Telecom use on a shoestring: Some findings from a study of the Financially Constrained in South Asia Ayesha Zainudeen, Rohan Samarajiva, Harsha de Silva,

Telecom use on a Telecom use on a shoestring:shoestring:

Some findings from a study of the Some findings from a study of the Financially Constrained in South AsiaFinancially Constrained in South Asia

Ayesha Zainudeen, Rohan Samarajiva, Harsha de Silva, Avanti Moonesinghe and

Ayoma Abeysuriya, with thanks to Sriganesh Lokanathan

www.lirneasia.netwww.lirneasia.net

Objectives of the Study Understand the use of telecom services by

the ‘financially constrained’ in South Asia To what extent do they use it? What benefits do they gain from use? How do they use it? Why they do what they do?


Survey SampleSurveys in India (2099) & Sri Lanka (1100)

Not representative of India and Sri Lanka as wholes

‘Users’those who have used a phone in the last three months

‘Financially constrained’ users:Monthly household income < USD100

Socio-Economic Classification (SEC) groups B,C,D & E

Mix of urban (37.5%) and rural (62.5%) respondents


Sri Lanka: 1100 respondents, 4 locations, 2 languages

Colombo - capital city, urban landscape

Badulla – rural, plantation economy, hill country

Jaffna – post conflict area, high migration

Hambantota – rural, tsunami affected


India: 2099 respondents, 7 locations, 5 languages

Dehradoon – agrarian economy, foothills of

Himalayas

Sivaganga – trading, fishing & agrarian economy

Kasargod – fishing economy

Neemuch - small arid area

Cuttack – poor area, high migration

Gorakhpur – agrarian economy

Mumbai – metropolitan, urban

landscape

‘Northern’‘Southern’


Survey ‘Mode’ of access:

fixed, mobile, ‘public access’ Reasons for selecting mode What does user do with it Ownership How telecom services are used Difficulties faced Use of Internet & telegrams


Ownership patterns by income

24

52

23

51 49

77

49

76

0

10

20

30

40

50

60

70

80

90

SL <50 SL > 50 India <50 India > 50

Own Don't Own

Doubling of phone ownership in the higher income bracket within the survey groups in both India and Sri Lanka

Sri Lanka India

< USD 50 > USD 50 < USD 50 > USD 50

Landline Only

2 20 19 37

Mobile Only

21 28 3 8

Landline and Mobile

1 4 1 6


How do the financially constrained communicate?

Fixed(49%)

Mobile(19%)

‘Public’ access (66%)

21%2%

11%

3%23%

3%

37%

Base: 3199


Mobile users talk longer than fixed users (incl. public phone users)

0

10

20

30

40

50

60

outgoing incoming outgoing incoming

fixed mobile

aver

age

num

ber

of

calls

per

mo

nth

Sri Lanka Northern India Southern India


Mode: still primarily public phones . . .

0

10

20

30

40

50

60

70

80

90

Sri Lanka Northern India Southern India

% o

f re

spo

nd

ents

wh

o u

se...

Public access

Fixed phone

Mobile

Bases :Sri Lanka =1100 North India =1195 South India = 904


Analysis based on two income levels within samples in some cases

0

10

20

30

40

50

60

70

80

90

100

Sri Lanka India

% o

f re

spon

dent

s

USD50-100per month

<USD50per month


Subscribers per 100 inhabitants (2004)

Sri Lanka India

Mobile 11.4 4.37

Fixed 5.14 4.07Source: ITU, 2004

Availability of service India & Sri Lanka almost same on fixed Sri Lanka higher in mobile but India gaining fast

Sri Lanka had mobile since 1989; India since 1994 India converted to CPP in 2003; Sri Lanka is still

RPP


Reasons for choosing mode: Cost on fixed; convenience on mobile . .

0

20

40

60

80social status

fashion

value added services

privacy

mobility

easy to use

easy to access

can use at any time

save on travel time and cost

clear connection

no other choice

control costs

economical to receive calls

economical to make calls

Fixed

Mobile

Public access

COST

CONVENIENCE Base: Fixed line users (1580)

SYMBOLIC


Some intra-regional variations Southern India differs from rest of sample: as

though on ‘steroids’ ‘Social status’ (57%) and ‘fashion’ (60%) rated

higher in (South) Indian locations for mobiles (SL: 7%, 7%)

Higher rating of ‘most economical way to receive calls’ on mobiles in Indian locations (72% vs. 35% in SL) Despite India being CPP since 2003!

