Scaling Mobile for Development: Harness the Opportunity

Scaling Mobile for Development
Harness the opportunity
GSMA Mobile for Development Intelligence
With support from the Rockefeller Foundation
Final report
May 2013
with support from

22
• The mobile phone holds the power of ubiquity. Across the developing world, around 40% of people now
actively subscribe to mobile services. Well over 50% have access to a mobile, despite not owning one. Access
to mobile services in the developing world has outpaced the rate at which much of the population is gaining
access to basic services such as electricity, sanitation, and banking.
• As the one technology that is becoming widely accessible to all populations, including those at the bottom of
the economic pyramid (BOP), there has been increased focus on the invaluable role mobile technology can play
in improving social, economic and environmental development in emerging markets. As the remaining
unconnected populations get access to mobile technology and the capabilities it provides, the lives of these
populations will fundamentally shift. The simple increase in access to information at a faster pace, from new
sources, will influence everything. Affordable mobile phones and the opportunities they usher in for the poor
will be one of the most dramatic game-changing technologies the world has ever seen. Industry growth will
happen with or without our intervention; the role of MDI will be to educate all those interested in harnessing
the power of mobile for good.
Overview
with support from

33
• This confluence underlines the opportunity held by Mobile for Development, which seeks to draw investment
and partnership to scale mobile-enabled services that can help to facilitate service delivery in the absence of
traditional modes of infrastructure that would otherwise do this. Indeed, Mobile for Development is a growing
sector, with well over 1,000 live services now tracked by the GSMA across the developing world in verticals
such as money, health, education and entrepreneurship. The problem is that while the sector has enjoyed
continued growth in the number of services over the last 5-7 years, scaling up services still proves to be a
challenge and sustainable business models continue to be elusive.
• This work is designed to inform and add insight to help address these challenges. It has been developed by
Mobile for Development Intelligence with support from the Rockefeller Foundation. Our inclusive approach
included a research process and production of an interim and final report in April and May 2013 respectively,
with a series of peer review workshops held in Nairobi, Kenya and Washington DC to drive collaboration and
thought leadership across stakeholder groups.
Overview (continued)
with support from

44
About us
Mobile for Development Intelligence is a freely available, online platform of mobile market and impact data, analysis
and access to an active community of practice in Mobile for Development. We believe that open access to high quality
data will improve business decision making, increase total investment from both the commercial mobile industry and
the development sector and accelerate economic, environmental and social impact from mobile solutions.
For more information, visit www.mobiledevelopmentintelligence.com

55
For more information, please forward direct correspondence to:
Tim Hatt thatt@gsma.com
Corina Gardner cgardner@gsma.com
Adam Wills awills@gsma.com
Martin Harris mharris@gsma.com
Correspondence

66
1. Executive summary 7
2. Key takeaways: a stakeholder guide 18
3. Market landscape: current and outlook 25
4. Impact of mobile on development sectors 54
5. Platforms, multiplicity and the drive for scale 82
6. User-centric innovation 107
7. Role of government 130
8. Appendix 141

77
1. Executive summary
2. Key takeaways: a stakeholder guide
3. Market landscape: current and outlook
4. Impact of mobile on development sectors
5. Platforms, multiplicity and the drive for scale
6. User-centric innovation
7. Role of government
8. Appendix

8
The next wave: harness the opportunity
• Nearly 50% of people own a mobile in
the developing world, with this closer
to 70% including those with access
despite not owning one
• Relative to other consumer electronics
devices, this makes mobile the nearest
to ubiquity
• We expect growth to moderate a bit,
but even still, an additional 300 million
people will use start using mobile
across the developing world each year
up to 2017
• This presents an opportunity from
sheer connections, but more
importantly, by using mobile as an
enabler to service access – both in
rural and urban areas (see slides 27-
32)
24%
27%
30%
33%
36%
39%
1% 2% 2% 3% 5%
8%
2% 3% 3% 4% 5% 5%
0% 0% 0% 1% 1% 2%
0%
10%
20%
30%
40%
50%
2007 2008 2009 2010 2011 2012
Penetration of population (developing world)
Mobile
Smartphone
PC
Tablet
49%
26% 33% 31%
15-20%
65-70%
0%
20%
40%
60%
80%
100%
Mobile Financial
services
Electricity Sanitation
Sub Saharan Africa*

9
Smartphones have grown, but not (yet) driving growth
• Network coverage remains both a
driver and limitation of mobile access
– 2G coverage (which mostly services
voice and text) is widespread, over 85-
90% in most markets
– 3G is more limited, especially in
countries where a lot of the population
lives in rural areas
• This is actually not a major problem
now – 2G is fine for data use provided
capacity is not over burdened
• Smartphones are the biggest data
consumers, but they are still owned by
less than 10% of people (compared to
nearly 50% in US/Europe)
• We expect this to rise (as device prices
continue to fall), but at an uneven
pace, with mid and upper income
groups the fastest adopters (see
slides 41-45)
0%
20%
40%
60%
80%
100%
0% 20% 40% 60% 80% 100%
3Gcoverage(population) Population living in urban area
3G network coverage
68%
52%
43% 42%
33% 29%
77%
0%
20%
40%
60%
80%
100%
Central
/Eastern
Europe
Latam Middle
East
East Asia
/Pacific
Africa South Asia US
/Europe
How big are smartphones?
Basic/featurephone Smartphone

10
The real story is data
• But, does this matter?
• We believe it is more important to
consider what a phone does, not what
it is called
• The key story is mobile data
• There is an ongoing convergence in
price and functionality between
featurephones and lower priced
smartphones (especially Android)
• In this sense, the featurephone
audience presents a vast (and latent)
market for VAS services
• It also has implications for how people
generate content – here, using social
networks on mobile will play a key role
(see slides 49-53; companion,
section 1)
Smart
phone
Feature
phone
Likelihoodofusingdata
Handset cost
Democratisation of data
Target audience
Bubble size = penetration
0
200
400
600
800
2009 2010 2011 2012
Millionusers
Facebook growth: a developing world story
US and Canada
Europe
Rest of world
20%
31%
CAGR (2009-2012)
66%

11
A growing sector in need of scale
• Mobile for Development is a
growing sector, having attracted
investment from mobile operators,
entrepreneurs, investors and
international development groups
• However, it has largely failed to
scale – if the last 5 years were about
growth in services, the next 5 will be
on consolidating sustainable
business models and ecosystems
• The momentum has already begun,
with several sectors moving to
revenue-based models as opposed
to relying on donor funding (see
slides 56-65; companion,
section 2)
0
200
400
600
800
1000
0
50
100
150
200
250
Pre
2005
2005 2006 2007 2008 2009 2010 2011
Cumulativelaunches
Launchesperyear
Mobile for development evolution
Entrepreneur
Learning
Agriculture
Health
Money
74%
11%
25%
34%
53%
66%
0%
20%
40%
60%
80%
100%
Donor Consumer (non MNO) Non
donor/government
Launch year
Shifting business models
Pre 2009
2009-12

12
SMS remains dominant, but for how long?
• SMS is the most commonly used
technology for mobile-enabled services
• Voice-based services (either calling an
operator, or using an IVR system) are less
popular, with a niche in mobile health and
agriculture applications
• This is easy to understand in the sense
that SMS can be used on any phone, and
it is relatively cheap to deploy
• However, we believe this will begin to
change over the next 2-3 years
– SMS is not effective for illiterate mobile
users
– Voice-based solutions have a higher up
front investment, but carry longer term
profit benefits
– As smartphone penetration rises, more
and more services will use apps and the
mobile internet – indeed, this is already
happening in the education and
entrepreneurship sectors (see slides
56-58; companion, section 2)
65%
25% 23%
77%
20%
76%
52%
13%
85%
38%
0%
20%
40%
60%
80%
100%
Launch year
SMS dominant, but apps and mobile internet emerging
Pre 2009
2009-12

13
Impact means nothing unless it lasts
• No one will dispute the value of
generating social impact
• The issue is whether that impact is
sustainable
• This presents the central challenge
(and opportunity) in M4D over the
next 5 years: shifting to scaled services
that, while offering the prospect of
social impact, are foremost businesses
with a defined value proposition (see
slide 89)
Audience reach
Ability to leverage size (e.g. to form
partnerships, economies of scale and scope)
Sustainability
Impact
The importance of sustainable impact…
Local Sub-national National Regional Global

14
Scale requires ecosystems
• Scale is very much a process of
several factors coalescing
• While verticals such as mobile
money or health will have some
unique barriers to scale, some can
be generalised across the wider
sector
– Defined value chains
– Sustainable business models
– Market visibility (e.g. the ability
to source partnerships)
• Mobile money has so far achieved
the greatest reach (having a clear
value proposition), but others can
follow – the demand side case is
evident in the lack of service
access, it is the supply side where
the barriers must be overcome
(see slides 90-98; companion,
section 3)
Fully formedUnformed Partially formed
Sustainablebusinessmodel
SelfreinforcingEarlystageMiddlestage
Mobile
money
Mobile
health
GoodPoor Modest
Defined value chain
Market visibility

15
What, really, is a platform?
• To understand what technology is capable of scaling, it helps
to be clear about what a platform is
• Despite liberal use of the term, there are not that many true
platforms
• In fact, most mobile-enabled services are bespoke –
designed to do one thing in one market
• Frameworks are more promising – scalable and cost
effective – and it is here where more investment is needed
(see slides 84-88; companion, section 3)
In theory…
Conceptual breakdown
Something
that can be
built on top
of & reused Further
technical
conditions
e.g., requires
APIs, underlying
rules-engines
that aren’t
specific to any
one service
The technical
definition of a
platform
(includes iOS,
Android, etc.)
The usage
we’re
interested in
(relevant to
scalability)
Tool tool
Platform
Framework
Foundation
app
Foundation
app
Bespoke
app
Tool
A more helpful view

16
Beautiful innovation, but overlapping (except in mobile money)
• Mobile, growth, developing
business, changing people’s
lives – all are drivers for the
innovation happening in
mobile across the developing
world
• The challenge is to
consolidate this through
partnerships (avoiding
duplication and
fragmentation) (see slide
92)
13%
63%
57% 60% 63%
54%
77%
13%
20% 17% 7% 25%
10%
13%
20% 20% 30% 15%
10%
3% 3% 6%
0%
20%
40%
60%
80%
100%
Money Health Agriculture Learning E&E Total
Does the mobile service use a framework?
Open framework
Closed framework
Foundation M4D
application
Bespoke M4D
application

17
The need to finance innovation
• There is also a need to finance this innovation
• Nowhere is this greater than for entrepreneurs at the early stage but not yet at the point of stable revenues
(pre-growth)
• The good news is that the investment community (from traditional VCs to impact investors to donors) realise
this and as such attitudes to risk/return are beginning to shift in favour of higher risk given the potential for
disruptive innovation (despite the inherent high probability of failure)
• The challenge will be in sustaining this, and with it innovation hubs with a refilling community of
entrepreneurs, investors and (increasingly) mobile operator involvement (see slide 93; companion,
section 3)
Funding gap
Stages of GrowthIdea Pre seed Seed Growth Maturity
High risk
innovators (many)
Mature, proven
models (few)Services that scale
over time
Services that do
not scale
Low
High
Investmentrisk

1818
8. Appendix

1919
Mobile market: current and outlook
Key findings
MNO
Vendor
Entrepreneur
Investor
International
development
Government
Developing world is becoming connected at a rapid pace: nearly
40% of people in the developing world now subscribe to mobile
services, with subscribers having grown at over 10% a year since
2007. Taking into account people who have access to a mobile,
despite not owning one, would push the connected population to
well over 50%
Network coverage is key: despite the rise in penetration, there is
still a wide gap in coverage between urban and rural areas, with
mobile penetration in urban areas up to double that of the rural
population
Smartphones have grown, but are not the engines of growth:
smartphones have grown to the point where we estimate just under
10% of people own one in the developing world, compared to
virtually no take-up in 2007. This is dominated by low cost Android
devices, which have steadily declined in price to below $100. We
expect growth to continue over the next 5 years, but mainly for mid
and higher income segments
Democratising data: mobile operators and internet players are
developing more innovative ways to get data into the hands of lower
income segments, such as through hybrid data plans or even zero-
cost mobile internet browsing
Relative importance*
High
Moderate
Low
*While findings may have
some relevance for all
stakeholders, we have
prioritised this to reflect the
different roles, and therefore
level of influence, held by each
For implications,
see slide 26

2020
Impact of mobile on development sectors
Key findings
MNO
Vendor
Entrepreneur
Investor
International
development
Government
M4D is growing: there are now over 800 live mobile-enabled
products and services in the developing world, with growth having
accelerated over the last 3 years. There are also interesting
geographic distributions: mobile money in Africa, learning/education
in Asia, with health and agriculture more balanced
Emergence of new business models: as new sectors in the M4D
space have emerged since 2009, so too have new business models.
Donor funding remains the most common model in mHealth, but
others drawing revenue from consumers or business (e.g. using B2C,
B2B and B2B2C) are used in the money, learning and
entrepreneurship sectors in particular
SMS remains dominant, but new technologies are emerging: 67%
of M4D services use SMS as an access medium, its popularity having
increased since 2009. USSD also remains popular, with the use of the
mobile web and apps on the rise
High
Moderate
Low
For implications,
see slide 55

2121
Platforms, multiplicity and the drive for scale
Key findings
MNO
Vendor
Entrepreneur
Investor
International
development
Government
Barriers to scale are multi faceted: scale is driven by a number of
factors related both to an organisation and the wider sector. Across
the M4D sector, the most important are the presence of defined
value chains, sustainable business models, and market visibility
An important distinction: it is important to distinguish between a
true platform, a framework and a bespoke service. Platforms (e.g.
Linux, iOS, Android) are generic and can accommodate a range of
applications or services. Frameworks (e.g. Fundamo, Frontline SMS)
are less generic than platforms, but provide many re-usable tools for
others to use in M4D services. Bespoke M4D services are the least
generic and are generally designed for one sector in one country
In the M4D sector, bespoke services are most common, followed by
frameworks, with true platforms generally controlled by global TMT
firms (with or without direct interests in M4D). We believe
frameworks present the best route to scale, and warrant investment
Mobile money stands out: the mobile money sector has the most
defined value chain, including a layer for vendors (e.g. Fundamo,
Comviva) providing the underlying frameworks the services are built
on
High
Moderate
Low
For implications,
see slide 83

2222
User-centric innovation
Key findings
MNO
Vendor
Entrepreneur
Investor
International
development
Government
Organisations, not departments: developing user-centric innovation
means the end user must be at the heart of all parts of an
organisation, including management culture, product and service
design, and marketing
Segmentation and personas are key: M4D service providers must
define target end user segments and develop personas that clearly
define the gaps and opportunities that could be met by a given
service
Cost and communication are key barriers: high up-front costs and
the fact many M4D organisations have partnerships where each
party has a different background and set of objectives create
barriers to effective implementation of user-centric innovation
High
Moderate
Low
For implications,
see slide 108

2323
Role of government
Key findings
MNO
Vendor
Entrepreneur
Investor
International
development
Government
A ubiquitous influence: the role of government on the mobile for
development sector is mostly indirect through setting regulation and
influencing the business environment. Direct investment in mobile-
enabled services has so far been limited, with this mostly focused on
the health sector
USFs strong in theory, weak in reality: Despite Universal Service
Funds (USFs) offering a way of underpinning coverage expansion to
rural areas, these have been largely mired by inefficiency. Around
$11 billion has been collected worldwide but not actually been put
towards any projects, with 97% of this in the developing world
Good business opportunities, not always the best environments:
while the culture for entrepreneurship has improved in many
markets (e.g. parts of Asia, Latam), there are still developing regions
languishing – 63% of markets in Africa and 33% in South Asia still fall
into the bottom quartile worldwide in the ease of doing business
High
Moderate
Low
For implications,
see slide 131

2424
• Mobile has become a transformative technology, with ownership in the developing world nearing 50%, and
still significant headroom for growth over the next 5 years. This growth will likely be fuelled by populations at
the lower and middle income level, further underlining the opportunity of mobile-enabled services targeting
these segments
• Mobile for Development as a sector is growing. The challenge over the next 3-5 years is to move away from
growth purely in the number of services towards a scalable and sustainable model. From a foundation
perspective, we would highlight two points in this context:
– Focus on the cross sector. The route to scaling a sector is to re-use technology (frameworks) in different verticals, and in
different countries. This horizontal, as opposed to vertical, way of thinking is driven by the recognition that, already,
many services are essentially doing the same thing but under different brand names – whether this is in P2P (e.g. mobile-
based recruitment solutions), in transactions using mobile money frameworks or other ways discussed in this report –
which provides opportunities for leveraging existing technologies for more than their originally intended purpose
– Flexible business models. To harness the innovation that is being developed by entrepreneurs and other organisations, it
is important that investors and foundations recognise the need for flexibility in business models. A crucial, yet largely
unfulfilled, requirement is for organisations to align services with customer needs. In a rapidly changing consumer
environment, these needs are fluid, and as such business models are likely to change over time. Established risk
perceptions in mature markets will need to be reconsidered in light of this to ensure this supply of innovation is
harnessed. This is indeed starting to happen, the challenge will be in gaining widespread recognition from the investment
and development community. We believe the Rockefeller Foundation can play a key role, both through its interventions
and role as a thought leader
• The cross sector view and driving sustainable business models are changes that will be most effective from a
foundation perspective if integrated at the organisational level. We see this report as a platform for further
discussions between MDI and the Rockefeller Foundation on achieving this, and ultimately helping both
parties in articulating these implications to the wider mobile and development communities
Learnings: Rockefeller Foundation

2525
8. Appendix

2626
What you need to know
Key findings Key implications
Developing world is becoming connected at a rapid pace: nearly
40% of people in the developing world now subscribe to mobile
services, with subscribers having grown at over 10% a year since
2007. Taking into account people who have access to a mobile,
despite not owning one, would push the connected population to
well over 50%
Harness the scale: while growth in the number of people using a
mobile will moderate over the next 5 years, we still expect 130
million new mobile services subscribers every year to 2017. This
means an increasing total addressable mobile for development
market, uniquely positioned to use the mobile as an alternative to
traditional modes of service delivery
Network coverage is key: despite the rise in penetration, there is
still a wide gap in coverage between urban and rural areas, with
mobile penetration in urban areas up to double that of the rural
population
Bridging the coverage gap is multi pronged: to bridge the gap will
require both further network roll-out and alternative solutions,
such as by using green power for rural base stations. There is also a
role for GSMA in lobbying for benign regulatory environments, and
community power, which can be used both to aid mobile
connectivity and access to utilities such as water and electricity
Smartphones have grown, but are not the engines of growth:
smartphones have grown to the point where we estimate just
under 10% of people own one in the developing world, compared
to virtually no take-up in 2007. This is dominated by low cost
Android devices, which have steadily declined in price to below
$100. We expect growth to continue over the next 5 years, but
mainly for mid and higher income segments
Featurephones and smartphones blur: it is increasingly important
to consider the convergence in price and functionality between
higher end featurephones and lower end smartphones. M4D
service providers should be aware that as smartphone penetration
rises, while this opens a more personalised experience, it carries
trade-offs, such as lower build quality and battery life
Democratising data: mobile operators and internet players are
developing more innovative ways to get data into the hands of
lower income segments, such as through hybrid data plans or even
zero-cost mobile internet browsing
Mobile data is the common denominator: more people, including
those at the low income end, will gain access to mobile data, either
on featurephones or smartphones. M4D services can tap into a
range of handsets and through a range of mediums (e.g. pre-
installed apps on a featurephone, browsing on a smartphone)

2727
24%
27%
30%
33%
36%
39%
1% 2% 2% 3%
5%
8%
2% 3% 3% 4% 5% 5%
0% 0% 0% 1% 1% 2%
0%
10%
20%
30%
40%
50%
2007 2008 2009 2010 2011 2012
Penetration of population (developing world)
Mobile
Smartphone
PC
Tablet
Mobile: the closest to ubiquity
• On an ownership basis, the mobile phone is the most widely owned communication device in the
developing world
• The PC is owned by a much smaller share of people, with tablets smaller still
• Access to a PC will be greater than ownership given device sharing, but the same is true of mobile, so the
gap is unlikely to change
Note: mobile is proportion of people that subscribe to mobile services
Source: GSMA-MDI estimates based on GSMA Wireless Intelligence, Strategy Analytics, Telegeography

2828
Access to services
49%
26%
33% 31%
15-20%
65-70%
0%
20%
40%
60%
80%
100%
Mobile Financial
services
Sub Saharan Africa*
83%
>90% >90% >90%
0%
20%
40%
60%
80%
100%
Mobile Financial
services
Western Europe
• While access to basic services such as electricity and sanitation is near universal in most developed
markets, it remains a minority in developing regions
• Mobile access – either through direct ownership or having access to a mobile in the household – is more
widespread, positioning it as a unique catalyst helping to increase access to these services
Ownership
Don’t own, but have access to
mobile in household (indicative)
*Mobile and financial services includes select countries
Source: GSMA Wireless Intelligence, GSMA Mobile Money program, IEA, World Bank, GSMA-MDI Analysis

2929
5.9
1.1
0
1
2
3
4
5
6
7
Developing Developed
Billion
Population
High growth economies, even higher in mobile
• There are now around 6 billion people living in the developing world, six times that of the developed
• Incomes remain much lower, but have grown at 5% a year over the last 4 years
• Mobile adoption has grown even faster, but still over half the developing world population is yet to own a
mobile, leaving a large opportunity for the mobile industry, and in turn presenting social and economic
opportunities in connecting low income segments (e.g. Mobile for Development sector)
4.1
41.8
0
10
20
30
40
50
60
Thousand/year
GDP/capita ($)
4.9%
-0.3%
12.8%
3.2%
-5%
0%
5%
10%
15%
Growth, 2007-11*
GDP/capita Mobile ownership
*Compound Annual Growth Rate. Population and GDP/capita are for 2011
Source: GSMA Wireless Intelligence, IMF, GSMA-MDI Analysis

30
Growth will come from the developing world
• Growth in active mobile subscribers in
the developing world has been very
strong the last 5 years at over 10%
• Even though we expect growth to slow
to 2017, this still translates into around
130 million new people subscribing to
mobile services every year in the
developing world
• By contrast, most mature markets have
reached saturation (something which will
happen in developing regions, but not
for several years)
Source: GSMA Wireless Intelligence, GSMA-MDI Analysis
4% 4% 3% 2% 2% 1% 1% 1% 1% 1%
16%
13% 12%
11%
8% 8%
6% 5% 4% 3%
0%
5%
10%
15%
20%
25%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Active mobile subscriber growth
Developed Developing
0.8 0.8 0.8 0.9 0.9 0.9 0.9 0.9 0.9 0.9
1.5 1.7 1.9 2.1 2.3 2.5 2.7 2.8 2.9 3.0
0
1
2
3
4
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Billion
Humans that subscribe to mobile services
Developed Developing

31
Penetration
• We draw an important distinction
between total penetration and active
subscriber penetration
• Total penetration reflects all SIM cards
(for mobiles, tablets etc), but also counts
multi-SIM owners (common in the
developing world to save money on calls)
and some people who are registered but
are only very infrequent users of their
phone
• Active subscriber penetration reflects our
estimate for the number of people who
actively subscribe to mobile services
• This is a more representative measure in
market sizing Mobile for Development
– Reflects potential human user base of a
service
– Overlay population with access to a
mobile (relevant for some sectors such as
mobile learning)
41%
51%
60%
70%
80%
86%
94% 99% 104% 107% 110%
24% 27% 30% 33% 36% 39% 41% 43% 45% 46% 47%
0%
20%
40%
60%
80%
100%
120%
140%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Developing world
98% 104% 108% 112% 118% 122% 126% 129% 131% 132% 134%
69% 72% 74% 75% 76% 77% 78% 78% 79% 79% 79%
0%
20%
40%
60%
80%
100%
120%
140%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Developed world
Total connections Active subscribers
Difference due
to:
- multi SIM
ownership
- Inactive SIMs
- Other
connected
devices (e.g.
tablets,
dongles)
Difference between
developing and
developed world
due to:
- Maturity of
market
- Ownership
barriers (e.g.
income levels,
cultural factors)
- Access vs.
outright
ownership

32
Regional view: soaring growth in India, Africa
• There is considerable variation in
mobile penetration within the
developing world, although
penetration has risen fairly evenly over
the last 5 years
• Central/Eastern Europe is nearing
maturity in penetration terms, while
most other regions still have significant
headroom
• South Asia (e.g. India, Bangladesh, Sri
Lanka) and Africa are the highest
growth regions at close to 20% over
the last 5 years, and we expect these
regions to continue as growth leaders
over the next 5 years, albeit at a slower
pace
58%
38%
25% 29%
13% 17%
68%
52%
42% 43%
29% 33%
74%
60%
50% 48%
41% 40%
0%
20%
40%
60%
80%
100%
Central
/Eastern
Europe
Latam East
Asia/Pacific
Middle East South Asia Africa
Active mobile subscriber penetration
2007 2012 2017 (f)
Note: developing world only
3%
8%
11%
10%
19%
16%
2%
4% 4% 4%
9%
7%
0%
5%
10%
15%
20%
Central
/Eastern
Europe
Latam East
Asia/Pacific
Middle East South Asia Africa
Active subscriber growth (5 year CAGR)
2007-12 2012-17 (f)

3333
Rise in the developing world
2007 2017
Mobile penetration
Note: penetration is of active mobile subscribers (e.g. those who subscribe to mobile services)
Source: GSMA Wireless Intelligence, GSMA-MDI Analysis, Google Fusion
2012

34
Urban/rural divide
62% 63%
32%
40%
30%
20%
0%
20%
40%
60%
80%
100%
South Africa Ghana India
Active subscriber penetration
Urban
Rural
• Large coverage gap
– Cost of network roll out
– Return on investment to mobile
operator
• Shared access brings several
implications
– Augments the M4D reachable audience
– Latent demand for mobile ownership
– Virtual SIM technology (e.g. Movirtu)
• Multiple log ins on one phone, each
with a separate tariff (e.g. for
women who could not otherwise
own a phone)
• Mobile as a utility (for now)
– Design of M4D services (personalised
nature)
– This form of access likely to continue in
rural markets in particular
12%
1%
50%
38%
25%
39%
14% 22%
0%
20%
40%
60%
80%
100%
Urban Rural
Active subscriber penetration, South Africa
No access to phone
Access to shared
phone in household
Own basic or
feature phone
Own smartphone
Source: GSMA Wireless Intelligence, AMPS, Ghana Statistical Service, GSMA-MDI Analysis

35
Income divide
• We show here one estimate based on
data from South Africa
• If these figures are accurate and
indicative of other countries, there are
interesting implications that arise
• Little difference in penetration
between incomes of below $850/year
up to $11,000 year ($2-$30/day)
• Implies mobile seen more as utility
than luxury, even for those with little
disposable income
38% 41%
71%
34%
37%
20%
29%
22%
9%
0%
20%
40%
60%
80%
100%
Less than $850 $850 to
$11,000
More than
$11,000
Annual household income (pre tax)
Active subscriber penetration, South Africa
No access to phone
Access to shared
phone in household
Own phone
Source: AMPS, GSMA-MDI Analysis

3636
User behaviours – what do people do on their phone?
• In Africa, call minutes are generally
higher than texts (e.g. around 3-4
minutes per day vs. 1-2 SMS)
• There is also the use of other functions
using a mobile
– P2P money transfers
– Cash ins and outs using a mobile
account
• Text-based communication should be
seen beyond just SMS
– Social networking – e.g. 5% of African
population uses Facebook, but this
goes up to 30% among those who use
the internet
– As people get even low end phones
with basic data access, social networks
likely to become more popular mode of
communication on mobile
120 116
67
303
322
228
20 13 19
0
50
100
150
200
250
300
350
400
South
Africa
Kenya Tanzania India Thailand Malaysia
Calls and texts (per month)
Call minutes made
and received
SMS
0.8
0.2
2.3 1.92.0
0.1
0
2
4
6
8
10
East Africa Asia Pacific
Other mobile transactions (per month)
P2P money transfers
Airtime top ups using
mobile money
Cash outs using
mobile money
Note: SMS data for India, Thailand, Malaysia not available for this report
Source: GSMA Wireless Intellignce, GSMA Mobile Money for the Unbanked 2011 Global
Mobile Money Adoption Survey, Internet World Stats

3737
Prepaid and contract plans
Prepaid Contract
Term None Commit to minimum (e.g. 18, 24 months)
Customer spend Limited by size of top up (often $5 or under)
Minimum = contracted months x monthly tariff
Maximum = minimum + overage + other (e.g.
roaming)
Barriers to acquisition
Logistical (e.g. proximity to an airtime vendor)
SIM registration provides identity barrier
Low income
Lack of identity documents
Poor credit history
Lack of credit history
Mobile operator view
Lower customer lifetime value on airtime fees;
less willing to subsidise handsets
Limited ownership of customer
Lower data/VAS uptake
Higher customer lifetime value on airtime fees;
more willing to subsidise handsets
Better knowledge/relationship of end users
Is the dominant structure in
Africa, Middle East, Latam, parts of Asia (e.g.
China, India)
North America, Western Europe, parts of Asia
(e.g. South Korea, Taiwan)
Source: GSMA-MDI Analysis

3838
Digital pioneers
Connected players
Fast growers
Discoverers
Contractshareofbase
Smartphone penetration
How do the mobile operators think about different markets?
• Monetising network investment
• Data explosion and network capacity
• Stagnation of traditional revenue
• Intelligent networks
• 4G roll out
• Growth of users generally
• Data take-up from low ARPU
• Low post-paid penetration
• 3G network roll outs
• Low cost internet ecosystems
• Strengthening customer engagement
• Network deployment and coverage
• Profitability with very low ARPU customers
• Cost effective network coverage
• Service innovation addressing local needs
• Service innovation
• Revenue diversification
Digital pioneers and
connected players
Fast growers
Discoverers
Challenges Strategic focus
E. Asia, N. America, Nordics,
Australasia, W. Europe
Middle East, Latam, SE Asia,
E. Europe, Russia, China,
S. Africa
Africa, S. Asia
Note: sphere size based on population
Source: GSMA, MDI Analysis

39
High growth, low spend
16%
14%
11% 11%
5%
2%
-4%
3%
9%
7%
4%
2% 1% 0%
-10%
-5%
0%
5%
10%
15%
20%
Brazil China India Kenya US UK Italy
Mobile vs. economic growth
Mobile
revenue
Real GDP
• Growth of the mobile sector in many
developing countries is higher than in
mature markets given their high
economic growth and continued rise in
mobile penetration
• However, people spend much less on
mobile in developing markets, as the
vast majority of users are prepay,
making airtime costs a higher share of
income (e.g. 2-3% on average, more for
markets such as Kenya, compared to
around 1% in developed markets)
• This ratio would be even higher among
the base of pyramid users
13
10
3 5
48
32
24
0%
2%
4%
6%
8%
10%
0
10
20
30
40
50
60
Brazil China India Kenya US UK Italy
Mobile ARPU, $
ARPU Share of income
Note: Figures are for 2011. ARPU is per month in US $
Source: GSMA Wireless Intelligence, IMF

4040
Healthier competition helps prices
• There is a higher concentration of market share
in developing relative to developed markets
• However, this has mitigated in many
developing markets over the last few years
(the opposite has occurred in some notable
developed markets such as the US and UK)
• Lower concentration generally translates into a
more competitive marketplace, particularly by
reducing prices
• In combination with several other factors (e.g.
increased network coverage, lower handset
prices), this has helped drive an increase in
mobile penetration in the developing world
• Key for governments to understand this
virtuous circle to promote healthy competition
0 2,000 4,000 6,000 8,000 10,000
India
US
Brazil
Germany
Indonesia
UK
Ghana
South Africa
Kenya
China
Mexico
Rwanda
Mobile operator competition (HHI)
2007 2011
HHI = sum of squared
subscriber market share
The greater the value, the
greater the concentration of
market share (generally less
competitive)

41
Smartphones and featurephones
• We estimate still less than 10% of
people have a smartphone in the
developing world (nearing 50% in
US/Europe)
• Smartphone penetration will rise,
but less for low income segments
• Regional variation, especially for
smartphones
– Higher in Latam
– Lower in Africa (where the
smartphone may serve more of a
community role (e.g. community
health worker, agricultural co-
op’s) for the time being
• By sheer size, East Asia
(dominated by China), Africa and
South Asian regions have the
most mobile subscribers
68%
52%
43% 42%
33% 29%
77%
0%
20%
40%
60%
80%
100%
Central
/Eastern
Europe
Latam Middle
East
East Asia
/Pacific
Africa South Asia US
/Europe
Subscribe to mobile services (penetration of population)
Smartphone
Basic/feature
phone
202
312
124
840
355
496
0
200
400
600
800
1,000
Central
/Eastern
Europe
Latam Middle
East
East
Asia/Pacific
Africa South Asia
Million
Subscribe to mobile services
Smartphone
Basic/feature
phone
Note: figures are estimated for 2012
Source: GSMA-MDI estimates based on GSMA Wireless Intelligence, Strategy Analytics

4242
Outlook
1.3
2.3
3.0
24%
39%
47%
0%
10%
20%
30%
40%
50%
0
1
2
3
4
5
2007 2012 2017
Penetration
Billion
Mobile in the developing world
Active subscribers Penetration
Mobile penetration will continue to
inexorably rise, but…
The shape and dynamics are more
fluid, particularly in terms of the
impact on lives of the base of pyramid
versus the mass market
1. Networks and coverage
Investment
Coverage expansion (urban to
rural)
Key influencing factors
2. Handset utility and
access to data
3. Income growth
Handset range
Handset price
Innovation in access to data
Subsidies
GDP growth
Growth in GDP per capita Source: GSMA-MDI Analysis

4343
Networks and coverage: roll out so far
• 2G coverage is generally much more widespread than 3G in
developing markets (average 2G coverage is around 95% of
population, with 3G often below 70%)
• 3G coverage is growing, but there remains a sizeable urban-
rural coverage gap due to roll out costs
Network coverage, Kenya (Safaricom)
Source: Safaricom , GSMA Wireless Intelligence, GSMA-MDI analysis
0%
20%
40%
60%
80%
100%
0% 20% 40% 60% 80% 100%
3Gcoverage(population)
Population living in urban area
3G network coverage
India
Would rely on
network
expansion to
rural areas

4444
Networks and coverage: roll out to come
85%
50%
2%
90% 90%
60%
0%
20%
40%
60%
80%
100%
2G 3G 4G LTE
Network coverage - APAC
2011 2017 (f)
Source: Ericsson, GSMA-MDI Analysis
• Coverage will continue to increase, especially for 3G
• But what does this really mean?
• Handsets can access data on 2G networks (via GPRS),
but the capacity (e.g. number of people using data)
is less than 3G
• For the Base of Pyramid and other lower income
segments, 2G coverage is sufficient to enable further
rises in mobile penetration and even data use
• 3G coverage is a leading factor for higher intensity
smartphone penetration (e.g. watching video) – in
other words, what people do on a phone, not
supporting whether they can own a phone

45
Networks and coverage: challenging economics in the pipeline?
• Mobile networks transfer data over radio
spectrum, while fixed broadband networks
transfer data via copper or fibre optic
• This means the data economics are more
challenging using mobile
• Currently, this is not a problem because most
people in developing markets use
featurephones, which use less data than
smartphones, and much less than a home
broadband connection
• However, as more people use data that
networks have to absorb, the cost of data to
consumers may rise, with more stringent
usage caps also a possibility
• Usage caps are more likely to impact mid and
high end users, with price rises impacting
mid and lower income segments
Source: Enders Analysis, GSMA-MDI analysis
0 1 2 3 4 5 6 7 8 9 1011121314151617181920
Networkcostpermonth
Data traffic (GB)
Network costs of data traffic
Mobile Fixed broadband
Average home
broadband usage
Average mobile
data usage

46
Networks and coverage: Green Power and alternatives
• Lack of reliable coverage in rural areas is
partly because many network sites are off
the electricity grid
• For these areas, mobile operators can
either power sites using a diesel generator
or alternative means
• Green Power increasingly used in sub
Saharan Africa (e.g. Kenya)
– Requires capex commitment from the
MNO, but is a cheaper power source than
diesel in the long run (ROI 2-3years)
– Number of green sites steadily increasing
– Infill solution to increase rural coverage
• Smaller, but more limited, infill possibilities
include IP-based connections (e.g. Range
Networks)
90%
69%
59%
10%
31%
41%
Kenya
Tanzania
Uganda
Network sites on the electricity grid
On grid
Off grid
28%
31%
40%
60%
65%
58%
12%
4%
3%
Kenya
Tanzania
Uganda
Power solution for off grid sites
24x7 DG
DG-battery hybrid
Green Power
Note: DG = diesel generator. Data as of September 2012
Source: GSMA Green Power for Mobile, Range Networks, GSMA-MDI Analysis

4747
Networks and coverage: utility access through mobile
1. Power from BTS infrastructure
• (i) Outsource power solution to ESCo who sells
community energy services or
• (ii) Sell power from over-capacity of BTS power
equipment
• Examples: OMC Power, Desi Power, Applied
Solar Technologies (AST)
2. CPM from retail distribution network
• Leveraging extensive rural sales dealer/ retail network for distribution or sale of
charging/ lighting devices through commercial partnerships
• Examples: Fenix International and MTN Uganda, Nokero, Azuri Technologies
3. Power with payment technology
• Opportunity for micro e-payments: high
volumes of small payments for off-grid domestic
and small business energy
• Examples: m-Kopa, Mobisol
Potential impact on mobile ARPU for off-grid customers is 14%+
Source: Digicell, GSMA Mobile Enabled Community Services

48
Handsets and data: featurephones and Android
• Smartphones are still less than a third of handset
sales in most emerging markets, with
featurephones (e.g. Nokia, Samsung models)
dominant
• Android is by far the largest smartphone platform;
it now takes a quarter of all handset sales in Latin
America and nearly 15% in the Middle East and
Africa
• Android has particular advantages for developers
compared to other platforms
– Lower cost devices in the ecosystem
– Larger audience
– Open source (more flexible)
• Convergence: Android with featurephones
Note: ASP (Average Selling Price) and sales share for Q3 2012
Source: Strategy Analytics, company websites, GSMA-MDI Analysis
605
266 226
337 312
223 215
65
0
100
200
300
400
500
600
700
Handset ASP ($, wholesale)
43%
14%
24%
24%
29%
78%
67%
0%
20%
40%
60%
80%
100%
US MEA Latam
Handset sales share
Featurephone
Other
smartphone
BlackBerry
iPhone
Android
Android

49
Handsets and data: smartphones blurring with featurephones
• There is now a convergence between
smartphones at the low end and featurephones
at the high end on price and functionality
• Important implications:
– As prices fall, smartphones open to wider
audience, with potential for richer experience
– However, cheaper smartphones may compromise
on quality (e.g. build, battery power –
problematic for rural areas)
– In time, smartphone adoption will rise even
among lower income segments
– Over short to medium term, featurephones likely
to remain the dominant handset type in most
developing countries
• Reliable phones for voice calls and SMS
• Potential for enhanced experience using data
iPhone 4S
(smartphone)
X100 (China)
(smartphone)
Nokia Asha 305
(featurephone)
OS iOS 5 Android 2.3 Series 40
Screen Touch Touch Touch
Price ($,
wholesale)
>$500 $99 $60-90
Camera (MP) 8 5 2
Processing
power (MHz)
1,000 650 1,000
Note: prices indicative, as of January 2013
Source: Strategy Analytics, company websites, GSMA-MDI Analysis

50
Handsets and data: the subsidy divide
• The developing world accounts for a
majority of handset sales but a minority
of subsidy (portion of handset cost paid
for by mobile operator)
• This is because most people using a
mobile phone in the developing world do
so on a prepaid plan (which operators
generally do not subsidise)
• The economics governing customer
lifetime value mean that this is unlikely
to change over the next 2-3 years
• This means that the mobile community
(operators and others) are looking at
new ways of enhancing the experience of
lower income users, such as through
innovative access to data
Note: data is for 2011
Source: Strategy Analytics, GSMA-MDI Analysis
13% 12%
43%
13%
7%
12%
54%
22%
18%
3% 3% 0%
0%
20%
40%
60%
80%
100%
North
America
Western
Europe
Asia Pacific Central and
Latin America
Central and
Eastern
Europe
Africa Middle
East
Global share of handset subsidies
Handset sales Handset subsidy

51
Handsets and data: democratising data
• Google Free Zone
• Free internet access for Google search, Gmail, Google+.
Further browsing is charged
• Trials in Philippines, South Africa, Indonesia from November
2012, full roll-out pending success of trials
• Facebook Zero, Wikipedia Zero
• Free access to these sites on mobile internet
• Key implications:
• Designed for basic and featurephones (e.g. majority of mobile
users in emerging markets)
• Data into the hands of lower income groups
• Content creation (see slide 31, ‘Implications for user
engagement’)
Internet (OTT) players
Mobile operators
Smart
phone
Feature
phone
Likelihoodofusing
data
Handset cost
Target audience
• Google
• Opera Mini
• Mozilla
• Hybrid data plans
- Prepay element: customer caps spend on data each
month
- Contract element: commitment term
- Avoids barriers to contract (e.g. proof of identity)
- Operators more willing to subsidise handsets
(featurephones or smartphones)
Source: Google, Opera Software, Facebook, Wikipedia, mobile operator websites, GSMA-MDI Analysis
Bubble size = penetration

