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WORLDTRADE

ORGANIZATION

WT/COMTD/W/193

14 February 2013

(13-0844)

Committee on Trade and Development

ELECTRONIC COMMERCE DE!ELO"MENT

AND #MALL MEDI$M%#IZED ENTER"RI#E#

Background Note by the Secretariat1

1

This docuent has been !re!ared under the res!onsibi"ity o# the $T% Secretariat and is &ithout!re'udice to the !ositions o# ebers and to their rights and ob"igations under the $T%

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Ta&le o' Content(

I) INTROD$CTION)))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))

II) T*E GROWT* O+ T*E INTERNET))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))

III) T*E DIGITAL DI!IDE, #TILL A REALIT-.)))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))

I!) T*E GROWT* O+ E%COMMERCE)))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))

1) Wat i( e%0ommer0e.)))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))

!) 2 2C OR 2G.)))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))

1) (ine((%to%(ine(( 425)))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))

2) (ine((%to%Con(mer 42C5))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))

3) (ine((%to%Government 42G5))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))

!I) ACCE##ING T*E WORLDWIDEWE T*RO$G* MOILE TELE"*ON-))))))))))))))

!II) *OW DO "OORER CO$NTRIE# ENE+IT +ROM MOILE TELE"*ON-.

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2) *o8 do poorer 0ontrie( &ene'it 'rom mo&ile telepon. A6ri0ltre On%line

(ppl and demand in'ormation +i(erie( and La&or mo&ili:ation)))))))))))))))))))))))))))))))

3) A6ri0ltre)))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))

;) On%line data and in'ormation (ervi0e()))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))

) La&or Mo&ili:ation))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))

!III) MOILE MONE-)))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))

1) Inerent ene'it())))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))

I?) E%COMMERCE AND #MALL MEDI$M ENTER"RI#E#)))))))))))))))))))))))))))))))))))))))))))))

?) "OLIC- I##$E# % W*AT RE#TRICT# #ME# +ROM MORE +$LL- $#ING

E%COMMERCE.)))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))

?I) CONCL$#ION))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))

ANNE?))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))

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The number of mobile phones in use worldwide between 2000 and 2012 grew from less than 1 to more

than 6 billion. The mobile revolution is transforming livelihoods, helping to create new businesses,

and changing the way we communicate, work and earn and spend income. The mobile phone

network is already "the biggest machine" the world has ever seen, and now that machine is being

used to deliver development opportunities on a scale never before imagined. uring this seconddecade of the new millennium, ma!imiing the potential of mobile phones is a challenge that will

engage governments, the private sector, and the development community alike.

#ource$ %orld &ank, 'nformation and (ommunications for evelopment 2012$ )a!imiing )obile

I) INTROD$CTION

1 This background !a!er &as !re!ared in res!onse to a re/uest #or a &orksho! on "ectronic+oerce ,ee"o!ent and Ss ade at the $T%s +oittee #or Trade and ,ee"o!ent(+T,) in u"y 2012 (see 5nne6 1) The !a!er #ocuses on the re"ationshi! bet&eene"ectronic-coerce (e-coerce) dee"o!ent and sa"" and ediu-si7ed enter!rises (Ss)

and on ho& soe o# the "atter hae used e-coerce to !roote arket serice and se"" their!roducts nationa""y and internationa""y arious ty!es o# e-coerce are discussed such as business-to-business business-to-consuer and business-to-goernent 5nd the ast !otentia" o# obi"ecoerce is described gien the key ro"e it !"ays in dee"o!ing and "east-dee"o!ed countries(9,+s) This !a!er by no eans !retends to be an e6haustie study o# the sub'ect under discussion

but does atte!t to !roide an oerie& o# both the o!!ortunities and cha""enges #acing Ss in"east-dee"o!ed and dee"o!ing countries

2 5 key #ocus o# the !a!er is on &hy soe sa"" and ediu-si7ed enter!rises hae used theinternet and rea"i7ed signi#icant increases in their e6!orts and business actiities oera"" &hereasothers are bare"y aking use o# the huge !otentia" o##ered by the internet and its arious a!!"ications,ee"o!ent-re"ated issues are discussed such as ho& "o& "ee"s o# inestent inade/uate

in#rastructure or a "ack o# a!!ro!riate "egis"ation can negatie"y a##ect e-coerce or sti#"e its!otentia" The need to oercoe in#rastructura" bott"enecks in te"ecounications trans!orte"ectricity grids and "ogistics are addressed a"ongside !o"icy issues such as consuer !rotectionsecurity o# transactions !riacy o# records and inte""ectua" !ro!erty The !a!er has a strong #ocus onobi"e te"e!hony and obi"e-coerce (-coerce) in genera" because o# the key ro"e both !"ayin any "o&-incoe dee"o!ing countries and because o# the ast !otentia" such techno"ogies hae#or i!roing trade and business o!!ortunities

II) T*E GROWT* O+ T*E INTERNET

1 The #irst decade o# the ne& i""enniu has &itnessed a !ro#ound change and draaticincrease in the &ay business and trade takes !"ace e"ectronica""y ach day ore users in "east-dee"o!ed and dee"o!ing countries are accessing the internet through terina"s 5 gro&ing

!ercentage o# users are no& a"so accessing the &eb through obi"e techno"ogy .redictions ca"" #orthe internet and es!ecia""y the use o# obi"e a!!"ications to e6!and e6!onentia""y in the decadesahead There is enorous !otentia" #or using in#oration and counication techno"ogies (:+Ts) tocontribute to the socia" and econoic !rogress o# dee"o!ing countries &or"d&ide 5 key ro"e in thisregard is !"ayed by sa"" and ediu-si7ed businesses

2 ;N+T5,s recent 'nformation *conomy +eport 2010 sho&s ho& :+T use by icro- andsa"" and ediu-si7ed enter!rises (Ss) has i!roed not on"y business !er#orance but hashe"!ed i!roe "ie"ihoods in soe o# the &or"ds !oorest regions and counities anyentre!reneurs in dee"o!ing countries no& hae a rea" !ossibi"ity to bene#it #ro :+Ts in their

business actiities :n any cases this has resu"ted in gains in enhanced !roductiity By i!roingcounication channe"s both doestica""y and internationa""y the a!!"ication o# re"eant :+Ts can

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great"y enhance the co!etitieness o# business

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dee"o!ing countries in ters o# nuber o# connections> +hart 2 high"ights the nuber o#indiidua"s using the internet !er 100 inhabitants $hi"e the 5#rica region has a !enetration rate o#124 uro!e has the highest !enetration rate &ith A84 out o# eery 100 uro!eans haing access

+hart 2? :ndiidua"s using the internet !er 100 inhabitants - 2011

#ource$ 'T

III) T*E DIGITAL DI!IDE, #TILL A REALIT-.

1 The ter =digita" diide= is coon"y used to e6!"ain the ga! bet&een indiidua"shouseho"ds businesses and geogra!hic areas at di##erent socio-econoic "ee"s regardingo!!ortunities to access in#oration and counication techno"ogies as &e"" as the use o# the internet#or a &ide ariety o# actiities The =digita" diide= is used to denote di##erences both aong and&ithin countriesA Since 2000 the !hrase =digita" diide= has coe to sybo"i7e the ga! in :+Tca!abi"ities bet&een dee"o!ed and dee"o!ing countries @o&eer cii" society organi7ations suchas the $or"d $ide $eb Foundation be"iee that the digita" diide is ore a sy!to o# other ore

#undaenta" !rob"es in a gien country These can inc"ude an education diide a hea"th diide anda goernance diide :t is not a"&ays the cause o# a "o&er "ee" o# dee"o!ent any e6a!"eshae sho&n that narro&ing the =digita" diide= can assist in narro&ing di##erences in other areas o#dee"o!enta" concern The i!ortance o# !rioritising the dee"o!ent o# e-coerce "ies in the#act that as the !ace and sco!e o# the techno"ogica" reo"ution increases and e6!ands so does the

!otentia" digita" diide htt!?**&&&bbcco*ne&s*techno"ogy-11>A48AA;nderstanding the ,igita" ,iide htt!?**&&&oecdorg*internet*interneteconoy*18884>1!d#

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2 The internet !"ays a "arge ro"e in e-coerce and has continued gro&ing &or"d&ide in terso# users and !enetration 5"though dee"o!ed econoies sti"" accounted #or the a'ority o# internetusers in 200A and are sti"" ery uch ahead in ters o# internet !enetration dee"o!ing econoieshae been catching u! /uick"y The nuber o# users in dee"o!ing countries actua""y sur!assed that

o# dee"o!ed countries soetie in 2010

8

Techno"ogica" !rogress has indeed been thriing in bothdee"o!ing and dee"o!ed countries and this trend is e6!ected to continue as the sector attracts oreresearch #unds and inestent

+hart 3? :ndiidua"s using the internet by "ee" o# dee"o!ent

#ource$ 'T

I!) T*E GROWT* O+ E%COMMERCE

1 There is no /uestion that e-coerce has gro&n ra!id"y since the #irst users started to bro&sethe &or"d&ide &eb in search o# goods and serices Today sa"es rea"i7ed oer the internet re!resent asigni#icant !ro!ortion o# oera"" coercia" sa"es :n 11 the internet had "ess than three i""ionusers around the &or"d and its a!!"ication to e-coerce &as non-e6istent 5"ost a decade "ater by1 an estiated 300 i""ion users accessed the internet and a!!ro6iate"y one /uarter o# theade !urchases on"ine #ro e"ectronic coerce sites &orth a!!ro6iate"y ;SC110 bi""ion Thisyear g"oba" business-to-consuer e-coerce sa"es are set to !ass the ;SC12> tri""ion ark 10

1) Wat i( e%0ommer0e.

2 For !ur!oses o# the trade #ocus o# this !a!er e-coerce is the sa"e or !urchase o# goods or

serices conducted oer co!uter net&orks by ethods s!eci#ica""y designed #or the !ur!ose o#receiing or !"acing o# orders en though goods or serices are ordered e"ectronica""y the !ayentand the u"tiate de"iery o# the goods or serices do not hae to be conducted on"ine 5ne-coerce transaction can be bet&een enter!rises househo"ds indiidua"s goernents and other

!ub"ic or !riate organisations :nc"uded in these e"ectronic transactions are orders ade oer the&eb e6tranet or e"ectronic data interchange The ty!e o# transaction ade is de#ined by the ethodo# !"acing the order Nora""y e6c"uded are orders ade by te"e!hone ca""s #acsii"e or anua""yty!ed e-ai"s11

8:T;htt!?**&&&oecdorg*eco*econoicout"ookana"ysisand#orecasts*208433!d#10htt!?**&&&internetretai"erco*2012*0A*14*g"oba"-e-coerce-sa"es-&i""-to!-12>-tri""ion-201311

=htt!?**&&&oecd-i"ibraryorg*sites*stiDscoreboard-2011-en*0A*10*inde6ht"E'sessionid04de/2yt1de"taGcontentTy!eHite:d*content*cha!ter*stiDscoreboard-

http://www.oecd.org/eco/economicoutlookanalysisandforecasts/2087433.pdfhttp://www.oecd.org/eco/economicoutlookanalysisandforecasts/2087433.pdfhttp://www.internetretailer.com/2012/06/14/global-e-commerce-sales-will-top-125-trillion-2013http://www.internetretailer.com/2012/06/14/global-e-commerce-sales-will-top-125-trillion-2013http://www.oecd-ilibrary.org/sites/sti_scoreboard-2011-en/06/10/index.html;jsessionid=v04de9q27yt1.delta?contentType=&itemId=/content/chapter/sti_scoreboard-2011-64-en&containerItemId=/content/serial/20725345&accessItemIds=/content/book/sti_scoreboard-2011-en&mimeType=text/htmlhttp://www.oecd-ilibrary.org/sites/sti_scoreboard-2011-en/06/10/index.html;jsessionid=v04de9q27yt1.delta?contentType=&itemId=/content/chapter/sti_scoreboard-2011-64-en&containerItemId=/content/serial/20725345&accessItemIds=/content/book/sti_scoreboard-2011-en&mimeType=text/htmlhttp://www.oecd-ilibrary.org/sites/sti_scoreboard-2011-en/06/10/index.html;jsessionid=v04de9q27yt1.delta?contentType=&itemId=/content/chapter/sti_scoreboard-2011-64-en&containerItemId=/content/serial/20725345&accessItemIds=/content/book/sti_scoreboard-2011-en&mimeType=text/htmlhttp://www.oecd.org/eco/economicoutlookanalysisandforecasts/2087433.pdfhttp://www.internetretailer.com/2012/06/14/global-e-commerce-sales-will-top-125-trillion-2013http://www.oecd-ilibrary.org/sites/sti_scoreboard-2011-en/06/10/index.html;jsessionid=v04de9q27yt1.delta?contentType=&itemId=/content/chapter/sti_scoreboard-2011-64-en&containerItemId=/content/serial/20725345&accessItemIds=/content/book/sti_scoreboard-2011-en&mimeType=text/htmlhttp://www.oecd-ilibrary.org/sites/sti_scoreboard-2011-en/06/10/index.html;jsessionid=v04de9q27yt1.delta?contentType=&itemId=/content/chapter/sti_scoreboard-2011-64-en&containerItemId=/content/serial/20725345&accessItemIds=/content/book/sti_scoreboard-2011-en&mimeType=text/htmlhttp://www.oecd-ilibrary.org/sites/sti_scoreboard-2011-en/06/10/index.html;jsessionid=v04de9q27yt1.delta?contentType=&itemId=/content/chapter/sti_scoreboard-2011-64-en&containerItemId=/content/serial/20725345&accessItemIds=/content/book/sti_scoreboard-2011-en&mimeType=text/html

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3 The ;nited States (;S) reains the &or"ds biggest e-coerce arket #o""o&ed by the;nited Iingdo and a!an :t is estiated that the gro&th rates #or e"ectronic transactions carried outoer the net &i"" be a!!ro6iate"y ten to 1>J in the coing years +hina ho&eer sa& e-coercesa"es gro& by ore than 130J in 2011 and it is "ike"y to be on"y a short atter o# tie be#ore it

becoes the &or"ds sing"e "argest e-coerce arket

12

+hart 4? obi"e-ce""u"ar subscri!tions by "ee" o# dee"o!ent

#ource$ 'T

!) 2 2C OR 2G.

1 There are nuerous ty!es o# coercia" transactions that occur on "ine #ro buying goodssuch as books or c"othes to !urchasing serices such as air"ine tickets or aking hote" or car renta"

reserations Since the ain #ocus o# this !a!er is on ho& Ss use the internet the discussion here&i"" concern on"y a #e& serices &hich re"ate c"ose"y to S econoic actiity These inc"ude?e"ectronic counications in the area o# Business-to-Business (B2B) Business-to-+onsuer (B2+)Business-to-J o# a"" inter-co!any transactions and retai" sa"es by 20114

2011-A4-enHcontainer:te:d*content*seria"*202>34>Haccess:te:ds*content*book*stiDscoreboard-2011-enHieTy!ete6t*ht"=

12htt!?**&&&internetretai"erco*2012*0A*14*g"oba"-e-coerce-sa"es-&i""-to!-12>-tri""ion-201313htt!?**searchciotechtargetco*de#inition*B2B14%+, conoic %ut"ook A and :nternationa" ,ata +or!oration (:,+) :,+ is the !reier g"oba"

