Smartphones and Emerging Markets: Making the Mobile Revolution Sustainable
When the first mobile phone reached consumers in the early 1980s, it weighed 2.5 pounds and cost just under $4,000. Eventually, we designed smaller, more life-fitting devices, so we could avoid Michael Douglas scenarios.
Mobile technology is now a ubiquitous part of our daily lives, whether we’re texting friends, checking the headlines, or mobilizing a protest. But it has taken a lot of work — both in developing devices and in building a sustainable data infrastructure — without which phones would be useless hunks of plastic.
While smartphone technology remains most prevalent in the “developed” world, this is rapidly changing as the cost of devices drops, making smartphones more accessible to the growing middle classes in emerging markets (check out the $25 smartphone Mozilla showed off at Mobile World Congress in February).
Feature phones — cellphones not connected to the internet — are already revolutionizing the lives of farmers, educators and health-care providers in the developing world. With the power of the Internet at their fingertips, individuals, families and entire communities will be further empowered.
If Mozilla can mass-produce a smartphone that retails for $25, there will certainly be a huge market for that product. But the effect won’t be transformational, at least not yet.
There’s no doubt that a lower price point will make smartphone technology more accessible to populations in emerging markets. But a smartphone is only as good as the network to which it connects, and Internet penetration remains extremely low in the poorest parts of the world. This fact and the challenges that come with changing it will define how people use their mobile devices for several years to come.
Right now, emerging-market consumers conserve their Internet activity for opportunities when they have access to a wireless network, which may be once a week or less. Even if they have access to a wireless network, the high cost of data plans bars many people from accessing the Internet via their phone.
In parallel to innovating down the cost of smartphone devices, we also have to tackle the critical issue of insufficient network infrastructure in the developing world. Building out network connections is neither cheap nor easy, although coalitions such as internet.org and a4ai are trying to move the needle on this with powerful partners, including Facebook and Google.
The real challenge has to do with sustainability: Mobile network operators (MNOs) need to develop business models that allow them to profit from bringing data networks to poor and remote parts of the world.
So, what are our options?
Building the infrastructure for widespread data coverage will take time, and I don’t see any shortcuts for carriers and companies dreaming of 4G connections. Ideas like Google Loon are intriguing, but even if Google can provide free services indefinitely, the cost to the local economies will be great. When outside organizations attempt to insert new solutions — whether via balloons or drones — they are disrupting the local ecosystem, which could have disastrous effects on the MNOs who provide jobs, and governments who get paid for 4G licenses and use that revenue to build roads and hospitals.
I believe the best form of smart, sustainable development comes from incentivizing existing, scalable business models. MNOs already have models in place to bring Internet via fiber optics and microwave signals, which, while not perfect technologies, do create a steady revenue stream for local governments.
To further profit from these plans and help offset high data costs, MNOs need to get creative and see local populations in poor and rural areas — demographics that are often numerous and young, magic adjectives to those in marketing — as the populations that will sustain them over the decades to come.
One way to catch these consumers as their spending power grows could be for MNOs to partner directly with advertisers or application developers; this is already happening in the developed world, where phone carriers and makers have deals with certain search engines or map applications. Even if young users in Kenya or Ghana don’t have the money to spend on products just yet, as the consumer class in emerging markets grows, they will be extremely valuable to any business looking to hook a new generation of buyers.
There’s no doubt that beneath the infrastructure challenges lie both significant business opportunities and sustainable development possibilities for currently unconnected populations. In our work at GeoPoll, we recognize the signs that things are changing, and that partnerships and cooperation among operators, companies and NGOs are opening up new and exciting opportunities for better services.
Powerful operators such as Airtel Africa are already recognizing the value of such partnerships: They recently paired up with RAMP (Real African Media Partners), a mobile advertising firm, to send advertisements to their customers via the mobile phone, perhaps a sign of more operator-advertising collaborations to come.
MNOs are already investing millions in getting Internet across the developed world, and to keep developing economies healthy they must continue on that path, while innovating at the same time to bring consumer costs down. Recently a consortium of some of the largest mobile carriers in Africa — including Orange, Vodafone, MTN and Airtel — announced that they plan to share network infrastructure to expand Internet and broadband access among underserved rural communities across many regions. The implications of this partnership alone, not to mention the involvement of technology companies, brands and government organizations, point to a very wired Africa in 2014.
James Eberhard is founder and CEO of Mobile Accord, a mobile services company powering communication for social good. In 2013, Mobile Accord launched GeoPoll, a survey platform that collects real-time data from emerging market audiences using text, voice and Web-based messages. Reach him @geopoll.