by ICTs?
Ability to communicate One-to-one
One-to-many
More than voice
Social networking
Ability to retrieve information that will Improve ability to make money or save money
Enhance ability to coordinate activities across time and space,thereby improving quality of life
Educate, improve know-how
Entertain
Ability to publish Voice for the voiceless
Niche publishing
Ability to transact Not only to interact, but to make payments
Remote computing Use of software and computing power that is elsewhere
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What are the prerequisites?
Reliable electricity
A computer A broadband connection
More than 256 kbps up and down
Always on
Service from an ISP
Familiarity with the interface Literacy
Language skills
. . . . Classic home Internet user?
How many at the BOP?
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Teleuse@BOP
Digital Divide
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10.4%8.8%1.5%0.3%1.9%Use the Internet
ThailandPhilippinesSri LankaIndiaPakistan
Internet use
3%
0%
2%
12%
14%
1%0%
1%
6%
7%
0%
2%
4%
6%
8%
10%
12%
14%
16%
Pakistan India Sri Lanka Philiphines Thailand
% a
t B O
P
Male
Female Large genderdivide, even in
South East Asia
Internet at the BOP…
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Have not heard about the Internet before
36%
72%
29%
14%
36%
0%
20%
40%
60%
80%
Pakistan India Sri Lanka Philippines Thailand
% a
t t h e B O P
What Internet??
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Internet awareness: Never heard of the Internet
before
24%
67%
23%
9% 10%
49%
78%
30%20%
43%
0%
20%
40%
60%80%
100%
P a k i
s t a n
I n d i a
S r i L
a n k a
P h i l i p
p i n e
s
T h a i l a
n d
% o
f B O P
Urban
Rural
Awareness poor, even in urban areas
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Teleuse @ BOP
But divide can be bridged and opportunity seized
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Why not a different starting point: “more-than-voice” uses of mobile?
Access and use implies familiarity with the technology
Access/ownership Is ownership of the terminal necessary?
Any conditions under which non-voice applications can be usedwithout individual ownership?
How many currently own terminals?
What kinds of terminals?
Are they capable of supporting more than voice? How many likely to join the ranks of owner-users by 2008?
Use for voice without ownership use forvoice with ownership more-than-voice
applications digital opportunity?
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Access is surprisingly high familiarity
95%93%92%94%98%Used phone inlast 3 months
ThailandPhilippinesSri LankaIndiaPakistan
South East AsiaSouth Asia
Most people approached for survey (BOP and other) had used aphone in the last 3 months
“Half the world’s population has not made a phone call” was wrong when Kofi Annan saidit in 1999; absolutely wrong now
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Ownership and GDP per capita (USD, PPP)
23%
9%
22%
60%
11%
23%
7%
14%
64%
81%
59%
38%
23%
76%
18%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Pakistan India Sri Lanka Philippines Thailand
% a
t b o t t o m o
f p y r a m i d
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
G D P p e r c a p i t a ,
U S D
( P P P )
Own a mobile Own a fixed phone (household)
Own nothing (but use something) Per Capita GDP PPP (USD)
Ownership is not as high
Especially in South Asia…
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Easy access needed for more-than-voice . . .
Easy access provided by ownership is important Unlikely that public/shared phones will be used for anything other
than basic voice
Access for more-than-voice, in order of importance
Own mobile
Household member’s mobile
CDMA “fixed” phone
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Most frequently used mode
0%
10%
20%
30%
40%
50%60%
70%
80%
90%
100%
% a
t B O P
Public phone 35% 71% 30% 8% 7%
Relative / friend's phone 10% 1% 12% 14% 6%
Neighbours phone 8% 7% 14% 7% 1%
Mobile of another household
member
12% 4% 6% 11% 5%
Household fixed phone 14% 9% 21% 4% 8%
Own mobile 21% 9% 17% 56% 73%
Pakistan India Sri Lanka Philippines Thailand
Access modes among BOP phone users
S Asia BOP mainly used public phones; SE Asia mobiles
Also note that 12% in PK,4% in IN & 6% in LK usethe mobile of anotherhousehold member
“Fixed” phones at S AsiaBOP are mostly CDMA;Mimic GSM features.