!roider o# arket inte""igence adisory serices and eents #or the in#oration techno"ogy

te"ecounications and consuer techno"ogy arkets :,+ he"!s :T !ro#essiona"s business e6ecuties and theinestent counity ake #act-based decisions on techno"ogy !urchases and business strategy

http://www.oecd-ilibrary.org/sites/sti_scoreboard-2011-en/06/10/index.html;jsessionid=v04de9q27yt1.delta?contentType=&itemId=/content/chapter/sti_scoreboard-2011-64-en&containerItemId=/content/serial/20725345&accessItemIds=/content/book/sti_scoreboard-2011-en&mimeType=text/htmlhttp://www.oecd-ilibrary.org/sites/sti_scoreboard-2011-en/06/10/index.html;jsessionid=v04de9q27yt1.delta?contentType=&itemId=/content/chapter/sti_scoreboard-2011-64-en&containerItemId=/content/serial/20725345&accessItemIds=/content/book/sti_scoreboard-2011-en&mimeType=text/htmlhttp://www.oecd-ilibrary.org/sites/sti_scoreboard-2011-en/06/10/index.html;jsessionid=v04de9q27yt1.delta?contentType=&itemId=/content/chapter/sti_scoreboard-2011-64-en&containerItemId=/content/serial/20725345&accessItemIds=/content/book/sti_scoreboard-2011-en&mimeType=text/htmlhttp://www.oecd-ilibrary.org/sites/sti_scoreboard-2011-en/06/10/index.html;jsessionid=v04de9q27yt1.delta?contentType=&itemId=/content/chapter/sti_scoreboard-2011-64-en&containerItemId=/content/serial/20725345&accessItemIds=/content/book/sti_scoreboard-2011-en&mimeType=text/htmlhttp://www.internetretailer.com/2012/06/14/global-e-commerce-sales-will-top-125-trillion-2013http://www.internetretailer.com/2012/06/14/global-e-commerce-sales-will-top-125-trillion-2013http://www.internetretailer.com/2012/06/14/global-e-commerce-sales-will-top-125-trillion-2013http://searchcio.techtarget.com/definition/B2Bhttp://searchcio.techtarget.com/definition/B2Bhttp://www.oecd-ilibrary.org/sites/sti_scoreboard-2011-en/06/10/index.html;jsessionid=v04de9q27yt1.delta?contentType=&itemId=/content/chapter/sti_scoreboard-2011-64-en&containerItemId=/content/serial/20725345&accessItemIds=/content/book/sti_scoreboard-2011-en&mimeType=text/htmlhttp://www.oecd-ilibrary.org/sites/sti_scoreboard-2011-en/06/10/index.html;jsessionid=v04de9q27yt1.delta?contentType=&itemId=/content/chapter/sti_scoreboard-2011-64-en&containerItemId=/content/serial/20725345&accessItemIds=/content/book/sti_scoreboard-2011-en&mimeType=text/htmlhttp://www.oecd-ilibrary.org/sites/sti_scoreboard-2011-en/06/10/index.html;jsessionid=v04de9q27yt1.delta?contentType=&itemId=/content/chapter/sti_scoreboard-2011-64-en&containerItemId=/content/serial/20725345&accessItemIds=/content/book/sti_scoreboard-2011-en&mimeType=text/htmlhttp://www.internetretailer.com/2012/06/14/global-e-commerce-sales-will-top-125-trillion-2013http://searchcio.techtarget.com/definition/B2B

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2) (ine((%to%Con(mer 42C5

3 5"though B2+ e-coerce receies a "ot o# attention B2B transactions #ar e6ceed B2+transactions 5ccording to the :,+ g"oba" B2+ transactions are estiated to reach ;SC12 tri""ion at

the end o# 2012 ten ties "ess than B2B transactions B2+ e-coerce entai"s businesses se""ing tothe genera" !ub"ic ty!ica""y through cata"ogues that ake use o# sho!!ing cart so#t&are 5"thoughB2+ e-coerce on"y accounts #or on"y a sa"" share o# e-coerce as a &ho"e it continues togro& B2+ e-coerce is highest in Nor&ay ,enark S&eden the ;nited Iingdo and the ;Sand coers ain"y co!uter-re"ated !roducts c"othing and digiti7ed !roducts ,es!ite the "o& a"ueo# its transactions B2+ e-coerce has receied the ost attention !art"y because issues such asconsuer trust and data !rotection hae receied considerab"e concern #ro !o"icy akers 1>

3) (ine((%to%Government 42G5

4 Business-to- i""ion obi"e !hone subscribersin 5#rica This has gien 5#ricans a si!"e and !erasie eans o# sharing in#oration andconducting business een in s!ite o# the #act that on"ine business transactions can be "ogistica""yco!"icated to e6ecute18

1>;N+T5, :K 20041A-coerce and -Business Lorayda Kuth 5nda ;N,.-5.,:.1

htt!?**&&&bbccouk*ne&s*101>AAA18;N+T5, :K 2002

http://www.bbc.co.uk/news/10156667http://www.bbc.co.uk/news/10156667http://www.bbc.co.uk/news/10156667

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> obi"e &eb ado!tion is gro&ing at a #aster rate today than the internet did in the 10s andear"y 2000s erging arkets "ike :ndia +hina Turkey and Bra7i" hae seen an e6!onentia" gro&thin obi"e &eb use &ith #igures that hae sur!assed ature arkets obi"e 3< subscri!tions in the;S gre& by 2AJ in 2011 &hereas Bra7i" Turkey +hina and :ndia sa& gro&th o# J 104J 12J

and 10>0J res!ectie"y

22

Tab"e 1? o"ution o# obi"e-ce""u"ar subscri!tions !er region

obi"e-ce""u"arsubscri!tions (i""ions) (!er 100 !eo!"e)

200> 200A 200 2008 200 2010 2011 200> 200A 200 2008 200 2010 2011

,ee"o!ed 2 112 1243 132> 1384 1413 1>14 821 2 102 1083 112A 114> 1223

,ee"o!ing 121> 1A1 212A 20A 32A3 388 44> 22 302 31 41 >84 A8 8

$or"d 220 24 33A 4031 4A4 >311 >2 33 41 >0A > A82 1 8>

5#rica 8 12 14 24A 2 3A3 434 124 1 23> 324 382 4>A >31

5rab States 8> 12A 1> 214 2A> 310 3>0 21 33 >3 A34 AA 88 A

5sia and .aci#ic 834 104 138 13 21AA 2A2> 300 22A 288 31 4AA >A3 AA A

+:S 1AA 22 2A 312 3>A 3 408 > 818 A1 1122 12 13>1 14A

uro!e >>0 A10 A 14 18 2A 4 1A 1011 111A 111 111 11 1208

The 5ericas 4> >>2 A4 41 814 8A 8 >21 A2 21 81> 88> 43 10>4

#ource$ 'T - pdated on une 2012

!II) *OW DO "OORER CO$NTRIE# ENE+IT +ROM MOILE TELE"*ON-.

1 obi"e te"e!hony has trans#ored "i#e #or any consuers in dee"o!ing countries obi"e!hones he"! i!roe the "ie"ihood o# the !oor through better counications and greater access toin#oration any !oor #arers are no& ab"e to receie better !rices #or their cro!s because they

hae access to in#oration on arket !rices !riari"y ia obi"e !hones TradeNet a 2J :n +entra"and South 5erica it had gro&n to 4>J ean&hi"e across 5sia and the .aci#ic in 2010 obi"e

22htt!?**&&&obi#yco*about*

http://www.mobify.com/about/http://www.mobify.com/about/http://www.mobify.com/about/

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ce""u"ar !enetration stood at A2J &hich &as higher than obi"e ce""u"ar !enetration in uro!eeight years ear"ier at AJ :n co!arison obi"e !hone use in uro!e had gro&n to 11J by 2010

> The sae re!ort noted that internet user !enetration in 5#rica gre& oer 20-#o"d in the decade

to 2010 #ro 0> J to 108J and that this gae 5#rica higher internet user !enetration in 2010 thanin the +oon&ea"th o# :nde!endent States (+:S) #ie years ear"ier :t noted that in +:S internet!enetration gre& #ro 102J in 200> to 34J in 2010

A 5ccording to the re!ort 9,+s #orged ahead in obi"e but sti"" need to coe on "ine The:T; noted that in 2010 833 i""ion !eo!"e &ere "iing in the 4 9,+s :n s!ite o# these being the&or"ds !oorest countries obi"e !hone serices across the 9,+s gre& steadi"y throughout the #irstdecade o# the ne& i""enniu :t added that in 2010 a"ost t&o thirds o# !eo!"e in 9,+s hadobi"e ce""u"ar coerage &ith !enetration reaching 34J u! #ro 'ust >J on"y #ie years ear"ier andc"ose to the g"oba" #igure #or 200> :n 'ust t&o o# the 4 9,+s &as obi"e !enetration sti"" be"o& >Jin 201023