52
Income growth
9%
5%
4% 4%
2%
1%
0%
-1%
8%
5% 5%
4% 3% 3% 2% 2%
-5%
0%
5%
10%
China India Indonesia Nigeria Brazil South Africa US UK
Income per capita growth (CAGR)
2007-12 2012-17 (f)
• The last 5 years have brought about
significant growth in the income per
capita in many emerging markets,
while this has broadly stagnated in
developed countries
• We must caution the likely skew from
higher income groups
• The proportion of the population in the
BoP has been falling (and will likely
have continued falling since 2008),
although there is significant regional
variation
• To the extent this decline continues,
combined with declines in the cost of
mobile ownership, this will be an
additional driver for mobile
penetration and, in middle income
groups, upgrades to smartphones
Source: IMF (income per capita), World Bank (Base of Pyramid), GSMA-MDI Analysis
22%
52%
77% 76%
17%
39%
73% 74%
12%
33%
71% 69%
0%
20%
40%
60%
80%
100%
Latam East Asia/Pacific South Asia Africa
Base of Pyramid (under $2/day)
2002 2006 2008

53
Implications for user engagement
• As mobile penetration rises, we expect growth in
user generated content to follow
• This is already being seen with mobile activity on
Wikipedia…
– Orange Kenya: 87% growth in mobile Wikipedia
page views in 4 months to October 2012, following
launch of Wikipedia Zero (growth for rest of Kenya
of -7%)
– Orange Niger: 77% growth on the same basis (6%
growth for the rest of Niger)
• …and Twitter
– 57% of tweets from Africa come from a mobile
– Local content is key: 68% of twitter users get news
through the platform, 22% search for jobs
• …and high growth in use of the mobile version of
the Opera Mini browser in Africa (mainly
featurephones)
184%
83%
47% 41% 35%
216%
99%
83%
32% 30%
0%
50%
100%
150%
200%
250%
Ethiopia Ghana Kenya Nigeria South
Africa
Growth in Opera Mini use in Africa
Users
Data usage
Content creation on mobile Mobile
ownership
Growth in content
creation on mobile
Note: Opera Mini figures are for the 12 months to March 2012
Source: Opera Software, Wikimedia, Portland Communications, GSMA-MDI Analysis
Time

5454
8. Appendix

5555
M4D is growing: there are now over 800 live mobile-enabled
products and services in the developing world, with growth having
accelerated over the last 3 years. There are also interesting
geographic distributions: mobile money in Africa,
learning/education in Asia, with health and agriculture more
balanced
The need for scale: while the number of M4D services continues to
rise, there remains a general lack of scale achieved (with some
exceptions, such as in the mobile money sector). The drive for
social impact must be balanced by the need for scale (social impact
is desirable, but must be sustainable)
Emergence of new business models: as new sectors in the M4D
space have emerged since 2009, so too have new business models.
Donor funding remains the most common model in mHealth, but
others drawing revenue from consumers or business (e.g. using
B2C, B2B and B2B2C) are used in the money, learning and
entrepreneurship sectors in particular
Diversification likely to continue: while some sectors have
established clearly defined business models that are unlikely to
change (e.g. mobile money, where mobile operators make money
on transaction volume), others are still evolving (e.g. an increasing
focus on B2B in the mobile entrepreneurship sector)
SMS remains dominant, but new technologies are emerging: 67%
of M4D services use SMS as an access medium, its popularity
having increased since 2009. USSD also remains popular, with the
use of the mobile web and apps on the rise
Balance basic functionality with growing data adoption: SMS likely
to remain a ubiquitous delivery medium given its ease of use, but
M4D services designed to run via the mobile internet, through
apps, or be hosted in the cloud are likely to increase, particularly in
sectors focused on interactive content and P2P (e.g. mLearning and
entrepreneurship)

5656
0
200
400
600
800
1000
0
50
100
150
200
250
Pre 2005 2005 2006 2007 2008 2009 2010 2011
Cumulativelaunches
Launchesperyear
Timeline of launches
Entrepreneur
Learning
Agriculture
Health
Money
Evolution
• Strong growth in the number of M4D services launched over the last 3 years
• Crucial to consider scale of each sector, not just the number of services or projects
Note: figures based only on mobile-enabled products and services in developing world tracked by GSMA (including those merged/closed)
Excludes services in pipeline with an impending launch

5757
0
100
200
300
400
500
600
Money Health Agriculture Learning Entrepreneurship
Live deployments
Central/Eastern Europe
Oceania
Africa
Latam
Asia
Mobile for Development landscape
• We show below the geographical distribution of live M4D services in the developing world tracked by the
GSMA
• Mobile money has a concentration in Africa, learning and education in Asia, while health and agriculture
are more evenly split between these two regions
Note: figures based only on mobile-enabled products and services in developing world tracked by GSMA
As of September 2012; excludes services in pipeline with an impending launch

5858
Definitions for analysis and methodology
Our work so far…
Current GSMA resources Further research & definitions Analysis & initial findings
Over 800
M4D
services
tracked
Augmenting research Analysis
Findings
Business model
•Where will the service
generate revenue from?
•Consumer
•Donor
•Business
•Open Source
•Government
•Advertising
Device
•What type of device is the
service aimed at?
•Basic phone (e.g.,
•Feature phone (e.g.,
•Smart phone (e.g.,
•PC/ laptop
•Tablet
•Other
Delivery technology
•What mobile delivery
technology will the service
utilise?
•Native Voice
•IVR
•SMS
•USSD
•Text-to-Audio
•Web
•Apps
•WAP
Enablers
•What kind of products and
services are being offered?
•Interactive content
•Push content
•Payments
•Peer to Peer
•Data Collection
•Call Centre
•Inventory management

5959
Business model
•Simple voice call to a trained human content providerCall Centre
•Content based services that users can access by querying a
central database
•May be delivered via IVR, SMS, USSD, app, WAP, etc.
Interactive
content
•Social networks and posting systems, users create and access
content
•Wide range of delivery mechanisms, even including voice
Peer to peer
content
•Content pushed out (one way) via voice message or SMS
•May be “broadcast” or “narrowcast” (customised by location /
user profile)
Push content
•Create customised surveys and send them to fieldworkers’
mobiles
Data
collection
•Supply chain management and stock ordering tools
•Product security / validation tools
Inventory
management
•Mobile wallets, payment gateways and a wide range of
payment based servicesPayments
• Rolled out as a value added service (VAS) by an MNO
• While it may not earn revenue from customer directly, VAS designed to
drive new customer uptake/ reduce customer churn.
Consumer
(MNO led)
•Revenue generated directly by end user
•e.g. subscription, one off mobile money payment
Consumer
(non MNO led)
• Businesses targeted by service to generate revenue
• Generally supports internal business processes (e.g. Inventory
management), or core business services (e.g., recruitment)
Business
• Revenue generated from advertising delivered through service itselfAdvertising
• Primary funding comes from governmentGovernment
• Service based around open source software/framework
• Value derived from external parties adopting serviceOpen Source
•Primary funding comes from donor organisations, usually in a
lump sum grantDonor
Product/service type

6060
Spotlight: use cases of mobile by sector
Financial inclusion
•Money transfer
•Airtime and prepaid
services
•Bill payment
•Bank account
management
•Micro-credit
•Micro-savings
•Micro-insurance
•Corporate
payments
•Mobile commerce
•Social payments
Health
•Health education
and promotion
•Reminders for
patients to take
medicines
•Remote patient
monitoring and
diagnosis
•Healthcare micro-
payments
•Data collection
tools for health
workers
•Health worker
training and
capacity building
•Medical supply
chain optimisation
•Drug verification
•Specialised medical
devices
Agriculture
•Helplines for advice
and trading
assistance
•Broadcast and
narrowcast advice
and weather
updates
•Crop insurance and
agricultural
financial services
•Fair trade
compliance tools
•Weather
monitoring on base
stations
•Agricultural supply
chain management
tools
Learning
•Literacy and
numeracy
•Financial literacy
•Technology literacy
•Language learning
•Workforce training
•Entrepreneurial
skills and career
development
•Job advice and
connection
•Teacher training
and support
•Classroom tools
and resources
Entrepreneurship
•Business advice
helplines
•Job posting and
trading platforms
•Training and skills
development
•Store / SME
management tools
•Inventory ordering
and management
tools
Corporate & NGO
use
•Prepaid airtime
vending systems
•Surveying tools
•Fieldworker
communications
tools
•Crisis monitoring
tools
•Supply chain
management tools
•ICT training
resources for small
organisations

6161
•Offers basic voice services (telephony/voice mail),
SMS and USSD based services.Basic phone
•Basic phone features plus…
•Internet enabled, supports transmission of picture
messages downloading music, built-in camera
Feature
phone
•Feature phone features plus…
•graphical interfaces and touchscreen capability,
built-in Wi-Fi, and GPS (global positioning system)
Smart phone
•Personal desktop computer, or laptop. Typically
running Windows, or maybe Linux OS.PC/laptop
•Smart phone features plus…
•Larger screen, increased computing power, front
and rear facing cameras, extra ports (e.g., USB)
Tablet
•A “catch all” for devices not included in the above
•E.g., modems, Personal digital assistance (PDA), etc.Other
•Basic telephony services, with voice delivered over a
mobile networkVoice
•Interactive voice response, allows a computer to
interact with humans through & voice recognition
navigation and DTMF tones via keypad
IVR
•Short Messaging Service, allows exchange of short
text messages between mobile phone devicesSMS
•Unstructured Supplementary Service Data. A
synchronous message service creating a real-time
M2P connection allowing a two-way exchange of
data, mostly through menu structures
USSD
•Computer or handset based service that generates
speech using text inputText-to-Speech
•A system of interlinked hypertext documents
accessed via the Internet; also accessible via enabled
mobile devices
Web
•a software application designed to run on mobile
devices. (typically smartphones, and tablet
computers)
Apps
•Wireless Application Protocol for accessing
information over mobile network. WAP browsers
typically found on older feature phones.
WAP
Device Delivery technology

6262
Spotlight: device and delivery technology
Voice
Messaging
Browsing
Apps
Interactive Voice Response (IVR)
SMS
USSD
MMS
WAP
Web
Embedded
Java (J2ME)
Android
Basic Feature Smart
Phone type
Examples
BBC WST Janala (Bangladesh)
Manobi Agriculture (Senegal)
HIV-911 (South Africa)
mDhil (India)
Esoko (Africa)
Kantoo English (Chile)
Infonet Biovision (Kenya)
Nokia Life Tools (India, Indonesia)
Tata Telecom m-Krishi (India)
Popularaccesstechnologies

63
Business model: shifting to consumer revenue
• Just under half of m-
services across all sectors
sell a product or service to
consumers
• Donor-based funding
accounts for a similar
share, but this is heavily
skewed by the mHealth
sector
• This has changed over the
last 3 years, with newer
projects less reliant on
donor funding and more
on a consumer-based
business model
45%
42%
36%
13%
10%
5%
1%
0%
20%
40%
60%
Consumer
(non MNO)
Donor Consumer
(MNO)
Business Open sourceGovernment Advertising
Business model of mobile services
Note: services often use more than one funding model, so percentages will add up to more than 100%
74%
11%
25%
34%
53%
66%
0%
20%
40%
60%
80%
100%
Donor Consumer (non MNO) Non donor/government
Launch year
How m-services are funded
Pre 2009
2009-12

6464
Business model heatmap
Consumer (non MNO)
138 96 37 96 9 376
Donor
0 287 21 35 4 346
Consumer (MNO)
124 112 6 57 4 302
Business
5 64 15 9 19 111
Open source
0 80 2 0 0 82
Government
0 32 2 4 0 38
Advertising
5 0 0 4 2 11
Mobile money services are most
likely to be funded at least partly
through consumer revenue
Heatmaps are used to compare
sectors on a given factor (here,
business model) or to look at
change in a sector over time
The shading is based on the
frequency of a given category
Emerging entrepreneurship services
have a B2B focus, with applications in
e-commerce, logistics and inventory
management
Advertising is not yet widely used
- Developing market MNOs and VAS
suppliers do no yet have advertising
capability built in to their networks
- Not yet defined end user market

6565
Business model evolution
Pre 2009
• Here we look at the popularity of different business
models for M4D services that launched before 2009
vs. after 2009
• There has been a shift to use different business
models M4D sector over the last 3 years (evident in
health sector)
– Increase in end-user pay
– Increase in m-services offered as part of wider suite of
services from a mobile operator
– On average, less reliance on donor funding
• On the other hand, m-services focused on
entrepreneurship have consolidated around a B2B
model (e.g. job advertising platforms, e-commerce)
2009-12
Health E&E Total
Consumer (non MNO) 0 3 25
Donor 159 2 167
Consumer (MNO) 16 1 22
Business 16 4 24
Open source 32 0 32
Government 32 0 34
Advertising 0 0 4
Health E&E Total
Consumer (non MNO) 48 4 274
Donor 127 1 178
Consumer (MNO) 48 1 218
Business 48 11 75
Open source 48 0 48
Government 0 0 0
Advertising 0 2 7

66
Technology
• Basic and featurephones remain
by far the most common
devices for m-services use
• Smartphones are targeted by a
third of m-services – most
popular in mLearning and
mEntrepreneurship
• SMS and its text-based cousin,
USSD, are the most popular
delivery modes
• This owes to their nature of
being ubiquitous technologies in
the mobile world (making them
cheap to deploy and available
on any handset) and ease of use
19%
6%
67%
40%
2%
34%
24%
8%
0%
20%
40%
60%
80%
100%
Voice IVR SMS USSD Text
-to-
Audio
Web Apps WAP
85%
33% 31%
9% 10%
0%
20%
40%
60%
80%
100%
Basic or
featurephone
Smartphone PC Tablet Other
Device for service use
Delivery technology
Voice Text Web or browser
Note: services can be designed for multiple devices or technologies, so percentages will add up to more than 100%

6767
Technology heatmap
Native Voice 0 143 7 0 5 156
IVR 0 16 17 13 2 48
SMS 133 287 37 83 16 557
USSD 133 159 17 17 4 331
WAP 5 32 6 13 8 63
Web 23 175 26 44 17 285
Apps 9 127 15 39 12 203
Traditional voice calls still used in
mHealth (e.g. to seek medical advice),
though not in other sectors
SMS is the most popular way to
deliver an M4D service to the end
user across all sectors
USSD-based services also
widely used, but most
concentrated for mobile money
Services using the mobile web
popular in the entrepreneurship
sector (e.g. location-based services)

