A friend forwarded (thanks Ram) this article from the Economist that has a special report on telecoms in the emerging markets looking to tap into the data services for innovation and growth.
I’m not selling for that
IN A field just outside the village of Bumwambu in eastern Uganda, surrounded by banana trees and cassava, with chickens running between the mud-brick houses, Frederick Makawa is thinking about tomatoes. It is late June and the rainy season is coming to an end. Tomatoes are a valuable cash crop during the coming dry season and Mr Makawa wants to plant his seedlings as soon as possible. But Uganda’s traditional growing seasons are shifting, so he is worried about droughts or flash floods that could destroy his crop. Michael Gizamba, a local village-phone operator, offers to help using Farmer’s Friend, an agricultural-information service. He sends a text message to ask for a seasonal weather forecast for the region. Before long a reply arrives to say that normal, moderate rainfall is expected during July. Mr Makawa decides to plant his tomatoes.
Farmer’s Friend is one of a range of phone-based services launched in June by MTN, Google and the Grameen Foundation’s “Application Laboratory”, or AppLab. As well as disseminating advice in agriculture, provided by the Busoga Rural Open Source and Development Initiative, the new services also provide health and market information. The Clinic Finder service points people to nearby clinics, and the Health Tips service explains the symptoms of common diseases.
Lastly there is Google Trader, a text-based system that matches buyers and sellers of agricultural produce and commodities. Sellers send a message to say where they are and what they have to offer, which will be available to potential buyers within 30km for seven days. Mr Makawa says his father used the service to look for a buyer for some pigs, which he sold to pay school fees. These services cost 110 shillings ($0.05) a time, the same as a standard text message, except for Google Trader, which costs double that. In their first five weeks the services received a total of more than 1m queries.
A web of sorts
“There is a big shift from holding a phone to your ear to holding it in your hand,” says David Edelstein of the Grameen Foundation. “It opens the door to information services. It’s not the web, but it’s a web of services that can be offered on mobile devices.” As with the Village Phone project, Grameen is trying to establish a model that can be scaled up and replicated in other countries. Offering agricultural and health information is more difficult than offering a phone service, however, because such information must be localised and must take cultural differences into account. The answer is to work closely with local partners, says Mr Edelstein. Grameen is also experimenting with the idea of “community knowledge workers”—local people who can help others get access to mobile services, reading, translating and explaining text messages where necessary, just as village-phone operators provide access to basic communications.
Trading up
Grameen’s collaboration with MTN and Google in Uganda is just one of dozens of services across the developing world that offer agricultural, market and health information via mobile phones. In India, for example, farmers can sign up for Reuters Market Lite, a text-based service that is available in parts of India. Its 125,000 users pay 200 rupees ($4.20) for a three-month subscription, which provides them with local weather and price information four or five times a day. Many farmers say that their profits have gone up as a result.
Tata Consultancy Services, an Indian operator, offers a service called mKrishi which is similar to Farmer’s Friend, allowing farmers to send queries and receive personalised advice. “The rural population is willing to pay substantial subscription fees to get this information multiple times a day,” says Kunal Bajaj of BDA. There have been lots of pilot schemes in the past, he says, but commercial offerings are now beginning to gain ground.
Nokia, the world’s largest handset-maker, launched its own information service, Nokia Life Tools, in India in June. In addition to education and entertainment, it provides agricultural information, such as prices, weather data and farming tips, that can be called up from special menus on some Nokia handsets. The basic service costs 30 rupees a month, and a premium service which provides detailed local crop prices in ten states is available at twice that price. “It is in its early stages, but it has resonated extremely well with its target audience,” says Olli-Pekka Kallasvuo, Nokia’s chief executive.
Services to help farmers have been most widely adopted in China, where China Mobile offers a service called Nong Xin Tong in conjunction with the agriculture ministry, as part of its push into rural areas. It has already signed up 50m users and is aiming for 100m within three years. The service provides news, weather information and details of farming-related government policies.
China Mobile also runs a website, 12582.com, that sends farmers information about planting techniques, pest management and market prices. The service, which costs two yuan ($0.30) a month, sends out 13m text messages a day and has over 40m users. There are dozens of other examples across the developing world. TradeNet, launched in Ghana in 2005, now links buyers and sellers of agricultural products in nine African countries; CellBazaar provides a text-based classified-ads service in Bangladesh.
Mobile phones are also being used in health care. One-way text alerts, sent to everyone in a particular area, can be used to raise awareness of HIV; sending daily text messages to patients can help them remember to take their drugs for tuberculosis or HIV. Mobile phones can be used to gather health information in the field faster and more accurately than paper records and help with the management of drug stocks. Camera-phones are used to send pictures to remote specialists for diagnosis.
Mobile data (particularly SMS) services can be huge in emerging markets provided the telcos don’t get greedy and keep the costs high. Telcos’ overhead costs for SMS are almost zero. SMS revenues are pure margin. There is no reason for SMS costs to be prohibitively high except for greed. Low SMS costs are key for the mobile data ecosystem in the developing countries to develop and thrive. I heard that SMS costs are pretty high in africa. India has low SMS costs but some tecos are starting to charge ridiculous interconnect fees that is threatening to kill the nascent SMS information services market.
