Mobile Youth TV #1: Rural

by Freddie on August 25, 2010

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7 Stories of Empowerment

How innovation could impact the lives of the world’s 200 million mobile owning rural youth.
This week we’re looking at the world’s 200 million mobile owning youth and their families living in rural areas. What can new mobile services such as banking, commerce and learning offer them in terms of adding value to their lives? How can mobile service providers tap this trend and monetize a particularly low-margin segment?

Presentation

Key Youth Market Data

Source mobileYouth report

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How has the Rural Market Changed?

Gone are the days when the Grameen Group had to run the Village Phone initiative to put a mobile phone in the hands of one influential villager willing to take the risk of running a pay phone business. Today prices of handsets have decreased significantly. Almost every family in villages across Bangladesh, India, Kenya and Nigeria has mobile phones. The Village Phone initiative that made Grameen famous is dead, and it’s a good thing.

The next step for emerging markets in mobile evolution is innovation in services and handsets. In this post we highlight 7 stories on how handset manufacturers and service providers have launched innovative products to meet the needs of consumers in emerging markets.

Updated 2011 statistics for Rural Markets (mainly Asia and Africa) from mobileYouth report. All of these high resolution charts are available to MobileYouthReport subscribers

#1 Mobile Commerce in Africa

The success of M-PESA in Kenya

“Pesa” means cash in Swahili. The ‘M’ is for Mobile. M-PESA is a mobile payment service launched by Safaricom, Kenya in March 2007. Within its first month of launch, the service had over 20,000 registered customers clearing showing the need for mobile payment in emerging markets. Today there are 17,000 M-PESA agents across Kenya compared to 840 bank branches and 150 ATMs. 10 million Kenyans are registered with M-PESA while only 4 million have a bank account.

How it works:

Customers do not need a bank account. They register with Safaricom for an M-PESA account.  Once registered, customers can use their mobile phones to move money quickly and securely to another mobile phone user. Customers turn cash into ‘mobile money’ at M-PESA agents. They then follow simple instructions on their phones to make payments through their M-PESA accounts. The process is very secure, PIN-protected, and supported with a 24/7 customer service.

M-PESA allows for four kinds of transactions:

1. Person to person transfer
2. Individual to business transfer
3. Cash withdrawals at designated agent outlets
4. Loan receipt or repayment

The three big reasons behind the success of M-PESA:

1. Trust: Over the last 3 years consumers have grown to trust M-PESA as a reliable service for transfer of money.
2. Pricing: Free registration and no monthly fee helped attract a large customer base right from the start.
3. Value: M-PESA saves time and money that would have been spent in travelling to the nearest bank/ATM or to meet the person with whom the transaction needs to be done.

Teenwise Media from Kenya, one of our valued members within the Youth Research Partners network, provided us with insights on how youth in Kenya are using the M-PESA service. Some of the innovative uses of M-PESA among Kenyan youth include:

Payment mode for purchase of items/services:

M-PESA is used as a mode of payment for services and goods purchased because it is generally accepted by business owners who are familiar with the person e.g. when shopping for clothes, buying movies, visiting a salon etc.

Some feel it is a bit safer than walking around with large amounts of money in cash.

Loans:

M-PESA transfer is the quickest and easiest way to get a loan from your friends when you need cash. This is especially convenient because of M-PESA’s nationwide penetration. Parents can also send pocket money regularly throughout the school term making it even more convenient.

Banking/Savings:

M-PESA is used as a savings account by most youth because it is more convenient than banks as M-Pesa outlets are found in most hoods. In fact, a huge number of M-PESA users either don’t have a bank account, or do not use it frequently.

Buy Airtime:

M-Pesa is used to buy airtime 24hrs making it very convenient for youth who are always on the go.

Profit-making:

If someone does not have an M-PESA account or I.D. card M-PESA can be used as a means to make some pocket money. M-PESA subscribers charge a percentage to their friends/acquaintance to withdraw via their M-PESA account.

#2 Life Tools in Asia

Ovi Life Tools by Nokia in India, Indonesia and China

Life Tools by Nokia is a service tailored for communities living in remote areas, providing them with information specific to their livelihood and personal enrichment. The service was first rolled out commercially in India on June 2009. The Life Tools program in India focuses on Agriculture and Education services with Entertainment as a supplement. The subscription schemes available are:

1. Basic Agriculture service: Priced at 30 rupees (US$0.65) per month, this provides farmers with tips on agriculture techniques and news.