!illa6e "one(,

The conce!t o# i""age .hone is an idea &hich caught !eo!"es iagination

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aerage rate o# >AJ !er year co!ared to the g"oba" aerage o# 3J @o&eer the e6!ectedgro&th in 5#rica and the idd"e ast is #ro a re"atie"y "o& base? in 2010 the obi"e !enetrationrate in 5#rica stood at >A>J o# the !o!u"ation

The 5sia-.aci#ic region &i"" continue to be the "argest regiona" obi"e !hone arket &ith3 bi""ion subscri!tions in 2020 (u! #ro 24 bi""ion in 2010) +hina &i"" continue to be hoe to the&or"ds "argest nuber o# obi"e !hone subscri!tions &ith 13 bi""ion subscribers in 2020 (u! #ro83 i""ion in 2010) @o&eer :ndia M current"y the &or"ds second "argest obi"e !hone arket M&i"" hae signi#icant gro&th !otentia" not on"y in the 5sia-.aci#ic region but g"oba""y &ith thenuber o# obi"e !hone subscri!tions #orecast to gro& at an aerage annua" rate o# >J during2011-2020 to reach 11 bi""ion in 2020 Fro a "u6ury !roduct used !riari"y in dee"o!ed countriesobi"e te"e!hony has becoe uniersa""y aai"ab"e :t is no& an integra" !art o# "i#e #or any

10 ean&hi"e in the dee"o!ed &or"d the coercia" de!"oyent o# ne6t-generationtechno"ogies and deices &i"" increase usage o# adanced obi"e serices &hich in turn &i"" o!en u!any ne& e-coerce business o!!ortunities and es!ecia""y in dee"o!ing countries2>ean&hi"e

ore data a!!"ications are no& regu"ar"y being used in dee"o!ing countries to conduct business(-coerce) engage in retai" or coercia" banking actiities (-banking) and to #ind &ork(-"abour)

Lo8 0o(t international 0apa0itis !robab"y one o# the key ti!!ing !oints #or i!roed internetaccess in dee"o!ing countries and disadantaged counities :n Ienya #or e6a!"e #i6ed andobi"e broadband serices e6!"oded #o""o&ing the arria" o# !"enti#u" and chea! internationa"

band&idth #ro co!eting subarine cab"es :nternationa" ca!acity in Ienya bet&een 2002 andid-2011 sho&ed assie gro&th a#ter subarine cab"es began to arrie in the country in id-200

#ource$ %orld %ide %eb oundation 2011

2) *o8 do poorer 0ontrie( &ene'it 'rom mo&ile telepon. A6ri0ltre On%line (ppland demand in'ormation +i(erie( and La&or mo&ili:ation

11 obi"e techno"ogy can be uti"i7ed by sa"" and ediu-si7ed businesses o!erating in theagricu"tura" and #isheries sectors :t a"so has uses #or "abour and trans!ort obi"i7ation #oricro-credit serices and #or obi"e oney This section !roides an oerie& as to ho& obi"etechno"ogy is being used by S business o!erators in arious sectors in dee"o!ing countries Soee6a!"es are !roided

3) A6ri0ltre

12 htt!?**b"ogeuroonitorco*2011*0>*/a-the-i!ortance-and-!ros!ects-o#-obi"e-te"e!honyht"

http://blog.euromonitor.com/2011/05/qa-the-importance-and-prospects-of-mobile-telephony.htmlhttp://blog.euromonitor.com/2011/05/qa-the-importance-and-prospects-of-mobile-telephony.htmlhttp://blog.euromonitor.com/2011/05/qa-the-importance-and-prospects-of-mobile-telephony.html

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!roduction arketing !rocessing and distribution a"" decisions that can !otentia""y "ead to greatere##iciencies reduced transaction costs and increased incoes2A

s has already been discussed, access to market information services can significantly increase a

poor farmer3s revenue and help bring the farmer over the poverty threshold. )anobi evelopmentoundation in akar, #enegal, for e!ample, is an organisation that has done substantial work with

and for #)*s. 'ts e!perience has shown that a poor developing country farmer who is marginally

literate or who has never even had a mobile phone can easily and 4uickly circumvent both the

education and the technology divide.

13 Farers in dee"o!ing countries are increasing"y uti"i7ing obi"e techno"ogy to increase theircoercia" !otentia" 5ccording to a $or"d Bank study re"eased in 2012 the bene#its #or #arers&ho use obi"e !hones inc"udes access to agricu"tura" in#oration concerning stock !i"es and !ricesdata isibi"ity #or a"ue chain e##iciency and being ab"e to ta! into ne& and e6isting arkets 2 $hen#arers hae access to in#oration about !rices and stocks it he"!s the to reduce the risk o#under-se""ing and o# either oer or under-su!!"ying their cro!s in a gien arket The $or"d Bank

study sho&s that access to !rice in#oration by #arers has he"!ed to increase #aring incoe by24J Se""ers rea"i7ed een greater gains o# u! to >J &ith oera"" !rice reductions #or consuers o#around 4J :n#oration transitted by obi"e !hone a"so inc"udes access to ear"y &arning systesto itigate the risk o# "osses due to e6tree &eather conditions or to the s!read o# disease

Lack of traceability during the growing and procurement process is a ma5or constraint for

producers growing for high-value e!port markets, such as specialty coffee. or the cooperatives and

companies that manage the e!ports, emerging mobile technologysmartphones and tabletscan

play a ma5or role in capturing, tracking, and accessing valuable information from growing practices

to crop 4uality. #ustainable 7arvest is a coffee importer that works with 200,000 farmers in 8atin

merica and *ast frica. *!tending its relationship-based procurement model to the digital platform,

the organiation and its farmer training offices have introduced a new coffee traceability program

called the +elationship 'nformation Tracking #ystem, or +'T#, to help coffee growers become more

efficient, reliable, and 4uality-focused through a new mobile or tablet-based information tracking

system. +'T# provides farmer cooperatives with the ability to trace each step of the value chain using

a cloud-based application. The application also tracks the certification status of each delivery,

processes farmer payment, and generates reports on farmer productivity, payments, and samples.

+oaster clients can access videos, photos, 4uality, and lot information from their supplier

cooperatives. The application has been designed for pple3s i9ad and i9hone, but it can be used in

any smartphone through the web browser. evices with large touchscreens allow for easier input of a

large variety of information. The application can record information offline, and then upload to the

online database when connectivity is restored. 'n 2011 #ustainable 7arvest also launched +'T# *d,

an i9ad app that delivers agricultural training videos on organic coffee production and 4uality

control that co-op managers can use to assist their members.

#ources$

"http$//siteresources.worldbank.org/*:T';

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co""ectie oice and ore isibi"ity in agricu"tura" a"ue chains Farers or their res!ectiecoo!eraties can estab"ish "inks to "arge-sca"e su!!"iers and distributors thereby obtaining keyin#oration on &hat and &hen to de"ier Through obi"e !hones sa""-sca"e #arers are there#oreab"e to "eerage econoies o# sca"e by 'oining #orces !oo"ing resources and increasing their

bargaining !o&er

;) On%line data and in'ormation (ervi0e(

1> obi"e serices can a"so enab"e better access to arkets and other a"ue-chain stakeho"dersSe""ers are increasing"y using their &ebsites to re"ay on-"ine in#oration on trans!ort and "ogistics&ith soe o# these serices being !roided on obi"e !hones For e6a!"e through the use o# oiceand short essage serice (SS) in orocco #arers coordinate &ith "oca" truckers to i!roe

!roduct trans!ort and to identi#y &here the best "ocations are #or the to de"ier their !roducts Soe#arers a"so ake use o# t&o-&ay trade by bringing !roducts back #ro "arger regiona" arkets tose"" in their o&n rura" counities

1A .roduct traceabi"ity has becoe increasing"y re"eant to those dee"o!ing countries &hich&ant to gain or e6!and into ne& e6!ort arkets The use o# :+T has "ed to i!roed consuer!rotection and #ood sa#ety on the one hand and better "ie"ihood outcoes #or #arers on the otherKadio #re/uency identi#ication (KF:,) chi!s are a"so used to trace ania" oeent enab"ing theonitoring o# ania"s #ro crad"e to grae The use o# the syste in Naibia to re!"ace traditiona"

!a!er-based recording has increased the accuracy o# the data and the s!eed in &hich it isdisseinated "eading to higher onetary returns on "iestock

