Tuesday, 13 December 2011

Information for emerging market mobile operator

Over a billion people in the Sub-Sahara Africa and South Asia earn between $1 and $2 a day, live within the reach of mobile network coverage, and use a mobile phone. They do not have access their own phone or mobile identity, and pay a significant premium, sometimes up to 20% of their take home pay, for mobile phone services. These users currently use mobile through public payphones or by sharing a device with family and friends.

Base of the pyramid users remain under-served due to a combination of factors: the relatively high cost of a mobile device if on a volatile and low income; perceptions by institutions and companies that this group do not use or understand mobile technology, and the practical challenges of addressing a rural population with variable income and literacy rates.  A SIM card may inexpensive to buy, but very expensive to distribute (at least $7 per SIM and upto $20 in some markets). SIMs are impractical because you need to pull apart a phone to use a borrower's SIM card and a SIM is easy to lose or damage. Because there will be no privacy when using a SIM in someone else's device, there is a barrier to sharing phones. Shared mobile users have no opportunity to be loyal to a single network, and the service provider has no opportunity to treat them as consumers and gain loyalty by tracking usage and managing loyalty schemes, discount bundles or having users grow from shared use to a device of their own.

For these and other reasons, network operators have treated the base of the pyramid market as an unattractive segment. This position is unsustainable, as urban penetration of mobile in Sub-Sahara Africa is reaching levels of saturation accompanied by price wars. Companies must figure out ways to grow their markets into the Base of the Pyramid in order to be competitive in the future.

Movirtu has created a way to address this market sustainably and profitably. We have done so through a combination of technical breakthrough innovation, and a re-engineering of the mobile proposition from user needs up to solution. Our award winning Cloud Phone technology allows mobile providers to supply and maintain the secure identity of a mobile user without the user needing a phone or a SIM card: which does away with the challenge of unprofitable distribution costs. In tandem, we have invested with our partners in user understanding and market segment needs and work with our clients to deliver not only technical solutions, but market study work and a complete market launch package including marketing collateral.