Except in India, combined BOP household use > BOP public phone use
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Sophisticated handsets at the BOP: Average for new is USD70+
60-70% of mobile owners at BOP use brand-new handsets
But even simple sets allow mobile payments and such
Average price paid for mobile handsets: brand new & second-hand
USD 0
USD 20
USD 40
USD 60
USD 80
USD 100
USD 120
USD 140
USD 160
Pakistan India Sri Lanka Philippines Thailand
A v e r a g e p r i c
e p a i d
ave. price paid for brand new ave.price paid for second hand
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38%42%53%38%53%% of non-owners who plan toget connected between mid-2006 and mid-2008
ThailandPhilippinesSri LankaIndiaPakistan
South-east AsiaSouth Asia
Mobile access is high … and growing
36%
19%
41%
62%
77%70%
50%
72%78%
86%
0
25
50
75
100
125
150
Pakistan India Sri Lanka Philippines Thailand
C o n n
e c t i o n s a t B O P ( m i l l i o n s )
0%
20%
40%
60%
80%
100%
% o
f h o u s e
h o l d s a t B O P w i t h a
t e l e p h o n e
Already own something Don't own but plan to buy
Current ownership at BOP (%) Penetration at BOP by mid 2008
Type of phone prospective owners would buy
23%29%
52%
8%
68%67%
40%
91%
9% 4% 7%1%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Pakistan India Sri Lanka Philippines
Not decided yet
Mobile
Fixed phone
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SMS as the main non-voice application; highest in Philippines, lowestin India (declined in the last quarter)
Frequency of SMS use (DE)
50%
65%
40%
70%
0%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Pakistan India Sri Lanka Philippines Thailand
% o
f m o b i l e o w n e r s
Never Less than once a month
At least once a month
At least once a week
Daily
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Mobile as a voting device
“A key advantage of a phone, as seen by participants, is itsability to promote democratic participation. The example
presented was a reality TV show . . . to select a ‘Super Star’ . . .based on the SMS/phone voting by the public. . . . Studyparticipants viewed this as a case of telecom enabling the
‘unheard’ to voice their opinion. . . . They felt that their voicewas heard; that they have been elevated from the level of mereobservers to that of active participants in democratic processes.. . . None of them complained of having to pay five times theregular cost of an SMS to place their votes.”
From a focus group on phone use; reference is to an American Idol-type show
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Payment systems in place for more-than-voice applications
For example, Sri Lanka’s largest GSM operator (~ 3.6 millionsubscribers)
86% prepaid subscribers, overall
Approx. 50% of prepaid top-ups are via electronic reload (50% viacard system)
12,000+ electronic reload outlets
Mobile payment system recently launched for the first time in S Asia
Philippines is the world leader
Personal accident insurance system via mobile connection also
recently launched
4%1%8%4%1%Post Paid
@ BOP
96%99%92%95%99%Pre Paid @BOP
ThailandPhilippinesSri LankaIndiaPakistan
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India’s mobile Internet users growing
As at 30 June 2007 (TRAI, 2007; p.14)
Fixed Internet subscribers: 9.22 million (declined in lastquarter!)
Internet subscribers accessing Internet via mobile handsets(GSM/CDMA): 38.02 million and growing
One out of five mobile users in India use their handsets to accessInternet
Mobile = 4 x Fixed
Foreshadowing the mobile-centric Internet?
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Reasons for not owning a phone
75%82%
72% 77% 77%
18%16%
19%15% 15%
7% 8% 7% 7%2%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Pakistan India Sri Lanka Philippines Thailand
%
o f n o n - o w n e r s
a t B O P
I cannot afford it Don't need one Other
Key barrier to ownership is affordability
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The cost of getting connected…Expectation vs. affordability gap
Expected cost of a new phone by non-owners
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Pakistan India Sri Lanka Philippines
% o
f n o n - o w n e r s a t B O P
>USD 176
USD 146-175
USD 116-145
USD 86-115
USD 56-85
USD 26-55
<USD 25
Initial cost that prospective owner can afford
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Pakistan India Sri Lanka Philippines
% o
f p r o s p e c t i v e o w n e r s a t t h e B O P
More than USD 71
USD 51 - 70
USD 31 - 50
USD 10 - 30
Less than USD 10
E.g., 70% of non-owners at BOP in Sri Lanka believe that the cost to getconnected will be greater than USD56
But only 11% can afford more than USD50
New mobile and connection possible for USD 36; lower with second-handphone Greater potential for more-than-voice applications as prices of mobiles with
additional capabilities decrease
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Use cost: most can afford less than USD5 per month oncommunication
Monthly charges: expected vs. affordable
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
a f f o r d a b l e
e x p e c t e d
a f f o r d a b l e
e x p e c t e d
a f f o r d a b l e
e x p e c t e d
a f f o r d a b l e
e x p e c t e d
Pakistan India Sri Lanka Philippines
% o
f u s e r s More than USD 20
USD 11 - 15
USD 5 - 10
Less than USD 5
Expectations and affordability are in line Most expect the monthly cost to be less than USD 5, which most can
afford to pay Also in line with ARPUs of mobiles (USD 3-4)
32% of customers of Sri Lanka’s largest mobile operator pay around
USD 1 per month
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Teleuse @ BOP
In sum
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In sum
Digital opportunity ≠ the way we use the Internet now
Need think of digital opportunity in terms of functions such as
information retrieval Massive divide exists if we think conventionally about the BOP
But possible to bridge the gap if we start from the mobile BOP are not necessarily heavy users, but they do use mobiles
Even non-owners are participating in telecom Potential owners, if connected, would also use phones for more than
voice
BOP mobile market is growing; much of the BOP will firstexperience the Internet via mobiles
Prerequisites for ‘more than voice’ applications are in place
Digital divide can be bridged and digital opportunity can be
seized, only if we take a road less traveled by
. . . that will make all the difference