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  1. Teleuse@BOP Owner-users, non-owner users and how they use phones at the Sri Lanka BOP Rohan Samarajiva Sri Lanka Telecom Limited Media Event Habarana, 15 September 2007

  2. Bottom of the Pyramid • Emerging markets are ‘where the action is’ • The next billion... • Untapped potential at the ‘bottom of the pyramid’

  3. Reality check . . . • What percentage of households had some kind of phone in 2004? • How many BOP households had some kind of phone in 2006? • Which Province was second highest in phones/households in 2004? Third? • Which province was second highest in computers/households in 2004? • Did fixed phones outnumber mobile phones or vice versa at the BOP in 2006? • What percentage of the BOP made or received international calls in 2006? • What percentage of people making international calls were women?

  4. Reality check . . . 8. What percentage of people had made/received a call in past three months, when approached by survey personnel in mid 2006? 9. Do women talk longer than men on the phone at the BOP in Sri Lanka? 10. Do women use the phone for different purposes than men in Sri Lanka? • What is the dominant purpose for men? • What is the dominant purpose for women? 11. Who makes the decision on whether a woman gets a mobile • In Sri Lanka? • In Thailand?

  5. Answers? • Not all the right answers in this presentation; some are from the 2004 Consumer Finance Survey of the Central Bank • The importance of challenging common knowledge/popular wisdom • Recent fiasco over mobile taxes probably driven by ignorance • Industry needs to • use representative surveys more and • communicate the results more broadly

  6. Plan of presentation • Methodology and background • Everyone has access but not ownership • Who owns phones? Why? • Getting connected • Not getting connected • Gender and telecom • Beyond basic services at the BOP?

  7. Methodology Qualitative Quantitative 6 Focus Group Discussions per country (30) Random sample 8,689 F-to-F interviews; in 5 countries 50% diary Final output

  8. SEC A, B & C SEC D & E Bottom of the Pyramid(BOP)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 *excluding FANA/FATA – Tribal Areas; **excluding N&E Provinces

  9. Teleuse@BOP • ~9,000 sample survey in five countries • India, Pakistan, Sri Lanka, Philippines & Thailand • Understand telecom use at the BOP (= SEC Groups D &E) in Developing Asia • Representative of target population • SEC D&E, ages 18-60

  10. Bottom of the Pyramid Everyone has access, but not ownership

  11. Overall access is very high • Most have used a phone in the last 3 months

  12. Phones are close at the BOP • Most can get to a phone in less than 30 mins

  13. Even in rural areas • A small number (6%) in rural areas incur up to US 50 cents to get to a phone

  14. But phone ownership is low • Just 41% of BOP own their own phone in Sri Lanka • 22% own mobiles; 23% own fixed; few have both

  15. BOP in South Asia mainly used public phones • 30% of BOP in Sri Lanka used public phones most frequently

  16. Why did they use their most-frequent mode? • Convenience and lack of other options override cost Not users of public phones Users of public phones

  17. Bottom of the Pyramid Who owns phones? Why? 41% of BOP in Sri Lanka own a phone

  18. Why own a mobile phone? • Convenience is key; privacy is more of a concern for Sri Lanka (highest) and Philippines

  19. Why own a fixed phone? • Same reasons on fixed

  20. Growth in mobile phone ownership at BOP since 2001 • 92% of mobiles at Sri Lankan BOP are prepaid

  21. Older fixed connections; LK picked up after 2005

  22. Mobiles used more often as the primary phone by males at BOP in South Asia % of mobile owners at BOP

  23. Who decides female ownership of phone at BOP? (Patriarchy lives in South Asia!) Who makes the decision to obtain a mobile (among female mobile owners)? % of female mobile owners at BOP

  24. Bottom of the Pyramid Getting connected 1.3 million from BOP in Sri Lanka will get connected between mid-2006- mid-2008

  25. 31% of the BOP in Sri Lanka plan to get connected between mid-2006- mid-2008 • This means that by mid-2008, 72% of BOP will own their own phone, unless actively hindered Prospective owners

