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Section 1 demonstrated that there is significant demand for connectivity at the Bottom of the Pyramid (BOP). The evidence from the BOP research goes against several common, and still prevalent, misconceptions—that those at the BOP have no need for telecom services, and/or are unable to afford telecom services. Government-owned operators who are said to be driven by considerations other than profit have in the past seen little reason to serve such segments. As a result, large swaths of financially constrained market segments have remained unserved, or underserved. The rapid growth triggered by the lowering of barriers to market entry and competition have extended service to some degree, but even after liberalization, many at the BOP have remained underserved because of bad policy, poor regulation and unimaginative business plans.

Telecom networks are made up of an access component (what customers directly interact with) and a backbone component, made up of 'big pipes' that carry large volumes of voice and data. The emphasis in this section is on the access network, though not simply limited to the equipment. For example, in Chapter 5, the emphasis is on business models that make access possible through Grameen Village Phone Operators (VPOs).

Chapter 4 is about people who want to use networks, not about networks per se. It describes the massive volunteer-based information and communication technology (ICT) education campaigns conducted in Indonesia around connectivity, assisted, among others, by the International Development Research Centre (IDRC). Faced with impossibly difficult conditions caused by bad policy, poor regulation and overall non-responsiveness from the government, civil society activists such as co-author Purbo engaged in efforts to educate consumers and producers of communication services. Because of the strength of that educated community, the Indonesian civil society was able to pull off a major policy reform, the delicensing of the 2.4 GHz frequencies used for Wi-Fi.

This section looks at how market participants, where policy and regulatory inadequacy compounded by hostilities from incumbent operators have found their own solutions. These workarounds may not be optimal, as in the case of Wi-Fi being used for backhaul in the absence of reasonably priced leased lines (Chapter 6), but they are the best available alternatives.

The Chapters in this section look at the cases of Indonesia and Bangladesh. Both of these countries have been poor performers in terms of telecom and broader ICT infrastructure (Figure S2.1), compared to their regional peers.¹ The growth that has been achieved has been a result of complex workarounds to surmount barriers thrown up by incumbent telcos as well as the government.

Both countries have suffered from dysfunctional regulatory and policy environments which have prevented them from achieving anything near their potential. But perversely,

Figure S2.1
Fixed Phone, Mobile, and Internet Subscribership per 100 Inhabitants: South Asia and Southeast Asia (ASEAN and SAARC Countries, respectively, 2004)

Source: ITU (2006).

the same hostile environments have also created innovation in the form of the world renown Grameen Village Phones that may have contributed to the award of a Nobel Prize in 2006 to the visionary Professor Muhammad Yunus, and to technical and educational innovation in Wi-Fi in Indonesia—that too will probably be recognized with a significant award in the near future.

The business innovations described in Chapter 5 have given Bangladesh, one of the poorest countries in South Asia, a surprisingly high level of rural telecom access. This innovative reseller model has connected 50,000 of the 64,000 villages in the country to telecom services (Grameenphone, 2006). Poor but entrepreneurial Bangladeshi women are assisted in purchasing a mobile phone which is connected to Grameenphone's GSM network, but provided subsidized airtime, so that the reseller may turn a profit. The demand that these phones generate is responsible for the network operator's highest ARPUs. Four percent of Grameenphone's subscribers who were village phone operators generated 16 percent of its revenue, as Chapter 5 reports. These innovations, with appropriate modifications, can and should be emulated.

The complex Indonesian workarounds described in Chapter 6 need not be emulated abroad. Yet the accompanying education and awareness building should be, if the objective is the co-innovation of ways to connect rather than the passive consumption of policies and services. The analysis of the workarounds leads to different conclusions, namely the identification of specific policy and regulatory barriers that require reform.

The key factor that has to be understood in both these cases is that the resulting systems/structures arose out of necessity, not choice. In the case of Indonesia, hostility of the incumbent towards private operators and licenses that prohibited them from building the links they could not buy left Internet service providers (ISPs) helpless. This gave rise to the innovation. In the case of Bangladesh, the business innovations were driven by high handset costs and low income levels in villages.

Thus, while these two approaches were optimal in their particular circumstances, they probably should not be replicated unchanged. As Chapter 5 points out, there are other options that may be more suitable, depending on the circumstances. In today's prepaid world, the necessity to involve a third party to administer billing and collection does not arise; with handset costs falling below USD 30, the need for micro-loans no longer exists.²

This section, perhaps more than any other in this book, is illustrative of the inadequacy of purely technological solutions. People who have been made aware, business innovations that take full account of the existing price and affordability constraints, technical and operational workarounds to policy and regulatory perversities—these are the things that can get people connected. In the never-perfect world of policy, there will always be a need for human imagination and the will to make possible the use of technology to get people connected.

Notes

¹ Both countries have seen considerable growth in the mobile sector since 2004.

² See Knight-John, Zainudeen and Khan, 2005 for more discussion.

References

Grameenphone (2006). Retrieved November 15, 2006, from http://www.grameenphone.com/index.php?id=79

ITU (2002). Asia-Pacific Telecom Indicators 2002. Geneva: ITU.

ITU (2006). Measuring ICT for social and economic development: World Telecommunication/ICT Development Report 2006. Geneva: ITU.

Knight-John, M., Zainudeen, A. and Khan, A.S. (2005). An Investigation of the Replicability of a Microfinance Approach to Extending Telecommunications Access to Marginal Customers. LIRNEasia research report. Retrieved from http://www.lirneasia.net/projects/completed-projects/grameen-phones-replicability/

TRAI (2004). Growth of telecom services in rural India: The Way Forward. TRAI Consultation Paper No 16/2004. Retrieved November 23, 2006, from http://www.trai.gov.in/trai/upload/ConsultationPapers/17/27octconspap.pdf

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