Mobile Kills the Telecenter Star?

Client Logo

Colloquium – based on LIRNEasia research

Mobile Kills the Telecenter Star?*Reaching the Bottom of the Pyramid in developing Asia

USC, Annenberg School30th Sep 2007

* With apologies to Trevor Horn, Courtney Courson, Geoffrey Downs, Bruce Woolley of the Buggles

2

Table Of Contents

Taking ICTs to the Bottom of the Pyramid (BOP) through telecenters

What the BOP uses – phones

What do phones do to the telecenters narrative

What do we do, if the phone is the only device for the BOP

Re-thinking e-Gov in this light

3

ICTs: the hype and hope

“ICT, with the ability to use and adapt it, is the critical factor in generating and accessing wealth, power and knowledge in our time” (Manuel Castells)

In the west, improvement in productivity and related growth due to ICT

Happening in Asia

– e.g. ICT-enabled outsourcing book contributing to growth in India

For developing countries, special significance

– A chance to catch up (leapfrog)

– A chance to take government services to citizens more equitably, reduce corruption

4

The model in the west: fat pipe to the home

Fiber/Cable/ADSL or other high bandwidth alternatives

Multiple devices connected to this pipe

– TV

– Computer

– Mobile/Fixed phones

Delivering

– Video

– Voice (mobile, fixed)

– Data (internet)

Quadruple/Multiple Pay play is what it is about

5

The equivalent in developing Asia: the telecenters

Across the world, despite significant gains, ICT networks are not reaching the poor (ITU 2006)

In developing Asia, under-developed network infrastructure

– If at all, broadband rolled out in urban areas (even with the hype of WiFi)

– Connectivity priced for businesses and households with higher income

– Unavailable and unaffordable to the poor and the rural

High cost of PC’s relative to income

Community Access Model promoted in an attempt to bridge the gap in income and geography

– Telecenters targeting the lower income/bottom of the pyramid or BOP

– Rationale Response

6

Telecenters come in various forms, and provide a range of services: some “tele” services, other are not

Some services dependent on having some telecommunication facilities

– Telecommunication services (voice, fax, internet)

– Information (e.g. agricultural information for farmers) obtained via the internet to telephone, disseminated locally

Some services that benefit from connectivity but not dependent on it

– Capacity building for rural communities

– E.g. language training, training trade skills for farmers

– (often via CD’s that are available or through instructors who physically visit the center).

Often a host of services NOT dependent on telecommunications

– Telecenter operator collect bills from villagers, travels to town and pays them. Charges INR5 per bill

– “Telecenter” as village meeting house (simply providing a common facility/space).

7

Many services provided for free. Voice, fax among the few services routinely “sold” to use

Many services provided for free

Voice/fax are the only services routinely sold

– Citizens expect to pay for phone calls made at telecenters

Willingness to pay for Internet untested

– Lack of content?

But all of this s seen as “OK”

– Most telecenters are donor funded and services nearly fully subsidized

– Many are implemented as pilots, without concrete scale-up plans

– Seen to provide other larger social objectives

Non-sustainability seen is “OK”?

– “Telecenters are a highly visible, powerful and inexpensive political tool. They generate much fanfare during early planning and inauguration stages of the programs, but interest in their programs wane shortly afterwards” (Proenza, 2003)

8

Most telecenters are already not sustainable; those that are depend on voice (phone calls) for large portion of revenue

Systematic studies on telecenter sustainability not available

– South Africa exception (Peter Benjamin PhD thesis and ITU Africa,2001)

DO know that a telecenter needs to be run “like a business” to ensure financial sustainability

– Amin, 2003

– Peter Benjamin’s 4 year evaluation of South African telecenters

Voice is the only service that is providing steady stream of revenue (not internet)

– E.g. e-Sri Lanka’s (planned) 1000 telecenters depend on voice calls to make up 60% of the revenues (World Bank,2003)

– Many get 100% of revenues from voice

9

Telecenters are popular and growing in numbers in PK, IN, LK

Country Organization Number of telecenters to be deployed in the next decade

Pakistan Pakistan State OilPakistan Telecom Authority Post Office TelecentersAgha Khan Rural Support ProgramKarakoram Development AuthorityAllama Iqbal Open UniversityTelecard, Mobilink,TelenorEntrepreneurs

3,500 400 12,000 200 100 2,000 200 Several 100

India MS Swaminathan Research FoundationITC (E-Choupal)DrishteeTarahaatGyandootN-LogueGramdoot

95 20,000 1,020 196 21 30 200

Sri Lanka USAIDSarvodayaE-Sri Lanka/ICTA

5001891,000

10

What have telecenters delivered? Not much: urban/rural divide very much alive, specially at the BOP

0.2%2.1%

12.8%

22.0%

0.7% 0.1%1.4%

4.3%2.3%3.0%

0%

5%

10%

15%

20%

25%

Pakistan India Sri Lanka Philippines Thailand

Country

% a

t B

OP

wh

o h

ave u

sed

th

e

Inte

rnet

Urban Rural

11

Most people at the BOP have not heard of the internet….

36%

72%

29%

14%

36%

0%

10%

20%

30%

40%

50%

60%

70%

80%


Country

% o

f B

OP

wh

o h

ave

no

t h

eard

o

f th

e In

tern

et

Not heard of the Internet

12

…. let alone have access to it

*excluding FANA/FATA – Tribal Areas; **excluding N&E Provinces


Target BOP population of study in millions

77* 260 4** 41 15

BOP population as % of total population

46.67% 23.74% 20.00% 46.07% 23.44%

% at BOP who have accessed the internet

1.90% 0.30% 1.50% 8.80% 10.40%

13

Table Of Contents


What the BOP does use – phones




14

Majority of the BOP have access to and use phones

*excluding FANA/FATA – Tribal Areas; **excluding N&E Provinces


% of those approached who have used a phone in the preceding 3 months

98% 94% 92% 93% 95%

Target BOP population of study in millions

77* 260 4** 41 15

BOP population as % of total population

46.67% 23.74% 20.00% 46.07% 23.44%

15

Most frequently used mode

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

% a

t B

OP Public phone

Relative / friend's phone

Neighbours phone

Mobile of another householdmember

Household fixed phone

Own mobile

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 householdmember

12% 4% 6% 11% 5%

Household fixed phone 14% 9% 21% 4% 8%

Own mobile 21% 9% 17% 56% 73%


The BOP use public phones when a (fixed or mobile) phone is not owned

16

Even for those who do no own a phone, one is accessible quickly

0%

20%

40%

60%

80%

100%


Country

% a

t B

OP

Less than 2 - 3 minutes Between 3 - 5 minutes Between 5 -15 minutes

Between 15 - 45 minutes More than 45 minutes

Time taken to access a phone

17

Phones are accessible, even in rural areas

0%

25%

50%

75%

100%

UrbanPakistan

UrbanIndia

UrbanSri Lanka

UrbanPhilippines

UrbanThailand

Country

% a

t B

OP

Less than 2 - 3 minutes Between 3 - 5 minutes Between 5 -15 minutes

Between 15 - 45 minutes More than 45 minutes

Time taken to access a phone, urban vs. rural

Rural Rural Rural Rural Rural

18

And ownership is likely to increase: 232 million at the BOP will own phones by mid 2008

77%70%

86%

62%

41%36%

19%

50%

72%78%

0

25

50

75

100

125

150


Country

Con

nect

ions

at B

OP

(m

illio

ns)

0%

20%

40%

60%

80%

100%

% o

f hou

seho

lds

at B

OP

w

ith a

tele

phon

e

Already own something Don't own but plan to buy

Current ownership at BOP (%) Penetration at BOP by mid 2008

19

…they will mostly purchase mobile phones or those with mobile-like capabilities (e.g. CDMA)

23%29%

52%

7%

19%

68% 67%

40%

92%

78%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


Country

% a

t B

OP

pre

fere

nce

to

war

ds

fixe

d

or

mo

bil

e

Fixed Mobile

Type of phone the BOP say they will purchase

20

And they are willing to pay up to USD 5 per month for the service

0%

25%

50%

75%

100%


Country

% a

t B

OP

Less than $5 Between $5-10 Between $10-15 More than $15

Expected monthly spend on phone services

21

Table Of Contents






22

Voice is making telecenters sustainable. But that revenue stream is running out telecenters are already not sustainable; those that are depend on voice (phone calls) for large portion of revenue

The BOP is spending money at telecenters

– But on voice

But soon this money is now going to be spent on a phone they (or their family members) own

– Money going to telecom companies, not telecenters

Also resulting in less ‘traffic’ walking into telecenters

– lowering even other revenue streams

Already public access phone model under threat

– Bangladesh mobile phone ladies losing over 50% of their income (Shaffer, 2007)

– Senegal's public call centers experiencing declining revenues (Le Soleil, 2007)

23

Table Of Contents






24

Develop Phone Centric Models that do not discriminate, and do not delay

Telecenters a long way from rolling out in mass numbers

– wait for them to become sustainable? Or for them to roll out in sufficient numbers?

