Dr  Hans  Wijayasuriya   Director/Group  Chief  Execu2ve  Dialog    Axiata  PLC  

&  Chief  Execu2ve  Officer  Axiata  Digital  Services,  Axiata    Group  

EXPLOITING THE DIGITAL STORM INCLUSIVE CONNECTORS TO CAPTURE EMERGING MARKET OPPORTUNITY

THE DIGITAL STORM

2

In 2020 there will be >50,000 MN devices connected to the internet

9,000 50,000

...5,000MN Internet Users

2010 2020 2000 2010 2020

394

2,000 5,000

A middle class citizen will have 10 devices connected to the Internet

Resulting in 50 times growth in the digital universe of People Businesses and “Things”

TV

2 3 10 1

PC Mobile Other X 50 2020 2010

0.8 ZB 40 ZB

ASIA ON THE MOVE IN THE EYE OF THE DIGITAL STORM?

54% of this middle class will live in Asia 67% of new employment will be created in emerging Asia (c.f. 1.8% in Europe)

3

By 2020 will be 40% bigger from an

economic point of view

43% of the economic weight will be Asian

52% of the world population will be middle class

A Smart Phone will be Affordable to 54% of Asians by 2015 and >80% by 2020

0.5  Bn

2  Bn

4  Bn

DIGITAL SERVICES WILL BE IRRELEVANT UNLESS THEY CAN TRANSFORM LIVELIHOODS

Popula2on Individual  Annual  Income

<  $  3,260

$  3,260  -­‐  $  20,000

>  $20,000

Source:  www.worldhunger.org

4 ADVANCING DIGITAL ASIA

THE OPPORTUNITY & CHALLENGE

The  Asian  Region  will  Con2nue  to  be  Challenged  by  Economic  Dispari2es  and  Socio-­‐Economic  Divides  in  terms  of  Equal  Access  to  Basic  Rights  such  as  Educa2on,  Health  &  Access  to  Informa2on  

36% of South Asians and 21% of South East Asians Live on

$1.25 per Day

ASIA - DIVERSITY AND DISPARITY WEALTH COEXISTS WITH ACCESS ASSYMETRIES

The Asian region is characterised by vast disparities – between sub-regions and countries as well as within countries. Singapore is ranked 18th under the UN Human Development Index (HDI), whereas Bangladesh and Pakistan are ranked 146th*).

On average South East Asia’s Income Gini Coefficient is >40… (UNDP Human Development Report 2013) *2013  UNDP  Human  Development  Index  (HDI):  A  composite  index  measuring  average  achievement  in  three  basic

dimensions  of  human  development—a  long  and  healthy  life,  knowledge  and  a  decent  standard  of  living.

Top of Pyramid: (TOP) Incumbent High-End Consumer Segment

Middle and Base of Pyramid (MOP/ BOP) High Growth Consumer Segment

λ  Heterogeneous λ  Mass Market

-  Global Influences -  Homogenous -  Cosmopolitan

Rapid Expansion

THE CUSTOMER SPACE DUALITY IN EMERGING ASIAN MARKETS

ToP MoP  &  BoP

The “Customer Space Duality Will Pervade Structural and Behavioural Dimensions of the Digital Opportunity”

Value Adaptation

•   Inclusive •   Lower  Cost •   Relevant

• High  Affinity

DIGITAL TRANSFORMATION BI-FOCAL OPPORTUNITY IN EMERGING MARKETS

Digital Transformation Can Bridge Across Asymmetry Flatten the Economic Pyramid & Create a More Equal World

Digital Empowerment

Digital Transformation

Value Addition

•   Cosmopolitan  Segments  

• Exclusive  &  Premium   •   High  End    Innova2on

Digital Bridge Equalizing  Asymmetries  in  Knowledge,  

Informa2on,  Commerce  &  Access  to  Basic  Rights

Digital Advancement

DIGITAL SERVICES DEFINED

SOCIETAL/ECO-SYSTEM CONNECTORS AT THE CORE

Connectivity & Technology

Digital Economics, Digital Democracy, Plurality, Ubiquity

Digital Society

Digital Enterprise (D

igita

l Con

sum

ptio

n)

DIGITAL SERVICES Connect & Interlink

• Commerce

• Payment

• Social Media

• Advertising

• Entertainment

• Health

• Education

Dig

ital M

oney

& P

aym

ent

Inter- Enterprise Engagement & Consumption

Intra - Society Engagement & Consumption

(Dig

ital E

ngag

emen

t)

