USAID's Global Broadband and Innovations program (GBI) hosts a monthly series, called Tech Talks. These events bring ICT4D professionals together to learn more about the successful implementation of information and communication technologies for social and economic growth.
In this event from Jan 2012, Pamela Riley of Abt Associates discusses the ins and outs of working with local mobile network operators.
The description of the event is as follows:
As USAID explores effective uses of mobiles for development, mobile network operators (MNOs) are actively exploring how to best position them- selves as partners in development projects. Using examples from Nicaragua, Bangladesh, Uganda and Pakistan, this TECHTalk discussion will touch upon:
• Trade-offs between engaging CSR departments vs commercial business units
• Pros and cons of exclusivity clauses
• Operator concerns, incentives and barriers
3. Overview
Purpose of presentation
Mobile industry snapshot
Case studies
– Pakistan: SMS awareness campaign
– Bangladesh: National health information service
– Nicaragua: Test platform to improve patient tracking
– Uganda: Mobile payments
Wrap-up
Abt Associates | pg ‹#›
5. Why Mobile is Important to USAID
Abt Associates | pg ‹#›
6. Explosion in Development Uses
Beneficiaries Workforce Project
Management
Market pricing Training Supply chain
Health Remote Data collection
information supervision
mBanking Peer support Mapping
Election Resource Emergency
monitoring access response
Abt Associates | pg ‹#›
7. Value Proposition for MNOs in
mDevelopment Programs
Brokered partnerships
Reputational capital with regulators
Risk protection
Services to enhance their brand
Evaluation research
Demand generation, aggregation, user preferences
Abt Associates | pg ‹#›
8. Value proposition for USAID in MNO
partnerships
Reach into mass market through distribution
channels, market research
Brand-building skills and advertising budgets
Consumer trust as transaction partner
Rapid development and deployment of value-added
services
Incubation platform to leverage technology for social
good
Abt Associates | pg ‹#›
9. Linking MNO and Development
Partner Needs
Characteristics that Implications for Development
drive MNOs Programs
• Urgency to recoup upfront • Demonstrate link to growth in subscribers,
investments network usage, loyalty
• Highly competitive • Address the different motives of market
leaders and newer entrants
• Pressure to differentiate, • Offer unique services, fail fast
product cycle 3-6 months
• Provide evidence of good citizenship
• Closely regulated
• Segment markets by age • Continue move toward integrated services,
and gender away from disease-specific programs | pg ‹#›
Abt Associates
10. Case Studies: Mobile interventions
to improve health outcomes
Pakistan: Free SMS Bangladesh: National
campaign to promote health message service
hygienic behaviors for pregnant women
Nicaragua: Enhancing
Uganda: Facilitating health infrastructure
mobile payments to with data tracking
malaria sprayers platform for maternal
care
Abt Associates | pg ‹#›
11. Pakistan: SMS messages to reinforce
hygiene promotion program
Pakistan Safe Drinking
Water and Hygiene
Promotion Project
(PSDW-HPP) 2006-
2010
Behavior change
communications (BCC)
– Hygiene activities
through community
partners in 5 districts
with population 50m
Abt Associates | pg ‹#›
12. Provision of mass market SMS to
build hygiene awareness
Project sought PPPs for mass media campaigns, and provision
of water treatment technologies.
