Www.lirneasia.net Teleuse on a Shoestring LIRNEasia Media Workshop Singapore. 28 February 2007.

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Teleuse on a Shoestring

LIRNEasia Media Workshop Singapore. 28 February 2007

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Agenda

Research methodology & key findings: Harsha de Silva

The SMS story and others Lorraine Carlos Salazar

The next billion customers Ayesha Zainudeen

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Research Methodology and Key FindingsHarsha de [email protected]

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Agenda

Research methodology & key findings: Harsha de Silva

The SMS story and others Lorraine Carlos Salazar

The next billion customers Ayesha Zainudeen

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Background

Emerging markets are ‘where the action is’ The next billion...

Want to know what users at the Bottom of the Pyramid want Pilot: Shoestrings 1 New and improved: Shoestrings 2

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Research objectives

Understand telecom use at the Bottom of the Pyramid (BOP) in Developing Asia

Large sample survey in five countries India, Pakistan, Sri Lanka, Philippines & Thailand

Representative of target population SEC D & E (BOP) between ages 18-60

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Methodology

6 Focus Group Discussions per

country (30)

Random sample 8,660 F-to-F interviews; in 5 countries 50% diary

Final output

QualitativeQuantitative

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Country profiles

South Asia South East Asia

Pakistan IndiaSri

LankaPhilippines Thailand

Population165

million 1,095 million

19.6 million

89 million

64 million

GNI per capita (2005), USD (Atlas)

690 720 1,160 1,300 2,750

GNI per capita (2005), USD (PPP)

2350 3460 4,520 5,300 8,440

Population below Poverty Line

32%(est. 2001)

25%(est. 2001)

23%(est. 2005)

40%(est. 2001)

10%(est. 2004)

Fixed teledensity (2006) 4.16(2006 Q4)

4.58(2006 Q1)

9.50(2006 Q4)

4.07(2005 Q4)

10.25(2005 Q4)

Mobile teledensity (2006) 25.22(2006 Q4)

8.82(2006 Q1)

27.1(2006 Q4)

41.30(2005 Q4)

46.45(2005 Q4)

Internet Users7.5

million 50.6

million 0.3

million 7.8

million 8.4

million Notes: India on an April – March reporting period ; Pakistan on a July – June reporting period; Other countries follow Jan – Dec (calendar year) reporting periods. Sources: India-COAI, TRAI; Thailand–Company Reports; Pakistan–PTA; Philippines–NTC; Sri Lanka- TRC; 2000 onwards from company reports; World Bank (2006); CIA Fact Book (2005)

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

Bottom of the Pyramid defined

Many definitions of poverty, but this study uses SEC D and E; between ages 18-60

SEC does not take into account income, but it is closely related to income levels

Pakistan IndiaSri

LankaPhilippin

esThailand

Population (million) 165 1,095 20 89 64

Target population of study (million)

77* 260 4** 41 15

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Quantitative sample

BOP segment is representative of the BOP population Diary respondents also representative of BOP

Small (non-representative sample) taken of SEC groups A, B & C

SAMPLE South Asia South East Asia TOTAL

Pakistan India Sri LankaPhilippine

sThailand

TOP (SEC A, B & C)

685 800 250 120 200 2055

BOP (SEC D & E)

1125 3200 800 980 500 6605

Total 1810 4000 1050 1100 700 8660

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Access at the BOPEveryone has access, but not ownership

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Overall access is very high

South Asia South East Asia

Pakistan India Sri Lanka Phils. Thailand

Accessibility(% of those randomly approached (all SEC groups) who have used a phone in the preceding 3 months)

98% 94% 92% 93% 95%

Most have used a phone in the last 3 months

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Time it takes to reach nearest phone

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Pakistan India Sri Lanka Philippines Thailand

% o

f n

on

-ow

ne

rs a

t th

e B

OP

>60 minutes

45-60 minutes

30-45 minutes

15-30 minutes

10-15 minutes

5-10 minutes

3-5 minutes

< 3 minutes

Overall access is very high*

Around 60% at BOP in all countries can get to a phone in less than 5 minutesAround 60% at BOP in all countries can get to a phone in less than 5 minutes