INTERLINK ENCOMPASSING DIGITAL ENTERPRISES AND DIGITAL SOCIETIES

INCLUSIVE DIGITAL SERVICES

4 CRITICAL SUCCESS CRITERION IN EMERGING MARKETS

Affinity Personalisation,

Experiential Alignment &

Trust

Affordability Total Cost of Service & Minimum Cost of Access

Applicability Context based Offerings which have high Relevance

Availability Immediacy & Reach

The Four A’s of Inclusive Market Creation

Leveraging Advanced Technologies to Deliver Inclusion & Robust Inter-linkages Between Digital Societies and Digital Enterprises will Maximise Socio-Economic Development

Modern Technologies can be Leveraged to Drive Inclusive Market Creation

DIGITAL SERVICES ARE (ALSO) OFF-LINE TO ONLINE TRANSFORMERS

Consumption & Engagement

Consumption & Engagement Offline

ONLINE Eco Systems

Physical Electronic

Offline Online

Asymmetries Inclusion and Parity

EMERGING MARKETS

Digital Services should also Seamlessly Combine

In the Emerging Market Context, the Off-Line World is Fraught with Asymmetry

Digital Services will Trend Towards a Digital Democracy as Opposed to Digital Divide

The Last Mile is a Key Determinant of Inclusivity

‘LAST MILE’ FULFILLMENT EXPERIENCE DETERMINES INCLUSION

Degree of Inclusion : Last Mile Challenged Against 4As (Affinity, Affordability, Applicability, Availability).

Customer Facing Interface

The ‘Last Mile’ is the Customer Facing Service Touch point & Includes the service eco-system and support system (including intermediaries)

Inclusive FULFILLMENT

is a key Determinant of

Trust & Adoption

Services

Citizens

Physical (Offline)

Electronic (Online)

Mobile (Online)

Three Last Mile Scenarios

e-Service Last Mile

M-Service Last Mile

Physical

INCLUSION DIMENSIONS OF E AND M-SERVICE LAST MILE

E-Powered E-Centric Service Delivery (Selective/ e-Infra Dependent)

M-Powered Evolved Mobile Digital Services (Inclusive/ Transactional)

Physical (In person service delivery)

m-Last Mile •  Inclusive •  High Immediacy •  Affordable & Trusted Fulfillment •  Location Sensitive •  Personalised •  Lower Transaction Cost e-Last Mile •  Superior Experience •  Urban Centric •  Shared Access •  Higher Transaction Cost

DIGITAL INCLUSION IN EMERGING MARKETS

M-LAST MILE POTENT BUT FRACTURED

Mobile Connectors to Scale Digital Services • Seamless Authentication & Validation • Robust Links – ToP, Enterprise, BoP • Relevant Apps for BoP and MoP • Seamless Payment and Fulfillment • Higher Affinity Customer Access Mediums • Contextual Ecosystems at MoP and BoP

Realise Mobile Digital Services Opportunity

e-Service Last Mile

M-Service Last Mile

Physical

“Experience, Relevance, and Contextual Ecosystems - Key Focus Areas to Cure Affinity and Applicability Deficits of Mobile Digital Services”

…But Mobile Digital Services have not delivered to potential. (E.g. Mobile share in D-Commerce is circa 10%) Similar Deficit in M-Ads Entertainment and Payments

FRACTURED INTERFACE BETWEEN DIGITAL & MOBILE WORLDS

PERFORMANCE DEFICIT UNCOVERS OPPORTUNITY

…Mobile Penetration in

Asia exceeds fixed internet by

6-8X

is the Primary Internet Access Medium

Mobile Outstrips Alternatives vis a vis Basic Information Exchange

But Lags in Digital Engagement – Leaves 90% Untapped

Comparison with Developed Countries Promises Circa

100X Potential

15

SCALABLE MOBILE CENTRIC API FRAMEWORK CAN BRIDGE FRACTURED MOBILE LAST MILE EXPERIENCE

MOBILE.CO RICH DATA ASSETS CAN ORCHESTRATE NEXT GENERATION ENGAGEMENT

> 7bn

>3.5bn

>$1.16Trn

Connections

Users

Revenue Industry

is the Primary Internet Access Medium

Possess  the  required  assets

Real  Time    Rich  Data  Assets

16

LINKING THE DIGITAL WORLD TO THE MOBILE WOULD REQUIRE OPEN NETWORKS and API’S

Global  Digital  Commerce

Local  Digital  Commerce

Long  Tail  User  Generated  Commerce

Operator  API’s

Mobile.Cos & Inclusive APIs can Orchestrate Secure Mediation & Positive Engagement Experience

Consumers

Payment  Channels

SMS,  RCS-­‐E,  MMS

Loca2on Device,   Customer  profile

M2M Complex  Event/Ac2vity

Key  Partnerships

“Plug  &  Play  APIs  can  create  a  Digital-­‐Mobile  Inter-­‐linkage  which  can  create  Explosive  Inclusion  &  Enhanced  Engagement  