Conducted roundtables with 17 cross-sector corporations:
educate them on needs, leverage their expertise
Partners included Unilever, Merck, Greenstar, Medentech
Pakistan leading MNO Mobilink (31% market share) expressed
strong interest, aligned with CSR objectives, signed MOU
RESULTS: 3m free SMS across 15 districts during 6
month period, provided extensive reach and exposure
in rural areas
Abt Associates | pg ‹#›
13. Mobilink lessons learned
• Specificity re: timelines, deliverables in MOU language
• Early on lack of follow-through
• Continuous and ongoing communications is necessary
• MOUs not legally enforceable, need to demonstrate high
expectation, clear directives
Clarity of roles is critical
• Companies must assign human resources to implement, a
focal point for internal planning and coordination
• Long planning periods needed, ideally one year ahead
• Messages sent during project extension period
Abt Associates | pg ‹#›
14. MAMA Bangladesh: National Health
Information Service
Initiated by USAID, White
House OTP in 2010,
launched as global
alliance with J&J in 2011
Bangladesh first country
Provide vital behavior
to launch, South Africa
change messages to new
and India in development
and expectant mothers
through mobile phones SHOPS project provided
assistance in coalition
formation
Abt Associates | pg ‹#›
15. MAMA Bangladesh: Aponjon
Overview
Catalytic funding to attract
national leadership, cross-
sector partners
Locally owned, designed,
implemented, co-funded,
championed
Sustainable business
model combines user fees,
message advertising,
corporate sponsorships
Abt Associates | pg ‹#›
16. MAMA Bangladesh Partners as of July 2011
Lead Partners
Implementing Partners Supporting Partners
TECHNOLOGY COORDINATION
CORPORATE
SPONSORS
OUTREACH - NGO
CONTENT
MOBILE OPERATORS
OUTREACH -
GOVERNMENT
ICDDR, B
Abt Associates | pg ‹#›
MEDIA RESEARCH
17. Aponjon Service Description
17
Expectant women/ Users receive 2 Partner advertising and
new mothers sign health-related advocacy will drive
up for service messages weekly subscription levels
“Your baby needs an
“If you have any immunization this week
bleeding during this to stay healthy,
month, seek medical available free at all
attention right away” clinics”
Messages will provide critical life-saving
information, leading to improved in
health knowledge, behaviors and
Abt Associates | pg ‹#›
outcomes
18. MAMA Bangladesh: MNO Outreach
Process initiation
– Conducted active outreach: Ambassador reception, pitch
meetings, government briefings
Articulating the benefits of novel service
– Broad alliance with international and local partners
– Extensive outreach through health partners and mass
media, opportunity to integrate with other services
Key focus on potential for revenue generation
Abt Associates | pg ‹#›
19. MAMA Bangladesh:
Phase 1 MNO Negotiations
GrameenPhone reception was warmest
– CSR department history with health initiatives, MAMA
partners
– Had already developed a similar concept (stage-based
pregnancy messages) but it had not gotten it off the ground
– Most attractive partner because dominant MNO (46%
market share)
Other operators had limited interest without offer of
long-term exclusivity
Abt Associates | pg ‹#›
20. MAMA Bangladesh:
Phase 1 MNO Negotiation Results
Coalition proposal
– Asked for large contribution ($250K cash/in-kind) in exchange for time-
bound exclusivity and high visibility in national media
Initial response to proposal took months
– Initiative was still in conceptual stage: no design documents, MOUs,
platform specifics
– Selling internally took time: both to top management, across affected
departments
Ultimately Grameenphone offered Design Phase support only,
contribution of free pilot airtime (~ $2K value)
– Connectivity through standard commercial revenue sharing terms
– Exclusivity offer withdrawn by Coalition
Abt Associates | pg ‹#›
21. Lesson 1: Balancing CSR versus
Business Unit Opportunities
CSR departments generally have limited money,
power, influence over decision-makers
CSR team was not in a position to value and deliver
marketing commitments
MAMA coalition was not part of internal
Grameenphone deliberations
– Ability to emphasize revenue projections, integration with
other Grameenphone services
Abt Associates | pg ‹#›
22. Negotiation Trade-offs
BUSINESS UNITS: CSR:
Needed for mainstreaming To prove the business case
• Faster to market, decentralized • More amendable to programming
decision making objectives focused on needs of
• Offers highly valuable non-cash beneficiaries
resources Build relationships
Technical Incubator for new ideas
Marketing Tax incentives for MNOs if pilot is
Distribution loss leader
• Requires more rigorous business • Priorities and budgets often set at
case regional level: long lead times
Metrics driven • Focus is short-term marketing and
• Brand –building advertising will be PR benefits
linked to revenue generation Favors events, tangible goods
• May not speak for relevant
implementing departments
Abt Associates | pg ‹#›
23. Lesson 2: Exclusivity problematic in
platform design
Exclusive partnership agreements serve MNO need for
competitive advantage
– Assumed MNO would make greater investments in exchange
for rights to be sole operator associated with MAMA
Coalition intended for exclusivity to be short-term,
opening service to all operators within a year
– Consistent with guiding MAMA principles of broad public
access
In parallel with operator negotiations, began design and
development of software platform
– Interactive voice response (IVR) complex, raised concerns
about future scale up with all operators
Abt Associates | pg ‹#›
24. Exclusivity Barriers and
Considerations
• Unexpected limits on access
• E.g. MAMA pilot location in Chittagong were
predominantly Robi subscribers, not Grameenphone
• National services need to accommodate different
charging capabilities
• E.g. three of six operators in Bangladesh could not
provide reverse billing for mobile terminated calls
• Design of scaled mobile interventions requires
inputs from all the operators
• E.g., variations in operator policies on remote platform
connectivity may require decentralized design
Abt Associates | pg ‹#›
25. MAMA Bangladesh:
MNO Negotiations Phase 2 Strategy
Nonexclusive agreements with all operators
Develop customized marketing, distribution activities
– Complementary applications: co-branding SIM cards, linkages to
MNO branded services such as health hotlines
– More targetted segmentation: e.g. Banglalink focus on women;
Robi focus on rural, indigenous culture
– Pilot technical innovations, such as voiceSMS, VOIP
Ultimately MNO financial support will be tied to
documented MNO benefits
New subscribers
Less churn
Higher revenue per MAMA user
Goal is more generous revenue sharing for MAMA
Abt Associates | pg ‹#›
26. Nicaragua mhealth demonstration
platform
• Objective to develop and
test mhealth platform
– To improve tracking
and case management
for pregnancy and
birth
USAID 4th Sector project
brokered agreement with
Ericsson, MNO Enitel,
NGOs
– Sept 2010 – Sept 2012
Abt Associates | pg ‹#›
27. MNO role in Nicaragua project
Enitel is largest operator in a two player market,
owned by large regional carrier American Mobile
– Eager to build relationship with MOH, particularly for data
services
– Wanted platform to test voice data transmission
Enitel commitments in signed MOU
– Subsidize service and equipment charges
– Optimize communication protocols to support the
applications
– Expand mobile coverage to rural areas still without service
Abt Associates | pg ‹#›
28. Nicaragua MNO Lesson 1
Progress flagged when key internal champion
promoted regionally, left Nicaragua
– Movement of senior management very common in dynamic
industry
– Project commitments were not broadly institutionalized
Solutions
– To build internal visibility & buy-in, need comprehensive
stakeholder communications, prepare regular updates for
MNO management
– Engage partners with scheduled site visits, frequent partner
meetings
Abt Associates | pg ‹#›
29. Nicaragua Lesson 2
Business case for build out to new rural locations weak
– Objective to convince MOH of value in infrastructure
development for health improvement
– Project data alone does not secure long-term government
support, or address tensions such as tax policy
Solutions
– Change pilot locations: To maintain flexibility, adjusted terms to
test platform where mobile infrastructure already in place
– Identify new partnership benefits: e.g. convene workshops on
regulatory barriers, advocacy for policy change
– Independent evaluation on costs and benefits
Abt Associates | pg ‹#›
30. Nicaragua Lesson 3
Project had retail needs not controlled by department
(interconnection) negotiating the MOU
– Enitel’s national structure decentralized into retail outlets
– Purchase of handsets delayed by lack of internal coordination,
disagreements over subsidy total value
– No process in place to authorize topping up airtime in locations
where phones used
Solutions
– Longer timeframes in workplan during deployment phase to
establish processes
– Specificity in MOU critical
Abt Associates | pg ‹#›
31. Uganda: Payments for household
sprayers to combat malaria
Program overview
Approach to the MNOs
What we learned