6868
The enduring power of SMS
• More m-services are now being designed for use on a smartphone (health, learning and entrepreneurship
services in particular), although SMS remains the most commonly used mobile technology to deliver m-
services despite this
• On the other hand, fewer services are launching using traditional voice, although this is likely due to the
complexity and cost of such services rather than its effectiveness
65%
25% 23%
77%
20%
76%
52%
13%
85%
38%
0%
20%
40%
60%
80%
100%
SMS USSD Native voice Featurephone Smartphones
Launch year
m-services delivered via…
Pre 2009
2009-12

6969
43%
31% 29%
20%
16%
14%
3%
0%
20%
40%
60%
Push content Data collection Interactive
content
Payments P2P content Call centre Inventory
management
M4D service function
Product and service function (enabler)
• The product/service type (enabler) looks at the function the service is actually performing regardless of the
vertical sector – in this way, it is a horizontal way of looking at M4D
• The wide use of push content is mainly driven by SMS-based services in the health, agriculture and learning
sectors
• Other horizontals are more specific (e.g. data collection for mHealth services, payments in mobile money,
inventory management in entrepreneurship services)

7070
Enabler heatmap
Interactive content
5 127 22 83 6 243
Push content
5 255 28 70 1 358
Payments
138 16 6 0 7 167
P2P
0 96 13 13 15 137
Data collection
5 239 4 9 0 256
Call centre
0 112 6 0 1 118
Inventory
management
0 16 6 0 6 28
Call centre generally found in the health sector
(as with traditional voice)
Intuitively it would also suit mobile agriculture
services, though cost and complexity may reduce
its popularity in this vertical
Interactive content plays
well into languages (often
English) and other
educational materials
Push and interactive content (mainly
through SMS, USSD) can be used to
deliver weather alerts, soil agronomy
information and crop prices

71
Mobile money
• Most scaled of all mobile for development
verticals
• Polarised: few big players, long tail
• Concentration of activity in East Africa
• Even excluding industry champion m-Pesa,
region accounts for around 50% of m-money
transactions worldwide*
• Opportunity for increased scale
• Emerging presence of large equipment
vendors (Ericsson, Huawei)
• 2.5bn unbanked, of which 1bn have mobile
• Potential for re-use
• Payment as the common denominator
• e.g. m-Kopa (solar lighting)
0
5
10
15
20
Millioncustomers
Services
Mobile money – registered customers
Note: registered customers exclude Safaricom (m-Pesa)
*June 2011, excludes Globe
Source: GSMA Mobile Money for the Unbanked, 2011 Global Mobile Money Adoption Survey
60m registered
customer accounts
Around 20% of services
with >1m registered
customers
As of June 2011…
Challenges
Operational hurdles
• Distribution, including agent
liquidity
• Market segmentation
• Customer activation
• Fraud & risk management
Regulatory barriers
• Onerous customer
registration / KYC
• Licensing requirements
• E-money
• Agent regulation
Inadequate investment
• Margin pressures on core
business
• Lack of proof points
Learning gaps
• New products i.e. Savings
• Greater efficiency to reduce
cost

7272
Mobile money: East Africa is the hub
Note: registered customers exclude Safaricom (m-Pesa)
Source: GSMA Mobile Money for the Unbanked, 2011 Global Mobile Money Adoption Survey

73
Mobile money: illustrative examples
• Provides Pay-as-you-go solar
solution, allowing users to pay KES40
per day via their m-Pesa account to
use system for lighting and mobile
charging.
• Partnered with Safaricom, leveraging
its 45,000 agent network in Kenya
• Available at more than 80 locations
in Kenya.
Launched: 2011
Backed by: Various
donors and investors
Target markets: Kenya
M-KOPA
• Canonical mobile money payment
system: send, receive, pay
• Largely rural Bangladeshi market
presents opportunity: 15% formal
banking penetration, over 50%
mobile penetration
• Service seeing high growth
• Available through over 28,000
agents
Launched: 2011
Backed by: BRAC Bank
Target markets:
Bangladesh
bKash Limited
Source: bKash, m-Kopa, GSMA-MDI Analysis

74
Mobile health
• Largest development vertical by number of
organisations
• High multiplicity and lack of scale identified as key
challenges
– Surplus of pilots (‘pilotitis’) and local impact
– Lack of exit strategy for donors
– MNO’s not used effectively
• Opportunities
– Move to a linear value chain
– Demonstrable value drivers for MNOs (e.g. ROI,
churn reduction) and health industry
– Advocate policy and legislative support (e.g.
ITU/WHO Oct 2012 – build on current projects,
form public/private/NGO partnerships)
– Facilitate/broker public private partnerships and
secure long term investment
– Drive down cost through tax and other
incentives for MNOs
74%
34%
83%
53%
0%
20%
40%
60%
80%
100%
Pre 2009 2009-12
Use of donor funding
All sectors
Health
Challenges
Fragmentation
• Reduces sustainability (recent
GSMA study of almost 700
services showed multiple
overlap of services in
countries and regions)
Scale
• Not achieved in >95% of
solutions – limited reach of
services
• MNO assets not being
leveraged effectively
Replication
• Without adequate proof
points/data, replication is not
happening
No linear value chain
• No “shared value proposition” being
demonstrated by either mobile or
health sector with clear
understanding of each-other’s value
drivers (impact indicators)
Source: GSMA mHealth program, GSMA-MDI Analysis

75
Mobile health: illustrative examples
• Uses mobile to monitor pregnancy
using ultrasound, identify danger
signs, pay for emergency
transportation, and communicate
with the referral facility
• Brings together healthcare
professionals, NGOs,
pharmaceutical/insurance
companies, state government
• Over 500 birth attendants trained,
over 20,000 pregnant women
registered
Launched: 2011
Backed by: Etisalat,
Qualcomm, D-Tree
International and Great
Connection Inc
Target markets: Africa
Etisalat Mobile Baby
• Open source mHealth software
project
• Provides underlying application
framework for a diverse range of
mHealth solutions
• Enables solutions to be developed
more quickly and cost-effectively
with fewer technical resources
• Allows data sharing across
different deployments of the
software
Launched: 2010
Backed by: Grameen
Foundation
Target markets: Health
initiatives anywhere in
developing word (e.g.,
Africa, India)
Motech
Source: Motech, Etisalat, GSMA-MDI Analysis

76
Mobile agriculture
• Polarised sector – few services with large
base (>1m users), long tail
• Opportunities for scale
– Penetrate untapped rural market and
‘unconnected’ rural customers
– Identifiable business case for mobile
operators: MNOs are keen to launch
services for rural sector to increase
customers and brand loyalty while
reducing churn
– Strong focus from international community
to invest in agriculture via ICT: food
security, climate change, large addressable
market
• Strong potential for overlap with other
sectors
• Financial services for rural sector (loans,
insurance and savings)
• Learning – training, advisory
• Health – delivery of content via mobile
shares elements
• Utilities & M2M (e.g. irrigation pumps
controlled by mobile tech)
17%
27%
1%
52% 56%
2%
20%
30%
85%
0%
20%
40%
60%
80%
100%
India Ghana Germany
Mobile agriculture opportunity
Agriculture %
GDP
% labor in
agriculture
Rural mobile
phone ownership
Source: CIA World Factbook, World Bank, GSMA mAgriculture program, GSMA-MDI Analysis
Challenges
Business model
• Price sensitive customers
(majority smallholder farmers)
• Proof points
• Many services, few with scale
Mobile operators
• Few MNO-led mAgri services
Content
• Lack of content
providers
• Illiteracy, technical
illiteracy
• Consumer education

77
Mobile agriculture: illustrative examples
• Penetrates untapped rural
markets by integrating thousands
of smallholder farmers with
exporters in larger markets
• Focuses on international
regulatory environment by aiding
farmers compliance with food
standards, traceability of goods,
etc.
• Uses sophisticated ‘virtual farm’
concept, linking farmers to
exporters via database.
Launched: 2012
Backed by: Syngenta
Foundation
Target markets: Africa,
Asia, Latam
Farmforce
• Agricultural web and mobile
based service for market prices,
advisory, jobs, and more
• Agriculture ministry uses
service for policy
announcements
• Long term investment for China
Mobile: focus on financial
viability for farmers, not pure
profit for MNO (service only
USD 6 a year for farmers)
• Over 40 million users
Launched: 2010
Backed by: China
Mobile
Target markets: China
Nong Xin Tong
Source: Farmforce, China Mobile, GSMA-MDI Analysis

78
• Interactive content is primary form of
product/service for this vertical
• Business models hard to prove and make
sustainable
• Needs more government regulatory support
• Opportunities for scale
– Highly desirable service in emerging
markets, which currently consumes around
¼ of family income in many low income
households
– Strong focus from international community
to invest in education access (e.g., MDG2)
• Strong potential for overlap with other
sectors
• In terms of strategic knowledge
partnerships, disseminating knowledge
from other sectors
• Content management systems and other
interactive content services in other
verticals
Source: TIME Mobility Poll – Qualcomm – 2012, GSMA mLearning program, GSMA-MDI Analysis
Challenges
Regulatory
• Education and ICT policies to
distinguish educational
content from other VAS
• Policies required to accelerate
ICT enhanced
learning/training
Mobile operators
• Proving/pitching business
case of educational
content to MNOs
• Appropriate revenue share
agreements with MNOs
Content and training
• Generating content to suit
diversity of end-users
(language diversity,
literacy levels, etc)
• Human resource capacity
• Appropriate training
lacking
Mobile learning
92% 91% 90% 90% 87%
82%
73%
69%
0%
20%
40%
60%
80%
100%
Indonesia S. Africa China Brazil India Korea USA UK
Believe mobile technology important to learning and
education

79
Mobile learning: illustrative examples
• Provides a range services covering
Agriculture, Education and
Entertainment targeted at both
urban and rural consumers
• Established over 90 knowledge
partnerships across the four active
countries
• Offered in 12 of India’s official
languages alone
• Over 90 million users
Launched: 2008
Backed by: Nokia
Target markets: India,
Indonesia, China,
Nigeria
Nokia Life Tools
• Short stories and classic literature
are published on mobile phones
(MXit and on a mobisite)
• Users can comment, enter writing
competitions, review stories
• Stories found in English, Afrikaans
and isiXhosa
• 470,000 complete reads of stories
and poems; 47,000 comments
Launched: 2010
Backed by:
Shuttleworth
Foundation
Target markets: South
Africa, Kenya
Yoza Cellphone Stories
Source: Nokia, Yoza, GSMA-MDI Analysis

80
Mobile entrepreneurship
• An up-and-coming vertical, with many new
services emerging
• Mobile money is a critical enabler to many
services
• Services tracked by GSMA are more likely to be
delivered using mobile web, and offer B2B
services
• High impact potential; in places such as Nigeria,
Egypt, and Indonesia, micro-entrepreneurs
estimated to generate up to 38 % of GDP*
• Opportunity for increased scale
• Maturing mobile money markets
• Strong focus from international community on
job creation in emerging markets
• Supporting businesses in multiple sectors (e.g.
agriculture, education, health)
• Well positioned to benefit from natural
‘willingness to pay’ from businesses
*Booz & Co., “Mobile Value Added Services” 2012
Source: TIME Mobility Poll – Qualcomm – 2012, GSMA-MDI Analysis
Challenges
Regulatory barriers
• Barriers inherited from mobile
money sector
• Little knowledge of regulatory
framework
• Tax and investment policies that
impede innovation
• Company registration expenses
and licensing requirements
Operational
• Assistance with
customer
relationship
management
• Marketing
• Market data
• Training and
mentorship
Investment
• Access to credit &
capital
• Low costs to afford
loans and business
services
• Information about
investment
opportunities
98% 96% 96% 94% 93% 92% 88% 87%
0%
20%
40%
60%
80%
100%
Indonesia India S. Africa China Brazil Korea UK USA
Believe mobile technology important to
entrepreneurship

81
Mobile entrepreneurship: illustrative examples
• Service connecting job-seekers
with employers via mobile
• Over 20 leading aid agencies
actively use AidLink services to
get key information to and from
communities in crisis
• In Palestine currently serves
close to 10,000 job seekers in a
given month
Launched: 2006
Backed by: The Synergos
Institute, The King
Abdullah II Fund for
Development
Target markets: Africa,
Asia, Latam, Caribbean
Souktel
• A tablet and barcode scanner
system for shopkeepers: can
register transactions, get useful
metrics, charge credit cards
• Data fuels Tiendatek Data: a
marketing analytics tool used by
companies like Unilever and Bimbo
• System integrates with payment
providers, mobile operators,
hardware providers, integrators,
banks, consumer-goods companies
and shopkeeper associations
Launched: 2008
Backed by: Frogtek
Target markets: Mexico,
Colombia
Tiendatek
Source: Souktel, Frogtek, GSMA-MDI Analysis

8282
8. Appendix

8383
Barriers to scale are multi faceted: scale is driven by a number of
factors related both to an organisation and the wider sector. Across
the M4D sector, the most important are the presence of defined
value chains, sustainable business models, and market visibility
It takes an industry: there is growing recognition among service
providers, donors and impact investors of these barriers and the
need to collaborate as a sector to overcome them. Partnerships
with mobile operators have and will continue to play a key role
An important distinction: it is important to distinguish between a
true platform, a framework and a bespoke service. Platforms (e.g.
Linux, iOS, Android) are generic and can accommodate a range of
applications or services. Frameworks (e.g. Fundamo, Frontline SMS)
are less generic than platforms, but provide many re-usable tools
for others to use in M4D services. Bespoke M4D services are the
least generic and are generally designed for one sector in one
country
In the M4D sector, bespoke services are most common, followed by
frameworks, with true platforms generally controlled by global TMT
firms (with or without direct interests in M4D). We believe
frameworks present the best route to scale, and warrant
investment
Re-use of frameworks: the potential to re-use a service or the
infrastructure underpinning it is a trade-off between how generic it
is, technical complexity and cost to intervene. In general, the more
generic and less costly/complex, the greater the potential for re-use
Platforms are most generic but they are also most expensive and
complex. Bespoke services are more accessible but also less
generic. Frameworks strike a balance, and it is here where we see
examples both of services being directly re-used across sectors and
countries (e.g. Ushahidi, Motech) and of services connecting to an
existing framework originally designed for a different sector (e.g. m-
Kopa) happening in the field today
Mobile money stands out: the mobile money sector has the most
defined value chain, including a layer for vendors (e.g. Fundamo,
Comviva) providing the underlying frameworks the services are built
on
Fewer players, larger scale: most mobile money services sit on top
of a framework developed and owned by one of a relatively small
number of vendors (e.g. 5-10 worldwide). In general, services in
other M4D sectors are bespoke, and often duplicate other services
in the same country

