Mobile penetration at BoP – An opportunity for telecentres

According to a recent study, 41% of the bottom of the pyramid (BoP) in Sri Lanka owns a phone, and among these 22% owns a mobile phone. The growth of the mobile phone sector since 2001 is phenomenal: 22% in Sri Lanka, 76% in Thailand, 60% in Philippines, and 23% in Pakistan.

In Sri Lanka, BoP consumers alone represent four million people who live below 2$USD a day. Despite the cost burden, they choose to purchase mobile phones because of convenience and the lack of other communication options. Another 31% (1.3 million people) are planning to buy a mobile phone before June 2008, according to the study.

But 28% are not planning to buy. According to LirneAsia, the group who conducted the research, this is the community who offers the opportunities for telecenters. Why..? majority ( 86%) of this 1.2 million population live in rural villages (where telecentres are setup). Though they are not willing to buy phones, a communication is a need for them.

How the telecentres can take the advantage?
> Offer attractive and affordable phone services (especially international calls)
> Promote alternate modes of communications (eg. Internet affiliated communication services – VOIP) – (26% in Sri Lanka and 71% in India, of the BoP unheard about Internet).

Factors to be aware of;
> Majority of this group is females (61% in Sri Lanka, 64% in Pakistan, 53% in Philippines)
> 86% of this non-phone buying community of Sri Lanka will be rural. (92% in Thailand).
> Average monthly income of majority would be less than 75US$
> Mean age of this group would be 40yrs.
> Majority of them in Sri Lanka was sensitive to privacy of their phone communication.

Based on the presentation "Mobile Penetration in Sri Lanka, Implications for Telecenteres" by Prof Rohan Samarajiva of LirneAsia, at Sarvodaya's National Telecentre Alliance Conference, August 31, 2007.

Leader-centric networks, are they sustainable?

Most of the grassroots telecentre networks are leadership driven, according to my observations. In Sri Lanka, most of the successful Nanasala are driven by charismatic leaders. In India, Bangladesh and Chile, I have observed the same character though conditioned by the socio-economic and cultural characteristics of the country. Originally, I thought it was my Sri Lankan (Sarvodaya-ness) culturally bound mind-frame created this insight. Yet, Maule Activa of Chile convinced me this character is common across the world.

What does that mean by Leadership driven / leader-centric-ness?

Leader has a vision and ambition. Vision builds the path, adjusting to the changing socio-economic and techno-cultural landscape. Ambition fuels the mission generating human and capital resources to translate that vision into action. Thus the telecentres / networks continue to survive.

These leaders maintain their circle of attention on;
> Maintaining a circle of influence with their target group (eg Community, Telecenter operators)
> Maintain visibility within their landscape
> Adapt strategic changes frequently (within Human & Financial resource base)
> Always in search for emerging opportunities

Still I could not find a logical reason to say they are not sustainable, as most of them run beyond the initial capital infusion (donor supported or slef-invested). But most of them do not demonstrate skills of articulating their success stories in the standard terms; balance books with consistent revenue, translating in-kind resources into economic terms, consistently generating convincing success stories in place of inspiring highlights.

Another quite common character to most of such leaders is, they fail to provide substantial revenue and welfare packages to their subordinates. That itself deprives their ability to infuse professional staff members, instead end up with constant struggle of keeping with, mostly, low quality staff.

But, as per the Peter Drucker, these leaders manage to get the best out of most human resources.

How genuine is the question...sustainability?

As I travel across the world – Asia, Africa, America, Europe – the common question raised – “Are the telecentres sustainable?”. It sounded, at times as a statement rather than a question..! I tried to analyse it, as it was quite intriguing. So following is my own self-questioning;

Who are the most common people raised this question?

Donors, consultants and policy makers!

What is their affiliation to telecentres?

There are two distinct types (a). Not deep in their experiences with telecenters, (b). closely affiliated with telecentre projects.

Why the group (b). ask this question?

>They are working in different thematic areas in the field of telecentres (eg. Project management, Monitoring and evaluations, content development, network facilitation, fund raising)
>They work often with NGO based telecenter networks. Most of these networks demonstrate the extra urge to ‘bend for money’ (fund raising vs capital-raising), which tend to dilute the feeling of economic sustainability.
> Not having seen systematic annual accounts, presenting internal revenue.
>They have never seen a convincing research study on the economic sustainability of telecentres / networks.

Are they really seeking an answer?

Not sure..!!!!

But the perception correction is very important.

Every thing under ‘One Roof’

They are unique because they offer very unfamiliar services from Telecentres; Solar panels, Clean water filters, HIV Counselling, Carrier counselling, Insurance and loan arrangements, all under one telecentre roof.

One Roof Inc. is a US based private company having subsidiaries in Chennai, India and Veracruz & Yucatana, Mexico. The company emerge as a ‘Social enterprise’, converting the experiences & credibility of community development organization – ‘World Corps’, founded in 1998. They had been engaged in youth entrepreneurship development and developing internet telecentres. Six World Corps staff members determined to invest private capital than philanthropic dollars to transform the non-profit World Corps to for-profit One Roof, since 2005.

As of now, there are 10 telecenters operational in India and another 9 in Mexico. They target to open about 3000 in India alone. One Roof offers a franchise model, encouraging the local investors to open up telecenters. Company provide brand name, MIS (Management Information System), capacity building and more importantly 9 marketable areas of services.

The niche area of One Roof is their ability to broker with enterprises who hardly considered telecentres as a potential outreach model. They had successfully engaged private companies to offer their products to the One Roof telecentres. For example, a Solar Panel system costs around US$30,000 in Mexico. Government has a grant scheme to support poor communities to install Solar panels, but the application procedures are too complicated. One Roof telecenters offer the ‘Grant application assistance’ to applicants. And they broker with private company to supply the Solar panels, to the successful applicants. One Roof telecentre charge a fee of US$20 - 40 for this service.

The business model seems to be working, as the services continue to offer in 19 telecentres opened so far in two countries. The telecentre model is expected to reach break even point in 6 months time. On the other hand, they believe these services are helpful to empower deprived communities, providing clean water, health, energy and educational services. Thus it is reckoned as a Social Enterprise.