More concern for mobility and privacy amongst Indian mobile users; ability to call any time is a big concern amongst Northern Indian mobile users


0

20

40

60

80

100keeping in touch (national)

keeping in touch (international)

send news & messages

receive news & messages

financial transactions

business transactions/enquiries

arranging logistics

access Internet

fixedmobilepublic access

BASES:Fixed: 1580Mobile: 616Public: 2106

Uses of telecom: It’s relationships…

INSTRUMENTAL

RELATIONSHIP MAINTAINANCE


Use of mobiles: relationships in SL; also some instrumental use in India

0

20

40

60

80

100keeping in touch (national)

keeping in touch (international)

send news & messages

receive news & messages

financial transactions

business transactions/enquiries

arranging logistics

access Internet

SLIndia

Bases:SL: 374India: 242


How fixed-line payment made? Higher reliance on finance in SL

0

10

20

30

40

50

60

70

80

90

100

full sample Sri Lanka India

% o

f fi

xe

d l

ine

ow

ne

rs

Had to get finance fromsomewhere elseI had the money (or someonein my household did

Base: full sample: 847SL: 212India: 647


Sri Lanka and India fixed connection charges compared Sri Lanka incumbent=USD 180 (min.) Sri Lanka entrants=USD 120 India incumbent=USD 16


0

10

20

30

40

50

60

70

80

90

100

Sri Lanka India

% o

f f

ixe

d li

ne

ow

ne

rs

Paid in installmentspaid full amount at once

Base: full sample: 847SL: 212India: 647

Slightly higher use of payment plans for fixed lines in Sri Lanka


How was mobile connection paid for? More relied on finance in India

0

10

20

30

40

50

60

70

80

90

100

full sample Sri Lanka India

% o

f m

ob

ile o

wn

ers

Had to get finance fromsomewhere elseI had the money (or someonein my household did

Base: full: 509SL: 322India: 187


Getting handsets: 10% got it free

0

10

20

30

40

50

60

70

80

90

100

bought it brand new bought it second hand received it as a gift /got it free

% o

f m

obile

ow

ners

Full Sample

Sri Lanka total

India totalBases:full:509SL: 322India: 187


Mobile is perceived to be the least affordable

0

10

20

30

40

50

60

70

80

90

100

fixed public mobile

mode of access

% o

f u

sers

wh

o f

ind

th

e c

ost

...

extr.high/v.high/highaffordable

Full sampleBasesfixed: 1580public: 2106mobile: 616

extremely high / very high / high

affordable


Mobiles perceived to be more affordable by Indian respondents

affordable

affordable

extr.high/v.high/

highextr.high/

v.high/high

0

10

20

30

40

50

60

70

80

90

100

SL India

Mobile

% o

f u

ser

s w

ho

fin

d t

he

co

st.

..

affordable extr.high/v.high/high

BasesSL: 374India: 242


0

2

4

6

8

10

12

Sri Lanka Northern India

Southern India India full sample

% o

f in

com

e s

pent

on

fixe

d co

mm

unic

atio

n

less than USD 50

USD 50 -100

Percentage of income spent on fixed: higher than norm

‘typical’ amount that people can afford to spend on telecom services


0

2

4

6

8

10

12

Sri Lanka Northern India

Southern India India full sample

% o

f in

com

e s

pe

nt

on

mo

bile

co

mm

un

ica

tion

less than USD 50USD 50 -100

Percentage of income spent on mobile: Much higher . . .

‘typical’ amount that people can afford to spend on telecom services


Cost perceptions: change patterns – fixed lines

0

10

20

30

40

50

60

70

80

Sri Lanka Urban Sri Lanka Rural N India Urban N India Rural S India Urban S India Rural

HighAffordable

0

10

20

30

40

50

60

70

80


Will increase usage

Won't change

Perceptions of affordability are higher amongst the respondents of the rural survey localities. This could be a result of two factors – the existence of an access deficit charge in rural India which ensures lower costs and also an implicit telecom/transportation trade-off where affordability is measured in terms of savings in cost and time incurred during travel.

Base: users of landlines only

Change in usage if costs were halved

Perception of current costs


Cost perceptions: change patterns - mobile

0

20

40

60

80

100


High Affordable

0

20

40

60

80

100


Will increase usage Won't change

Users of mobile phones tend to select it as a mode of communication primarily for the ability to make calls while on the move – thereby convenience overrides the cost factor when choosing to use a mobile. However despite this, the survey respondents indicate that costs are high and that they would increase usage if costs reduced by half.

Base: Mobile phone users

Base: users of mobile phones only




Cost perceptions: change patterns (PCO)

0102030405060708090


High Affordable

01020304050607080

Sri LankaUrban

Sri Lanka Rural N India Urban N India Rural S India Urban S India Rural

Will increase usage Won't change



Despite respondents in India perceiving current costs to be affordable, they are willing to increase phone usage if costs were halved.