8484
In theory, platforms exist on several levels
Operating system Delivery Product/service
(what does it do?)
Functional nature
• Smartphone
– iOS
– Android
– BlackBerry
– Windows
– Symbian
• Featurephone
– Nokia Series 40
– Samsung/LG
proprietary
– Other
• Basic handsets
– Many
– Proprietary OS
• Text-based
– SMS
– USSD
• STK
• Voice (e.g. IVR)
• Data
• Combination of these
modes
• Temporal
• Communication type
• Transactional
• Public
• Community vs.
individual
• Location-based
• Identity-based
• Application level
– Call centre
– Interactive content
– Peer-to-peer
– Push content
– Data collection
– Inventory
management
– Payments

8585
The “platform” problem
• In the mobile space the term “platform” can currently
be used to mean:
• iOS, Android, Linux,…
• pieces of open source software with public APIs…
• or simply mobile services that scale to reach a
large user base…
• This distinction will better enable us to landscape
existing M4D services with respect to their reuse
potential
The mobile space…
Conceptual breakdown
Something
that can be
built on top of
& reused Further
technical
conditions
e.g., requires
APIs, underlying
rules-engines
that aren’t
specific to any
one service
The technical
definition of a
platform
(includes iOS,
Android, etc.)
The usage
we’re
interested in
(relevant to
scalability)
Problem
• This use of the term doesn’t sufficiently indicate
what can be reused, and in what sorts of ways
Solution
• We propose to make the issue of reuse more
transparent by drawing a clear distinction
between platforms, frameworks, and M4D
applications

86
A more helpful view
Our classification…
Closed
iOS Ushahidi Kom Kom
Open
Generic in nature, could
be used in a multitude
of different services. An
operating system,
cloud, etc.
“One off"
application
built from the
“ground up”
A set of re-usable software tools
and interfaces for developing
applications
• Generic/novelty
• Longevity/evolutionary
• Enabler/developer focus
• Development tools open/closed to external developers
Fundamo
Platform Framework M4D
application
Application built
on top of a vendor
framework
Foundation Bespoke
Orange Money
Nokia
Series40

87
Examples of this classification
Application
Services Carbon
iOS development
framework
Angry Birds
Twitter
iPhone app
Cocoa
iOS
Platformlevel
Mapping UI
tools
inux
Ushahidi
Kanco
ushahidi
Urbanmirror
Time-line
Linux
Frameworklevel
Kom
Kom
Java
ME
Bespokeapplicationlevel
iOS Ushahidi Kom Kom
Foundation application level

88
The cost of development
Low
cost
Medium cost
High cost
Tool tool
Platform
Framework
Foundation
app
Foundation
app
Bespoke
app
Tool

8989
Why is achieving impact with scale important?
Audience reach
Ability to leverage size (e.g. to form
partnerships, economies of scale and scope)
Sustainability
Impact
With increasing scale, there is increasing…
Local Sub-national National Regional Global
Impact in M4D can and has been achieved
by small (e.g. local) and large (e.g. regional)
scale organisations
However, relatively few have achieved
sustainable impact
“We think [our impact is] probably around a $100 a farmer a year, which
is maybe 10-20% of their annual revenue.
However, the fact that impact equals scale doesn’t necessarily follow”
Mark Davies, CEO, Esoko

9090
Achieving scale is multi faceted
Defined value chain
Fully formedUnformed Partially formed
Full ecosystem with defined
value proposition at each level
Collection of participants, but
lack of defined value proposition
Sustainablebusiness
model
SelfreinforcingEarlystageMiddlestage
Defined customer
base, streamlined
operations, defined
cost structure,
revenue linked to
investment
Clusters and pilots,
local impact, lack
sustainable revenue
Mobile
money
Mobile
health
Visibility
GoodPoor Modest
Taking a user-centric approach to
organisational culture and product
design also plays a key role (see
section 4)

9191
Barriers to scale in M4D
Defined value chains with
scalable infrastructure
Sustainable business models
Visibility across markets and sectors
Lack, as opposed to multiplicity, of
frameworks underpinning M4D services
Impact without scale
Funding models (silos, pilotitis)
Inability to harness scale of mobile operators
Partnerships
Proven value proposition for participants at
each stage of the value chain (e.g. M4D
service provider, vendors, mobile operators)
The need for…
Services with potential to become self
sufficient or to have funding underpinned
on long term basis
Current barriers
Knowledge of adjacent participants in the
sector and ability to partner in areas that
expand reach or value of the service
• We show below key barriers to scale in M4D
• These will be felt more by some sectors than others

9292
13%
63% 57% 60% 63%
54%
77%
13% 20% 17% 7% 25%
10%
13% 20% 20% 30% 15%
10% 3% 3% 6%
0%
20%
40%
60%
80%
100%
Does the mobile service use a framework?
Open framework
Closed framework
Foundation M4D application
Bespoke M4D application
Defined value chains: the framework landscape
• The mobile money sector has the most defined value chain in M4D , helped by the presence of vendors
whose business is to design and deploy frameworks (e.g. Fundamo, Comviva, Utiba)
• The majority of mobile money services sit on a framework owned by one of a few providers (who have
relatively large scale)
• In contrast, the majority of M4D services in other sectors are bespoke, which reduces the potential for re-use

9393
Sustainable business models: the investors view
• Criteria for impact investors moving to focus more on ensuring scalability, sustainability and innovation as opposed to solely
impact
• Willingness to accept risk provided an identifiable problem can be solved by the proposed solution, and that potential for long
term scale exists (e.g. hundreds of thousands or millions of users)
• “We don’t mind if the investment opportunity has a 90% risk of failing, if the 10% chance of success has a disruptive impact
capable of changing the market” – investor in M4D (anonymised)
A B C D E F
Scale
Time since launch of service
Reaching maturity
High risk
innovators (many)
Mature, proven
models (few)
Low
High
Investmentrisk
Note: coloured spheres are
indicative only, and do not
correspond to hard data points
Source: Omidyar Network, GSMA-MDI Analysis
Services that scale
over time
Services that do
not scale

94
Sustainable business models: funding silos and pilotitis
• Funding silos can result in duplication of services in
different markets
• This is exacerbated with small pilot projects that
prioritise impact in the local area over the short to
medium term
• The result is a lack of sustainable business models
with visibility to be used across markets or sectors,
limiting scale
• Most common in mobile health sector, but also
seen in others (e.g. agriculture)
Source: mHealthAfrica.com

95
Sustainable business models: overlap of services
• As an example, the GSMA has tracked the number of mHealth services by type (e.g. wellness, prevention etc)
– Africa alone has around 130 services, of which 66 are centered around prevention; we believe there are around 30
countries in the region with at least one mHealth service, equating to over 4 per country
– Multiplicity of services is even higher in specific segments of the health market in some countries
• For example, the GSMA tracks 18 mHealth services focused on HIV/AIDS in South Africa run by 14 separate organisations; 8 health
prevention services in Uganda run by 6 separate organisations
• In some sense, this can be related to objectives – the WHO defines mHealth as the “use of mobile and wireless
technologies to support the achievement of health objectives”
mHealth services by region
Source: GSMA mHealth program, GSMA-MDI Analysis

9696
• Use of different vendors may increase cost for mobile operator, limiting roll out and slowing down service
deployment (ultimately limiting scale)
• Other difficulties can arise if…
• Need Value Added Service (VAS) provider with equipment embedded within network of the local MNO (this holds even
if the MNO is a multi-national, as often need to hold separate negotiations with country op-co’s to launch a service in
local markets)
• Use multiple VAS providers (e.g. IVR VAS and a content VAS)
• Negotiating with MNO on a business model
- If M4D service provider wants revenue share or to charge a subscription for service, must have relationship
with local MNO
Visibility: matching vendors with mobile operators
MNO (group level)
Op-Co A Op-Co B Op-Co C
Vendor A (local market) Op-Co’s use same vendor (A) if solution available
in both markets (achieve synergies and scale)
Vendor B (local market)
Op-CO’s use different vendors (A, B) despite same or
similar solution available from one vendor
Op-CO’s = operating company (e.g. MTN
Uganda)

9797
Smartphone OS providers
M4D deployments (e.g. m-
health services led by MNO)
Microsoft (Redmond, WA)
Apple (Cupertino, CA)
Google (Mountainview, CA)
BlackBerry (Waterloo, Canada) Nokia/Symbian (Espoo, Finland)
Number
Scale
Ecosystem
Number
Scale
Ecosystem
Few (5 majors)
International
Integrated
Many (hundreds)
Local or national
Fragmented
Visibility: geographic fragmentation
(also hit by
funding silos)

9898
Visibility: forming partnerships
• Important for M4D organisations to form range of
partnerships (e.g. MNO, vendor, content)
• Mobile operators are key partners both for connectivity
and reach to the end user
• MNO-led M4D services appear most common in sectors
with more of a proven value proposition
• There is an opportunity in other sectors to develop this
• Discussions with stakeholders suggest it is key to
understand motivations – e.g. balancing the need for a
return with the goal of social impact
70%
49%
35%
27%
Money
Learning
Health
Agriculture
M4D services led by MNOs
“Very quickly we realised that positioning the product
straight up as a business benefit made better sense.
Until now we haven’t been proven wrong on this”
– Bhanu Potta, Nokia Life Tools
“It’s not a sector [mAgriculture] that’s represented real
value to them [MNOs] in the past. You need to approach
them in such a way as meets their business objectives”
– Mark Davies, CEO, Esoko

9999
Re-use: a continuum of opportunity
Deployedin
industry
Low High
Scope for re-use (sector or geography)
Bespoke applications (e.g.
KomKom, Cell Life)
Frameworks (e.g. Ushahidi,
Motech, Fundamo)
Platforms (e.g. iOS, Android,
Linux)
Few
Many
• Designed for specific purpose
(few generic elements)
• Built with many generic elements that
could be re-used (e.g. database,
location engine, language)
• Limited by need for customisability
(e.g. identity, payment platforms)
• Generic (e.g. built so that many
services/applications can plug into)
Specific Generic

100100
To understand re-use, we must understand technology
Mobile phone Mobile network Application server
Opportunity for
intervention (e.g.
by donors,
impact investors)
• High level view of key components in a phone, network and server (e.g. where an M4D service is hosted)
• The area we are interested most in is the application layers which give a functional view of the services
being represented

101
Under the hood: handsets and networks
• The terminal represents the mobile device –
e.g. phone, tablet, etc
• Hosts the applications principally used by the
user
• Built in apps (e.g. SMS inbox, browser)
• mAgri service sending push SMS to the phone
• Applications downloaded by someone after
they buy a phone (e.g. BlackBerry apps)
• Diagnostic app for child illnesses used by
frontline health workers
Handset application layer
• The network represents the mobile network –
e.g. base stations, communications
• The application layer in the network hosts
services used by the handsets
• These applications include messaging, voice,
identity and location
Network application layer

102102
Under the hood: server
• Application layer
– Backend infrastructure that defines and realises the
mobile service
– Two parts: application and framework
– Application
• single self-contained application (bespoke - e.g.
Z on right), OR
• As an application built upon shared resources
collected in a framework (e.g. A/B/C on right)
– Framework
• collection of resources and repositories that can
be used by multiple applications in order
function as a coherent service
• Communications
• Platform
– Underpins the entire mobile service
• Caveats
– Generic system shown, not specific to any one M4D
service
– Most frameworks themed to match a particular need
(e.g. transactional in mobile money, identity in mobile
health)

103103
Service overlap
Scenario A - agricultural SMS tip service
• This is a service where a farmer would subscribe to
receiving a periodic agricultural tip over SMS which is
relevant to the crops they grow and the location their
farm is located, according to the crop calendar/cycle
Scenario B – diagnosis app for health workers
• This is a service where frontline health workers are
issued with mobile phones capable of running a
downloaded diagnosis app on the phone. This works
with a back end server to allow the health worker to
step through a basic diagnosis tree for infant health
and recommend relevant courses of action
• This diagram shows the touch points in the
architecture of two example mobile services.
Key:
Items used by an agricultural SMS tip service (A)
Items used by a diagnosis app for Health Workers (B)
Items used by both

104104
Re-use in practice
• Genuine re-use
– Open frameworks (e.g. Ushahidi, Motech)
• Less resource (e.g. coding, money) to deploy an application based on an existing framework than to create an
application from scratch (e.g. weeks instead of months)
• APIs open to developers. Cost to use framework often low or zero, but may have licensing restrictions for
commercial use
• Integration
– Use of other frameworks (e.g. m-Pesa)
• Connect M4D service to a payment solution (the need to transact is a ‘common denominator’ that can be
integrated with other services)
– Utility access for rural or remote communities (see spotlight overleaf)
Biorefinery initiatives
Biorrefinaria, Brazil
(industry/environmental)
Restaurant recommendations
FoodieFinds, South Africa
(entertainment)
River pollution
Qiantangriver, China
(environmental)
Source: Ushahidi, GSMA-MDI Analysis

105105
• Leveraging connectivity and mobile money to support Community Services
• GSM connectivity integrated to micro-utility systems can increase their resilience
– Remote monitoring of units (e.g. photovoltaic energy production, battery voltage) and early detection of failure
– User’s consumption patterns
• Micropayments can support energy access initiatives:
– The “Pay As You Go” model allows for flexibility of payments and remote transaction
– Provides consumer financing, eliminating the prohibitively high upfront costs needed to acquire equipment
– Allows to send remittances wirelessly to the mobile money account of the individuals using the micro-utility system
Spotlight: enhanced utility solutions
Grundfos Lifelink provides
Pay-as-you-go purified
water services in rural
Kenya. The revenue
management system
allows water service
providers to collect
revenue via m-Pesa and
monitor daily water
consumption and revenue
(close to 40 sites to date)
m-Kopa provides Pay-as-
you-go solar solution,
allowing users to pay
KES40 per day (USD0.47)
via their m-Pesa account
to use system for lighting
and mobile charging.
They have a distribution
partnership with
Safaricom, leveraging its
45.000 agent network in
Kenya
Energy Access Clean Water Access
Source: m-Kopa, Grundfos, GSMA-MDI Analysis

