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,

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  • Teleuse@BOPOwner-users, non-owner users and how they use phones at the Sri Lanka BOP

    Rohan SamarajivaSri Lanka Telecom Limited Media EventHabarana, 15 September 2007 www.lirneasia.net

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    Bottom of the PyramidEmerging markets are where the action isThe next billion...Untapped potential at the bottom of the pyramid

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    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?

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    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 mobileIn Sri Lanka?In Thailand?

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    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 wisdomRecent fiasco over mobile taxes probably driven by ignorance Industry needs to use representative surveys more and communicate the results more broadly

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    Plan of presentationMethodology and backgroundEveryone has access but not ownership Who owns phones? Why?Getting connectedNot getting connectedGender and telecomBeyond basic services at the BOP?

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    Methodology6 Focus Group Discussions per country (30)Random sample 8,689 F-to-F interviews; in 5 countries 50% diaryFinal outputQualitativeQuantitative

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    Bottom of the Pyramid (BOP) definedMany definitions of poverty, but this study uses SEC D and E; between ages 18-60SEC does not take into account income, but it is closely related to income levels*excluding FANA/FATA Tribal Areas; **excluding N&E Provinces

    PakistanIndiaSri LankaPhilippinesThailandPopulation (million)1651,09520 8964Target population of study (million)77*2604**4115

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    Teleuse@BOP ~9,000 sample survey in five countries India, Pakistan, Sri Lanka, Philippines & ThailandUnderstand telecom use at the BOP (= SEC Groups D &E) in Developing AsiaRepresentative of target populationSEC D&E, ages 18-60

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    Quantitative sampleBOP segment is representative of the BOP populationDiary respondents also representative of BOPSmall (non-representative sample) taken of SEC groups A, B & C

    SAMPLESouth AsiaSouth East AsiaTOTALPakistanIndiaSri LankaPhilippinesThailandTOP (SEC A, B & C)731652596923482,420BOP (SEC D & E)1,0813,3484811,0083526,269Total1,8124,0001,0771,1007008,689Error margin at 95 percent CI2.7%1.5%3.0%3.0%7.0%

  • Bottom of the PyramidEveryone has access, but not ownership

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    Overall access is very highMost have used a phone in the last 3 months

    South AsiaSouth East AsiaPakistanIndiaSri LankaPhilippinesThailandUsed phone in last 3 months98%94%92%93%95%

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    Phones are close at the BOPMost can get to a phone in less than 30 mins

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    Even in rural areasA small number (6%) in rural areas incur up to US 50 cents to get to a phone

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    But phone ownership is lowJust 41% of BOP own their own phone in Sri Lanka22% own mobiles; 23% own fixed; few have both

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    BOP in South Asia mainly used public phones30% of BOP in Sri Lanka used public phones most frequently

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    Why did they use their most-frequent mode?Convenience and lack of other options override costUsers of public phonesNot users of public phones

  • Bottom of the PyramidWho owns phones? Why?41%of BOP in Sri Lanka own a phone

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

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    Why own a fixed phone? Same reasons on fixed

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    Growth in mobile phone ownership at BOP since 200192% of mobiles at Sri Lankan BOP are prepaid

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    Older fixed connections; LK picked up after 2005

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

    Chart2

    0.30.11

    0.120.05

    0.220.12

    0.560.55

    0.760.7

    Male

    Female

    Sheet1

    MaleFemale

    Pakistan30%11%

    India12%5%

    Sri Lanka22%12%

    Philippines56%55%

    Thailand76%70%

    Sheet1

    00

    00

    00

    00

    00

    Male

    Female

    Sheet2

    Sheet3

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

    Chart1

    0.73579327470.2642067253

    0.08531956280.9146804372

    Male

    Female

    Sheet

    RegionCountCol %

    South AsiaGender of the person who spent money on home 1st mobile phoneMale10173.6%

    Female3626.4%

    South East AsiaGender of the person who spent money on home 1st mobile phoneMale258.5%

    Female26691.5%

    MaleFemale

    South Asia73.6%26.4%

    South East Asia8.5%91.5%

    Sheet

    Male

    Female

  • Bottom of the PyramidGetting connected 1.3 millionfrom BOP in Sri Lanka will get connected between mid-2006- mid-2008

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

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    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

    Monthly spend (LKR)Current take (VAT+2.5%)Orig. proposal (VAT+50+7.5%)Am. proposal (VAT+10%)2003595 (48%)50 (25%)40070140 (35%)100600105185 (31%)150800140230 (29%) 2001000175275 (28%)2501200210320 (27%)3001400245365 (26%)3501600280410 (26%)4001800315455 (25%)4502000350500 (25%)500 (25%)

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    The cost of getting connectedExpectation vs. affordability gap70% of non-owners at BOP in Sri Lanka believe that the cost to get connected will be greater than USD56Only 11% can afford more than USD50 Can get new mobile and connection for USD 33; lower with second-hand phone

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    Use cost: most can afford USD5 per month on communicationExpectations and affordability are in lineMost expect the monthly cost to be less than USD5, which most can afford to payAlso in line with ARPUs of mobiles (USD 3-4)

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    Most would use phone for emergency communication & keeping in touchs

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    Most new connections in Sri Lanka will be fixed phones

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    Affection for fixed higher in rural Sri Lanka

  • Bottom of the PyramidNot getting connected1.2 millionfrom BOP in Sri Lanka will not get connected between mid-2006 & mid-2008

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    The biggest barrier to ownership at the BOP is affordability31% plan to get connected between mid-2006 and mid-2008 BUT, 28% will not

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

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

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

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    What do we know about this group?Poorer. The large majority will have monthly household incomes below USD75.81 (median)

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    What do we know about this group?OlderThe mean age of this group will be 40 years of age Compared to mean age of mobile owners at BOP of 33 years

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    What do we know about this group?Make fewer callsThey make and receive a total of 8.65 calls per monthCompared 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

    Non-ownersDo not plan on buying phone by mid-2008Plan on buyingphone by mid-2008Mean monthly number of calls(incoming + outgoing)8.6515.05

  • Gender and telecom at the BOPFindings from T@BOP2

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    Access: Primary phone used in Sri LankaSmall gender divide in access exists at BOP in Sri LankaIndividually owned mobiles and public phones appear to be more male-dominated access modesUse of household fixed phones, and other peoples phones (within as well as outside of the house) is more often among femalesRatio 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/relatives phone).

    Ratios: f : mPublic phone1 : 1.2Neighbor/friend/relative's phone1 : 0.8Mobile of another household member1 : 0.5Household fixed phone1 : 0.8Own mobile1 : 1.8

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