There are many economic benefits of getting people connected to the mobile internet. Overcoming the main hurdle of making access affordable to unconnected could lie in the ability of agile charging systems to quickly and cost effectively enable new business models.
The GSMAs 2019 Digital Economy Report highlights the fact that 47% (3.6 billion people) of the world’s population were connected to the mobile internet in 2018. Which leaves 53% (4.1 billion people) with no connection to mobile internet.
The economic benefits of internet connectivity are well documented. Ericsson Research, in collaboration with the Imperial College of London, published a 2017 report on mobile broadband and economic development. It was an in-depth report that covered data from 135 countries and it highlighted that “as mobile broadband penetration increases by 10 percent, it causes a 0.6-2.8 percent rise in Gross Domestic Product (GDP). That translates to an equivalent of approximately USD 500–2000 billion, worldwide.”
But one of the main barriers to accessing mobile internet is affordability. According the GSMA’s Digital Economy Report, “The cost of accessing 500 MB of data in low- and middle-income countries that impose sector-speciﬁc consumer taxes is almost 4% of monthly GDP per capita, compared to 2.5%in countries that do not”.
One question that is often raised is how can people benefit from mobile internet if they can’t afford it in the first place? But the question shouldn’t be just about getting the end customer to pay. There’s many innovative models such as partner, ad and even government funded models that can be rolled out to make mobile internet access affordable to all and help drive the associated economic benefits.
Recently, Vodacom in South Africa announced the launch of an ad funded free mobile internet service branded Vodacom Flex. When a customer runs out of data, they are automatically redirected to the Vodacom Flex portal, where they can have access to certain internet services (web search, local and international news, etc), as well as having the option to buy more data. According to The Fast Mode, Vodacom has seen “a massive uptake with 55 per cent of its subscriber base already engaging with the portal. Users are averaging sessions of nearly six minutes as they “snack” on the free digital content available in the platform”.
The advertisers who are supporting ad funded free mobile internet services are doing this for business reasons and to make money from advertising. We’re going to see more of this approach as 4G and 5G will see many new partnerships as companies look to use mobile internet as a delivery channel for their services. It’s in the interests of these companies to have a large base that can use their services. We will see such partner companies subsidising (or paying for) mobile internet access for some sections of the population.
This approach is already happening.
For example, at the recent ITU Telecoms World 2019 event, Telefonica spoke about how innovative approaches are being used in Peru to overcome the high cost of connectivity and the relatively low incomes of consumers. Initially, Peru had only 55% of the population connected to the internet. In order to fix this, Telefonica is partnering with Facebook and national banks as part of their Internet Para Todos (Internet for All) scheme to deploy internet connectivity. The result is that they will have connected half a million people in only one year in Peru with a goal of connecting everyone in Peru. Such approaches involve innovative thinking from the operators and partners as well as support from the regulators, for zero rating of services.
Being able to give consumers access to certain services at low cost or for free requires for operators to be able to quickly (and cost effectively) change the rules in their monetisation systems. Rolling out a new ad funded service or, indeed zero-rating a government subsidised mobile public health or education program should be quick and easy. The economic benefits of being connected to the mobile internet are well established. Charging systems that can easily zero rate these services and enable new business models, could hold the key to help turn these into reality.
Written by Wasim Azhar, GVP Solution Sales Consulting at Openet