Thanks and it’s great to be here.A quick introduction to Movirtu: we are a leading provider of mobile identity management software to telecom operators. Our roots and current core business is to provide innovative cloud phone to base of the pyramid, or ‘webmail for mobile’.We are now turning to developed market use cases and applications such as reinventing roaming and integrating social and telephony networks. Currently we work closely with operators and this talk reflects some of the observations. This talk is entitled what the mobile industry in the West can learn from ice cream and African villages: bringing some of the learning that we have from tackling emerging market issues from a user point of view to a broader need. In brief summary, I argue that technology and communications innovation (and marketing) focusses on the new, new thing: better, faster, more. This has driven the frenzied pace of availability of over the top applications and device churn: billions of Iphone and Android apps (include exact number, and growth rate)This approach can stimulate short term consumer demand in highly developed markets. But value is being left on the table and huge markets are going under-served or even invisible. There are lessons in examples from meeting needs in developing markets, which have far scarcer resources available and where services have to be that much more valuable to the user to be justifiable.Value lies in services that meet a user's individual, local needs better, and recognise the context in which they are consumed. Critically, the providers of these services have considered packaging, distribution, marketing - the whole of the supply chain - from the user's point of view. As a result they have produced genuine improvements in meeting needs, not just technical innovations in search of users.
The View From Here: most innovation and media noise in telecommunications has focussed on the new, new thing: better, faster, more. There is a disproportionate focus on the West and leading technology but also leading users: for instance, 54 million hits for LTE networks and communication management. Where developing markets are mentioned it tends to be in the views of the ‘Twitter Revolution” We seealmost nothing on what the vast majority of users of 4 billion GSM handsets are doing.This has driven the frenzied pace of availability of over the top applications and device churn. However there’s both waste and opportunity here. Users almost never use beyond 10-15% of the capability of their phone, and even though device cycles have shortened, the usual window of time to discover new apps is in the first two weeks for 80% of users (source: TNS) . Therefore there is a lot of superfluous and therefore wasted innovation.While frenzied innovation can stimulate short term consumer demand in highly developed markets, how will the communications industry develop what will people really be willing to pay for, rather than just be replaced by over the top providers? Let’s look at examples in developing markets, where far scarcer resources available and where services have to be that much more valuable to the user to be justifiable.(Photo courtesy of creative commons, SJ Pinckney’s Flickr photograph of the New York skyline with the Empire State Building)
(Photo: Marcia Zoet for Bloomberg, available through Getty on creative commons)We’ll start with an example completely outside of communications, but in an equally complex area: fast moving consumer goods retail. A very good example of thinking differently about a challenge and using all resources comes from Nestle’s efforts in the Amazon jungle. To get to users’ real needs and serve them well, you need to understand what they really value and need, but also their context of use and the whole ecosystem in which they operate. What you see picturedhere is Nestle’s radical solution to a distribution and access challenge. Nestle was looking at the challenge of reaching base of the pyramid users in Brazil, many of whom live in tremendously remote areas without access to formal retail or distribution chains. Nestle realised the best way to do this was to set up their own combined retailer and distributor. Collaborating with NGOs and other partners, the Nestle barge now carries hundreds of products of both nutritional and health value. Nestle invested about half a million dollars in product variants and partnerships, to access a potential market of more than a billion in countries like Philippines and India. The products have been modified not just shrunk: nutrients such as iron, zinc, iodine and vitamin A address nutritional deficiencies. Sales also got a revamp: the direct channel of 7,000 saleswomen who peddle packs of Nestle goods door-to-door in Brazilian slums. This model has spawned imitators: for instance, BancoBradesco now offer floating banking services observing that these clients want what everyone else does. Value lies in services that meet a user's individual, local needs better, and recognise the context in which they are consumed. Critically, the providers of these services have considered packaging, distribution, marketing - the whole of the supply chain - from the user's point of view. As a result they have produced genuine improvements in meeting needs, not just technical innovations in search of problems.
How does this translate into the communications universe? This chart represents the .7 billion at the top of the pyramid for whom a mobile is a highly personal, can’t live without, spend as much as I like (multiple devices or handsets as well). People talk about “ 5 billion handsets in the world,” or “ there as a many SIM cards as there are people in the world,” : but this leaves out a vast group of people who are not yet connected, or who have inferior means of being connected. Europe is at 130% penetration while Africa is a 50% (and this is only SIM cards not devices). For people who cannot get connected one option is to share privately owned phones, or use public phone kiosk infrastructure. Of course people have been sharing phones since they were invented - think back to the role of the landline in your home as you were growing up, or a few years back when the first person in your family or peer group bought a mobile phone. We have started thinking of the phone as indispensible, and personal. But in the eyes of those who are not connected, the world looks very different. These people don’t necessarily want, or need, or more simply can’t afford a phone: but they want and need the benefits of telephony. The 3 billion at the base of the pyramid include those who are destitute: but there are also 1.3 billion or so current users whose needs have been ignored. Why are they invisible, and how can their needs be met?