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Urban-rural differences

Time to nearest phone: urban vs. rural: Sri Lanka

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Urban Rural

Sri Lanka

% o

f n

on

ow

ner

s at

BO

P Betw een 45 - 60 minutes

Betw een 30 - 45 minutes





Less than 2 - 3 minutes

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Urban Rural

Pakistan

% o

f n

on

ow

ner

s at

BO

P More than an hour








Time to nearest phone: urban vs. rural: Philippines

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Urban Rural

Philippines

% o

f n

on

ow

ner

s at

BO

P More than an hour








0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Urban Rural

India

% o

f n

on

ow

ner

s at

BO

P More than an hour








0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Urban Rural

Thailand%

of

no

n o

wn

ers

at B

OP

Urban-rural Differences in time to phone in Pakistan & IndiaUrban-rural Differences in time to phone in Pakistan & India

Time to nearest phone

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Ownership and GDP per capita (USD, PPP)

23%

9%

22%

60%

76%

11%

23%

7%

14%

63.60%

80.70%

59.00%

38.00%

22.70%

18%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%


% a

t b

ott

om

of

pyr

amid

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

GD

P p

er c

apit

a, U

SD

(P

PP

)

Own a mobile Own a fixed phone

Own nothing (but use something) Per Capita GDP PPP (US $)

But ownership is low

Pakistan India Sri Lanka Philip-pines Thailand

Total number of phones per 100 population

29.4 13.4 36.6 45.4 56.7

(2006 Q4) (2006 Q1) (2006 Q4) (2005 Q4) (2005 Q4)Notes: India on an April – March reporting period ; Pakistan on a July – June reporting period; Other countries follow Jan – Dec (calendar year) reporting periods. Sources: India-COAI, TRAI; Thailand–Company Reports; Pakistan–PTA; Philippines–NTC; Sri Lanka- TRC; 2000 onwards from company reports; World Bank (2006); CIA Fact Book (2005)

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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

Household fixed phone

Mobile of another householdmember

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%

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

Mobile of another householdmember

12% 4% 6% 11% 5%

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


So, mainly use public phones*

Many at BOP in South Asia use public phonesMany at BOP in South Asia use public phones

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Mobiles used more often by males in South Asian BOP

Most frequently used phone: Own mobile

30%

12%

22%

56%

76%

11%

5%

12%

55%

70%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Pakistan India Sri Lanka Philiphines Thailand

% a

t B

OP

Male

Female

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Females use household fixed phones more often

Most frequently used phone: Household fixed phone

11% 9%

19%

3% 4%

16%

10%

23%

4%

12%

0%

10%

20%

30%

40%

50%

60%

70%

80%


% a

t B

OP

Male

Female

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Females more reliant on other peoples’ phones in South Asian BOP

Most frequently used phone: Someone else's phone (neighbor, friend, family, work)

13%8%

27%

34%

13%

48%

16%

39%33%

12%

0%

10%

20%

30%

40%

50%

60%

70%

80%


% a

t B

OP

Male

Female

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Public phones used much more by Pakistani males at BOP

Most frequently used phone: Public phone

45%

71%

31%

7% 7%

24%

70%

26%

7% 6%

0%

10%

20%

30%

40%

50%

60%

70%

80%


% a

t B

OP

Male

Female

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Usage patternsKeeping in touch…

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Average number of calls (incoming + outgoing) for a month

20.0 18.3 13.0 10.3

46.514.1 16.8

10.15.3

33.8

0

10

20

30

40

50

60

70

80

90


me

an

nu

mb

er

of

ca

lls

outgoing

Incoming

Source: Diary

Around 1 call per day in S Asia; less than 1 call per day in SE Asia


Average # of calls for a month (in+out)

34.2 35.1 23.2 15.6 80.3

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Mostly local calls at the BOP

Type of call (local, long distance, international)

71%78%

62%

88% 84%

28%22%

34%

6% 16%

1% 0% 4% 6% 1%

0%10%20%30%40%50%60%70%80%90%

100%

Pakistan India Sri Lanka Philipines Thailand

% o

f c

alls International call

Long distance call

Local call

Source: Diary

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Source: Diary

Calls mostly to ‘keep in touch’

Main purpose of call

82%72% 65% 64% 70%

4%14% 27%

21%

14% 14%8%

15%29%

2%

0%

20%

40%

60%

80%

100%

Pakistan India Sri Lanka Philipines Thailand

% o

f al

l cal

ls

Keeping in touch with family & friends To check something / Deliver message

Business

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Calls are short

Average call durations

0%

10%

20%

30%

40%

50%

60%

<1 minute 2-3minutes

About 5minutes

About 10minutes

>15minutes

Duration of the call

% o

f c

alls

Pakistan

India

Sri Lanka

Philipines

Thailand

Source: Diary

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Bottom of the pyramidSome do own phones

