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Teleuse@BOP

Mobile penetration in Sri Lanka:


Implications for telecenters

www.lirneasia.net
Rohan Samarajiva
Telecenter National Alliance
Sarvodaya HQ, August 31, 2007
Plan of presentation

† Methodology and background


† Almost everyone has access but not ownership
† Who owns and uses phones?
† Not getting connected
† So where do telecenters fit in to the picture?

www.lirneasia.net
Bottom of the Pyramid 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

SEC A, B & C

SEC D & E

www.lirneasia.net
Pakistan India Sri Lanka Philippines Thailand

Population (million) 165 1,095 20 89 64

Target population of study


77* 260 4** 41 15
(million)

*excluding FANA/FATA – Tribal Areas; **excluding N&E Provinces


Bottom of the Pyramid

Almost everyone has access, but not


ownership
Overall access is very high

† Most have used a phone in the last 3 months

South Asia South East Asia

Pakistan India Sri Lanka Philippines Thailand

www.lirneasia.net
Used phone in
98% 94% 92% 93% 95%
last 3 months
Phones are close at the BOP

† Most can get to a phone in less than 30 mins

Time it takes to reach nearest phone

100%
90%
% of non-owners at the BOP

80%

www.lirneasia.net
70%
60%
50%
>60 minutes
40%
45-60 minutes
30% 30-45 minutes
20% 15-30 minutes
10% 10-15 minutes
5-10 minutes
0%
3-5 minutes
Pakistan India Sri Lanka Philippines Thailand
< 3 minutes
Even in rural areas in Sri Lanka

Time to nearest phone: urban vs. rural: Sri Lanka

100%
90%
% of non owners at BOP

80% Betw een 45 - 60 minutes


70% Betw een 30 - 45 minutes
60% Betw een 15 - 30 minutes
50% Betw een 10 - 15 minutes

www.lirneasia.net
40% Betw een 5 - 10 minutes
30% Betw een 3 - 5 minutes
20% Less than 2 - 3 minutes
10%
0%
Urban Rural

Sri Lanka

† A small number (6%) in rural areas incur up to USD 0.50


(LKR 50) to get to a phone
But phone ownership was low in mid 2006, when survey
was done

† Just 41% of BOP own their own phone in Sri Lanka


„ 22% own mobiles; 23% own fixed; few have both
Ownership and GDP per capita (USD, PPP)

90% 9,000
81%
80% 76% 8,000

GDP per capita, USD (PPP)


70% 7,000
% at bottom of pyramid

64%

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59% 60%
60% 6,000

50% 5,000
38%
40% 4,000

30% 3,000
23% 22%23% 23%
18%
20% 14% 2,000
11%
9%
10% 7% 1,000

0% 0
Pakistan India Sri Lanka Philippines Thailand

Own a mobile Own a fixed phone (household)


Own nothing (but use something) Per Capita GDP PPP (USD)
BOP in South Asia mainly used public phones

† 30% of BOP in Sri Lanka used public phones most


frequently

Most frequently used mode


100%
% at BOP 90%
80%
70%

www.lirneasia.net
60%
50%
40%
30%
20%
10%
0%
Pakistan India Sri Lanka Philippines Thailand
Public phone 35% 71% 30% 8% 7%
Relative / friend's phone 10% 1% 12% 14% 6%
Neighbours phone 8% 7% 14% 7% 1%
Mobile of another household 12% 4% 6% 11% 5%
member
Household fixed phone 14% 9% 21% 4% 8%
Own mobile 21% 9% 17% 56% 73%
Why did they use their most-frequent mode?

† Convenience and lack of other options override cost

Reason for selecting primary phone (use): Sri Lanka

Accessibility in
Quality of any location
Other
connection 2%
6%
2%

Privacy

www.lirneasia.net
7% Accessibility at
any time
35%
Not users of public phones?
Lower cost
18%

Users of public
Lack of other
phones?
options
30%
Bottom of the Pyramid

Who owns phones? Why?

41%
of BOP in Sri Lanka
owned a phone
Why own a mobile phone?

† Convenience is key; privacy is more of a concern for


higher-income countries (highest in Sri Lanka)

Primary reason for choosing to own a mobile

1% 1%
100% 3% 4%
10% 7%
18% 16%
20%
% of mobile owners at the BOP

Other

www.lirneasia.net
80% 17%
7% 4%
6%
9% 5% It is cheaper
11%

60% For privacy

92%
So I don’t depend on
others
40%
71% Convenience: accessibile
66% 68%
64% at any time

20%

0%
Pakistan India Sri Lanka Philippines Thailand
Growth in mobile phone ownership at BOP since 2001

100%
%(cumulative) at BOP

80%
76%

60% 60%

40%

www.lirneasia.net
23%
20% 22%
9%

0%
before 2001 2002 2003 2004 2005 2006
2001 (Q1&2)
Year during which connection was obtained
Pakistan India Sri Lanka
Philippines Thailand

† 92% of mobiles at Sri Lankan BOP are prepaid


Mobiles used more often as the primary phone by males at
BOP in South Asia

80% 76%
70%
70%
% of mobile owners at BOP

60% 56% 55%

50%

40%

www.lirneasia.net
30%
30%
22%
20%
11% 12% 12%
10% 5%

0%
Pakistan India Sri Lanka Philippines Thailand

Male Female
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

100%

26%
80%

www.lirneasia.net
60%
91%

40% 74%

20%

9%
0%
South Asia South East Asia
Male Female
Bottom of the Pyramid

Not getting connected

1.2 million
from BOP in Sri Lanka will not
get connected between mid-
2006 & mid-2008
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 1.2 million


(28% of BOP)

Don't own
and don't
plan to buy a 1.8 million
(41% of BOP)

www.lirneasia.net
phone
Already own a
Potential phone
primary
market for
telecenters Plan to buy a
phone between
mid-2006 & mid-
2008

1.3 million
(31% of BOP)
What do we know about this group?