Abt Associates | pg ‹#›
32. Uganda IRS Overview
Indoor Residual Spraying (IRS) is a cornerstone of
President’s Malaria Initiative program to reduce malaria-
related mortality
– 3 year program (2009-2012), spray 80% dwellings with
insecticide in NorthWest Uganda
– Twice per year, each campaign last 20-25 days
Challenge: total 3500 field workers to be paid each spray
cycle
– Most no bank accounts, those that did had to travel long
distances
Initial solution: drive truck with cash from village to village
– Safety and cost concerns
Abt Associates | pg ‹#›
33. Uganda IRS challenge
Interim solution to contract with
PostBank
• No requirement for sprayers to
have accounts
Travels from village to village
Charged $1 per transaction
Objective: Switch to more
Cash dispensed from cost effective phone-based
“teller trucks” payment process
Abt Associates | pg ‹#›
34. Uganda IRS: Approach to the MNOs
Mobile money utilizes mobile network for financial
transactions:
– Distribution structure is well positioned for high-volume, low
value transaction processes
– Spray operators all owned phones
Successes in Kenya (mPesa) and Philippines not yet
replicated in other countries
• Policy, infrastructure, regulatory hurdles
In Uganda, only MTN offered mobile money at that
time (June 2010)
Abt Associates | pg ‹#›
35. Uganda IRS Lessons Learned
Critical mass needed for cost recovery in rural
trading centers for agent overhead
– Too early in the MTN product roll-out period: focus was still
in urban centers
– Would expect different result in 2012 as competitors begin
to saturate dense areas
Minimum per transaction mbanking pricing is costly
for low value payments
– Project pays to transfer, sprayers pay to cash out
– “Mobile teller” was more cost-effective for predictable pay
schedule
Abt Associates | pg ‹#›
36. Wrap-Up
MNO partnership challenges and success factors not
unique
– Relationships must be nurtured, expectations clearly stated,
terms flexible
– Setbacks are universal, adaptability is essential
Case studies highlight early stage of mobile partnerships
– Ambiguity regarding how to maximize benefits for end users
and implementers
– Requires field-testing range of approaches, text cases
– Many additional examples from which to learn
Abt Associates | pg ‹#›
Purpose to share experiences negotiating with mobile operators, what it takes to work effectively with MNOs. May be a lot of collective knowledge in this room., like to check on familiarity & exposure to MNOs. Are these terms known: ARPU, VAS, VOIP, SMS, SIM card, mPESA, GSMAFor case studies, want to emphasize still early days, feeling our way, programs need seasoning, validation. No standardization. Learning across many dimensions – this is not a cookbook or roadmap, but rather an initial set of considerations and insights
Massive shift from growth in developed to developing world
USAID partnerships extend to system strengthening,R&D, demand generation, service provision, quality improvements
Why mobile operators are exploring development opportunities
Why USAID is forming alliances with mobile operators
Investments include spectrum fees, infrastructure, customer acquisition costs. Whether 2 or 10 licensed providers in a market, competition has resulted in price cuts, high budget marketingAirtime is airtime, commoditized industry, differentiation strategies include better signal coverage, novel pricing plans, unique value added serviceNeed to speak operator language: bottom-line driven, measure what is important to MNOs. One example of where we don’t speak same language is segmentation strategies. MNOs not aligned with development silos, want cross-cutting applications: women empowerment, mpayments
These examples are health but apply across all development topics: agriculture, clean water, nutrition, democracy, financeRepresentative of considerations in beginning stages. These are reference points, many other examples, some very large. Gates Fdn/GSMA funding a comprehensive mhealth initiative with 17 licensed operators, 30m consumers. Columbia University/UNICEP MVP in 10 countries has long track record with AirTel, MTN. Esoko (market price platform) new deal with Ghana MTN call center for farmers, based on years of collaborationChangamka (mobile health savings account) has deal with Orange to act as agents of the other. Safaricom is biggest provider but charges a lot for women to top up, Orange provides for free – seeking to increase market share.
This is a good example of common approach to MNOs: generic category campaign that address important public health issues and involve multiple private sector partners.