1 KF:, has a"so been used #or the !reention o# ania" !oaching

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@In ne 2B11 a 6rain trader arrived at m 6ate o##ering e 30 k&acha !er ki"o #or y !eanuts=Sara aunda said =y SS #ro soko to"d e that the !rice &as ore than #our ties the traders

!rice $hen : sho&ed hi he said These !eo!"e are "ying to youUyou &i"" go ery #ar and #ind thatyou hae "ost oney= aunda trusted both her instincts and the te6t essages She and #our

neighbors rented a !ick-u! truck in adisi the nearest to&n and headed south to 9i"ong&e80 ki"oeters a&ay to se"" their groundnut cro! these"es She said =the arket !rice there &as #ieties the endors o##er y share o# the sa"e c"eared 24000 k&acha (C130) a#ter a"" e6!enses :# :had so"d to the endor at y i""age : &ou"d hae ade on"y 4>00 k&acha (C2)=#ource$ #' rontlines uly/ugust 2012

1 5s obi"e serice and a!!"ications !roiders in agricu"ture becoe ore kno&"edgeab"eabout the needs o# the #arers as &e"" as their behaiour they are dee"o!ing increasing"yso!histicated a!!"ications :n 2000 the :ndian Tobacco +o!any (:T+) a "arge cong"oerate in:ndia broke ne& ground by estab"ishing e-+hou!a"Ukiosks &ith co!utersUin rura" i""ages &here#arers are ab"e to access in#oration about !rices !"anting ties and ethods and &eatherconditions Since then the co!any has been &orking to !roide its serices oer obi"e !hones and

has !i"oted a ne& irtua" coodity e6change Tradersnet The "atter enab"es the direct !urchase andsa"e o# co##ee #or e6a!"e by !roducers and &ho"esa"e !urchasers oer an internet-based trading

!"at#or SS essages are sent to users obi"e !hones eery orning &ith the o##ers aai"ab"e #or!urchase that day 5t the end o# the day users receie another essage &ith detai"s as to &hatactua""y trans!ired31

20 The co!any soko in

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&eb in#oration and other data een i# they do not hae ne&er generation =sart= !hones Ne&generation !hones and higher band&idth access are su!!"anting $5. in ost dee"o!ed countries@o&eer the need #or "o&-cost obi"e serices and "o& !enetration o# ne&er !hones has thus #ar ke!t$5. a"ie in any dee"o!ing countries

CA#E #TOR-, MANOI #ene6al

:n 2003 in co""aboration &ith Sonate" (the Senega"ese !hone o!erator) 5"cate" :,K+ and :n#o,ethe Senega"ese te"ecounications co!any anobi began to !roide #isheren &ith rea" tie&eather re!orts and arket !rices using $5. and SS techno"ogy ia obi"e !hones Theinteractie techno"ogy enab"ed #isheren to in!ut #ish stock in#oration #or arketing as &e"" asde!artures and estiated ties o# return so that "oca" #ishing unions cou"d be a"erted in eergenciesThe !ro'ect success#u""y !ersuaded Sonate" to insta"" a !hone base station near the beach ensuringnet&ork coerage u! to 14k #ro the shore :n 200> anobi "aunched a ) La&or Mo&ili:ation

24 9abour !oo"s in any dee"o!ing econoies are co!rised !redoinant"y o# "o& to

sei-ski""ed &orkers $hi"e high-ski""ed &orkers regu"ar"y use the internet to "ook #or 'obs there is a"ack o# a centra"i7ed !"at#or #or 'ob in#oration #or the sei-ski""ed Since any cannot a##ord toregu"ar"y buy ne&s!a!ers or isit cyber ca#es to "ook #or 'obs they hae to re"y on &ord o# outh%n the other hand those &ho are !roiding 'obs are inundated &ith thousands o# a!!"ications #ro

'obseekers &hose /ua"i#ications are not suitab"e #or the !ositions in /uestion Since recruiting!rocedures cost co!anies a "ot o# tie and considerab"e resources obi"e techno"ogy is seen as a&ay to obi"i7e "abour arkets :n :ndia #or e6a!"e the co!any Baba'ob &as ins!ired by theconce!t that ost !eo!"e i!roed their "ie"ihoods through #inding better !aying 'obs @o&eerany o# the &ays used to #inding such better !aying 'obs used !"at#ors &hich catered ain"y to the

!ro#essiona" counity and not to those &ith #e& 'ob ski""s Baba'obs !"at#or ho&eer a""o&s&orkers in :ndia to #ind 'obs in their res!ectie #ie"ds3> $hi"st Baba'ob uses SS #or userregistration and in#oration co""ection and distribution ne& !"at#ors using other !rotoco"s are being

estab"ished in other dee"o!ing countries %ne o# these is -Ia7i in Ienya &hich re"ies on;nstructured Su!!"eentary Serice ,ata (;SS,) a !rotoco" used by

htt!?**obi"eactieorg*case-studies*baba'ob-bringing-'obs-botto-!yraid3Ahtt!?**en&iki!ediaorg*&iki*

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Wat i( G#M.The J o# the obi"e arketshare in IenyaE Sa#arico and 5irte"

-I5L:s c"ient base cuts across u"tinationa" co!anies Ss N

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!III) MOILE MONE-

1 obi"e oney serices are increasing in !o!u"arity They hae he"!ed to i!roe ho&businesses o!erate and no& they are a"so contributing to he"!ing to c"ose the !oerty ga! %ne o# the

a'or barriers to !oerty reduction is access to #ora" #inancia" systes #or the !oor The use o#in#ora" instruents eans that the !oor are "iited in their abi"ity to sae borro& re!ay debt andanage risk res!onsib"y obi"e oney serices in dee"o!ing countries are gaining in !roinenceain"y due to their e##ectie &ay o# conducting !ayents and !roiding access to #inance

!articu"ar"y in areas &here access to !hysica" bank branches or een 5T achines is inia" Theyare he"!ing to increase !roductiity and e##iciency &hi"e at the sae tie reducing transaction costs

2 obi"e #inancia" serices co!rise obi"e #inance (inc"uding credit insurance and saings)obi"e banking (inc"uding transactiona" and in#orationa") and obi"e !ayents (inc"uding

!erson-to-!erson goernent-to-!erson and business-to-business)

Wat i( a Commni0ation( "roto0ol. 5 counications !rotoco" is a syste o# digita" essage

#orats and ru"es #or e6changing those essages in or bet&een co!uting systes and inte"ecounications 5 !rotoco" ay hae a #ora" descri!tion .rotoco"s ay inc"ude signa""ingauthentication and error detection and correction ca!abi"ities 5 !rotoco" de#inition de#ines thesynta6 seantics and synchroni7ation o# counicationE the s!eci#ied behaiour is ty!ica""yinde!endent o# ho& it is to be i!"eented 5 !rotoco" can there#ore be i!"eented as hard&are orso#t&are or both +ounications !rotoco"s hae to be agreed u!on by the !arties ino"ed To reachagreeent a !rotoco" ay be dee"o!ed into a technica" standard +ounicating systes use &e""-de#ined #orats #or e6changing essages ach essage has an e6act eaning intended to !rooke ade#ined res!onse o# the receier 5 !rotoco" there#ore describes the synta6 seantics andsynchroni7ation o# counication 5 !rograing "anguage describes the sae #or co!utationsso there is a c"ose ana"ogy bet&een !rotoco"s and !rograing "anguages? !rotoco"s are tocounications &hat !rograing "anguages are to co!utations

#ource$ http$//en.wikipedia.org/wiki/9rotocol

3 The gra!h be"o& indicates that the use o# obi"e oney in dee"o!ing countries es!ecia""y inSub-Saharan 5#rica is substantia""y ore than other regions in the &or"d 5ccording to the $or"dBank the !otentia" adantages o# the obi"e oney industry arise because o# the inherentcharacteristics o# the serices on o##erE the &ides!read usage and net&ork e##ects and the !ur!ose#u"and innoatie a!!"ications &hich are being designed to !roide users &ith ore e##icient and easiero!erating systes3

3$B a6ii7ing obi"e ! A3

http://en.wikipedia.org/wiki/Protocolhttp://en.wikipedia.org/wiki/Protocol

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+hart A? Nuber o# obi"e oney ,e!"oyents by $or"d Bank Kegion arch 2012

