Poverty and Telephony Access in Latin America and the Caribbean

Mobile Opportunities:

Explore the strategies employed by the poor in Latin America and the Caribbean to access and use mobile telephony services, as well as to identify the major market and regulatory barriers for increased penetration and usage

GOAL

• MOBILE OPPORTUNITIES Survey 2. Key Results

3. Conclusions and Recommendations

CONTENTS

Mobile Opportunities Survey1

•Mobile users vs. owners•Patterns of Use•Key Access Strategies•Value of Use •Reasons for not being a user

RESEARCH QUESTIONS

7 LAC countries

total of 7,168 surveys

low income urban inhabitants

METHODOLOGY

KEY RESULTS2

most people in LAC are

USERS and OWNERS

90JAMAICA 94

30MEXICO 37

42BRAZIL 53

37PERU 60

61ARGENTINA 70

83T&T 86

63COLOMBIA 89

(%)

9698%9692909674

T&TJamaica PeruMexicoColombiaBrazilArgentina

LAC is prepaid

REASON control mobile spending

Most users think mobile services are neither cheap nor expensive

COST PERCEPTION

users value mobile use

ARGENTINA

T&T

PERU

COLOMBIA

MEXICO

JAMAICA

BRAZIL

cheap neither/nor expensive

Mobile services at the BOP appears to be inelastic to tariff variations DEMAND ELASTICITY

Most common cost-control strategies:

¨beeping¨ or simply not making outgoing calls

for a period of time

COST REDUCTIONSTRATEGIES

BARRIERS TO OWNERSHIP

Service affordability remains a key barrier for increased adoption of basic as well as value-added services.

ARGENTINA

T&T

PERU

COLOMBIA

MEXICO

JAMAICA

BRAZIL

Can’t afford it Not necessary

BARRIERS TO OWNERSHIP

Brazil, Mexico and Peru: a majority of the poor still cannot afford a mobile

many rely on informal resellers and family or friends to make or receive calls.

those who can afford their own mobile phone make little use of voice and other services,

tightly control their expenditure

frequently rely on public payphones for outgoing calls.

TYPICAL BASKET USAGE

Most users in LA make less than one call a day, while outgoing call levels are higher in Caribbean countries because of more affordable tariffs.

ARGENTINAT&T PERUCOLOMBIA MEXICOJAMAICA BRAZIL

average median

Total outgoing calls per week

KEEPING IN TOUCH IS KEY

Most mobile calls are made to friends and family, followed by business-related calls

ARGENTINA T&TPERUCOLOMBIA MEXICOBRAZIL

friends workplacerelatives

Destination of outgoing calls

100%

0

SMS: MAIN NON-VOICE APPLICATION

SMS is the only service beyond voice that is gaining rapid adoption across the region

ARGENTINA

T&T

PERU

COLOMBIA

MEXICO

JAMAICA

BRAZIL

SMS use among mobile phone users (%)

18

BASIC DATA (2007)

Brazil

121 million mobiles, added 21 million

mobilesteledensity of 63.59

world’s fifth largest mobile market

7 million households with broadband internet

(2008)next to last lowest use of mobiles with 79 minutes /month, behind Perufourth most expensive tariff (US$ 0.26/per minute with PPP), together with Japan.

19

ADDITIONAL RESULTS

Brazil

small majority uses mobiles, but 1/3 of non users

plan to acquire one

2/3 of users own a prepaid mobile, the majority

having purchased it.

mobile users are willing to spend more on the

service immense opportunity for government to

take a quantum leap in the provision of services

20

CONCLUSION & RECOMMENDATIONS3

Mobile Telephony is not a luxury good

Economic impact is mediated by social capital

variables such as strengthening of trust networks

and improved coordination of informal job markets.

Poor attribute a significant improvement in quality of

life to mobile access: consistent with highexpenditure level & low elasticity of

demand.

For poor Mobile Telephony is

A tool for strengthening social ties and for increased personal security,

beginning to prove useful for enhancing business and employment opportunities.

perceived to bring numerous benefits <=significant level of expenditure on mobile handsets and services

Tariffs are the main barrier to access

Lower tariffs do not have to penalize operators

results show a wide margin for win-win initiatives thru

increased traffic & value-added services to BoP.

M-banking and M-government are stillunderdeveloped in LAC.

As users inch up the technological learning curve and

equipment prices continue to fall, Mobile Opportunities

will only increase.

Emergent Markets:

BOP

Emergent Technologies:

M-commerceM-bankingM-government

Emergent Consumers:

A greater proportion of women use Mobile PhoneInformal workers and micro-entrepreneurs: business opportunities

Poverty and Telephony Access in Latin America and the Caribbean

www.dirsi.net

Mobile Opportunities: