Developing Mobile World Blog

Mobile Penetration versus Broadband Penetration
Once again, the World Bank appears to be making project decisions based on the wrong criteria.  We just came back from Bhutan where the World Bank is putting significant pressure on the government and regulators to open up the market to international competition.  Agreed, open markets are ultimately the goal for Developing World countries that wish to participate in the world markets.  However, using mobile phone penetration as a sole measure of readiness is not appropriate to all markets.

A country with a large growing population like Myanmar can attract multiple aggressive mobile carriers to compete within its borders and sustain years of growth before price erosion sets in.  A small country like Bhutan with a much smaller population and low growth would immediately resemble the hyper-competitive markets in its bordering neighbor India.  

In Myanmar, MicTel can slowly transition into a more market-facing model or even spin-off assets and survive as a wholesale unit.  The same cannot be said for Bhutan Telecom and it only competitor Tashi Cell.  Within months of opening the market, mobile phone margins would be stripped to commodity levels removing any possibility that a full-service telecommunications provider in a market, too small to create any economies of scale, it could no longer invest in diversifying its services.  Eventually, Bhutan, like other Developing World markets, will lose its local player in the industry and become subject to the whims of international carriers.

So, is the purpose of making open and transparent markets in the Developing World to increase the number of $1/month consumers to "acceptable" developed world levels of penetration. Or should we be focusing on how investments in local ICT capabilities beyond telecom can create an enabled and sustainable workforce.  A skilled labor pool that can leverage a smartphone to increase their pay and job security in high growth markets.

The World Bank's response has been that there is no demand for smartphones in the Developing World. Where do you recharge a phone?  Why do these poor populations need access to the internet?  Who can afford such devices?  The myopic view of ICT services through only a consumer perspective negates the real purpose of the World Bank's mission in the Developing create economic development and stability.

Enterprise mobility solutions create the opportunity to realize that mission but this requires a much tighter integrated strategy, on a national scale, than truly open and transparent markets would tolerate. Indeed, in Bhutan and many isolated island economies whose populations are not large nor growing astronomically, we need to give the local telecom companies the time to evolve in to ICT enablers for Financial Services, Agriculture, Logistics, Construction, Hospitality, Healthcare and more.

We are not recommending small scale pilot projects that are common and seldom provide a justifiable return on the World Bank's investment.  Another project that sends a single nurse to a remote village only to use mobile healthcare tools to collect data on neo-natal care for young mothers fails to leverage what the tool was created for.  Collect key medical statistics on the entire village while the clinician is there.  A national roll-out of mobile healthcare tools is the future and the technology is ready for it.

Of course, national roll-outs require complete cooperation between all of the stakeholders in the industry and a deep trust in the governments goals and vision to implement them.  This is much more difficult to accomplish once the markets have been opened to globally competitive forces.