January 22, 2013
Some call mobile phones the great equalizer. With one click, poor farmers in rural Uganda can have the same access to information as a rancher in Texas. Because of this, many expect the dramatic growth of phones in the developing world to bring boundless opportunities.
But according to a GSMA report released in October, we actually ended 2012 with about 2 billion fewer mobile phone subscribers than previously thought. GSMA’s estimate of 3.2 billion subscribers by the end of the year (growing at a rate of 16 % per year) is at odds with another report by the International Telecommunications Union (ITU) – one of the main public sources of information often cited for this data – that put the count at 6 billion and growing.
So who’s right? The difference lies in understanding what’s being counted. ITU totals the gross number of locked and unlocked SIM cards in circulation. By contrast, GSMA makes a distinction between the number of connections (its report cites 5.9 billion mobile connections, excluding inactive SIM cards and machine-to-machine communications) and the actual number of unique subscribers, because many people have more than one SIM.
If we go with the GSMA figure – and many in the technology-for-development (T4D) field do – then what does this mean for the mobile-based initiatives that have been developed for poor and underserved communities? How can organizations leading these efforts design products that take non-mobile users into account? And should they actively promote phone ownership to help more people access these benefits?
Here are a few things we’ve learned based on our experience delivering these services:
1. Build a mobile+ system
“Technology has positive effects only to the extent that people are willing and able to use it positively.” (Kentaro Toyama, Boston Review)
It’s exciting to see the jump in the number of poor people signing up for mobile-based services. In fact, some researchers have found that poor people will buy phone access before almost any other necessity. The phones provide the greatest benefit to the poor, however, when services are designed specifically to meet their needs and circumstances. For example, in both our mobile health initiative in Ghana and our microsavings program in India, we learned that it was common for the phone to be shared in the family or for a community to share a single phone. This made it difficult for the pregnant women and new mothers in Ghana to get the weekly calls from the Mobile Midwife service, and kept many Indian women from depositing money into their savings accounts regularly. Those with limited phone experience also had trouble using the phone’s features to navigate the systems on their own.
Improving those experiences demands different approaches to service design. One strategy is building human networks to bridge the gap for those without phones. A “trusted intermediary” equipped with a smartphone and data services can become a valued advisor to neighboring households. Grameen Foundation is already doing this in Uganda with Community Knowledge Workers who provide valuable information to poor farmers, and we have started working with the Ghana Health Service to use Community Health Workers in this role. In Uganda, some early, independent results have showed a 17 percent increase in farmers’ knowledge of fair market prices – which translates into real benefits for them and their families.
2. Design for the User not the Technology
This intermediary approach doesn’t necessarily address the needs of all users. For example, mobile savings clients need to safeguard their private financial information. So, do we fast-track these services for those who own or have easy access to phones and then focus later on those without access to phones? Or do we try to break the “one size fits all” mold and follow Ignacio Mas’s advice to change the product to accommodate the behavior of the client?
Adopting the latter approach takes more than simply changing or tweaking a product; it’s about researching and understanding the whole customer experience. For example, we discovered that many of the microsavings clients in India know only how to choose the green button to talk to whomever they’re calling, and to use the red button to hang up. As a result, they often ask their children to help them use the phone, including making deposits. Grameen Foundation is using trusted intermediaries from the microfinance institution we’re working with to help the clients conduct these transactions. This works best, however, when clients have long-standing relationships with an institution and have regular contact with the staff. For more remote locations or those situations where relationships are not as strong, we need different models. One option could involve using agents to conduct transactions and having clients simply confirm them with a PIN code.
3. Improve the Economics of Access
The new figures from GSMA also remind us that billions of poor people have no access to phones. In addition, as our work moves deeper into rural areas, we’re finding more people using older phones and systems that don’t provide the security they need for financial services, or the data capabilities that would improve their productivity.
So how should the T4D community respond? Do we work with telecommunications firms to help expand access to phones? Or should we focus on expanding options that don’t require phone ownership? Is there a third way?
Grameen Foundation is exploring ways to work with existing social enterprises and groups to provide mobile services to their members. We’re also looking at partnerships that can help increase the value of investing in a phone.
Another big question is, when does the cost of performing a transaction outweigh the benefits?
Some customers tell us that the cost is too high and the return is too uncertain – “information” alone is not sufficiently compelling to offset the cost of a text message or a data subscription. Others, especially those seeking mobile financial services, immediately recognize the benefit and adopt the services, though cost still remains a challenge for many.
The coming year certainly presents new opportunities and challenges for making mobile phones truly benefit the poor. Grameen Foundation is looking forward to seeing new innovations from across the industry.