#ource$ #) )obile )oney Tracker 2012

1) Inerent ene'it(

4 obi"e oney is an accessib"e and conenient ediu #or the de"iery o# #inancia" serices

and has a"ready sho&n itse"# to be as i# not ore re"iab"e than traditiona" in#ora" ethods o#banking :n soe countries obi"e banking serices hae been sho&n to be "ess e6!ensie thanaerage banking serices 9o&er costs there#ore direct"y trans"ate into e6tra incoe #or the !oor

> %ne o# the ost success#u" and #astest gro&ing obi"e banking serices is -.esa #oundedin 5!ri" 200 by Sa#arico a Ienyan te"ecounications co!any Sa#arico"aunched the ne&obi"e !honebased !ayent and oney trans#er serice to o##er its custoers an array o# sericesranging #ro de!ositing oney into an account stored on a custoers ce"" !hone to sending ba"ancesusing SS techno"ogyto other users (inc"uding se""ers o# goods and serices) and to redee de!osits#or regu"ar oney :t a"so a""o&s users to sett"e their bi""s ;sers are charged a sa"" #ee #or sendingand &ithdra&ing oney using the serice .esa has s!read /uick"y and has becoe the ostsuccess#u" obi"e !honebased #inancia" serice in any dee"o!ing country By 2012 in "ess than #ie

years tie a stock o# about 1 i""ion .esa accounts had been registered in Ienya -.esa is abranch"ess banking serice eaning that it is designed to enab"e users to co!"ete basic bankingtransactions &ithout the need to isit abank branch The continuing success o# -.esa in Ienyahas

been due to the creation o# a high"y !o!u"ar a##ordab"e !ayent serice &ith on"y "iitedino"eent o# a bank38

A Serices su!!"ied by -.esa are considered to be uch sa#er than carrying i!ortant sus o#cash in !erson :n addition there are other bene#its such as !riacy and autonoy These arees!ecia""y i!ortant as!ects #or e6a!"e #or argina"i7ed grou!s o# &oen &ho through suchobi"e oney serices no& hae direct access to their !ersona" saings accounts

38htt!?**en&iki!ediaorg*&iki*-.esa

http://en.wikipedia.org/wiki/Safaricomhttp://en.wikipedia.org/wiki/Short_Message_Servicehttp://en.wikipedia.org/wiki/Kenyahttp://en.wikipedia.org/wiki/Branchless_bankinghttp://en.wikipedia.org/wiki/Branchless_bankinghttp://en.wikipedia.org/wiki/Branch_(banking)http://en.wikipedia.org/wiki/Branch_(banking)http://en.wikipedia.org/wiki/Kenyahttp://en.wikipedia.org/wiki/Kenyahttp://en.wikipedia.org/wiki/M-Pesahttp://en.wikipedia.org/wiki/M-Pesahttp://en.wikipedia.org/wiki/M-Pesahttp://en.wikipedia.org/wiki/Safaricomhttp://en.wikipedia.org/wiki/Short_Message_Servicehttp://en.wikipedia.org/wiki/Kenyahttp://en.wikipedia.org/wiki/Branchless_bankinghttp://en.wikipedia.org/wiki/Branch_(banking)http://en.wikipedia.org/wiki/Kenya

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Wat i( Mo&ile pament.5"so re#erred to as obi"e oney obi"e oney trans#er and obi"e&a""et genera""y re#er to !ayent serices o!erated under #inancia" regu"ation and !er#ored #ro oria a obi"e deice

Financia" institutions and credit card co!anies as &e"" as internet co!anies such as 0J o#the &or"ds adu"t !o!u"ation according to Financia" 5ccess 200 Ke!ort =@a"# the $or"d is;nbanked= These !ayent net&orks are o#ten used #or icro!ayents The use o# obi"e !ayents#or Financia" :nc"usion has attracted the interest and #unding o# internationa" aid #oundations "ike the

Bi"" and e"inda payment

obi"e oney is to date ain"y being used #or sending oney 5ccess and use o# oreso!histicated #inancia" serices such as saings credit and insurance cou"d !roe #ar ore bene#icia"to the !oor Serices such as those !roides by Ii"io Sa"aa a icro-insurance !roduct that uses-.S5 to !roide !ay outs to sa""ho"der #arers &hose cro!s #ai" are no& being dee"o!ed 5sindiidua"s dee"o! #inancia" histories &ith obi"e oney the abi"ity to !roide credit can e6!and

because #inancia" institutions &i"" be ab"e to assign credit scores

Tro6 ilimo #alama 'armer( 0an minimi:e ri(7by !aying an e6tra >J #or a bag o# seed#erti"i7er or other in!uts #ro !artici!ating "oca" agro-dea"ers That trans"ates to about nine Ienyanshi""ings (Ishs) to insure a one-ki"ogra bag o# i!roed higher-yie"ding ai7e seed and 2> Ishs toinsure a 10-ki"ogra bag o# #erti"i7er The agro co!anies !artici!ating in the !rogra 5Ferti"i7ers and Syngenta ast 5#rica 9iited atch the #arers inestent to coer the #u"" 10J

!reiu it takes to coer the cost o# the !rograe The !ro'ect !artners ho!e to e6!and the!rograe to inc"ude other agribusiness co!anies in the u!coing years

5gro-dea"ers registered and trained by Ii"io Sa"aa hae been e/ui!!ed &ith a caera !hone thatscans a s!ecia" bar code at the tie o# !urchase &hich iediate"y registers the !o"icy &ith ;5.:nsurance oer the Sa#aricos obi"e data net&ork This innoatie obi"e !hone a!!"ication&hich &as dee"o!ed by the Syngenta Foundation then sends a te6t (SS) essage con#iring the

insurance !o"icy to the #arers obi"e !hone Soe 30 &eather stations in the targeted regions hae

http://www.en.wikipedia.org/wiki/Mobile_paymenthttp://www.en.wikipedia.org/wiki/Mobile_payment

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been renoated &ith autoated so"ar-!o&ered systes ca!ab"e o# broadcasting regu"ar u!dates on&eather conditions and rain#a"" /uantities $hen data transitted oer Sa#aricos 3< data net&ork#ro a !articu"ar station indicates that drought or other e6tree conditions (inc"uding e6cessie rains)are destined to cri!!"e cro!s a"" #arers registered &ith that station autoatica""y receie !ayouts

direct"y ia Sa#aricos -.S5 obi"e oney trans#er serice

=This is the #irst !ro'ect to use obi"e !hones to set u! insurance contracts and issue !ayouts to !oorsa""ho"der #arers in 5#rica de!"oying both our ast data in#rastructure and g"oba""y acc"aied-.S5 serice= said Betty &angi +hie# %##icer Ne& .roducts ,iision at Sa#arico =$e areha!!y to su!!ort a !ro'ect that organi7es a co!"e6 business adinistration oer our e6!ansienationa" 3< net&ork The c"ose "ink to rura" sho!s and #arers insures that thousands o# #arers &i""hae #ast e##icient and re"iab"e serice and sho&s that there is great !otentia" #or any othera!!"ications that "ink obi"e techno"ogy &ith the needs o# #arers and !eo!"e in rura" areas This isthe kind o# innoation that under&rites our arket "eadershi!=3

I?) E%COMMERCE AND #MALL MEDI$M ENTER"RI#E#

1 The ter S has a &ide range o# de#initions arying #ro country to country and bet&eenthe sources re!orting S statistics Soe o# the coon"y used criteria used to de#ine an S arenet assets nuber o# e!"oyees and the "ee"s o# sa"es and inestent The ost coon"y usedcriterion used to de#ine Ss is ho&eer the tota" nuber o# e!"oyees en the de#inition o# anS on the basis o# a s!eci#ic criterion is not uni#or across countries For instance a s!eci#iccountry ay de#ine an S to be an enter!rise &ith "ess than >00 e!"oyees &hi"e another countryay de#ine the cut-o## to be 2>0 e!"oyees40

2 :n both dee"o!ed and dee"o!ing countries Ss ake u! a a'ority o# business ande!"oy the a'ority o# &orkers in both anu#acturing and serices sectors Ss cater ost"y totheir doestic arket and their contribution to 0J in other dee"o!ing countries such as

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ado!tion o# :+T by Ss in dee"o!ing countries is "arge"y a arket-drien !rocess and eentua""y itis e6!ected that co!etition in :+Ts &i"" "ead to greater a##ordabi"ity and a""o& Ss to engage orein e-coerce

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on"ine and can aoid ca""ing co!anies on the !hone This can sae both tie and oney 5ddingcustoer on"ine serices such as oernight !ackage de"iery serices can a"so hae coercia"

bene#its These can be co!"eented by !ackage tracking serices &hich a""o& custoers to checkthe &hereabouts o# their !ackages on"ine This he"!s !roide good "ee"s o# custoer satis#action

&ith ery "itt"e e##ort #ro the side o# the business

>3

?) "OLIC- I##$E# % W*AT RE#TRICT# #ME# +ROM MORE +$LL- $#ING

E%COMMERCE.