2. Premium Agriculture service: Costs twice as much, this offers the full suite of information including market prices, weather updates and news and tips.

3. Education (Learn English): Costs 30 rupees per month, this provides simple courses on English in the local language.

4. Entertainment: This provides users with regional news updates and covers the ‘ABC’ of mobile services in India – Astrology, Bollywood and Cricket.

Nokia Life Tools works with local content providers to gather the information needed to create a hyper-local, regionally-specific service. The Agriculture service provides immense value to farmers not only by delivering advice and tips via SMS but via instant market price updates for the produce. This has removed the need of a middle man who used to connect farmers with markets resulting in increased income for farmers.

The education service is mainly used for learning English. Most schools implement and follow a curriculum based on the regional language. Learning English is seen as an essential skill to move up the social ladder for better career prospects. Subscribers of the education service tend to make it a family affair to gather around the phone and learn new words, phrases and pronunciations. The education service also provides students help with exam preparation in the form of tips and advice for various education boards in the country. There is also a General Knowledge service, which gives subscribers useful information about current affairs.

The Life Tools program runs in dual languages – primarily in the local language of the user, but subscribers to the educational programs can get English translations and lessons side by side with their other information. Nokia Life Tools in India, operates in nine local languages (Marathi, Gujarati, Punjabi, Bengali, Kannada, Tamil, Malayalam, Telugu, Hindi) and also in English.

One of the differentiating factors of the Life Tools program was that it came pre-loaded with phone models that were prevalent in the rural markets. Consumers only had to pay for the monthly subscription and did not have to go through the hassle of downloading and installing the application.

Following its success in India, Nokia has rolled out Life Tools in Indonesia and China along the same strategy of providing locally relevant content in regional languages. During its China launch in May 2010, Nokia revealed that the service has around 1.5 million subscribers across India and Indonesia.

#3 Dual SIM Handsets

Dual SIM handsets from Samsung, Nokia and others for India and Africa

With multiple accounts ownership, comes the weight of carrying an extra handset. Youth mobile owners usually have two or more accounts from different service providers so that they can call friends and family on different networks at a cheaper rate. Increasingly, youth consumers also choose to own a post paid mobile account which comes with an ‘expensive’ handset with internet capabilities.

The rise of multiple SIM ownership has caught the attention of handset makers who have started to offer dual SIM handsets in the emerging markets of India and Africa. Nokia and Samsung are the big brands who have forayed into this new trend recently. Other manufacturers such as Videocon, Spice, LG, Micromax and Karbonn have been active with a cheaper range of dual SIM handsets. Nokia’s range of C1 and C2 models, not only boast a dual SIM capability, but also a flashlight that meets the needs of low-income subscribers in rural areas.

#4 IVR and Radio in Africa

Freedom Fone and Farm Radio engage farmers with localized content in Tanzania & Ghana

Freedom Fone leverages audio as a mobile function using IVR (interactive voice response), a technology that allows a system to detect voice and keyboard input. IVR allows a user to call, enter or say specific numbers, and listen to or contribute audio content.  You’ve likely encountered IVR when you called a customer service number and were prompted with instructions to press numbers or for different issues or say out loud your name or identification number.

Freedom Fone was adapted by Radio Maria in Tanzania and Volta Star Radio in Ghana to reach out, connect and engage with farmers in the field.

At Radio Maria, broadcasters announced a competition asking local farmers to submit stories of how they were using the knowledge gained from radio programs. Listeners could call in to the radio station and leave a message on the IVR system. This allowed the radio station to enable its listeners to interact with the radio station. The station received stories from the field which were 10 seconds to 3 minutes in duration. They received a total of 2,499 calls made by 1,448 distinct callers within a month and half. They also received a total of 297 SMS messages, which were usually requests for information or greetings.

Volta Star in Ghana focused on improving access to radio segments by posting outgoing audio content on organic fertilizer and included information for farmers such as market prices. The content was broken down into 5 minute long segments and was made available over the IVR system. When listeners call, they are able to choose their language and a specific summary to listen to. The service is of great value for farmers who would instead have to tune-in to the radio station at a specific time to obtain the information over an hour long program. With the information broken down into segments, farmers can call in to receive the information they need at any time. Volta Star received a total of 4,503 calls to the “farmers fone” and 2,041 of these calls proceeded past the welcome message (meaning that the user accessed the information or left a voicemail).