Base: users of PCOs only


Difficulties in getting fixed connections: Only 20% complain of wait

0 10 20 30 40 50 60

difficulty in finding the money

had to wait for service to become available

lack of information on phone options

had to go to another town to get connected

waiting time of over 1 year

too much paper work

had to make many visits to office

had to pay bribes

wasn't treated well because didn't have 'contacts'

phone did not get connected immediately

no difficulties

% who faced difficulty

full sample

Base: 847(fixed owners)


Difficulties in getting a fixed line: More in India?

0 10 20 30 40 50 60


had to wait for service tobecome available

lack of information on phoneoptions

had to go to another town toget connected


too much paper work

had to make many visits tooffice

had to pay bribes

wasn't treated well becausedidn't have 'contacts'

phone did not get connectedimmediately

no difficulties


India

Sri Lanka

Base: SL: 212India: 647(fixed owners)


Difficulties after connection (fixed)

0 5 10 15 20 25 30 35

phone is often disconnected

repair time is too long

repair costs are too high

innaccurate billing

bill is not reader-friendly

have to travel far to pay bills

get disconnected without warning (red notice)

no difficulties


Base: 847(fixed owners)


Difficulties as users: Sri Lankans unhappy re dead phones . . .

0 10 20 30 40 50

phone is often disconnected

repair time is too long

repair costs are too high

inaccurate billing

bill is not reader-friendly

have to travel far to pay bills

get dis connected without warning (red notice)

no difficulties


India

Sri Lanka



Problems with connection (fixed)

0 5 10 15 20 25 30

Cannot get a call through

Poor audio connection (including crossconnections)

Weak signal

Line disconnection due to not paying the bill ontime

Customer service is not efficient

Call getting cut off (calls dropped)

% who face difficulty

full sampleBase: 847(fixed owners)


Difficulties with connections: Indians less happy?

0 5 10 15 20 25 30



Weak signal



Call getting cut off (calls dropped)


India

Sri Lanka



Obtaining a connection: Happier with mobile . . .

0 10 20 30 40 50 60 70 80


had to wait for service to become available

lack of information on phone options

had to go to another town to get connected


too much paper work

had to make many visits to office

had to pay bribes

wasn't treated well because didn't have 'contacts'

phone did not get connected immediately

no difficulties


Base: 509(mobile owners)


Even in getting mobile, a little more unhappiness in India . . .

0 10 20 30 40 50 60 70 80


had to wait for service tobecome available

lack of information on phoneoptions

had to go to another town toget connected


too much paper work

had to make many visits tooffice

had to pay bribes

wasn't treated well becausedidn't have 'contacts'

phone did not get connectedimmediately

no difficulties


India

Sri LankaBase:SL: 322India: 187(mobile owners)


Minor gripes about mobile use

0 10 20 30 40 50 60 70

phone is oftendisconnected

cannot make callsdespite having credit

some features don'talways work

Difficult to make/receivecalls

no difficulties


India

Sri Lanka

Base: SL: 322India: 187(mobile owners)


Using mobile: bad signals in SL; bad service in India

0 2 4 6 8 10 12 14 16 18 20



Weak signal



Calls dropped

have to go to locations where there is signal


India

Sri Lanka

Base: SL: 322India: 187(mobile owners)


Pre-paid v. post-paid mobile: Pre-paid by a mile in both countries

Base: all respondents

0

10

20

30

40

50

60

70

80

90

100

Less thanUSD5

More thanUSD5

Less thanUSD5

More thanUSD5

Sri Lanka India

% o

f m

obile

ow

ners

Pre-paid

Post-Paid

Bases: SL: 322India: 187


India: Prepaid cheaper than postpaid

Monthly Mobile Tariffs (Pre-Paid vs Post Paid)India

0

2

4

6

8

10

12

14

16

18

20P

repa

id

Pos

tpai

d

Pre

paid

Pos

tpai

d

Pre

paid

Pos

tpai

dLow User Medium User High User

US

$

SMSUsageRentalConnection


Sri Lanka: Prepaid cheaper than postpaid

Monthly Mobile Tariffs (Prepaid vs. Postpaid)Sri Lanka

0.00

5.00

10.00

15.00

20.00

25.00

30.00

Pre

pa

id

Po

stp

aid

Pre

pa

id

Po

stp

aid

Pre

pa

id

Po

stp

aid

Low User Medium User High User

US

$

SMS

Usage

Rental

Connection


More on basket methodology on Friday . . . The tariffs are monthly tariffs Low user basket has 25 minutes of use per

month Medium user basket has 75 minutes of use

per month High user basket has 150 minutes of use

per month


In conclusion Neglected, silent group of consumers What do regulators need to know? What can regulators do? What can operators do?

More findings on Friday 5-6 articles in preparation

Documents

Telecom use on a shoestring: Some findings from a study of the Financially Constrained in South Asia Ayesha Zainudeen, Rohan Samarajiva, Harsha de Silva,