Experience”

Social  and  Empowerment

Secure  ID Privacy

λ Regulation λ Verification λ Trust Framework

ORCHESTRATING MOBILE INCLUSION (& INTRUSION) KEY PRINCIPALS

Sacheted - MicroX Service Fragmentation

Proportionality

Experience Translation Enterprise, ToP, BoP/MoP

Immediacy - In time and space

Engagement - Multi-Media (Voice, Text, Data, Video)

Real Time, Omnipresent, Personal & Private

AFFORDABILITY ENHANCEMENT API FRAMEWORKS SHOULD FACILITATE SERVICE FRAGMENTATION

Buy Micro & ‘No Commitment’ Psyche

Affinity to ‘Cash’ and ‘ Liquidity’

Minimise Gap in Time Between Payment and Consumption

Variability in Cost (relative to) Volume, Quality, Spend per period

High Volume Consumer Key Triggers

Addressed Through Sachet Marketing Principles

Digital Sacheting - “Breaking the Bulk”

Micro-X (Voucher, Insurance, Finance, ……)

Contextual Fit of the Payment Instrument vis Consumption Model will Determine Viability

Citizen Empowerment

TRANSLATING DIGITAL ECOSYSTEMS AT TOP AND BOP KEY DELIVERBALE FROM API FRAMEWORKS

e- Last Mile

m- Last Mile

Transaction fulfilment

Transaction fulfilment

Sustainable Digital will span both e and m fulfillment & Link Enterprises at the ToP to the MoP and BoP m-Implementation will drive a broader pool of consumption

Mobile Money P2P transfers, Institutional and OTC Payments USSD, APP, NFC Interface

>1.3mn  Subscribers

Micro Insurance Daily Payment & Coverage Rs.1mn to 5mn for Rs 1 and 5 per day. SMS, USSD, M-Money and Operator Billing Fulfillment

Most  Subscribed  Accident  Policy  in  Sri  Lanka  >225K  Subscribers

SERVICE INNOVATION CENTRED ON MOBILE FULFILLMENT SRI LANKA MOBILE MARKET CASES

Digital Vouchers Gift Voucher via SMS USSD Product Code. Fulfillment via SMS, USSD, APP, Operator Billing, Loyalty Points, Mobile Money

>11,000  Vouchers  Sold  From  Launch

API Rich Application Development Environment with plug and Play Connectors to SMS, USSD, Location, ID, M-Ads, Mobile Money & Operator Billing.

1,500  Applica2ons,  350K  Users

Medical Appointments Booking & Payment System. Fulfillment via Web, Call Centre, IVR, Operator Billing, Mobile Money, .

INTERNET PAYMENTS (Via Mobile Money) Mobile Money payment with two factor authentication

Largest  Distributor  of  Medical  Appointments  >30,000  pm

E & M Education Secondary, Tertiary, Language and Vocational Education Web, SMS, USSD, Mobile Money and Operator Billing Fulfillment

>23,000  subscribers

SERVICE INNOVATION CENTRED ON MOBILE FULFILLMENT SRI LANKA MOBILE MARKET CASES

>100  Web  Sites  

of  the  global  ci<zen Digital  Empowerment

INFORMATION SOCIETY will bridge ToP and BoP

Global-Local, Enterprise-Citizen & ToP-BoP INTERLINKAGE WILL SPAWN INCLUSIVE DIGITAL

SOCIETIES

Mobile can Accelerate the Establishment of Citizen Driven Digital Societies which Span the Socio Economic Pyramid, are Inclusive and Empowering

Inclusive Digital Commerce will Create a more equal (Commercial) World &

Sustainable Socio-Economic Development

SUSTAINABILITY CHALLENGE ? SHARED VALUE CREATION DRIVES EXPANDED CONSUMPTION

Shared  Value

Crea2on

Social

Economic

Environmental Dev

elop

men

t

ConsumpIon

Diligent Focus on Net Footprint and Environmental Impact will ensure Shared Value Creation sums to Sustainable Development

CONVERGENCE ACROSS E, M, ToP and BoP HOLISTIC SOCIO ECONOMIC DEVELOPMENT

MULTIPLIER

CONVERGENCE

E and M Convergence via Smart Devices

ToP and BoP Convergence via Information Societies

CONSUMER SURPLUS

Productivity + Efficiency Dividend Delivered Via Digital Empowerment of Citizens and Enterprises can be as high as 4 x Direct Investment

INDIRECT CONTRIBUTION

Thank  You