The success of both the above programs highlights the need for localized content for emerging markets. The technology to receive, store and broadcast voice messages is already active. While consumers in emerging economies climb the learning curve of getting accustomed to the technology, mobile operators and handset manufacturers needs to develop services that cater to their needs. A run-of-the-mill calendar application for organizing tasks is less likely to be successful in emerging markets.

#5 Mobile Services for Entrepreneurs and Storytellers

Youth entrepreneurs and community based mobile journalism in Kenya

In rural Kenya, there is no way of getting a timely announcement to people due to high cost of Internet access and televisions. Newspapers are not effective due to low literacy rates. This is where mobile phones and the youth population come in.

Mobile phones reach a large portion of the Kenyan population. Farmers, teachers, students, street hawkers and businessmen all own a mobile phone. Information Convergence Technologies, a Kenyan firm, saw an opportunity to empower youth, serve the community and make revenues by filling the information gap. Their innovative service MwananchiSMS recruits youth leaders to collect mobile phone numbers and information on subscribers in their respective villages. The youth leaders run the business as a franchise. They act as self-employed journalist working to disseminate important news and announcements to those who subscribe to the service. The young entrepreneurs in the program retain 30% of the revenue.

#6 Email Solutions for those without Accounts

In the Philippines, you can now send email using only SMS from your mobile phones

Smart Communications in Philippines along with Synchronica have launched GoMail – an SMS based service that allows subscribers to send email messages without having to access the internet.

When the subscriber sends an email to a mobile number, it is guaranteed that the email will reach the intended receiver, even if the receiver has an extremely low-tech phone. If it’s a smartphone, the email will be delivered through a synchronized email account. For mid-range phones, the message will be delivered through a series of MMS messages. For phones that have only voice and SMS, the message will be broken down into parts and delivered as SMS. The two subscription plans available are $0.45 for an entire day of emails or $4.45 for a month of email service.

In Phillippines and other emerging economies, the cost of purchasing a Personal Computer and a broadband connection are too high. Services like GoMail allow consumers to use advanced features without having to upgrade the hardware. GoMail adds instant value to consumers in emerging markets looking for an affordable yet efficient option to stay in touch with their contacts.

#7 Innovative Power Solutions

Nokia’s bicycle charger kit, Vodafone’s solar powered handset and the emergence of Micromax in India

Innovation in mobile phones usually refers to the invention of a clever shiny feature that fascinates and entertains the mobile phone owner – such as the front facing camera for video chat. In emerging markets, however, the challenges of innovation take on a different form as handset manufacturers and service providers try and figure out mundane (yet practical) ways around how mobile owners can recharge their phones.

Nokia has a fancy but practical mobile charging device which allows mobile owners to charge their phones while riding their bikes. The charger kit is dynamo powered and comes with a phone holder for the bicycle. The dynamo starts charging when the speed of the bicycle reaches 6km per hour and stops when it hits 50km per hour. The kit matches the efficiency of a normal charger when the bicycle is travelling at 12km per hour.

Vodafone followed suit by releasing a solar powered handset which gets fully recharged in 8 hours under the sunlight. The handset retails for INR 1500 (USD 33).

The most inspiring story to emerge out of the need for a longer battery is from Micromax Mobile in India. Micromax now sells about 1 million handsets a month and has about 4% of the Indian market. Its first phone was the X1i model which has talk time of 17 hours and stand-by duration of up to 30 days. Since then Micromax has introduce 3 new phones under the ‘Marathon Battery’ range. Micomax founder Vikas Jain drew inspiration for the phone after witnessing a line of Indian villagers standing in midday heat to get their cell phones charged by a man with a car battery mounted on a bicycle because their homes had no electricity.

Summary

Mobile services that are “must have” in developing markets, ones which provide bridges in deficient infrastructure and ones that empower people’s lives will be the ones that grow. What do you think? Which of these services will be the standouts over the next 5 years? What other stories of mobile innovation from rural mobile youth markets do you have?

References:

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