Phones here, now, and in use

Put the phone at the centers

Solutions may lack sophistication

But they will benefit the BOP NOW, not at some distant point in the future

25

Table Of Contents






26

e-Government: taking government to the BOP

G2G e-Government initiatives promise to increase

– Transparency

– Efficiency

– Citizen centric service delivery

– To act as a media to facilitate citizen consultation, policy discussion & increased democratic input into policy process

Dominant model to take e-Gov to citizens have 2 parallel strategies

– @ the Back-end: the re-engineering and automating of government services so that they are accessible online, and

– @ the Front-end: the installation of telecenters (community Internet access centers) for citizens to access reengineered government e-Gov services via the Internet

27

Government presence online evolves: inform interact transact

INFORM INFORM INTERACTINTERACT TRANSACTTRANSACT

Level of Sophistication of e-GovernmentLow High

Information about government services made available via government websites

94% of UN member countries have some kind of online presence (UNPAN,2005)

Full govt. transactions (including payment) completed online

24% of UN member countries offer online payment on certain govt. services

Govt. presence online allows citizens to send/receive information (e.g. email govt. office, receive response)

88% of UN member countries offer interactive services for citizen (UNPAN,2005)

TRANSFORMTRANSFORM

Govt. uses online presence to as a tool to improve governance

15% of UN member states encourage participatory deliberative decision-making & engage with citizens in open debate online

28

The dominant e-Gov requires re-engineering, requires the internet. But have disadvantages, specially in developing Asia

We’ve already seen that the internet reach @ the BOP is negligible

Transacting online requires credit cards. The BOP have none– E.g. Less than 4% of the TOTAL population of India and Sri Lanka + India have a credit cards

Re-Engineering is extremely difficult– Over 50% of e-Gov projects fail. Another 35% are partial failures (Heeks)– Key reason for failure: re-engineering government attempts to radically change the way the government

(and its employees) work. – A large gap between existing (manual) system, and new (re-engineered and automated) system

Cost benefits analysis for government automation unproven in the developing world – It works for the west. Cost of investment in ICT more than off-set by savings in labor cost (Stanforth,

2006)– In the developing world, labor is ten times cheaper, and software+hardware much more expensive

But developing countries, specially developing Asia, have undertaken LARGE re-Gov initiatives along with telecenter programs– Sri Lanka, India

29

How can governments (and donors) do e-Gov with just a phone? Examples already exist

Inform

– Government Information Center (Sri Lanka) enables dialing 1919 from any phone and finding out the procedure for obtaining government services

– Highly used service; used by citizens where ever there are phones.

Interact

– State of Gujarat passport example

– Passport application has 7 stages. Citizens kept informed of progress (or lack of) at each stage via SMS

– Reduced queues reduced from 900 (previously) to 350. Most came just to inquire about the state of their passport

Transact

– SMS tax payment in Philippines via g-Cashs “payBIR” service

– Taxes (income tax, fines, stamp duty) of up to P10,000 (USD 180) can be done via mobile phone

– SMS receipt sent to citizen for records

30

Why is this helpful?

Avoids the pit-falls of large-eGov initiatives

– Projects less likely to fail

– Face less resistance from government employees

– Employees likely to view further re-engineering more positively

Phones are here, now, and available to the BOP

– Enables the BOP to benefit now, not at a distant time in the future

– Don’t have to wait for tele-centers to roll-out

Unlikely to face sustainability issues in the end-delivery (people willing to pay for phone service. Not telecenters)

Enables a full range of e-Gov services including transactions

– Not just information service provision, but full transaction (0% of BOP with credit cards, vs 124 million at the BOP who have transaction-capable mobile phones in Sri Lanka, India, Pakistan)

– People ALREADY USED to transacting via the phone – just not with government (e.g. cash transfer via phone, paying for goods through phone minutes)

31

Does NOT mean internet (via telecenters) and re-engineering of Government services are not needed

Some services will always need high-bandwidth

– Uploading a picture + filling out an online passport application, then submitting online

Many more services (and benefits) brought by broadband

– Rural Business Process Outsourcing, creating of jobs

But these are for the future: at least 5 – 10 years to REALLY reach the BOP

Do we keep them on the other side of the digital divide till then?

Its time for governments, donors and civil society to re-think immediate ways to empower the BOP using mobile-centric models

– Not just in e-Gov, but other initiatives (e.g. agriculture, fisheries)

32

Our mission

To improve the lives of the people of Asia Pacific by facilitating their use of information and communication technologies; by catalyzing the reform of the laws, policies and regulations to enable those uses; by building Asia Pacific based human capacity through research, training and advocacy

[email protected]

Mobile Kills the Telecenter Star?

Business

Transcript of Mobile Kills the Telecenter Star?