106
Mobile operator opportunity: early view
• Few operators have publicly disclosed
results or guidance on mobile services
beyond connectivity
• Estimates largely confined to mobile
money
• Clear upside potential, even beyond
the proven businesses
– Safaricom’s m-Pesa already 16% of
group revenue (compared to 9% in
2010), and is a major driver of growth
for the overall business
– Telenor’s mobile money business <1%
of group revenue, but it expects this to
grow to around 5% by 2016
• Direct benefits are obvious (e.g.
transaction fees); less obvious (and
more interesting) are indirect benefits,
such as those arising from ARPU uplift
and churn reduction
8%
-1%
6%7%
5% 5%4%
9%
2%
19%
13% 13%
-5%
0%
5%
10%
15%
20%
2010 2011 2012
Contribution to revenue growth (Safaricom)
Voice
M-Pesa
Other
77
1,000
0%
1%
2%
3%
4%
5%
6%
0
200
400
600
800
1,000
1,200
2011 2016 (f)
$million
Mobile money revenue (Telenor)
Indirect
Direct
Share of group
revenue
Source: Safaricom, Telenor, GSMA-MDI Analysis

107107
8. Appendix

108108
Organisations, not departments: developing user-centric
innovation means the end user must be at the heart of all parts of
an organisation, including management culture, product and service
design, and marketing
From theory to practice: user-centric innovation needs to be seen
not as a theoretical concept, but a real modus operandi that
permeates all parts of an organisation and is fundamental in the
long term sustainability of an M4D service
Segmentation and personas are key: M4D service providers must
define target end user segments and develop personas that clearly
define the gaps and opportunities that could be met by a given
service
Act early: these should be defined as part of the service planning,
which means an upfront cost and time resource. While there are
encouraging examples of organisations redefining a service and its
marketing message after launch (e.g. Tigo Money in Paraguay), this
can be even more costly and time consuming
Cost and communication are key barriers: high up-front costs and
the fact many M4D organisations have partnerships where each
party has a different background and set of objectives create
barriers to effective implementation of user-centric innovation
These are surmountable: clear communication between
stakeholders of a given service and a demonstrable link between
investment in key tools (e.g. user research, segmentation and
personas, and user feedback) and scale will drive acceptance and
wider implementation of the user-centric concept

109109
What does it mean to be user-centric?
User-centric
• All parts of the organisation oriented
towards the user and their needs
– Vision and strategy
– Management approach
– Organisational culture and rewards
– User segmentation, targeting and
positioning
– Products/services developed
– Marketing competencies and resources
– Operational processes
Functional-centric
• Vision and strategy not oriented around
customer needs
• Users not often voiced in management
discussions
• User focus not a shared organisational norm
• No clearly defined target segments or
positioning
• ‘One-size-fits-all’ products/services
• Inadequate marketing competencies and
resources
• Processes not customer driven

110110
Why be user centric focused?
Health “shared phones”
In one project, an organisation tried to send personal HIV/AIDS test
results to people over their mobile phones; they were surprised by the
low pick-up rate until they realized that many people in the community
share their mobiles with family and friends. A text message isn’t
personal when multiple people share one phone.
Lesson need to understand user and community
habits before designing services
Note: examples adapted from: http://www.mobileactive.org/how-fail-mobileactives-definitive-guide-failure
Source: Mobileactive.org, GSMA-MDI Analysis

111111
MNO perspective: the customer journey (mobile money)
Unaware
Customer
has never
heard of
mobile
money
Customer has
heard of mobile
money and
knows
what it does
Awareness
Customer
understands how
mobile money
could be useful to
them
Understanding
Customer knows
the steps
necessary to
transact
Knowledge
Customer tries the
service
Trial
Customer
habitually uses
the mobile money
service
Regular Use
• The process of converting a customer who had never heard of mobile
money to one that habitually uses the service
• In theory this is the way it works, but where can practical barriers
spring up?
Note: adapted from “Marketing Mobile Money: Top 3 Challenges” - Yasmina McCarty, June 2012
Source: GSMA Mobile Money program, GSMA-MDI Analysis

112112
Lack of user centricity as a barrier in the journey
“I do not trust it because I do not
know how the money will reach the
other person.” – Non user
“Here in the deep village not
many people know much about it, so
they should sensitize us more on
how it works.” – Non user
Unaware
Customer
has never
heard of
mobile
money
Customer has
heard of mobile
money and
knows
what it does
Awareness
Customer
understands how
mobile money
could be useful to
them
Understanding
Customer knows
the steps
necessary to
transact
Knowledge
Customer tries the
service
Trial
Customer
habitually uses
the mobile money
service
Regular Use
• High awareness
• Clear understanding
• Lack of
knowledge
MTN
Uganda &
GSMA
MMU
consumer
research
(2011)
means to Ugandans to post it, literally
putting it in an envelope. When it comes to cell phone
management of money, they would use the term “put”
“send money”
• Vernacular of Mobile Money
Source: GSMA Mobile Money program, GSMA-MDI Analysis

113113
Organisations and user centricity
Organisation
Strategy
Culture
Marketing
Product & Service
development
User centricity impacts
organisations at all
these levels

114114
Organisation
Strategy
Culture
Marketing
Product & Service
development

115115
Best practice for user-centric business – key questions
Organisation
• Are we integrated across functions and divisions (or even across organisations) to meet customer
needs? Or do different business units serve the same customer segments independently?
• Are employees at every level rewarded based on customer metrics?
• Are frontline employees empowered to resolve user problems?
• Are systems in place to feedback user problems throughout the organisation?
Strategy
• Do we have clearly defined target market segments? For each of these, do we have a clear
differentiation versus existing products / services?
Culture
• Is our mission / vision customer focused?
• Is the customer’s voice adequately represented in strategy conversations?
• Do top managers demonstrate a behavioural commitment to customers?
• Do our most powerful symbols or rituals reinforce the importance of customers?
• Is customer obsession a shared norm?

116116
Organisation
Strategy
Culture
Marketing
Product & Service
development
Marketing
• Do we continually invest in better
understanding our users’ needs?
• Have we benchmarked our marketing
processes?
• Does our customer database actually
help us to serve customers better?
• Are marketing metrics clearly defined
and well understood? Can we show the
link to ROI?
• Is our marketing mix based on robust
customer research?

117117
Personas
Segmentation Products and
Services
PositioningTargeting
The ‘user focused’ marketing process
User Research
Possible feedback from any of the key activities back to user research phase

118118
Personas
Segmentation
User research e.g.
• Focus groups
• Interviews
• Immersion
• Observation
• Experiments
• Surveys
• Conjoint analysis
• Perceptual maps
• Geographic
• Demographic
• Behavioural
• Needs-based
Chosen methodology a
trade off: predictive
accuracy vs. ease of
implementation
Choose target segments
based on the needs of
different user groups,
organisational
competencies to meet
them and the competitive
landscape
• Product
• Pricing
• Place (distribution)
• Promotion
All designed to provide a
compelling offering to the
targeted user segments
Products and
Services
• Product
• Pricing
• Place (distribution)
• Promotion
All designed to provide a
compelling offering to the
targeted user segments
User Research
The ‘user focused’ marketing process
• Put a human face on abstract segment data (but still need to carefully link back to real user research, not just conjecture)
• Orients product design and messaging

119119
Personas
Services
User Research
Examining the process in more detail…

120120
The process in action: CGAP
• Quantitative survey covering 2,634 Ugandan households
• Question topics covered: Demographics; Financial Service Behaviours; Mobile Usage
• A process of prioritisation according to: Market opportunity; Customer accessibility; Willingness to try new
financial service products
Segmentation
User Research
User Research
Targeting
Targeted
segments
Deeper dive analysis
Segmentation
Targeting
Groundwork for positioning
Market opportunity
Source: CGAP, GSMA-MDI Analysis

121121
Coming full circle: Tigo mobile money (Paraguay)
• Multiple service offerings
• Marketed all services to all
customer segments
• Failed to differentiate on key
consumer purchasing criteria
• Low take-up and traction
• Consolidated service offerings
• Re-focused marketing with unified
message around single, core
consumer segment
• Improved uptake and volume
• Increased scale to other Tigo
markets (Guatemala, Honduras)
Tigo Cash Giros Tigo
MNO Tigo (2008) Tigo (2010)
Services
e-Wallet, merchant payments, domestic
remittances via P2P transfer, top ups
e-Wallet, merchant payments, domestic
remittances via OTC withdrawal, top ups
Marketing focus All services Domestic remittances
Registration Application and validation at agent point USSD (approximately 45 seconds)
1. Customer
research and
segmentation
2. Reform product
offering and
marketing
Purchase criteriaSegmentation lines
Route of remittance flow
Amount and frequency of money
transfers
Customer behaviours
Cost (most important)
Speed (least important)
Pre segmentation Post segmentation
Source: Tigo, GSMA Mobile Money program, GSMA-MDI Analysis

122122
Personas
Services
User Research
Creating Personas: further into the persona design process

123123
given a targeted market segment….
Then, a persona should:
• Be a representation of the goals and
behaviour of a fictional individual
• Epitomise the (prioritised) market
segment
• Follow the rough outline of the template
opposite
Practical steps: creating a persona
Persona template elements
Name: respectful fictitious label
Role: within a given user group, e.g., family
Demographics: Age, income and personal details
Knowledge, skills and abilities: real but
generalised capabilities of persona
Goals, motives, and concerns: describe the real
needs of the user
Usage Patterns: how frequently do they use
mobile, and in what way
Action statement: opportunity to provide a
specific product/service that meets user gaps and
needs
Personas
Segmentation
Targeting

124124
Example of Persona: CGAP
Personas
Segmentation
Targeting
Source: CGAP, GSMA-MDI Analysis

125125
Personas of
proposed m-
service
Best practice persona design and use
Persona template
elements
Name
Role
Demographics
Knowledge,
skills, abilities
Goals, motives,
concerns
Usage Patterns
Action
statement
1. Intuitively
sound?
The persona
should make you
believe this based
on a real person
Use a "real" fictitious name, ideally first and surnames. Make sure the back story contains relevant information (even when
not directly attributable to the service) e.g. educational background, aspirations, emotional disposition (optimistic,
pessimistic, etc.)
2. Elements
there?
The persona
should feature all
elements of the
persona template
Refer back to primary research to find relevant details, do not be tempted to create the relevant parts without reference to
primary data. Usage patterns should be based on pre-defined patterns constructed from the primary research.
3. Based on
fieldwork?
The personas
should be based
upon bespoke
fieldwork
Ideally data should be from a combination of quantitative and qualitative survey data, along with user interviews, relevant
macro level reports (e.g. regional teledensity, etc.) and user concept testing. At a very minimum there should be user
interviews and concept testing.
4. Visible to
wider
organisation?
The personas
should be used by
all relevant
members of the
organisation
Re-create new personas based on the baseline data involving all the relevant people/teams in the process. So they can
understand the thinking behind the persona.
5. Developed
user stories?
The personas
should be used to
develop user
stories
If they have developed user stories prior to the persona's they should have a persona for each user derived from the
methods above and from the user stories, plus they should reconcile the personas to the user stories and primary research. If
they have their personas but not yet created the users stories then they should hold an ideation workshop to compile the
relevant user stories based on the provided personas with a wide a base of stakeholders as possible.
6. Proposed
user research in
future?
The development
process should be
such that user
research is used in
future.
Assuming an Agile approach to development, they should be planning to implement further user testing at key iterations of
the development cycle as well as planning for user testing to be an intrinsic part of the final UAT.

126126
Organisation
Strategy
Culture
Marketing
Product & Service
development

127127
Product and service lifecycle
Idea generation
Requirements gathering
and analysis
Service model
generation
Design & content
development
Development
Deployment
Feedback and
evaluation
User
Primary
research,
Persona
development
User stories
creation, user
testing
User testing -
affordability,
teledensity,
access, etc.
User test - UX, UI
and visual
designs; Content
development
Showcase
iterations and
user test
UAT - user test
and correction

128128
Barriers to implementing user-centric design in emerging markets
Access to users
•Geographical
•Cultural
•Identification of
users
Cost of initial
research and on going
user testing
•Quantitative and
qualitative surveys,
prep, execution and
analysis
•User interviews
•User testing on an
iterative basis
Time and process
costs
•Up front research
and analysis
•Iterative testing and
feedback loops
Cross partner
communication
•Multi-partner
projects need co-
ordination across
different teams e.g.
organisations focused
on social impact
partnering with
organisations
specialising in tech
development
Understanding of UX
v's UI
•Tech development
organisations are
prone to doing user
interfaces without
much thought to user
experience and user
interaction
•Cross-team
involvement in the
process
Implementing
user centric
design

129129
Calls to action
Donors
• Focused on big picture,
less on whether service
meets user needs
• Funding structures that
don’t allow for user
research, testing, etc
• Waste money on projects
not targeting a real user
segment
Managers Designers
• Mismatch in MNO
incentives and long term
nature of BoP solutions
• Vendor/NGO managers
minimise user testing due
to upfront costs; rely
instead on 3rd party reports
• Marketing neglected
• Use ‘one size fits all’
template over primary user
research
• Too much focus on visual
design rather than whole
experience
• Pick up problems after
service designed
(expensive to change)
Common
Pitfalls
• Understand the
value of user centric
design, and develop
tools to test for it
• Organise business
practices around
user centric
principles
• Integrate with end
users as part of
design processCall to
Action

130130
8. Appendix

131131
A ubiquitous influence: the role of government on the mobile for
development sector is mostly indirect through setting regulation
and influencing the business environment. Direct investment in
mobile-enabled services has so far been limited, with this mostly
focused on the health sector
Clear dialogue: frequent dialogue between stakeholders in the
mobile sector (including operators, entrepreneurs and investors)
and policy makers is crucial to recognise the shared opportunity in a
more connected population (especially with mobile data) but also
to be frank about the challenges and how partnership can help to
overcome these
USFs strong in theory, weak in reality: Despite Universal Service
Funds (USFs) offering a way of underpinning coverage expansion to
rural areas, these have been largely mired by inefficiency. Around
$11 billion has been collected worldwide but not actually been put
towards any projects, with 97% of this in the developing world
Opportunity cost: any failure so far to expand coverage as a result
of USF inefficiency cannot be reversed, but there are increasingly
visible economic (and social) opportunities in urban and rural
regions by offering access to utilities like electricity and water
(mobile-enabled community services). Given the potential for ARPU
uplift, proof points of these businesses will be key in further
incentivising coverage expansion
Good business opportunities, not always the best environments:
while the culture for entrepreneurship has improved in many
markets (e.g. parts of Asia, Latam), there are still developing regions
languishing – 63% of markets in Africa and 33% in South Asia still
fall into the bottom quartile worldwide in the ease of doing
business
If you build it, they will come: Entrepreneurship is a key part of the
growth story in mobile for development. Maintaining this means
both improvements in the skills developed in country and the
proportion of the population with those skills (a refilling talent
pool), and promoting an investment friendly environment,
particularly for small and medium size businesses

132132
• Governments are a somewhat unique stakeholder – they control vast amounts of resources, but often act
‘behind the scenes’, as such playing more of an influencer as opposed to direct actor role in M4D
• This influence is broadly separated into two areas
– Regulatory environment (excluding direct regulation on pricing)
• Ease of doing business
• Promoting network coverage (via USFs)
• SIM registration
– Investment
• Direct (or through partnerships)
• Promoting a business-friendly investment environment
What is the role of government in M4D?