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Primary reason for choosing to own a mobile (SEC D & E)

64%71% 66% 68%

92%

11%6%

9% 5%

7% 4%

20%17%

18% 16%

4%10%

3%7%

1%1%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


% o

f mob

ile o

wne

rs a

t the

BO

P

Convenience: accessibile at any time So I don’t depend on others For privacy It is cheaper Other

Why own a phone?*

Convenience is key among mobile owners; privacy is more of a concern for higher income countriesConvenience is key among mobile owners; privacy is more of a concern for higher income countries

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Primary reason for choosing to own a fixed phone (SEC D & E)

55%65%

60% 63%

80%

24%

18%

14% 8%

11%10%

7%6%

7%6%

17% 22%

1%

0%

16%

3%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


% o

f fix

ed o

wne

rs a

t the

BO

P

Convenience: accessibile at any time It is cheaper So I don’t depend on others For privacy Other

Similar pattern among fixed ownersSimilar pattern among fixed owners

Why own a phone 2?*

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More recent mobile connections at BOP in South Asia

0%

20%

40%

60%

80%

100%

before2001

2001 2002 2003 2004 2005 2006(Q1&2)

Year during which mobile connection was obtained

%(c

um

ula

tiv

e)

at

BO

P w

ho

ob

tain

ed

m

ob

ile c

on

ne

cti

on

in y

ea

r X


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Older fixed connections

0%

20%

40%

60%

80%

100%

before2001

2001 2002 2003 2004 2005 2006(Q1&2)

Year during which mobile connection was obtained

%(c

um

ula

tiv

e)

at

BO

P w

ho

ob

tain

ed

m

ob

ile c

on

ne

cti

on

in y

ea

r X


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Perceived benefits of ownership

Why does ownership matters

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Economic benefits from direct access Income generation through the sale of

telecom services; Grameen model… Indirect

Use of a phone by an auto-rickshaw driver Obtaining agricultural price info by farmer Cost savings made by making a call as opposed to taking

a bus ride into town

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Efficiency of daily activities

BOP sees the benefit

Efficiency of daily activities

1 2 3 4 5

India (3.90)

Sri Lanka (3.98)

Pakistan (4.17) Thailand (4.37)

Philippines (4.40)

worsened slightly worsened

no change somewhat improved

improved

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Efficiency income benefit?

Indian & Filipino BOP perceives economic benefit Large transactions costs avoided?

Ability to earn or save

1 2 3 4 5

Sri Lanka (3.19)

Thailand (3.56)

Pakistan (3.80) India (3.97)

Philippines(4.07)



improved

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Seen both in services and agriculture

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Agriculture /Farming

Employed inan off ice

Labourer /Industrialw orker

Trader / SelfEmployed

Employed inservicesector

% o

f o

wn

ers

wh

o's

ab

ilit

y t

o e

arn

or

save h

as

imp

roved India

Sri Lanka

Pakistan

Saving travel time and costs, checking price information, sale of minutes?Saving travel time and costs, checking price information, sale of minutes?

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But, sense of security is main perceived benefitAbility to act in an emergency is key

Ability to act in emergency

1 2 3 4 5

India (4.28)

Pakistan (4.48)

Sri Lanka (4.58)

Philippines (4.63)

Thailand(4.83)



improved

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BOP in summary

Almost everyone has access to a phone, but very low ownership

Benefits of ownership (direct access) are known Perceived as improving efficiency and economic benefit

in India

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To think about…

Telecom operators Leverage benefits of direct access

Security, friends & familyParticularly in India: cost saving + income

enhancing Increase awareness on efficiency economic gain

Convergence; collaborate on meaningful contentSMS based services vs. Bollywood movies

Innovations to enable cheaper calls e.g. any-amount prepaid balance top-ups

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C K Prahalad, The Fortune at the BOP “…if we stop thinking of the poor as a burden

and start recognizing them as value conscious consumers, a whole new world of opportunity will open up”

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Www.lirneasia.net Teleuse on a Shoestring LIRNEasia Media Workshop Singapore. 28 February 2007.

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