The project’s overarching strategy for public-private partnerships (PPPs) was to bring private sector organizations under the umbrella of PSDW-HPP to leverage their strengths, expertise, and resources to actively contribute to the Millennium Development Goal of significantly reducing the incidence of diarrhea through safe drinking water and hygiene promotion. Roundtables are good forum to identify potential benefits across a host of categories
First messages sent middle of the night, initially not well-orchestrated, sporadic, driven by MNO priorities, not project needs Secret sauce was rigorous project management: communications on deliverables, milestones, and timelines, relentless follow-upCorporate partners bring skepticism about project’s ability to deliver on schedule and within budget, partners will be tested
Purpose to reduce maternal & newborn mortality & morbidity through stage based health messages tied to delivery dateCharacterized by Focus on women Encourage country ownershipLeverage technology to support development goals Promote private sector engagement, research, innovationAdditional MAMA partners include mHealth Alliance, BabyCenter, UN FoundationSHOPs focuson coalition formation, business models, technology platform evolution
Aponjon service owned by local NGO, overseen by MOH led Advisory BoardEmphasis was on the end user – formative research demonstrating demand, active VAS market, high production value. Business model combined user fees and ad messages – forcing partners to respond to market preferences, not push solutions
Branded commercial mobile phone service. Women subscribe, receive two recorded messages per week such as importance of ANC visits, post-partum family planning
Started from scratch, novelty of initiative needed leap of faith by Founding Partners.Coalition set aggressive deadlines, sought early traction amid fluid roles.Initial outreach happened at time when no platform to show them, marketing strategy yet to be developed, partners yet to be signed, complex structure.Another hypothesis to be validated is whether MAMA subscription increases the “stickiness” of the service provider, making subscribers less likely to switch out their SIM cards. Operators benefit from increased “costs” of switching.
6-operator market, with top three owning > 80% market share
Coalition offered valuable assets to MNO including customer registration, vetted content, mass media exposure Business model based on conjecture Urgency for “quick win” in signing a Founding PartnerFactors which influenced GP response Predecessor service BBC Janala had negotiated discounted flat monthly rate, GP seriously underestimated volume, lost substantial incomeAt the time, government threatening huge tax increase, led to conservative revenue projections
Given untested business case, made sense to start with CSR, but proposition was better fit for business unit
Key advantage of commercial agreements is to access advertising budgets of MNOs: dominate the mass media market – TV, print, billboards, point of sale, celebrity endorsementsCSR departments likely not in a position to deliver
Advantages of MNO exclusivity clauses : incentivesfor financial support/discounts from standard commercial terms in exchange for national visibilityMNO drive for differentiation is intense: need distinction for commodity service
Goal is moregenerous revenue sharing, financial support for MAMA through unique MNO positioningThis has been key to the India Gates/GSMA effort. Each of the 17 operators was given a distinct role with no overlap. Some are providing health training module, some EMR, others consumer messaging. SO each get a small slice of the revenue. Currently MAMA revenue sharing agreement with Grameenphone is 50/50 – industry norm is 60 (telco)/40 (service provider).
The platform would enable HWs and patients to access database by phone, specifically to support pregnancy referral and patient follow-up. Include electronic medical records, SMS reminders and follow-up. This map shows maternal mortality ratio estimates in 2005 per 100,000 live birth, big disparity between rural and urban areas In looking at important maternal and neonatal health indicators, more than 2/3 of pregnancies are “caught” by the system at some point during the prenatal period and attended by a birth assistant of some kind, but only about 1/2 are being followed for an entire pregnancy or were seen for follow-up care during the post-birth period.
This case study represents example of what GSMA has been advocating with development agencies: don’t develop a solution and then go to MNOs, first come to MNO with a problem and invite cooperation in solution design. Higher buy-in, fit with MNO prioritiesEricsson initiated, provided mapping of gaps. 4th Sector provides management, stakeholder convening, dissemination. NGO SSI designs and builds the intervention.Enitel incentive to explore B2B market for mhealth hosting, regional visibility with American Mobile
Project’s chief point of contact (director of interconnection) left Nicaragua, replaced by more junior representative unable to make decisions without broader approvals. Prior to staff turnover, project had benefited from leadership of championMNOs particularly volatile, turnover needs to be anticipated. Contrast to pharmaceutical, consumer goods, media companies in which senior management more stable. Also example of overlap between regional strategy and national strategy – not clear where mdevelopment partnerships should reside
Idea is to remain responsive to partner needs, shift focus of partnership as needed. Nicaragua one of handful of countries whose laws prevent hosting data out of the country. Result is that cost-effective cloud services such as those offered by non-local technology NGOs (e.g. Dimagi) not available at scale, post real barriers to use of open source, low cost solutions.
Some operators ‘borrowed’ the account number of a friend but payments to bounce. Nov. 2009, 1500 operators sprayed 2 districts in 43 days
mPesa is the infamous example from Kenya, most countries playing catch up, dealing with numerous regulatory. Policy and infrastructure issues