one in 50 people at the beginning of this century to almost one-third of the population today.
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1 momentum for change Africa s Creating sustained growth in even the remotest and poorest areas of Africa is possible if you apply a careful bottom-up approach and learn about the real needs of the people. T huge potential for growth in Africa, where the telecommunications sector has witnessed rapid development over the last few years. Mobile subscriptions are growing at a pace averaging over 40 percent annually, which makes Africa one of the fastest-growing mobile markets in the world, adding no less than 65 million new subscribers during At the beginning of 2008, there were over a quarter billion mobile subscribers on the continent. Mobile penetration has risen from just one in 50 people at the beginning of this century to almost one-third of the population today. Since mobile technology is a tool that can not only help fight hunger and disease but also substantially boost national economic growth, these are encouraging trends. However, internet and mobile penetration in rural Africa remain limited, caused in part by the lack of infrastructure, low literacy levels and unawareness of the benefits of being connected to the internet. Cost is also a major barrier to entry on a continent where owning your own handset, let alone a computer, is a major obstacle. Pre-paid airtime vouchers must be of the lowest denominations possible as the subscribers often choose to spend their last penny either on a soft-drink or on a few minutes of airtime. Over 60 percent of Africa s population live in unconnected rural areas, representing an unhere is tapped market that holds great growth potential for service providers, equipment manufacturers, and the telecommunications industry as a whole. While these market gaps do present challenges, they also reveal new opportunities for telecom operators who have begun to look at the rural market. Challenges in the uptake The UN-initiated Millennium Villages development project provides a unique opportunity to test, deploy, replicate, and scale up a broad range of solutions as well as to conduct research. Ericsson is partnering with mobile operators in sub-sahara, Africa, including MTN and Zain, to bring connectivity to the villages. Lessons from the villages so far show that both data and the internet play key roles in village development. By enabling services that are relevant to health, education, small business development, farming and so on, productivity, profitability and quality of life in general can be improved. The uptake of the services has not been without challenges. The villagers need time to get familiar with the mobile phones and their functions before additional applications can be introduced. Applications and solutions should be simple and easy to use, focusing initially on voice and short message service (SMS), with the added 32 EBR # C_EBR_1/09.indd
2 sustainable cities ««momentum for change ««theme EBR # C_EBR_1/09.indd 33
3 The power of the example In an effort to make the social and economic gains sustainable, Ericsson and Zain are transforming the mobile network in the Kenyan village of Dertu, which is currently powered by a diesel generator, into a green one. By deploying sustainable energy technology in the form of wind and solar to power the network, Ericsson is reducing Dertu s dependence on fossil fuels. As a result, operational energy expenditures will decrease by up to 80 percent. requirement of being capable of update over the network and usable off-line without network coverage. Experience has shown the importance of ensuring that applications are provided in the villagers own languages. It is also important to provide locally relevant content. Currently, recorded health messages and other public notices, relevant to the villages, are sent via the phones, targeting those who use only tribal languages. Considering that building new mobile networks requires substantial investments, and that rural areas are characterised by both low population density and lower than average expected revenues per user, it can be hard to justify such a large investment weighed against the potential subscriber revenues. Nevertheless, the type of new network equipment implemented in the villages is helping operators reduce capital and operating expenses. New radio and microwave transmission equipment enables them to provide greater coverage with fewer base stations, and also use less power per connection. Rural areas, as represented by the Millennium Villages often lack an electrical power grid, so the default solution for many operators is to install diesel-driven electric generators. As it can be both difficult and costly to deliver fuel to these remote areas, solutions that maximize renewable energy, such as solar and wind power, are essential. Although more-advanced network equipment involves higher initial capital investment, the operating cost is greatly reduced in the long term, as a result of solar and wind energy that can be harnessed. The payback time is relatively short. Ericsson studies have shown that for low- to medium-capacity base stations, solar energy provides a more cost-effective power source than diesel fuel within about two years. In addition, solar charging micro-businesses are expected to develop rapidly in the future. This will stimulate the local economy, provide new jobs, and increase the demand for new services as more people will be able to charge their phones and start using more demanding services. Other small business developments can be stimulated. In Mayange, Rwanda, Ericsson and MTN have launched a pilot project in partnership with the GSMA Development Fund, creating small business entrepreneurs through the use of community phones and the internet. The concept is based on the principle that not all residents in the village can afford their own phone or computer, but rather can buy shared services from a local village entrepreneur. After just three months, weekly income for the community phone entrepreneurs increased by 22 percent. Research shows that residents use the phones to communicate with relatives across Rwanda, to access market information and to arrange informal remittances. The community internet entrepreneurs increased their weekly income by 20 percent by letting residents use the computers for and news, job and entertainment searches. Turning rural areas into good business Operators are understandably currently focused on urban areas as the urban scenario presents a more profitable business case. This, however, does not mean that the rural environment will not present a sufficiently profitable business case. Untapped markets, such as in rural Africa, are likely to become attractive to operators, particularly as technology becomes increasingly affordable. The mobile network can be scaled to meet growing demand cost-efficiently. This means designing and building a network that provides the lowest possible total cost of ownership from the start. As the number of users, range of applications and traffic volumes grow, operators must be able to profitably expand their network by offering services also to the low-income segments in small steps and flexibly. With this in mind, operators can benefit directly from the applications that are developed locally, for exemple in the Ericsson Innovation Centre, and implemented in the Millennium Villages. Some examples are e-health services that save the patients both time and money in travel and medical care, which in turn can be used for buying more airtime. Also, community health workers can now collect household data with their mobile handsets. Ericsson and operator Zain has installed a mobile network in Dertu, Kenya, bringing basic voice and data coverage to the area for the very first time. Because the livelihood of Dertu s citizens revolves around the well-being of their animals, a mobile phone application that tracks animal health has been trialed. The result is an early warning system that monitors key health indicators. Animal health workers enter data into a mobile phone, which in turn is used to observe health trends within the livestock population. At key thresholds, the system alerts the animal health workers to serious threats to the livestock, helping them to take appropriate action before it is too late. Cost and price factors will also have crucial impact on the uptake of services and market growth. African operators will have to make mobile telephony affordable for lower-income users. This means that they will have to adopt high-volume, low-cost market penetration strategies using innovative pricing and payments methods. African governments push telecom services as part of their ICT strategies, so operators should soon see profitable network solutions for voice that will eventually scale up to EDGE 34 EBR # C_EBR_1/09.indd 34
4 sustainable cities ««momentum for change ««theme The success of mobile telephony in high-growth markets is closely tied to income generation, either as a business in itself or as a way of gaining access to broader markets, securing the best price for commodities, or saving time and resources by having accurate and up-to-date information. and 3G networks in for rural areas. Ericsson s experience from the Millennium Villages is that the uptake of mobile services will happen more quickly than anticipated in the rural environment, because the need for even basic services is much greater than in developed areas. A sustainable way forward Mobile phones are perfectly suited to life in these parts of the world, where legacy information and communications technologies struggle to penetrate. Mobile phones are cheaper and easier to use than conventional telephones or PC:s; they do not need a regular power supply; and can be easily used by people who are inexperienced with technology. Mobile phones have all the voice and data capabilities needed to bring people into the digital society. Existing business models, as well as products and services, are not always applicable when addressing areas with few and low-spending users. Access to information is critical to breaking the poverty cycle, for instance providing farmers and fishermen with better knowledge about their market makes it possible for them to market their goods and get better prices for their products. Therefore, mobile connectivity creates a vital foundation for change by providing tools that empower people to lift themselves out of extreme poverty. To drive sustainable socioeconomic development, all the different stakeholders involved, along with their sometimes conflicting agendas, must be taken into consideration. Nonetheless, it is crucial that the solutions support local entrepreneurs, who assist in the development of local economies and in promoting information sharing. The mobile phone experience could be seen as the template for sparking and fostering interest in the internet. The success of mobile telephony in high-growth markets is closely tied to income generation, either as a business in itself or as a way of gaining access to broader markets, securing the best price for commodities, or saving time and resources by having accurate and up-to-date information. Internet-capable mobile phones are both accessible and affordable, but new internet capabilities must be explained to potential new con- sumers in terms that are relevant to their lives. Unlike city-dwellers who want anywhere, anytime connectivity, rural residents move in a limited geographic area and are highly involved at a grassroots level family, friends, and village or community. Wider mobility, therefore, is not a high priority. Mobile telephones are therefore adequate to provide the required accessibility in areas where few people own a computer and no fixed infrastructure is in place. From an infrastructure perspective, this means starting with the access, speed and capacity that support basic everyday services, ensuring that small businesses can reap the benefits of the internet without having to foot an exorbitant bill for advanced technology they do not, or cannot, exploit. Furthermore, combined internet and voice handsets must be adapted to meet the lower literacy needs, for example, through bigger displays and touch screens and unique situations of rural users, while being available at low cost. Implementing the broad benefits of the widespread availability of ICT requires a coordinated, long-term approach and the telecom industry (infrastructure vendors, handset vendors, and operators) has a key role to play. However, governments, regulators, educators, and content providers should also play their part, if the crucial first step appreciation of the benefits of increased efficiencies and societal development is to be achieved. How the villagers are being served Access to basic healthcare is critical and in the Millennium Villages project, the mobile connection plays a central role for patients and healthcare professionals. using mobile phones, patients in remote places are able to call the local community health worker or the district clinic to seek advice, or simply reach for help in an emergency. Mobile phones can also be used for other public health- The money-maker Research conducted through the Ericsson ConsumerLab in high-growth markets has proven that mobile phones are crucial to securing a better livelihood. The research found that people can double or even triple their income by being connected to a mobile phone network. In addition, people in lower-income segments are willing to spend a higher portion of their income on mobile communication not only for its financial, social and environmental benefits, but also because it makes them less vulnerable to the stress of being poor. It also improves their education, health and security, not to mention status. EBR # C_EBR_1/09.indd 35
5 ...the phone can be used to provide information on how to care for a newborn baby. The m-learning solution will also be used for other sectors and purposes in the villages, such as to train farmers on how to maximize agricultural production and marketing. A model for development The Millennium Villages initiative offers a model for helping rural African communities lift themselves out of extreme poverty. The project is proving that by fighting poverty at the village level through community-led development, rural Africa can achieve the Millennium Development Goals global targets for reducing extreme poverty and hunger by half and improving education, health, gender equality and environmental sustainability by oriented tasks, such as information and education delivery, directly to villagers using their own mobile phones. People can call and listen to pre-recorded health-related messages. This facilitates the dissemination of public health information about common illnesses, such as tuberculosis, malaria, and HIV/AIDS. Also emergency alert systems, bulk SMS messages, and ring-back tones give villagers and healthcare workers the opportunity to receive and send critical health, weather, and crop information. For healthcare professionals, there are a number of tele-health services of high interest. The most straight forward application is the simple voice service, such as using standard mobile phones to call a colleague for advice or medical counseling. Systems to transmit pictures and videos, as well as measure physical data, are also available. This communication channel is used most widely by community healthcare workers, nurses and doctors. Another important professional tool is the decision support system for community healthcare workers, which has been described as an external brain. Basic data about diseases is recorded, and a diagnosis is made based on data from the system, then delivered to community healthcare workers. The next step is to enable retrieval of healthcare data from central databases using mobile phones. In addition, there is a move in the villages to gradually transform the paper records into electronic data. To facilitate data collection for healthcare, education, agriculture, business, finance, and government, Ericsson is developing a mobile survey tool (MST). It enables operators and end users (healthcare providers, governments, and other organizations) to dynamically create and deploy questionnaires and survey forms without the need for any coding or database. The collected data can then be post-processed for various functions within the villages or for other government requirements. The MST was inspired by the birth and death registration process. Birth and death statistics from remote rural villages are often difficult and time-consuming to obtain owing to manual paperwork and poor infrastructure. This often means that unregistered children are overlooked for life-saving interventions, such as immunizations. Furthermore, the inability to abstract mortality patterns hinders the ability to design and implement healthcare interventions. Mobile learning offers cost-effective, interactive and educational content for healthcare education on a mobile device. Ericsson s m-learning solution has been adapted for community health workers in the Millennium Villages. For example, the phone can be used to provide information on how to care for a newborn baby. The m-learning solution will also be used for other sectors and purposes in the villages, such as to train farmers on how to maximize agricultural production and marketing. Authors Anna Kramers has worked with developing multimedia business opportunities since the beginning of She has also studied industrial ecology at the Royal Institute of Technology in Stockholm. She is responsible for developing a portfolio of applications for global sustainability and emerging markets and is part of the team working with Ericsson s sustainability strategy. (anna.kramers@ericsson.com) Peter Håkansson is a Research Engineer at Ericsson Research in Kista, Sweden, focusing on mobile healthcare solutions. He holds a master s degree from the Royal Institute of Technology in Stockholm. Before joining Ericsson in 2005, he held various positions within the medical device industry. (peter.hakansson@ericsson.com) 36 EBR # C_EBR_1/09.indd
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