1. Serving the Poor: Drivers ofBusiness Model Innovation in MobileBy Yogesh Garg 11EMPDM21 4BIMTECH

2. Introduction This case focuses the light on the importance of connecting the lowerincome consumers by mobiles There are more than 2.5 billion people at the bottom of pyramid. Ofthose, more than 1 billion people have per capita income of less than$1 per day. A study by London Business School found that, in a typicaldeveloping country, a rise of 10 mobile phones per 100 people boostsGDP growth by 0.6 percentage points. World Bank estimation: 75% of Worlds population are in Mobilenetworks coverage But Most companies choose to focus on Upper & middle incomesegments of Developing World Two perceived reasons of Universal access gap: Affordability &Availability Actions to fill Universal access gap: Universal access funds &Subsidies forInfrastructureinvestment 3. Beyond shared-Use Models Many have applauded shared use models adopted by Grameenphone in Bangladesh and Vodacom in SA. Providing Telecommunication to Community that could not affordindividual ownership Fundamental Question: Why cant poor afford such services? Barriers: Cost of Mobile Phone But research in Brazil and chinaPenetration of refrigerators : 68% in E segment and 88% in DsegmentPenetration of television : 72% in E segment and 90% in DsegmentMobile ownership in Brazil : 80 million individuals in 2006 Reasons: Innovation in consumer credit ( Installment payments) 4. Business model innovation: Beyond Voice tofinancing Relinace Infocomm in India: Adopted Handsetinstallment plan in a risk sharing arrangement Mansoon Hangama offer: A handset worth $120 foronly $10 upfront and $4 per month for 36 months Share of net adds: 50% Market Share : from nothing to more than 20% Worked with insurance company to insure handset Redesigned dealer incentives Engaged in massive marketing efforts Built an elaborate collections infrastructure to controlbad debt Aggressive tariff packages 5. Individual Handset ownership Handset financing models New handsets are getting cheaper by theintroduction of ultra low cost handsets Availability of second-hand handsets So handsets affordability has not been the keybarrier to penetration in developing markets 6. Do firms really wants to serve thepeople? are more concerned with the threat of cannibalisingtheir high-margin A & B segment consumers than inrealising the opportunity of serving the poor throughnovel tariff and distribution approaches Model in India: Price:$0.02 per minute on almost allnetworks and highest minutes of use per month in theworld Same model was adopted by Smart CommunicationsInc. in the Philippines 7. Competition: A drive forInnovation India: A lot number of players Hyper competitive market : 22 circles with 4-6 players in each circle revenues per minute are low in India per-minute usage now the highest in Asia Smart approach electronic recharge and micro-top-ups village-level micro-finance organizations Innovation in Technology innovations such as GSM extension technology quite simply attaching a long aerial to a mobile handset to extend range from 15 kilometres to 30 kilometres or more that can reduce CAPEX and OPEX for operators. 8. Thank you