Poverty and Telephony Access in Latin America and the Caribbean Mobile Opportunities:

Explore the strategies employed by the poor in Latin America and the Caribbean to access and use mobile telephony services, as well as to identify the major market and regulatory barriers for increased penetration and usage GOAL

MOBILE OPPORTUNITIES Survey 2. Key Results 3. Conclusions and Recommendations CONTENTS

Mobile Opportunities Survey 1

Mobile users vs. owners Patterns of Use Key Access Strategies Value of Use Reasons for not being a user RESEARCH QUESTIONS

7 LAC countries total of 7,168 surveys low income urban inhabitants METHODOLOGY

KEY RESULTS 2

most people in LAC are USERS and OWNERS 90 JAMAICA MEXICO BRAZIL PERU ARGENTINA T&T COLOMBIA 89 (%) ‏

96 98% T&TJamaicaPeruMexicoColombiaBrazilArgentina LAC is prepaid REASON control mobile spending

Most users think mobile services are neither cheap nor expensive COST PERCEPTION users value mobile use ARGENTINA T&T PERU COLOMBIA MEXICO JAMAICA BRAZIL cheapneither/norexpensive

Mobile services at the BOP appears to be inelastic to tariff variations DEMAND ELASTICITY

Most common cost-control strategies: ¨beeping¨ or simply not making outgoing calls for a period of time COST REDUCTION STRATEGIES

BARRIERS TO OWNERSHIP Service affordability remains a key barrier for increased adoption of basic as well as value-added services. ARGENTINA T&T PERU COLOMBIA MEXICO JAMAICA BRAZIL Can’t afford itNot necessary

BARRIERS TO OWNERSHIP Brazil, Mexico and Peru: a majority of the poor still cannot afford a mobile many rely on informal resellers and family or friends to make or receive calls. those who can afford their own mobile phone make little use of voice and other services, tightly control their expenditure frequently rely on public payphones for outgoing calls.

TYPICAL BASKET USAGE Most users in LA make less than one call a day, while outgoing call levels are higher in Caribbean countries because of more affordable tariffs. ARGENTINAT&TPERUCOLOMBIAMEXICOJAMAICABRAZIL averagemedian Total outgoing calls per week

KEEPING IN TOUCH IS KEY Most mobile calls are made to friends and family, followed by business- related calls ARGENTINAT&TPERUCOLOMBIAMEXICOBRAZIL friendsworkplacerelatives Destination of outgoing calls 100% 0

SMS: MAIN NON-VOICE APPLICATION SMS is the only service beyond voice that is gaining rapid adoption across the region ARGENTINA T&T PERU COLOMBIA MEXICO JAMAICA BRAZIL SMS use among mobile phone users (%) ‏

18 BASIC DATA (2007) ‏ Brazil 121 million mobiles, added 21 million mobiles teledensity of world’s fifth largest mobile market 7 million households with broadband internet (2008) ‏ next to last lowest use of mobiles with 79 minutes /month, behind Peru fourth most expensive tariff (US$ 0.26/per minute with PPP), together with Japan.

19 ADDITIONAL RESULTS Brazil small majority uses mobiles, but 1/3 of non users plan to acquire one 2/3 of users own a prepaid mobile, the majority having purchased it. mobile users are willing to spend more on the service immense opportunity for government to take a quantum leap in the provision of services

20 CONCLUSION & RECOMMENDATIONS 3

Mobile Telephony is not a luxury good Economic impact is mediated by social capital variables such as strengthening of trust networks and improved coordination of informal job markets. Poor attribute a significant improvement in quality of life to mobile access: consistent with high expenditure level & low elasticity of demand.

For poor Mobile Telephony is A tool for strengthening social ties and for increased personal security, beginning to prove useful for enhancing business and employment opportunities. perceived to bring numerous benefits <=significant level of expenditure on mobile handsets and services

Tariffs are the main barrier to access Lower tariffs do not have to penalize operators results show a wide margin for win-win initiatives thru increased traffic & value-added services to BoP. M-banking and M-government are still underdeveloped in LAC. As users inch up the technological learning curve and equipment prices continue to fall, Mobile Opportunities will only increase.

Emergent Markets: BOP Emergent Technologies: M-commerce M-banking M-government Emergent Consumers: A greater proportion of women use Mobile Phone Informal workers and micro-entrepreneurs: business opportunities

Poverty and Telephony Access in Latin America and the Caribbean Mobile Opportunities: