scaling mobile for development: a developing world opportunity

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Mobile for Development is a growing sector, with well over 1,000 live services now tracked by the GSMA across the developing world in verticals such as money, health, education and entrepreneurship. The problem is that while the sector has enjoyed continued growth in a number of services over the last 5-7 years, scale and sustainability have generally not been achieved. This work is designed to inform and add insight to help address challenges to mobile-enabled services that can help to facilitate service delivery in developing countries. This research has been developed by Mobile for Development Intelligence with support from the Rockefeller Foundation. This being the interim report, we overview and provide analysis on the barriers to scalability, while at the final report stage we will provide further analysis and communicate recommendations to stakeholders on how these can be overcome. Please visit https://mobiledevelopmentintelligence.com for more information.

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  • 1. Scaling Mobile for Development A developing world opportunityGSMA Mobile for Development Intelligence With support from the Rockefeller FoundationInterim reportApril 2013with support from

2. OverviewThe mobile phone holds the power of ubiquity. Across the developing world, around 40% of people now activelysubscribe to mobile services. Including those with access to a mobile despite not owning one would push theconnected population to well over 50%. However, while access to core services such as banking, electricity andsanitation is near universal in developed regions such as Europe and the United States, it is enjoyed by below 50%in several developing regions.This confluence underlines the opportunity held by Mobile for Development, which seeks to draw investment andpartnership to scale mobile-enabled services that can help to facilitate service delivery in the absence of traditionalmodes of infrastructure that would otherwise do this. Indeed, Mobile for Development is a growing sector, withwell over 1,000 live services now tracked by the GSMA across the developing world in verticals such asmoney, health, education and entrepreneurship. The problem is that while the sector has enjoyed continuedgrowth in the number of services over the last 5-7 years, scale and sustainability have generally not been achieved.This work is designed to inform and add insight to help address this challenge. It has been developed by Mobile forDevelopment Intelligence with support from the Rockefeller Foundation. Our collaboration involves a researchprocess and production of an interim and final report in April and May 2013 respectively, with a series ofstakeholder workshops also held to drive thought leadership in this area. This being the interim report, weoverview and provide analysis on the barriers to scalability, while at the final report stage we will provide furtheranalysis and communicate recommendations to stakeholders on how these can be overcome.with support from2 3. About usMobile for Development Intelligence is a freely available, online platform of mobile market and impact data, analysisand access to an active community of practice in Mobile for Development. We believe that open access to high qualitydata will improve business decision making, increase total investment from both the commercial mobile industry andthe development sector and accelerate economic, environmental and social impact from mobile solutions.For more information, visit www.mobiledevelopmentintelligence.com3 4. CorrespondenceFor more information, please forward direct correspondence to:Tim Hattthatt@gsma.comCorina Gardnercgardner@gsma.comAdam Willsawills@gsma.comMartin Harris mharris@gsma.com 4 5. 1. Market landscape: current and outlook 62. Impact of mobile on development sectors 353. Platforms, multiplicity, scalability and re-use 634. User-centric innovation 885. Appendix111 5 6. 1. Market landscape: current and outlook2. Impact of mobile on development sectors3. Platforms, multiplicity, scalability and re-use4. User-centric innovation5. Appendix 6 7. What you need to know Key findings Key implicationsDeveloping world is becoming connected at a rapid pace: nearly Harness the scale: while growth in the number of people using a40% of people in the developing world now subscribe to mobilemobile will moderate over the next 5 years, we still expect 130services, with subscribers having grown at over 10% a year since million new mobile services subscribers every year to 2017. This2007. Taking into account people who have access to a mobile,means an increasing total addressable mobile for developmentdespite not owning one, would push the connected population to market, uniquely positioned to use the mobile as an alternative towell over 50%traditional modes of service delivery Bridging the coverage gap is multi pronged: to bridge the gap will require both further network roll-out and alternativeNetwork coverage is key: despite the rise in penetration, there is solutions, such as by using green power for rural base stations.still a wide gap in coverage between urban and rural areas, with There is also a role for GSMA in lobbying for benign regulatorymobile penetration in urban areas up to double that of the rural environments, and community power, which can be used both topopulation aid mobile connectivity and access to utilities such as water and electricitySmartphones have grown, but are not the engines of growth: Featurephones and smartphones blur: it is increasingly importantsmartphones have grown to the point where we estimate just to consider the convergence in price and functionality betweenunder 10% of people own one in the developing world, compared higher end featurephones and lower end smartphones. M4Dto virtually no take-up in 2007. This is dominated by low cost service providers should be aware that as smartphone penetrationAndroid devices, which have steadily declined in price to below rises, while this opens a more personalised experience, it carries$100. We expect growth to continue over the next 5 years, but trade-offs, such as lower build quality and battery lifemainly for mid and higher income segments Mobile data is the common denominator: more people, includingDemocratising data: mobile operators and internet players are those at the low income end, will gain access to mobile data, eitherdeveloping more innovative ways to get data into the hands of on featurephones or smartphones. M4D services can tap into alower income segments, such as through hybrid data plans or even range of handsets and through a range of mediums (e.g. pre-7zero-cost mobile internet browsing 8. Mobile: the closest to ubiquity On an ownership basis, the mobile phone is the most widely owned communication device in thedeveloping world The PC is owned by a much smaller share of people, with tablets smaller still Access to a PC will be greater than ownership given device sharing, but the same is true of mobile, so thegap is unlikely to changePenetration of population (developing world)50%39%40%36%33% 30% Mobile30% 27%24%Smartphone20%PC Tablet10% 8% 5%5% 5% 2%3% 3%4% 1%2%0%2%3% 1% 1% 2% 0%0%0% 200720082009 2010 20112012 Note: mobile is proportion of people that subscribe to mobile servicesSource: GSMA-MDI estimates based on GSMA Wireless Intelligence, Strategy Analytics, Telegeography 8 9. Access to servicesWhile access to basic services such as electricity and sanitation is near universal in most developed markets, it remains a minority in developing regionsMobile access either through direct ownership or having access to a mobile in the household is more widespread, positioning it as a unique catalyst helping to increase access to these servicesWestern Europe Sub Saharan Africa*100%>90% >90% >90% 100% 83%80% 80% 65-70%Dont own, but have access tomobile in household (indicative)60% 60% 15-20% Ownership40% 40%49%20% 20% 26%33%31% 0%0%Mobile Financial Electricity SanitationMobile FinancialElectricity Sanitation services services*Mobile and financial services includes select countries Source: GSMA Wireless Intelligence, GSMA Mobile Money program, IEA, World Bank, GSMA-MDI Analysis9 10. High growth economies, even higher in mobile There are now around 6 billion people living in the developing world, six times that of the developed Incomes remain much lower, but have grown at 5% a year over the last 4 years Mobile adoption has grown even faster, but still over half the developing world population is yet to own amobile, leaving a large opportunity for the mobile industry, and in turn presenting social and economicopportunities in connecting low income segments (e.g. Mobile for Development sector)PopulationGDP/capita ($)Growth, 2007-11*760 15% 12.8%5.9650 41.8 10%5 Thousand/year 4044.9%Billion 305%3.2%3 2020%1.11104.1-0.3%0 0-5% DevelopingDevelopedDevelopingDevelopedDevelopingDeveloped GDP/capitaMobile ownership *Compound Annual Growth Rate. Population and GDP/capita are for 2011 Source: GSMA Wireless Intelligence, IMF, GSMA-MDI Analysis 10 11. Growth will come from the developing world Growth in active mobile subscribers inActive mobile subscriber growththe developing world has been very 25%strong the last 5 years at over 10%20% 16% 15% 13% 12% 11% 10%8% 8%6%5% 4% 3% 4%4%3% 5% 2% 2% 1%1% 1% 1% 1% 0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 DevelopedDeveloping Even though we expect growth to slow Humans that subscribe to mobile servicesto 2017, this still translates into around 4130 million new people subscribing to 2.82.93.0 32.52.7mobile services every year in the 2.12.3 Billiondeveloping world 1.7 1.9 21.5 By contrast, most mature markets have0.8 0.8 0.8 0.90.90.90.90.90.90.9 1reached saturation (something which willhappen in developing regions, but not0for several years)2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 DevelopedDeveloping Source: GSMA Wireless Intelligence, GSMA-MDI Analysis11 12. Penetration We draw an important distinction Developing worldbetween total penetration and active 140% 120% 110%Difference duesubscriber penetration104% 107% to: 100% 94% 99%86% - multi SIM80% 80%70% ownership Total penetration reflects all SIM cards51%60% - Inactive SIMs 60% 47%(for mobiles, tablets etc), but also counts 41%41% 43% 45% 46%- Other 40% 30% 33% 36% 39%connectedmulti-SIM owners (common in the24% 27%devices (e.g. 20%developing world to save money on calls)tablets,0%dongles)and some people who are registered but2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017are only very infrequent users of theirphone Developed world Difference between 134% 140%126% 129% 131% 132% developing and 118% 122% Active subscriber penetration reflects our 120%108% 112% developed world98% 104% due to:estimate for the number of people who100% 76% 77% 78% 78% 79% 79% 79% - Maturity of80%69% 72% 74% 75%actively subscribe to mobile servicesmarket60%- Ownership40%barriers (e.g. This is a more representative me

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