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Teleuse on a Shoestring
Teleuse on a Shoestring
Teleuse on a Shoestring
Teleuse on a Shoestring
Teleuse on a Shoestring
Teleuse on a Shoestring
Teleuse on a Shoestring
Teleuse on a Shoestring
Teleuse on a Shoestring
Teleuse on a Shoestring
Teleuse on a Shoestring
Teleuse on a Shoestring
Teleuse on a Shoestring
Teleuse on a Shoestring
Teleuse on a Shoestring
Teleuse on a Shoestring
Teleuse on a Shoestring
Teleuse on a Shoestring
Teleuse on a Shoestring
Teleuse on a Shoestring
Teleuse on a Shoestring
Teleuse on a Shoestring
Teleuse on a Shoestring
Teleuse on a Shoestring
Teleuse on a Shoestring
Teleuse on a Shoestring
Teleuse on a Shoestring
Teleuse on a Shoestring
Teleuse on a Shoestring
Teleuse on a Shoestring
Teleuse on a Shoestring
Teleuse on a Shoestring
Teleuse on a Shoestring
Teleuse on a Shoestring
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Teleuse on a Shoestring

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    • 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

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