1 -+oerce is genera""y !resented in ery !ositie ters but a"ong &ith the !otentia"bene#its coe !otentia" !rob"es #or dee"o!ing countries The ado!tion o# e-coerce indee"o!ing countries di##ers great"y #ro one country to the other But any #ace a nuber o# sii"arobstac"es to e-coerce These ain"y inc"ude a "ack o# #inancia" "ega" and !hysica" in#rastructure#or the dee"o!ent o# e-coerce The dee"o!ent o# arious ty!es o# e-coerce de!ends

!riari"y on the e6isting structure o# an industria" sector and ho& it #its into a gien sectora" a"uechain 5dditiona""y the di##erence o# cu"tures and business !hi"oso!hies across dee"o!ing countries

has a"so been seen to "iit the a!!"icabi"ity and trans#erabi"ity o# the e-coerce ode"s designed bysoe dee"o!ed countries>4

Re6latin6 ottlene07( in te road&and #ppl Su!!"ying broadband serices ino"es acobination o# net&ork e"eents !rocessing and business serices that can be thought o# as the

broadband su!!"y chain This su!!"y chain can be diided into #our ain co!onents?(a) internationa" connectiityE (b) doestic backboneE (c) etro!o"itan connectiityE and (d) "oca"connectiity Bott"enecks in any o# the "inks o# the chain &i"" sti#"e co!etition and the dee"o!ento# broadband @ence e##ectie regu"atory #rae&orks ust identi#y and address such instances o#arket #ai"ure in a tie"y and e##ectie anner 5s concerns doestic in#rastructure or &hat soere#er to as the nationa" backbone in#rastructure a #ocus on net&orks is key +onstituting the second"ee" o# the net&ork e"eent su!!"y chain a countrys high-ca!acity doestic backbone net&ork is

essentia" #or broadband connectiity since it !roides the "ink #ro internationa" gate&ays to "oca"arkets as &e"" as doestic connectiity bet&een a'or cities and to&ns @o&eer backbonenet&orks re/uire e6tensie inestents 5 a'or i!edient to reducing these costs !articu"ar"y inany dee"o!ing countries re"ates to ertica" integration in &hich the backbone net&ork !roidersare ertica""y integrated &ith the "oca" access net&ork o!erators This resu"ts in a sing"e end-to-end

!roider that can &ie"d great arket !o&er 5s such other serice !roiders ay not hae access tothe backbone or ay #ace high costs #or interconnecting a !rob"e addressed in gro&ing debates ono!en net&ork access. 55

2 5"though Ss hae nuerous reasons #or engaging in e-coerce the security concerns o#the custoers reain an i!ortant i!edient to e6!anding e-coerce serices and business

.robab"y the biggest dra&back is the re"uctance o# custoers to !roide on"ine in#oration abouttheir credit cards nsuring both trust and #ai"iarity through a &e""-#unctioning &ebsite has !roento be one o# the a'or e-coerce success-#actors>A :n the sae ein the gro&th o# broadband hascreated a greater need #or users to !rotect their security and !riacy in an =on"ine= enironent Bothindiidua" users and businesses re!ort that co!uter iruses are the =a"&are= they encounter theost> Security continues to be a !rob"e #or on"ine businesses as custoers hae to #ee" con#identabout the integrity o# the !ayent !rocess be#ore they coit to the !urchase

>3htt!?**&&&an'eetssco*artic"es*adantagesdisadantagesecoerceht">4 See at? htt!?**&&&sciencedirectco*science*artic"e*!ii*S03820A000028 Business-to-business

ado!tion o# e+oerce in +hina>>Broadband Strategies Too"kit at? htt!?**broadbandtoo"kitorg*3>>A

-coerce? the ro"e o# #ai"iarity and trust ,aid

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(ine(( Development Department invitin6 #ME( to ma7e (e o' e%0ommer0e

B5N%+, =htt!?**&&&oecd-i"ibraryorg*sites*stiDscoreboard-2011-en*0A*10*inde6ht"E'sessionid04de/2yt1de"taGcontentTy!eHite:d*content*cha!ter*stiDscoreboard-2011-A4-enHcontainer:te:d*content*seria"*202>34>Haccess:te:ds*content*book*stiDscoreboard-2011-enHieTy!ete6t*ht"=

>8;N+T5, :K 2004> =&&&te"egeogra!hyco*!roducts*cosu!date*artic"es*2012*0*2>*!eru-en#orces-net-neutra"ity-

"ooks-to-ro""-out-#ibre-backbone*=A0;N+T5, :K 2004

http://www.oecd-ilibrary.org/sites/sti_scoreboard-2011-en/06/10/index.html;jsessionid=v04de9q27yt1.delta?contentType=&itemId=/content/chapter/sti_scoreboard-2011-64-en&containerItemId=/content/serial/20725345&accessItemIds=/content/book/sti_scoreboard-2011-en&mimeType=text/htmlhttp://www.oecd-ilibrary.org/sites/sti_scoreboard-2011-en/06/10/index.html;jsessionid=v04de9q27yt1.delta?contentType=&itemId=/content/chapter/sti_scoreboard-2011-64-en&containerItemId=/content/serial/20725345&accessItemIds=/content/book/sti_scoreboard-2011-en&mimeType=text/htmlhttp://www.oecd-ilibrary.org/sites/sti_scoreboard-2011-en/06/10/index.html;jsessionid=v04de9q27yt1.delta?contentType=&itemId=/content/chapter/sti_scoreboard-2011-64-en&containerItemId=/content/serial/20725345&accessItemIds=/content/book/sti_scoreboard-2011-en&mimeType=text/htmlhttp://www.oecd-ilibrary.org/sites/sti_scoreboard-2011-en/06/10/index.html;jsessionid=v04de9q27yt1.delta?contentType=&itemId=/content/chapter/sti_scoreboard-2011-64-en&containerItemId=/content/serial/20725345&accessItemIds=/content/book/sti_scoreboard-2011-en&mimeType=text/htmlhttp://www.telegeography.com/products/commsupdate/articles/2012/07/25/peru-enforces-net-neutrality-looks-to-roll-out-fibre-backbone/http://www.telegeography.com/products/commsupdate/articles/2012/07/25/peru-enforces-net-neutrality-looks-to-roll-out-fibre-backbone/http://www.oecd-ilibrary.org/sites/sti_scoreboard-2011-en/06/10/index.html;jsessionid=v04de9q27yt1.delta?contentType=&itemId=/content/chapter/sti_scoreboard-2011-64-en&containerItemId=/content/serial/20725345&accessItemIds=/content/book/sti_scoreboard-2011-en&mimeType=text/htmlhttp://www.oecd-ilibrary.org/sites/sti_scoreboard-2011-en/06/10/index.html;jsessionid=v04de9q27yt1.delta?contentType=&itemId=/content/chapter/sti_scoreboard-2011-64-en&containerItemId=/content/serial/20725345&accessItemIds=/content/book/sti_scoreboard-2011-en&mimeType=text/htmlhttp://www.oecd-ilibrary.org/sites/sti_scoreboard-2011-en/06/10/index.html;jsessionid=v04de9q27yt1.delta?contentType=&itemId=/content/chapter/sti_scoreboard-2011-64-en&containerItemId=/content/serial/20725345&accessItemIds=/content/book/sti_scoreboard-2011-en&mimeType=text/htmlhttp://www.telegeography.com/products/commsupdate/articles/2012/07/25/peru-enforces-net-neutrality-looks-to-roll-out-fibre-backbone/http://www.telegeography.com/products/commsupdate/articles/2012/07/25/peru-enforces-net-neutrality-looks-to-roll-out-fibre-backbone/

