Liberalisation and User Driven
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1 Liberalisation and User Driven Innovation in Africa Sam Paltridge, OECD
2 Liberalisation enabled access growth Fixed and Mobile Subscriptions per 100 inhabitants in Low income countries Global telephone subs (fixed + mobile) 1 st Billion (1997) = 120 years. 2 nd Billion = 4 years 3 rd Billion = 3 years 4 th Billion = 2 years Source: OECD based on ITU
3 Net subscriber additions in 2007 Internet (Top 20) Mobile (Top 20) 1. China 2. USA 3. Brazil 4. Pakistan 5. Columbia 6. India 7. Iran 8. Russia 9. Germany 10. France 11. Vietnam 12. Canada 13. Egypt 14. Indonesia 15. UK 16. Mexico 17. Thailand 18. Nigeria 19. Poland 20. Venezuela 1. China 11. Mexico 2. India 12. Thailand 3. Pakistan 13. Turkey 4. Brazil 14. Argentina 5. Russia 15. Saudi Arabia 6. Indonesia 16. Vietnam 7. United States 17. Nigeria 8. Iran 18. Philippines 9. Egypt 19. Peru 10. Germany 20. Algeria = 7 out of 20 = 4 out of 20
4 Liberalisation helped create an enabling environment Tele-de ensity You don't look at GDP. You ignore that. Dennis O'Brien, CEO Digicel (quoted in The Economist September 2007) Wealth Jipp, A. (1963). Wealth of Nations and Telephone Density.
5 Creating innovation aimed at local requirements Mobile phone SIM card collar, virtual "geofence" using gps, when elephant approaches the virtual fence collar texts rangers. Safari Bima is a Personal Accident cover, providing a benefit of US$ 1300 in the event of DEATH or Permanent Total Disability resulting from an accident. 24 hour coverage can be activated by SMS at a premium of US$ 0.39 deducted from a customer s mobile phone credit.
6 J B A C I D Creating innovation aimed at overcoming local barriers E F G H
7 Location of innovation and take up rate no longer predictable Acceleration/deceleration measures the rate at which technology adoption exceeds (or falls below) expectations for the country s level of GDP. Rates have been averaged across three technologies: mobile phones, PC s, and internet users. Source: Intel Technology Metabolism Index
8 Time to change perceptions of what is possible OECD North America Mobile penetration mid 2008: United States 84%, Canada 62%, Mexico 68% Europe High roaming charges Korea 15.4% of mobile users use mobilesfor payments of products andservices (Dec 2007) Africa Gabon 1st African sub Saharan with 100%+ mobile penetration? sub Saharan Africa Borderless roaming for post paid and prepaid users across Africa for onnet calls (and Middle East) Kenya 30% of Kenya s 12 million mobile users were registered for M Pesa by mid 2008
9 Some emerging market segment rankings Opera Mini Browser (Top 10) Sept 2008 AdMob Mobile Advertising (Top 20) Sept Russia 2. Indonesia 1. United States 2. Indonesia 11. Brunei 12. Saudi Arabia 3. India 4. Ukraine 3. India 4. United Kingdom 13. Israel 14. Australia 5. China 6. South Africa 5. Philippines 6. South Africa 15. Canada 16. Kenya 7. United States 8. United Kingdom 7. Nigeria 8. Romania 17. Italy 18. Pakistan 9. Poland 10. Egypt 9. China 10. Malaysia 19. Bangladesh 20. France = 3 out of 10 = 6 out of 20
10 Send in the ICT anthropologists! ICT companies are increasingly seeking better ways to understand emerging markets For example observations of shared use lead to design innovation in areas such as multiple address books and cost trackers Jan Chipchase, Nokia Dawn Nafus, Intel Younghee Jung, Nokia Genevieve Bell, Intel
11 How does this work in practice User Innovation: Sente (Uganda) Market internalises financial transfers an informal way of sending Operator sees value (an and receiving money, cheaper externality) being captured by than other options users and wants to internalise. User buys prepaid airtime and Internalises by creating calls local lkiosk k operator in network of trusted agents location of recipient across a country, information Negotiation on commission goes direct to recipient, Kiosk operator tops up their transparent pricing, own phone with the credit, promotion, etc and after taking commission, Provides banking and payment pays cash to recipient services to the unbanked
12 From little things g Safaricom: 3.8 million customers in 18 months for M Pesa Kenya s banking industry took over 100 years to achieve this benchmark Competitive response in 2007 : Traditional banking sector tripled number of account holders 3.3 million to 10.1 million. Branches expand from 575 to 740 and mobile banking services launched World Bank estimates remittance flows to developing countries were $251 billion in 2007, up 11 percent on 2006 regulatory barriers to low cost cross border remittance services deserve examination. Each mobile user becomes an ATM with potentially profound development effects
13 For further information The Seoul Declaration for the Future of the Internet Economy Shaping Policies for the Future of the Internet Economy Global Opportunities for Internet Access Developments
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