Movirtu solved this by thinking about the market from the user needs out, and realising a fundamental weakness of the way communications companies look at the world. The telecommunications world tends to treat the SIM card as the unit. Its operating model is: one SIM card, one device, one person. In reality in much of the world it doesn’t work like that. Over a billion users borrow public or private phones because they cannot afford their own, or have other priorities ahead of buying their own. Even at the cheapest handset price affordability is still an issue and will continue to be. Heretofore these people are ‘invisible customers’ to the mobile firms: they have no identity. This is serious, but in markets like Africa and South Asia where the mobile isn’t just for communication, but for banking, emergencies, health and agricultural information, it’s actually critical.
It becomes easiest to understand through the story of real people. Her name is Germain and she is a farmer in Madagascar: she’s an active user of mobile phones but before Cloud Phone her children have no way of leaving her a message, and she has no way of sending them money or receiving any…
Germainhere is spending 10c on a call a friend asking her to send her $5 cash in an envelope with the driver of the bus that moves between the villages. The village phone or public phone operator plays an important role not just in access but in advocacy and education for users.Germain can now use the phone in the shop as is it was her own phone with her own phone number and her own message box and allows her to lead an individual social life. It will also enable her to receive mobile payments instead of having to pay large bank fees, or relying on cash being transferred in envelopes on the local bus…
What was the technological solution to the user need?Movirtu developed is the mobile equivalent of cloud computing. Instead of thin client computers that use shared resources, software and information on demand over the internet we have developed technology that enables the functionality of a mobile phone to reside in a telecom cloud and provide access not using the internet but using protocols that are build into every GSM handset since 1992. We developed a Cloud Phone that enables shared mobile phone usage on the most basic of handsets available in the market today without the need to download any client or software to the handset. Also, now that users have an identity they can send or receive messages Movirtu provides this system to the mobile service providers to enable them to serve the rural poor at a much lower cost than traditional handset or SIM only solutions and thereby helps people access jobs, reach family members and transfer money
Just as with the best of innovations, the cloud phone accesses real, fundamental human needs: not just an element of entertainment.
What kinds of services would operators invent if they began to think about how developed market needs were changing? Rather than just the people who have an Iphone or an android smartphone (still the 75% of the market) At the moment the context of mobile use has many frustrations. In cities, call and network quality are a challenge to maintain. The trap of success and plenty: mobile operators in developed markets focus on innovation in networks (to cope with explosion of traffic) and profusion of devices (easy to see when you look at number of articles on LTE, 4G etcvs new services) Users do not value infrastructure improvements-they take that as read, and pay for what matters to them: customised services that reflect their needs. For instance, managing multiple identities is a challengeas peoples’ lives become more complex, and an issue of affluence lives in multiple devices and fragmented information and access points…
These numbers tell the story of everyone in this room, and illustrate a whole set of as yet unmet needs, despite the ability of complexity of managing devices, short cycles for replacement, identities drifting in the cloud, adoption cycles for learning new devices, loss of people and memory, rotten roaming experience…all of these are basic human needs in developed markets, what my friend calls ‘developed market problems’ (but which still need a solution).
Imagine how these needs could be satisfied…in a way that was personal and contextually relevant. How could communications companies help people to be more in control? A more intelligent means of forwarding or controlling calls, which learns and understands patterns, could be brought to bear. Combining control and costs when roaming is incredibly important: 74% of consumers in a recent survey felt that their mobile operator would take advantage of ignorance when travelling (source: Kantar panel). However, managing multiple devices: either with one number, or as a group of devices is important-why does my Ipad have its own SIM card? Finally, the balance between being connected and accessible and being unconnected (not through network unavailability, but through choice) remains a huge opportunity.
Context driven personalisation is another big need. At the moment the app vendors are winning with augmented reality applications, but the telcos actually have far more information to bring to this. They need to go down to real user understanding: think about what people use, rather than how much they use in network terms. To a network, ‘service quality’ too often means network availability rather than utility to the user. Another interesting finding is that personalization has the ability to increase trust: The participants received personalized mobile content for restaurant recommendations. After four weeks, they reported their trust beliefs about personalized mobile services. We found that both types of personalization increase users’ trust, which has a positive effect on users’ intention to adopt mobile services. (from Shuk Ying Ho, Sarah Bull, Users’ Trust and Intention to Adopt Personalized Mobile Services’ JNIT Journal of Next generation Information Technology vol 2 2011Finally, there’s plenty of room at retail. In our Africa example earlier, the retail environment functions as a learning center: our mobile retailers underperform this function. A recent Yankee Group report looks at the last remaining frontier for mobile operators to differentiate: particularly around the area of the retail experience. Face to face conversation still has a lot to offer especially as routine transactions all move onto self service.