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Teleuse on a Shoestring
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Teleuse on a Shoestring Presentation Transcript

  • 1. Teleuse on a Shoestring 2: Poverty reduction through telecom access at the Bottom of the Pyramid Harsha de Silva and Ayesha Zainudeen, LIRNE asia Colombo, 6 December 2006 7th Annual Symposium on Poverty Reduction
  • 2. Agenda
    • Definitions
    • Logic
    • Untruth, truth, what?
    • Issues
    • Access and poverty reduction?
    • Questions
  • 3. Agenda
    • Definitions
    • Logic
    • Untruth, truth, what?
    • Issues
    • Access and poverty reduction?
    • Questions
  • 4. definition Bottom of the Pyramid
    • SEC D and E
      • Respondent : teleuser between ages 18-60
    *excluding FANA/FATA – Tribal Areas; **excluding N&E Provinces 15 41 4** 260 77* Target population of study (million) 64 89 20 1,095 165 Population (million) Thailand Philippines Sri Lanka India Pakistan
  • 5. definition Access
    • Universal access
      • Community access
      • Household access; universal service
    • ITU Maitland Commission (1998)
      • In the developing world; within an hour’s walk
    • More recent definitions; in 30 minutes walk
  • 6. Agenda
    • Definitions
    • Logic
    • Untruth, truth, what?
    • Issues
    • Access and poverty reduction?
    • Questions
  • 7. logic Telco access, poverty, inequality
    • Lack of access  poverty
    • Theory: improved access  less poverty?
    • Telecom liberalization  improved access
      • Less poverty; greater equality?
      • Less, same or more poverty; greater inequality?
    • What, on the ground?
  • 8. Agenda
    • Definition
    • Logic
    • Untruth, truth, what?
    • Issues
    • Access and poverty reduction?
    • Questions
  • 9. untruth, truth, what? Numbers we use…
    • Sri Lanka
      • CBSL CFS 2003-04: access 24.5%
      • TRCSL (2006 June): teledensity 29.1%
    • How meaningful?
  • 10. untruth, truth, what? While ownership is low… Thailand Philippines Sri Lanka India Pakistan Source: National regulatory agencies; * 2005, **2004 57.80** 45.30* 29.10 12.80 29.38 Total number of phones per 100 population
  • 11. untruth, truth, what? …access is very high* Most (66%) can get to a phone in 5 minutes ; much less than 1 hour… 95% 93% 92% 94% 98% Accessibility (used a phone in the preceding 3 months) Thailand Phils. Sri Lanka India Pakistan South East Asia South Asia
  • 12. untruth, truth, what? High reliance on commercial phones * Does it mean no access; or have access?
  • 13. Agenda
    • Definitions
    • Logic
    • Untruth, truth, what?
    • Issues
      • Technical
      • Usage
    • Access and poverty reduction?
    • Questions
  • 14. technical issues Overestimation?*
    • Impact
      • Poverty reduced because access increased…
      • Inequality increased because access is a more middle class thing…
    • Based on what access?
      • Direct household access is normally used
      • Whereas indirect but actual access of 90 percent +
    How relevant is direct access? Is it the same as other infrastructure; electricity, piped water, sanitation?
  • 15. user issues Affordability; tight purse… * Owners only: mobile is almost all pre-paid; to control expenditure 4% 1% 8% 4% 1% Post Paid 96% 99% 92% 95% 99% Pre Paid Thailand Philippines Sri Lanka India Pakistan  
  • 16. user issues Affordability; only a few calls… * Source: Diary All users (owners or otherwise) on average one call a day
  • 17. user issues Affordability; short calls… * Source: Diary However, average MOUs for owners are higher e.g: Sri Lanka: Prepaid: 120 MOU per month Source: Operators >15 min.
  • 18. user issues Affordability; abnormal pattern … * Source: Diary Sri Lanka Poverty premium
  • 19. user issues Expenditure higher than ARPU * Poverty premium; those who use other peoples’ or public phones are being charged higher rates… Ave. Monthly expenditure for users (USD) 9 9 9 7 12 Home Fixed Phone 19 10 18 7 21 Post Paid 8 2 7 5 8 Pre-Paid Thailand Phils. Sri Lanka India Pakistan  
  • 20. user issues Summary
    • Have access
    • Use sparingly; essential calls only
    • Speak for a short while
    • Pay premium
  • 21. Agenda
    • Definitions
    • Logic
    • Untruth, truth, what?
    • Issues
    • Access and poverty reduction?
      • Macro numbers
      • Household level
    • Action?
  • 22. benefit At the macro level; large?
    • Contribution to GNP
      • 2003 – 4%
      • 2004 – 5%
    • Every additional 10% increase in mobile teledensity  0.6% increase in annual GDP growth (Waverman et al., 2005)
    • Access  poverty? inequality?
      • Evidence
  • 23. benefit Access  less poverty?
    • Direct income generation through the sale of telecom services
      • Grameen, Nobel prize…
    • Indirect income generation; anecdotal
      • Auto-rickshaw driver to check hires
      • Farmer to check market prices
      • Parents looking for health and education information
    • Cost savings made by making a call as opposed to taking a bus ride into town; anecdotal
  • 24. benefit Access  Efficiency
  • 25. benefit Efficiency  economic benefit?
    • BOP does not see the benefit?
      • Except for in India, mean responses on efficiency of daily activities vs. ability to earn or save are significantly different at a 95 percent confidence interval
  • 26. benefit Possible reasons…
    • Do people actually make that connection ?
      • Some do; services, trade, self employed…
      • What connection?
    • May see gains in saving travel time and cost but if the cost of using the telephone is high
      • Maybe no net benefit ( RPP in LK?)
      • In LK, 24% said direct access has worsened their financial situation
    • Link may exist, but
      • Little business use; people prefer face-to-face interactions?
      • Not enough content?
      • Perception: time isn’t money?
  • 27. benefit Security and keeping in touch
  • 28. benefit Keeping in touch Source: Diary
  • 29. Agenda
    • Definitions
    • Logic
    • Untruth, truth, what?
    • Issues
    • Access and poverty reduction?
    • Questions
  • 30. questions Technical
    • Are access numbers in the 20s or 90s?
      • How important is it to define access ?
      • Are we massively overestimating impact of access on economic development?
    • Are conclusions on improved access increasing inequality in Sri Lanka justified?
  • 31. questions Practical
    • What is the link between access and poverty reduction?
      • No empirical micro-level literature
      • Is there one? Is it pure hype?
      • Is it a complex social networks based culturally sensitive mumbo jumbo nut no one’s cracked?
    • More likely, no silver bullet but one-of-many necessary conditions
      • Lessons from India: access  usage  efficiency  economic benefit
  • 32. questions Important
    • How to increase usage?
      • Evidence of net economic benefits through lower prices
        • Current scenario: low price elasticity of demand ≈ 0.5; consistent with low and essential use only
        • Shift from Receiving Party Pays  Calling Party Pays
          • Sri Lanka mobile: 120 MOU/mo (estimate)
          • India GSM mobile: 414 MOU/mo; tumbling prices
        • Meaningful content
      • Increase rural access: VG levy and disbursement mechanism specifically setup; but Government “squandering” money?
  • 33. In conclusion
    • Hypothesis is inequality in access to telecom is contributing to poverty
      • But, people at the BOP have easy access to phones
      • Use sparingly and pay premium
      • Inequality in access; not so black and white
        • Randomized evaluations
    • Question is how to increase usage by making access more meaningful
      • Regulatory policy
      • Content; convergence
  • 34. Thank you. Harsha de Silva and Ayesha Zainudeen www.lirneasia.net