While Internet penetration is not "very good" amongst the Bottom of the Pyramid (BOP), those earning less than $2 a day, with many in Pakistan, India, Sri Lanka, Bangladesh, the Philippines and Thailand never even having heard of the Internet; the BOP can still benefit from the enhanced access to information and, as such, opportunity inherent in the so-called "Internet economy" through mobile 2.0, or more than voice, services. This was noted by Prof. Rohan Samarajiva, a past head of Sri Lanka's telecommunications regulator and the current chair of a regional telecommunications think tank LIRNEasia, which is also based in the same country.
Prof. Samarajiva, who made these comments during his welcome to attendees of the Mobile 2.0 Expert Forum which was organised jointly by his organisation and the Pakistan Telecommunications Authority (PTA) and held this week in Islamabad, Pakistan, also hghlighted some of the findings of a two-year study conducted by LIRNEasia which encompassed a sample survey of 10,000 BOP participants spanning six South Asian and South East Asian countries (mentioned above). One of which that proved interesting was that surveyed countries offered the same bundle of services for less than $5 (in 2006) that were typically offered in other countries for much more, for example Brazil was the highest at $28.
Prof. Samarajiva also contended that a budget telecom network model which advocated the use of more than voice (mobile 2.0) was the only way to interact with those at the BOP since their use of SMS and other value additions far exceeded voice, the basis for traditional mobile network models.
Comprising findings and cases from LIRNEasia's 2008 study of 10,000 participants from Sri Lanka, India, Pakistan, Bangladesh, the Philippines and Thailand as well as a case from Kenya, the Mobile 2.0 Expert Forum broadly touched on easing payments and making markets efficient, m-government, m-commerce, m-social networking, market entry, and quality of service experience.
The following are some highlights from a few presentations (most are available online at lirneasia.net) at the conference:
According to a Deputy Governor of the State Bank of Pakistan, Yaseen Anwar, the "inherent power" of branchless banking is that it can be used to extend traditional financial networks to encompass the "unbanked", those without bank accounts. A significant attribute since, again according to Mr. Anwar, there are over four billion unbanked people across the world, two thirds of whom are from poor or less developed countries. Meanwhile, according to LIRNEasia's Sriganesh Lokanathan, mobile agriculture services in India such as crop advisories, market prices and weather reports are used by telecommunications companies as sweeteners to retain customers and increase rural customers. Revenue generation from agriculture services is only a secondary expectation. This is because adoption of these services by the BOP is very low due to poor literacy.
Summit Strategies' Muriuku Mureithi, while highlighting the case of mPayment gateway M-PESA in Kenya where its parent Safaricom, the market leader with 80% share, leveraged this service from its roots as a pilot project for the rural unbanked, which makes up 75% of the population, to accept remittances into a service that is now perceived as easier and less risky and is now gaining ground as a payment gateway which is preferred by almost 39% of the adult population.
In contrast to the telecommunications company-oriented M-PESA example, the case of Pakistan's Easypaisa mPayments, as presented by Aamir Ibrahim of its parent Telenor Pakistan, highlighted the bank-centric approach whereby Telenor used its considerable resources as the second largest operator in Pakistan, in terms of revenue and subscribers, to buy over Tameer Microfinance Bank and, with the consent of both the banking and telecommunications regulators, consolidate both customer bases and cross-sell services to push mPayments into the public eye and consequently gain ground in this area.
Highlighting the rise of the CellBazaar online marketplace in Bangladesh and the Buzzcity social network in Thailand was LIRNEasia's Shazna Zuhyle and Dr. Puree Sirasoontorn. Both these are cut down mobile versions of popular Internet services such as Amazon and Facebook which are popular amongst the BOP segments for ease of access and understanding. While CellBazaar was important to Bangladeshis because 72% of them use their mobile phones for business purposes, Buzzcity was successful because it had been flexible enough to change its business model and sell advertising to become lucrative.
Explaining the role of the Universal Service Fund in connecting the unserved areas of Pakistan was its chief Pervez Iftikhar who highlighted how the fund's investments in fibre optics and broadband in previously unattractive areas allowed them to become more lucrative in the eyes of telecommunications operators, eventually leading to almost half these areas being served by private companies. He also noted that all base stations built by the fund were now powered by renewable energy such as solar. Adding to this session was the comment by Prof. Samarajiva that Sri Lanka's Universal Service Fund could learn from Pakistan's since it and many others often held onto funds rather than spending it on important projects as they did not have the private sector representation in decision making that Pakistan's had.
Meanwhile, Prof. Samarajiva presented a case for mobile government being more convenient than electronic government using an Internet kiosk distribution where he highlighted a host of benefits such as minimal equipment costs, convenience, minimal training required, etc.
