Read ICTupdate special issues before and after the conference
Setting the scene
(issue)/74 |
Making it happen(issue)/75 |
Broadband strategies
Eric WhiteEveryone agrees that ICTs are important for agricultural development. But the level of access in ACP other countries varies. What are some of the reasons why access to internet is often poor in rural areas?
It mostly has to do with the fact that it's difficult for internet companies to make a profit, or even break even, in rural areas with the model they are comfortable using. The best situation for an internet provider's bottom line is a dense concentration of high-income individuals. In this scenario, people can afford to pay not just for basic connections, but high-value ICT services.
This drives up revenues. And since people are geographically concentrated many of them can be reached with the same infrastructure, minimising network costs. Rural areas present the opposite scenario: citizens are generally poorer, driving down revenues, and because they are more spread out the companies need to provide more infrastructure to reach them, driving up costs. In the end that math doesn't work out and networks are not deployed.
What new technologies and new business models are being developed that could provide affordable connectivity in rural areas?
There are several new radio technologies that drastically lower the cost of providing internet in rural areas, and hence make it more likely that a company can profitably offer access. A good example is the 'small cell'. This is a scaled-down version of the technology currently used on standard 3G cell towers. It can handle less traffic and has a much smaller broadcast range, but it can be run on solar power and reduces capital cost by up to 80%. This can be a good option for rural areas where demand is likely to be less, and where people concentrate in small villages.
Another new technology, or class of technologies, involves the use of 'TV White Spaces'. These are the spectrum gaps between TV channels. When TV broadcast channels were originally allocated, buffers of empty spectrum, or 'white spaces', were left between channels to ensure that they didn't interfere with each other. But the size of the buffers was determined based on technology that is now several decades old. Due to technological advances, these white space gaps are now too big, and other signals can safely be broadcast through them. It is now possible to broadcast a WiFi signal a very long way – up to several hundred miles – very cheaply using these white spaces. This has important implications for rural internet access.
Are there examples of business models that have already been introduced, and have they been successful?
Indeed there are, but many are still new and coming onto the market. Altobridge, an Irish company that manufactures small cells, has had several successful pilot deployments in rural areas, and at the conference we'll hear about their partnership with Orange in Niger. TV White Spaces are an even newer idea, but deployments are already underway throughout Africa. We'll hear about an ongoing initiative in Kenya called Mawingu at the conference.
Not all successful business models for rural internet rely on new technology, however. One that has proven successful in many areas is for the government, or a company, to serve as an 'anchor tenant'. In this scenario, the two parties agree that if the internet company offers service, the anchor tenant will buy enough connectivity to make the venture profitable for the internet company. Residents in the surrounding area then benefit from the new connectivity infrastructure.
What is being done at the policy level to support the introduction of new business models?
Well, public policy tends not to support a particular business model over another. It can offer incentives to use small cells, or it can authorise operators to use TV White Spaces, but that's about it for picking particular business models. What policy can do effectively is ensure that the enabling environment – in terms of both infrastructure and regulation – does not contribute unnecessarily to the cost of providing internet service.
In some countries, this means that policy is restricted to things like ensuring local governments don't try to tax fibre-optic cables that run through their land. In other countries, it means much more. An example is coordinating investors to put up the money to build fibre-optic cables in locations with limited internet. Some governments even build the cables themselves. Something that most governments offer is a subsidy program, called a Universal Service Fund, that helps make companies' operations in rural areas profitable.
An emerging trend is to develop and implement National Broadband Plans or Strategies, which take a holistic view of the problem and coordinate resources across ministries to bring connectivity to rural residents. These plans coordinate supply incentives with demand creation, regulatory streamlining and pilot projects in multiple sectors. They can be difficult to implement though, and we'll hear about a few of them at the conference.
Related links
Grameen Foundation’s Community
IMobile money revolution
Lee H. BabcockMobile money is seen in some quarters as the next big innovation in finance. What exactly is mobile money?
Mobile money uses the cell phone to send, receive and store economic value.
How is mobile money different from other innovations, such as microfinance?
Microfinance was the last big innovation in finance. When Mohammad Yunus pioneered the Grameen Bank in 1976, nobody believed microfinance institutions (MFIs) could be commercially sustainable. But there was hope in the model's ability to provide lending to the very poor, so donors helped to set up MFIs around the world.
The organization I work for, ACDI/VOCA, established a dozen MFIs, with USAID support, that have disbursed more than US$1 billion in loans to microenterprises, smallholders and rural families. Once it was clear that MFIs were commercially sustainable, the private sector stepped in to expand financing. Donor-financed and now privately financed MFIs have served more than 154 million clients worldwide but fall far short of serving the 2.5 billion adults that are unbanked. This is because we can't build a physical MFI or bank in every community that needs one.
Mobile money leverages an investment that an increasing number of poor people around the world already have made – a cell phone – in order to bring banking services, including savings, transfers, loan disbursements and repayments, directly into the home. It can extend financial inclusion into even the most remote areas. According to the International Telecommunications Union, we now have more worldwide mobile subscriptions than there are people in the world! About 39% of those in the developing world have mobile subscriptions, a number that's rapidly rising.
Who, specifically, stands to benefit from mobile money?
While everybody will benefit, the people who live at the base of the economic pyramid have the most to gain from mobile money. The long-term value of the phone for communication, safe storage and transfer of money means people will make substantial sacrifices to save to buy a phone.