† The majority in Sri Lanka will be females


% of non-owners at BOP who do not plan to buy a

100%

90%

80%
52% 53% 56%
70% 64% 61%

www.lirneasia.net
60%
phone

Female
50%
Male
40%

30%
48% 47% 44%
20% 36% 39%

10%

0%
Pakistan India Sri Lanka Philippines Thailand
Among those not planning to buy phones, males are more
dependent on public phones, while women are more
dependent on other peoples’ phones

100%
12%
90% 22% 21%

80%
% of those not planning to buy a phone

49%
70%
64%
68%

www.lirneasia.net
60% 83% 83%
87% 86%
Other peoples' phones
50%
Public phones
88%
40% 78% 79%

30%
51%
20%
36%
32%
10% 17% 17%
13% 14%

0%
Male Female Male Female Male Female Male Female Male Female

Pakistan India Sri Lanka Philippines Thailand


What do we know about this group?

† The large majority will be rural


% of non-owners at BOP who do not plan to buy a

100%

90%

80%
47%
58% 54%
70%

www.lirneasia.net
60%
86%
92%
phone

Rural
50%
Urban
40%

30%
53%
42% 46%
20%

10%
14%
8%
0%
Pakistan India Sri Lanka Philippines Thailand
What do we know about this group?

† Poorer. The large majority will have monthly household


incomes below USD 75.81 (median) (~ LKR 7500)
% of non-owners at BOP who do not plan to buy a

100% 4% 7% 6%
13% 14%
90% 12%
15%
80%
25% 19%
70%

www.lirneasia.net
22%
39%
60% Above 3rd quartile
13% 79%
phone

Median-3rd quartile
50%
1st Quartile-median
40% Below 1st Quartile
67%
30% 57%
50%
45%
20%

10% 16%
0%
Pakistan India Sri Lanka Philippines Thailand
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

www.lirneasia.net
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)
Non-owners
Do not plan on buying Plan on buying

www.lirneasia.net
phone by mid-2008 phone by mid-2008

Mean monthly number of


calls 8.65 15.05
(incoming + outgoing)

Source: diary
Bottom of the Pyramid

So where do telecenters fit in to the


picture?
Currently few at the BOP use the Internet; even fewer know
what it is

Pakistan India Sri Lanka Philippines Thailand

Use the Internet 1.9% 0.3% 1.5% 8.8% 10.4%

Internet ‘un-awareness’
80%
7 1 .9 %
70%

www.lirneasia.net
60%
% of bottom of the pyramid

50%

40% 3 6 .0 % 3 5 .7 %

2 8 .6 %
30%

20%
1 4 .3 %

10%

0%
P a k ista n In d ia S ri L a n k a P h ilip p in e s T h a ila n d

N o t h e a rd o f In te rn e t

Next to the Philippines, highest level of knowledge. . .


Even less so in rural Sri Lanka

Pakistan India Sri Lanka Philippines Thailand


Use the Internet Urban Rural Urban Rural Urban Rural Urban Rural Urban Rural
3.0% 0.7% 0.2% 0.1% 2.1% 1.4% 12.8% 4.3% 22.0% 2.3%

Internet ‘un-awareness’
100.0%

www.lirneasia.net
77.9%
80.0%
67.0%
% at BOP

60.0%
48.7%
42.8%
40.0% Urban
29.6%
Rural
23.8% 23.5%
19.8%
20.0%
9.3% 9.6%

0.0%
Pakistan India Sri Lanka Philippines Thailand

Not a massive urban-rural gap in knowledge


In sum, telecenters should…

† To attract the phone-owners


„ Provide affordable services, especially international
„ At ~USD 0.20 (LKR 20), LK international calls are now
overpriced
ƒ Planned decreases since 2003 have not occurred because
of cartel behavior in the international market
ƒ But to make Internet-PSTN calls, telecenter operators will
need to have international credit/debit cards

www.lirneasia.net
ƒ Can operators offer discounted prices to
telecenters/bureaus?
† Collectively, we should develop more services that people can
use on the Internet (more useful e-gov, . . . )
„ And publicize them broadly
† Provide more than Internet, more than voice
„ Teach people how to use new services
In sum, telecenters should…

† To attract the non-owning segment


„ Provide a welcoming, caring environment
† Be female-friendly
† Cater to the needs of an older clientele
† Provide settings where conversations cannot be overheard; Internet
activity cannot be observed by others
ƒ Different from conventional telecenter user profile
† Difficult, but not impossible, to run these two marketing

www.lirneasia.net
strategies in parallel
„ Women are interested in international calls, so some overlap
„ This group also wants to learn how to use new services
† Can the telecenter become an “EZbuddy” (mobile payphone)?
„ Take the phone to the non-owning women?
„ Can telcos offer “Super 5 +2” type international prices on
“EZbuddy”?
International calls

† 71% of international calls at the BOP in Sri Lanka are made by


women
† 88% are made by rural people

100% 100%

90% 90%

80% 80%

70% 70%

www.lirneasia.net
% of international calls

% of international calls
71%
60% 60%
Female 88% Rural
50% Male 50% Urban

40% 40%

30% 30%

20% 20%
29%
10% 10%
12%
0% 0%
Sri Lanka Sri Lanka

Source: Diary