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training in :+T and obi"e techno"ogy This great"y disadantages any Ss that ay be seekingto diersi#y or to branch out into e-coerce aking sure enter!rises !ossess the re/uired set o#ski""s and ca!abi"ities to use re"eant techno"ogies !roductie"y is key to securing the econoic

bene#its o# e-coerce any entre!reneurs in dee"o!ing countries and es!ecia""y in 9,+s "ack

the necessary ca!acity or a&areness to take #u"" adantage o# :+Ts en i# they hae access toobi"e !hones or the internet they ay not kno& ho& best to "eerage the #or their businesso!erations :n soe circustances they ay een #ai" to see the a"ue o# inesting in the techno"ogyre/uired so as to be ab"e to take adantage o# the o!!ortunities o# e-coerceA1

+hart ? nter!rises &ith their o&n &ebsite "atest year 200A-200 (J)

#ource$ %orld &ank *nterprise #urveys

A S"o& internet di##usion in dee"o!ing countries can be attributed to arket and in#rastructura"#actors contro""ing the aai"abi"ity o# :+Ts :n Tan7ania #or instance a "ack o# e"ectrica" su!!"y a "o&te"e-density and a "ack o# !urchasing !o&er resu"ted in a "o& rura" internet usage The cost o# :Te/ui!ent can a"so discourage S take u! o# e-coerce The costs o# co!uters serers !artsetc can be !rohibitie #or Ss and can soeties be sub'ect to high tari##s or inconsistent tari##regies For e6a!"e !roiding incenties by "o&ering tari##s on co!uter terina"s but not on

!arts can ake buying "o&er cost re!"aceent !arts #or si!"e re!airs an unattractie o!tionoreoer anu#acturers o# :+T !roducts #ocus on "arge distributors o#ten "ocated in dee"o!edcountries

Financia" in#rastructure is a"so key For e6a!"e the unaai"abi"ity o# credit cards can be aa'or hurd"e .ast studies hae #ound such !rob"es #or B2+ e-coerce in Kussia :ndia and9atin 5erica :n 5sia 3>M40J o# transactions are cash-based %ther as!ects o# #inancia" systesare a"so underdee"o!ed :n soe countries and regions "oca" banks do not !rocess on"ine credit cardtransactions or other #ors o# e"ectronic !ayent systes Since obi"e oney targets the !oor indee"o!ing countries and enco!asses t&o ery distinct industries (te"ecounications and #inancia"serices) dee"o!ing the necessary cross-sectora" !artnershi!s - inc"uding bridging cu"tures andregu"ations - ay there#ore be di##icu"t Furtherore in order to get the obi"e oney industry to be

A1;N+T5, :K 2011

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iab"e agents and consuers hae to be coninced at a "arge sca"e %!erators are #aced &ith thetrade-o## bet&een higher costs to recou! their inestents or "o&er costs to reach sca"e and bui"d aass arket

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:n a study !ub"ished in 2008 on the ado!tion :+T by sa"" hote" estab"ishents in Southern5#rica soe key #actors &ere e6ained such as the ro"e o# goernent and goernent !o"icy andattributes re"ating to the o&ners o# the hote"s their organi7ation and their abi"ity to ado!t ore :+T intheir coercia" actiitiesA3 en though the study #ocused on sa"" hote"s using the internet any

o# the studys #indings are a!!"icab"e to other industries in &hich Ss o!erate such as sa"es anddistribution o# !roducts anu#acturing and serices trade The study #ound that internet &ebsitesand #i6ed-"ine and obi"e !hone net&orks are the ost coon techno"ogies ado!ted by Ss tosu!!ort their e-business o!erations The resu"ts a"so suggest both #ora" and in#ora" net&orks asi!ortant #or :+T ado!tion These inc"ude key sources o# in#oration techno"ogy and socia" and

business su!!ort :n addition #inancia" and o&ner anager su!!ort inc"uding !ersona" ski""s ande6!erience are a"so crucia" in the ado!tion o# :+T .o&er outage is identi#ied as a a'or barrier

10

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e "oli0 Re0ommendation( made & te OECD 'or #ME(

V Move &eond poli0ie( 'or &a(i0 0onne0tivit and ICT readine(( to 'a0ilitate more 8ide(preadpta7e and (e o' 0omple ICT appli0ation( and e%&(ine(( pta7e & (mall 'irm( Target

!rograes &here there are deonstrated arket #ai"ures (eg KH, incenties #rae&orks #orstandards ski"" #oration in#oration and deonstrations on best !ractice and bene#its #ro ado!tionand use o# :+T) taking into account that coercia" considerations and returns drie businessado!tion o# ne& techno"ogiesV En0ora6e rollot o' a''orda&le alit &road&and net8or7( to nderpin te 0ompetitivene((and 6ro8t o' #ME() +ontinue to "ibera"ise net&ork in#rastructure and !roote broadbandco!etition and "ibera"isation in net&ork serices and a!!"ications $here the needs e6ist and&ithout !re-e!ting !riate initiatie or inhibiting co!etition co!"eent !riate inestent &ith

!ub"ic #inancia" assistance to e6!and coerage #or under-sered grou!s and reote areasV #tren6ten te in'ra(tr0tre 'or tr(t (e0rit 4in0ldin6 (pam and vir(e(5 priva0 and0on(mer prote0tion) :nte""ectua" !ro!erty !rotection o# :+T innoations and digita" !roducts isnecessary to bui"d the con#idence aong Ss that is essentia" i# such #irs are to take #u"" adantage

o# the !otentia" o# doestic and cross-border on-"ine actiitiesV Epand in 0onFn0tion 8it &(ine(( and 0on(mer 6rop( #ME( (e o' lo8%0o(t on%linedi(pte re(oltion me0ani(m( Strengthen cross-border co-o!eration bet&een stakeho"ders and thedee"o!ent o# ru"es &ith cross-border a!!"icationV Develop and di(tri&te di6ital 0ontent in0ldin6 & epandin6 te 0ommer0ial (e o'in'ormation a&ot te p&li0 (e0tor ed0ation and ealt 0are) -goernent serices toenter!rises shou"d be used as a too" to i!roe e##iciency o# goernent interactions and o!erations&ith SsV Red0e ICT (7ill impediment( to te 6ro8t o' #ME( Strengthen goernent and !riate ro"esto i!roe basic :+T ski""s and dee"o!ing #rae&orks to encourage higher "ee" :+T and e-businessski"" #oration (inc"uding arketing organisationa" security trust and anageent ski""s in additionto :+T ski""s) in con'unction &ith education institutions business and indiidua"s

#ource$

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because they hae access to in#oration on arket !rices !riari"y ia obi"e !hones The 5#ricanco!any TradeNet a

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ANNE?

$ork on "ectronic +oerce in the $T%s

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e"ectronic coerce as a eans to cobat !oerty= A8!roided ne& i!etus to the +T,s &ork one-coerce :n !articu"ar inisters decided at the thSession he"d on 1A u"y 2012 +uba and cuador !ro!osed the idea o#ho"ding a $orksho! on -+oerce ,ee"o!ent and Ss ($T*+%T,*$*18) and suggestedthat the Secretariat !re!are a background !a!er on the sub'ect and organi7e a &orksho! &hich &ou"dino"e !ub"ic and !riate sector re!resentaties as &e"" as indiidua" e6!erts

5t the +T,s 8Ath Session on 1 Noeber 2012 it &as agreed that the &orksho! on"ectronic +oerce ,ee"o!ent and Ss &ou"d be he"d on 8 and 5!ri" 2013 The t&o-day&orksho! &ou"d #ocus on the !riate sector inter-goernenta" organi7ations and a"so non-goernenta" actors and &ou"d seek the actie !artici!ation #ro Ss #ro "east-dee"o!ed anddee"o!ing countries "ocated in 5sia 5#rica and the 9atin 5erican and +aribbean regions

HHHHHHHHHH

A8

$T*-0-$T*+%T,*$*1 and its addenduA$T*9*843