This is so important because it means we now have a self-financed infrastructure that extends all the way into the household. Now that we have this robust infrastructure there can be multiple value-added applications such as mobile money, m-agriculture, m-health, m-education and more. The use of mobile money will transition the base of the pyramid from informal, non-transparent, inefficient economic activity to formal economic activity. What's a good example of a mobile money innovation that is already being used?
There are numerous examples in this brand-new industry.
The most often cited example is M-Pesa in Kenya. M-Pesa is a joint venture between Safaricom and Vodafone. In agriculture, Zoona is a third-party platform in Zambia that started with the cotton value chain. Both M-Pesa and Zoona received support from DFID (UK Department for International Development) and USAID, respectively, at their formative stages. Opportunity Bank Malawi leveraged mobile finance for their agriculture loan portfolio. SmartMoney is another third party that is serving agriculture sectors in Tanzania and Uganda. Agricultural mobile finance helps to reduce side-selling and administrative as well as security costs while increasing efficiency, farmer productivity and transparency of economic transactions.
Who make up the 'ecosystem' that's needed to ensure mobile money can be successful?
There are currently 190+ mobile money platforms worldwide with many more in the pipeline. The ecosystem of participants can include mobile network operators, card payment providers, financial institutions, solution providers, third party providers and others.
This industry is all about business model innovation. With very few exceptions the 190+ platforms are based in the urban city centres. As the industry looks to expand into rural areas in pursuit of nationwide penetration they are coming to realise they don't know how to deal with illiteracy, financial illiteracy and lack of trust. Therefore, business model innovation in rural areas must embrace NGOs and other development implementers that are more adept at dealing with these challenges.
By aligning the mission-driven objectives of the non-profit development sector with the profit objectives of the private sector we might be looking at mobile finance doing for the base of the pyramid what the commercial banking sector did for the industrial revolution!
Streamer: While everybody will benefit, the people who live at the base of the economic pyramid have the most to gain from mobile money.
Related links
Women’s access to ICTs
Dorothy OkelloWhy is improving women's access to ICTs critical for agricultural development?
In many developing countries, such as Uganda, agriculture is the main source of livelihood for a large portion of the population – particularly for those in rural areas where the majority of women are based. Women also form the greater part of the agricultural labour force – even though they often do not own the land they till.
It is generally accepted that timely and accurate information, for example on weather conditions, good farming practices or market prices can go a long way to help farmers increase productivity. This can be done through farmer extension services, true, but in rural areas such services may be out of reach or be irregular, so it is extremely important to make use of ICTs. Given women's role in agricultural development, it is thus important that women are given access to use ICTs to improve their productivity and overall livelihoods.
What would happen if we did not improve access?
According to FAO, the agricultural output in developing countries can be increased by 2.5% –4% by giving male and female farmers equal access to productive resources such as seeds, fertilisers and technology. More women than men lack access to appropriate and affordable ICTs, and as long as that is the case women will remain marginalised. Women are a potentially huge income base, but this potential will remain untapped as long as the gender gap continues to widen and a large number of women remain unable to undertake economic activities including active participation in all sections of agricultural value chains.
What measures need to be taken to ensure improved access?
A number of questions need to be addressed. While access to ICTs for women is a key issue, so is affordable access. For example, programmes can be aired via radio and made interactive by offering women farmers the opportunity to call in or SMS the show. This assumes, of course, that these farmers have access to a radio set or a mobile phone, and that they are in a region that is adequately covered by a telecommunication network, and also that they are able to purchase airtime to call in or SMS.
These programmes would have to be conducted in a language that is easily understood by women in the local community. It's also important that the technical jargon is translated into locally relevant terms. The radio programme would also have to be conducted at a time when women farmers are most available to listen to the programme and participate in it. The measures that need to be taken therefore have to address at least the following questions: do women have access to radios and mobile phones? Is there a network nearby, and are programmes being conducted in local languages?
These measures need to be addressed in order to make ICT access a reality for women, whether rural or urban, whether educated or not, and whether mobility is constrained or not.
What are the challenges in terms of social expectations and roles?
Social expectations and roles often tend to confine women to their homes or private spaces, which deprives them of access to public ICT points – keeping in mind that they may lack ICT tools of their own. Moreover, women are largely based in the rural areas, which mean that they live in areas with limited access to ICT infrastructure (or the energy required to regularly power up their ICT equipment). Even in places where women could potentially go to public access points or indeed have their own phones, they have less disposal income to spend on ICT use.
Indeed, some studies have shown that women spend a greater percentage of their income on communication that would be considered 'affordable' communication. Women have necessarily taken on multiple roles in society, so having to find the time to go out and search for information is likely to end up becoming just another item on a long to-do list, especially if this information is out of the way or otherwise not readily accessible.
And what are the challenges in terms of women's educational status, and limited time and resources, for example?
The education and literacy levels of women are generally below that of their male counterparts. As a result, when literacy is a requirement in order to make effective use of an ICT tool, which is generally the case, or when literacy in English or another 'foreign' language is necessary, women's lower literacy and education levels place them at a distinct disadvantage. It also means that women may tend to opt for voice-based solutions, which may have an impact on the bandwidth and cost required for a given service, compared to an SMS-based service. Improving literacy among women and improving their education are essential to improving women's position in society.
Related links
Female farmers and the use of ICTs for agriculture in Uganda