133133
The ease of doing business
• Regardless of sector (telecoms, pharmaceuticals etc), government has a role in fostering new business
• Some of this will come through the use of fiscal levers to encourage large scale investment
• However, equally important are the factors that go into setting up a small or medium-sized business (e.g.
taxation, ease of company formation, accessing credit, enforcing contracts)
• While progress has been made, many developing countries in Africa and South Asia still languish relative to
regional peers and mature markets, placing an (unnecessary) impediment to entrepreneurship
0
10
20
30
40
Top Upper middle Lower middle Bottom
Countries
Quartile
Ease of doing business rank, 2012
US/Western Europe
East Asia/Pacific
Middle East
Central/Eastern Europe
Latam
Africa
South Asia
Source: IFC, World Bank, GSMA-MDI analysis

134134
Mechanism of Universal Service Funds (USF)
Customer pays
Prepaid (or
contract)
subscriptions
Levy
fixed % of
MNO’s gross
revenue
Affordable Access
inclusive
telecommunications
services
USF
Grants
Funding for
access
services
Customers/Citizens
MNOs
Services/
infrastructure
The Universal Service Fund Value Chain
• Universal Service Funds (USFs)
were created mostly over the last
10 years with the aim of extending
access to telecommunications
services at affordable prices
• They are intended, in effect, to
ensure communications operators
provide coverage irrespective of
the economic rationale for doing so
(particularly in rural areas)
• USFs have historically funded a
range of communication services
in addition to mobile:
• Fixed line
• Broadband and dial-up
• Other services

135135
Can USFs be explored as a fund component for Mobile
Enabled Community Services?**
No
TBD
Yes
Source: GSMA Universal Fund Study (2013), **Ladcomm Corp (2013), GSMA-MDI Analysis
0%
50%
100%
Fixed
Wireless
Broad band
Dial-up
Internet
Other*
What do USFs fund?
Developed
Developing
* ‘Other’ has many different definitions but generally refers to tele-
centres, community access centres and similar concepts
• The main target of USF funding in mobile is
network rollout to rural areas
• The impact on M4D services is therefore mainly
indirect – enhanced coverage is a requisite for
mobile access, which increases the addressable
audience for mobile-enabled services
• There is also potential for direct funding of M4D
services in some markets, such as water and
electricity access
• However, this potential has largely gone
unfulfilled
Prospects for USFs as funding for M4D

136136
Financing of USFs – in theory, a solution to a market failure
• Funds in the developing world are generally
financed through a contribution mechanism
from telecommunications service providers
(usually calculated as a percentage of revenues
– e.g. 5% in India)
• These started out around 5-6%, but for
countries that have introduced USFs more
recently, the levies have come down to around
2-3%
• In theory, this makes sense because
governments have an in-built way of linking the
incentives of mobile operators (acquiring
spectrum) with governments (connecting as
many people as possible)
0%
2%
4%
6%
8%
10%
1990 1995 2000 2005 2010
Levy(percentageofrevenue)
Year fund established
USF levy by market
Source: GSMA USF study (2013), GSMA-MDI analysis

137137
…but inefficient in practice
• Nearly a third of USFs in the developing world are inactive, compared to under 10% in mature markets
• Worldwide, we believe there to be around $11 billion accrued by governments through USF mechanisms,
but not yet spent on actual telecom projects
• The vast majority of inefficiency is in the developing world, predominantly in Asia and Latin America, with
around 70-80% of funds unspent in several markets
Source: GSMA Universal Fund Study (2013), GSMA-MDI analysis
* Inactive funds were identified through attempting to contact/find a fund administering body, where no such body could be found
Note: figures on undisbursed funds reflect the information available/reasonably estimable concerning the financials of USFs. The
actual figure for total undisbursed funds is likely to be much higher, as details of many fund’s financials are often unobtainable
of the
$11 billion waiting
to be disbursed,
97% is in
developing world
0
3,000
6,000
9,000
12,000
15,000
Developed Developing Asia Latam Africa
$million
USF efficiency
Balance Undispersed Developing region split

138138
Rural economies feel the hit
Source: GSMA Universal Fund Study (2013), World Bank, GSMA-MDI Analysis
*Calculated on the basis of country samples from regions about which the GSMA was able to find data (Africa, 20; Asia, 9; Latam, 12; developed, 5)
• Although the greatest proportion of undispersed funds come from India and Brazil, other countries fair
poorly when their undispersed funds are seen as a percentage of GDP
• These amounts are far from negligible, particularly for small, largely rural economies, where the
opportunity cost of mobile network rollout is likely to be highest
0.0%
0.1%
0.2%
0.3%
0.4%
0.5%
0.6%
0.7%
Undisbursed funds as % of GDP
Africa Latin America Asia
Developing
c.0% 0%

139139
SIM registration
*Information collected where starting year of registration could be determined
Source: A.Martin & K.P.Donovan (2012), N.Jentzsch (2012), GSMA-MDI Analysis
Most of Africa Requires SIM registration (2012)
80%
6%
15%
Sim registrations
required
Sim registration
not required
Unknown
0
2
4
6
8
10
2006 2007 2008 2009 2010 2011
Mandatory SIM registration
Northern Africa
Southern Africa
Middle Africa
Western Africa
Eastern Africa
• In the last 10 years 80% of countries in Africa have
started requiring registration in order to activate a
prepaid SIM card (mostly as a counter-terrorism effort)
• While this gives operators more details on their
customers (to offer more tailored services), it also can
have unintended consequences
• Customers unable to get to an operator store or
distribution point in the specified time frame may simply
be cut off from service
• This can favour operators with larger distribution
networks, with a resulting risk to competition

140140
Investment
2.3
1.8
1.6
1.2
1.4
0.0
0.5
1.0
1.5
2.0
2.5
0
100
200
300
400
500
MNO Vendor and
entrepreneur
Development
organisation*
Government Academic
Investments in M4D
Products and services
Organisations**
Deployments per
organisation
*Includes donors, NGOs and other development groups
**Number of unique organisations (country operating companies of MNOs each count as a unique organisation)
Source: UNCTAD, Financial Times Ltd, fDi Markets (FDI), GSMA-MDI analysis (M4D investments)
0
5,000
10,000
15,000
20,000
25,000
East Asia South Asia Latam Africa Developed
$million
Greenfield FDI (telecoms, transport, storage)
2010 2011
• Governments can invest directly or indirectly
in mobile
• Direct investments (or partnerships) are
currently limited, and mainly targeted towards
mobile health services
• The indirect role is to promote a friendly
investment environment (e.g. use of tax
incentives) – FDI is a reasonably proxy, with
East Asia and Latam the largest and fastest
growing destinations

141141
8. Appendix

142142
Glossary
2G The second generation of digital mobile phone technologies including GSM, CDMA IS-95 and D-AMPS IS-136
3G The third generation of mobile phone technologies covered by the ITU IMT-2000 family
Active Mobile Connections
Active unique SIM cards (or phone numbers, where SIM cards are not used), excluding M2M, that have been used for voice, messaging or data activity on the
mobile network over the operator’s activity period, which can range from one to 13 months.
Advertising Revenue generated from advertising delivered through service itself
API An application programming interface is a protocol intended to be used as an interface by software components to communicate with each other.
Framework A set of re-usable software tools and interfaces for developing applications
Apps A software application designed to run on mobile devices. (typically smartphones, and tablet computers)
ARPU Average Revenue Per User
Basic phone Offers basic voice services (telephony/voice mail), SMS and USSD based services.
Business
Businesses targeted by service to generate revenue. Generally supports internal business processes (e.g. Inventory management), or core business services
(e.g., recruitment)
Call Centre Simple voice call to a trained human content provider
Consumer (MNO led)
Rolled out as a value added service (VAS) by an MNO. While it may not earn revenue from customer directly, VAS designed to drive new customer uptake/
reduce customer churn.
Consumer (non MNO led) Revenue generated directly by end user. e.g. subscription, one off mobile money payment
Data collection Create customised surveys and send them to fieldworkers’ mobiles
Donor Primary funding comes from donor organisations, usually in a lump sum grant
Feature phone Basic phone features plus… Internet enabled, supports transmission of picture messages downloading music, built-in camera
Foundation M4D application Application that is designed to sit on top of a framework owned by another vendor
Government Primary funding comes from government
GSM
Global System for Mobile communications, the second generation digital technology originally developed for Europe but which now has in excess of 71 per cent
of the world market. Initially developed for operation in the 900MHz band and subsequently modified for the 850, 1800 and 1900MHz bands. GSM originally
stood for Groupe Speciale Mobile, the CEPT committee which began the GSM standardisation process
HHI
Herfindahl-Hirschman Index, A commonly accepted measure of market concentration. It is calculated by squaring the market share of each firm competing in a
market, and then summing the resulting numbers
Interactive content Content based services that users can access by querying a central database. May be delivered via IVR, SMS, USSD, app, WAP, etc.
Internet
A loose confederation of autonomous databases and networks. Originally developed for academic use the Internet is now a global structure of millions of sites
accessible by anyone
Inventory management Supply chain management and stock ordering tools. Product security / validation tools
IP Internet Protocol
IVR Interactive voice response, allows a computer to interact with humans through & voice recognition navigation and DTMF tones via keypad
Java A programming language developed by Sun Microsystems Java is characterised by the fact that programs written in Java do not rely on an operating system
M2M
Machine-to-machine is a broad label that can be used to describe any technology that enables automated wired or wireless communication between
mechanical or electronic device

143143
Glossary
MNO Mobile Network Operator
Active mobile subscriber
penetration
Unless otherwise specified, this is the total active subscribers in the market divided by the total population, expressed as a percentage. (It is not the more often
cited penetration of total mobile connections, which will always be higher)
Bespoke M4D application A “one off" application built from the “ground up
Open Source Service based around open source software/framework. Value derived from external parties adopting service
Other A “catch all” for devices not included in the above. E.g., modems, Personal digital assistance (PDA), etc.
OTT Over the Top refers to video, television and other services provided over the internet rather than via a service provider’s own dedicated, managed IPTV network
Payments Mobile wallets, payment gateways and a wide range of payment based services
PC/laptop Personal desktop computer, or laptop. Typically running Windows, or maybe Linux OS.
Peer to peer content Social networks and posting systems, users create and access content. Wide range of delivery mechanisms, even including voice
Platform Generic in nature, could be used in a multitude of different services. An operating system, cloud, etc.
Push content Content pushed out (one way) via voice message or SMS. May be “broadcast” or “narrowcast” (customised by location / user profile)
SIM
Subscriber Identity Module; A smart card containing the telephone number of the subscriber, encoded network identification details, the PIN and other user data
such as the phone book. A user’s SIM card can be moved from phone to phone as it contains all the key information required to activate the phone
Smart phone Feature phone features plus… graphical interfaces and touchscreen capability, built-in Wi-Fi, and GPS (global positioning system)
SMS Short Messaging Service, allows exchange of short text messages between mobile phone devices
STK
SIM ToolKit: specified within the GSM standard, this allows operators to add additional functions to the phone menu in order to provide new services such as
mobile banking or email
Tablet Smart phone features plus… Larger screen, increased computing power, front and rear facing cameras, extra ports (e.g., USB)
TCO Total cost of ownership
Text-to-Speech Computer or handset based service that generates speech using text input
Total Mobile Connections
Total unique SIM cards (or phone numbers, where SIM cards are not used) that have been registered on the mobile network at the end of the period.
Connections differ from subscribers such that a unique subscriber can have multiple connections.
USSD
Unstructured Supplementary Service Data. A synchronous message service creating a real-time M2P connection allowing a two-way exchange of data, mostly
through menu structures
Voice Basic telephony services, with voice delivered over a mobile network
WAP Wireless Application Protocol for accessing information over mobile network. WAP browsers typically found on older feature phones.
WAP Wireless Application Protocol for accessing information over mobile network. WAP browsers typically found on older feature phones.
Web A system of interlinked hypertext documents accessed via the Internet; also accessible via enabled mobile devices

144
Case Study work
Health Agriculture Money
Entrepreneurship Learning Power
• CEOs and high level executives
from organisations the GSMA
regards as leading in their
sector were interviewed.
• Interviews were 1-to-1 and
lasted around an hour
• We asked questions
specifically tailored to issues of
scalability and user centric
attitudes
• Interviews revealed that for
these leading organisations:
• Success depended upon
building to scale from the
outset
• Reaching out to users on a
regular basis to test products
was essential
• There was a strong desire to
clarify social impact of work
• Sustainable business models
were essential, but tough to
prove
• Partnerships were essential
• MNO partnerships were
fruitful but hard to set up
Case studies

Scaling Mobile for Development: Harness the Opportunity

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