Mobile Telephony Growth at the Bottom of the Pyramid– What are the Key Drivers
Written by Administrator
Monday, 30 January 2012 20:59
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The massive surge in mobile subscriptions over the last few years is well documented. Of course the usage of any popular technology or social tool becomes more widespread over time, what is interesting about the rise in mobile subscriptions is the way those at the bottom of the pyramid have joined in this surge. These are the people who, until not so long ago were viewed in terms of unprofitable market sectors.


Some work we did last year looked at a number of case studies of M4D projects across various sectors and countries and as part of the findings made explicit what the key drivers of this pro-poor growth area are:

  • The liberalization of markets – Leading to falling prices and extended coverage. By 2009, 87% of the world's mobile markets were partially or fully liberalised.
  • Targeted policy and regulation – This has forced operators to improve their service achieving amongst other things certain licensing agreements that required universal (inc. rural) access.
  • The ambitious roll-out of mobile network infrastructure between 2000 and 2010.
  • Wide availability of pre-pay connections - In Africa, for example, 95% of subscribers are prepaid. Flexibility being highly attractive to those on low incomes.
  • The falling price of entry-level mobile handsets
  • The rise of low denomination top-up cards - In Sierra Leone for example, where 53% of the population live on less than USD1.25 per day users can top up and make calls for as little as USD 0.35.
  • The flexible forms of ownership and usage – such as the opportunity to automatically transfer units/credit to others.
  • The development and use of innovative business models, including infrastructure-sharing and unique distribution strategies – this particularly has increased the cost effectiveness of increasing coverage to rural and outlying areas.
  • Rapid economic development in some regions – Russia being a good example where between 2000 and 2008 GDP per capita rose from USD 1,254 to USD 9,119, and the penetration rate soared from 2.2% to over 140%.

These factors are more than just interesting to note. The same kinds of things still need to happen to increase access in many areas. Furthermore, these principles may well prove effective in improving other types of service provision, such as water or mobile banking services.


To read the full report commented upon here please follow this link - Mobiles for Development

Last Updated on Monday, 30 January 2012 21:17