Additionally, a presentation on mobile number portability by LIRNEasia's Helani Galpaya highlighted issues which surfaced from allocating spectrum, especially when it was controlled by two regulators such as in the case of broadcast and telecommunications spectrums. Also shared were a number of other spectrum-related difficulties from across the region. Further, Prof. Samarajiva suggested that, according to LIRNEasia's 2008 study, mobile number portability did not prove to be very important to the BOP and rather they went for "Friends & Family" plans with benefits being restricted to a few, most frequently dialled numbers. Closing out the session was the Pakistan Telecommunications Authority's Muhammad Talib Dogar who spoke on his country's apparent success with the service and the growing revenues being achieved from it as well as the improved and more convenient service offerings introduced recently.
The forum concluded with segments by LIRNEasia's Chanuka Wattegama and Pakistan Telecommunications Authority's Wasim Tauqir commenting on measures taken to test and improve quality of services such as broad band across the region and in Pakistan, and a panel discussion featuring regulators and telecommunications companies from Pakistan, the Philippines and even Bhutan.
Better technology - MP economist's new agenda in parliament
New Sri Lankan Member of Parliament and economist Dr. Harsha de Silva plans to focus on issues that currently block the greater use of technologies that would prove beneficial to the lives of everyday citizens. One such idea is using mobiles as bus passes.
According to Dr. de Silva, this could prove to be a very valuable service when it is considered that 75% of all transport used by Sri Lanka is public transport, utilising buses and trains. Out of this, 93% is bus transport and the vast majority of which is private. There are some 10 million passengers a day. Importantly, a key flaw with this sector is that approximately 25% of ticket revenues are 'lost in transit' namely due to leakage (stealing) or even passengers getting off too quickly to collect ticket fares. Situations that result in buses overloading with passengers and even speeding as well as bus companies generally being not very profitable.
Bearing in mind that many Western Province buses nowadays have handheld digital ticket machines and that approximately 36% of all mobile phone users earn less than US$ 2 per day, offering a system whereby passengers can buy their tickets via SMS or even through Near Field Communications (like the Singapore metro card where you hold it near the sensor)using their mobile or SIM as a smart card to swipe to buy tickets.
This would allow for a faster and better experience for passengers and significantly reduced leakage for bus owners. Additionally, passengers may also benefit in monetary terms as about 60% of the time change is not available, a major long term cost for frequent travellers.
Speaking exclusively to the Business Times on the sidelines of the Mobile 2.0 Expert Forum held in Islamabad, Pakistan this week, where he presented this mobile bus pass idea to representatives of regional regulators, academia, telecommunications operators and media outlets from South and South East Asia; Dr. de Silva also commented on other promising concepts highlighted at the forum which could better the everyday lives of Sri Lankans: mPayments and mAgriculture.
According to Dr. de Silva, the mPayment cases presented at the forum which pertained to the Philippines' e-Wallet, Pakistan's Easypaisa and Kenya's M-PESA were not feasible in the Sri Lankan context. Highlighting the example of Dialog's EZ Pay which was introduced in the Sri Lankan market in conjunction with NDB Bank, a concept similar to Easypaisa, Dr. de Silva noted that the country needed something more accessible as well as being financially secure, especially in the wake of negative public sentiment resulting from financial scandals such as Golden Key. As such, he suggested a hybrid system where mobile companies' agents in villages act as money transferors overseen by the regulator and immediately transfer the money out of their hands.
Speakers at the Pakistan conference |
Further, commenting on a presentation which highlighted India's mAgriculture initiatives, he noted that Sri Lanka's own mobile agriculture project, TradeNet, which he launched four months ago in conjunction with Dialog, was progressing well. TradeNet provides farmers with periodic and current updates of vegetable-specific market prices from the Meegoda and Dambulla economic centres with the help of the country's Ministry of Trade and Dr. de Silva's Govi Gnana Seva organisation.
He further indicated that there were now a number of subscribers to the service and it was also helping promote the government's agriculture helpline amongst farmers so that they could get advice on improving crops. He added that efforts were continuing to ensure farmers have mobile phones and Dambulla and Meegoda area farmers learn how to use this technology.
However, remarking on the negatives of mobile services, Dr. de Silva revealed that close to 28 cents of every mobile rupee goes towards government. This is a problem since these taxes may overwhelm benefits and so kill future innovations. Meanwhile, with regard to mPayments, he noted that the government needed to clarify its position regarding this means of remittance.
Commenting on recent revelations that the Sri Lankan government plans to present another vote-on-account in the next few weeks followed by what has been termed a "mini-budget" later in the year, Dr. de Silva said "the government has failed miserably in fiscal management for the year.
And they are unable to present the budget. When the President was elected in 2005, they immediately presented the budget. Now, after being elected in January, and even with the cabinet being selected, it seems that they are not presenting it because it is impossible to meet the terms of the Stand-by Agreement". |
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