  26. Hitting the poor (Hutch ARPU = LKR 311; Dialog prepaid ARPU = LKR 414; Dialog postpaid ARPU = LKR 1,709) Understated because tax on tax not calculated

  27. The cost of getting connected…Expectation vs. affordability gap • 70% of non-owners at BOP in Sri Lanka believe that the cost to get connected will be greater than USD56 • Only 11% can afford more than USD50 • Can get new mobile and connection for USD 33; lower with second-hand phone

  28. Use cost: most can afford USD5 per month on communication • Expectations and affordability are in line • Most expect the monthly cost to be less than USD5, which most can afford to pay • Also in line with ARPUs of mobiles (USD 3-4)

  29. Most would use phone for emergency communication & keeping in touch s

  30. Most new connections in Sri Lanka will be fixed phones

  31. Affection for fixed higher in rural Sri Lanka…

  32. Bottom of the Pyramid Not getting connected 1.2 million from BOP in Sri Lanka will not get connected between mid-2006 & mid-2008

  33. The biggest barrier to ownership at the BOP is affordability • 31% plan to get connected between mid-2006 and mid-2008 • BUT, 28% will not

  34. What do we know about this group? • The majority in Sri Lanka will be females

  35. Among those not planning to buy phones, males are more dependent on public phones, while women are more dependent on other peoples’ phones

  36. What do we know about this group? • The large majority in Sri Lanka will be rural

  37. What do we know about this group? • Poorer. The large majority will have monthlyhouseholdincomes below USD75.81 (median)

  38. What do we know about this group? • Older • The mean age of this group will be 40 years of age • Compared to mean age of mobile owners at BOP of 33 years

  39. What do we know about this group? • Make fewer calls • They make and receive a total of 8.65 calls per month • Compared to the average for the Sri Lankan BOP of 23.2 (compared to those who plan to buy a phone who make and receive a total of 15.05 calls per month) Source: diary

  40. Gender and telecom at the BOP Findings from T@BOP2

  41. Access: Primary phone used in Sri Lanka • Small gender divide in access exists at BOP in Sri Lanka • Individually owned mobiles and public phones appear to be more male-dominated access modes • Use of household fixed phones, and other people’s phones (within as well as outside of the house) is more often among females Ratio of 1 indicates equal access between males and females. Ratio > 1 indicates males use access mode more often as primary phone (e.g. mobiles). Ratio < 1 indicates females use access mode more often as primary phone (e.g. neighbor/friend/relative’s phone).

  42. However, far larger divide exists in India and Pakistan, esp. on mobile, and public phones in Pakistan

  43. Access almost equitable in Philippines and Thailand

  44. Little urban-rural differences in Sri Lanka except on individually owned mobiles • Gender divide on mobile is most severe in rural Pakistan (ratio of 1 : 4.8) and rural India (ratio of 1 : 3.9) • Highest reliance on other peoples’ phones among women in rural Pakistan • Public phones hold strong among women even in rural India

  45. Access: Urban vs. Rural (India and Pakistan only)

  46. Use: average number of calls per month Total (in+out) • Only country where differences were significant (95% confidence interval) was Pakistan

  47. Use: Average call duration (mins) • NB, minutes recorded were an approximation (e.g., ‘1 min or less’, ‘2-3 minutes’, ‘about 5 mins,’ ‘about 10 mins’…) • Only country where differences between men & women were significant (95% confidence interval) was Pakistan

  48. Use: Purpose of calls • Significant differences: • Pakistan: male vs. female use of the phone to keep in touch and for business purposes (95% confidence interval) • India: male vs. female use of the phone for business purposes (90% confidence interval)

  49. Bottom of the Pyramid What about “beyond-basic” services, including IDD, at the BOP?

  50. Currently few at the BOP use the Internet; even fewer know what it is Internet ‘un-awareness’ Next to the Philippines, highest level of knowledge. . .