Abstract

http://ssrn.com/abstract=1564529
 
 

Citations (4)



 
 

Footnotes (81)



 


 



How the Developing World may Participate in the Global Internet Economy: Innovation Driven by Competition


Rohan Samarajiva


LIRNEasia

2009

Joint Workshop on 'Policy Coherence in the Application of Information and Communication Technologies for Development,' Paris, France, September 10-11, 2009

Abstract:     
Full participation in the global Internet Economy requires electronic connectivity of considerable complexity. Today, due to a worldwide wave of liberalization and technological and business innovations in the mobile space, much of the world is electronically connected, albeit not at the levels that would fully support participation in the global Internet Economy. Yet, many millions of poor people are engaging in tasks normally associated with the Internet such as information retrieval, payments and remote computing using relatively simple mobiles. Understanding the business model that enabled impressive gains in voice connectivity as well as the beginnings of more-than-voice applications over mobiles is important not only because widespread broadband access among the poor is likely to be achieved by extending this model but because it would be the basis of coherent and efficacious policy and regulatory responses.

This report demonstrates that voice connectivity was achieved for a majority of the world’s people, including substantial numbers of the poor, because governments removed or lowered barriers to participation in the supply of telecom services and created conditions somewhat conducive to competition, even if less than perfect. This was the necessary condition. Where multiple suppliers existed, intense competition, the critical step of implementing the budget telecom network model, occurred. The radically lower prices attracted more minutes of use, which in turn made further reductions possible. Operators were able to load their networks with high volumes of revenue-yielding minutes because they had succeeded in reducing the transaction costs of dealing with low-volume customers. Prepaid, which accommodates the needs of those with irregular earning patterns was also a critical element. Along with these business process innovations, the exponents of the budget telecom network model also succeeded in drastically reducing costs, especially opex. The new model makes ARPU [Average Revenue per User] irrelevant because what really matters is how many revenue-yielding minutes are carried on the network, not how much money is earned from a customer. In the same way that Ryan Air and Air Asia make profits while conventional airlines lose money, budget telecom networks make more money than conventional operators. However, the model increases the volatility of earnings and results in lower quality of service.

Number of Pages in PDF File: 41

working papers series





Download This Paper

Date posted: March 7, 2010  

Suggested Citation

Samarajiva, Rohan, How the Developing World may Participate in the Global Internet Economy: Innovation Driven by Competition (2009). Joint Workshop on 'Policy Coherence in the Application of Information and Communication Technologies for Development,' Paris, France, September 10-11, 2009. Available at SSRN: http://ssrn.com/abstract=1564529 or http://dx.doi.org/10.2139/ssrn.1564529

Contact Information

Rohan Samarajiva (Contact Author)
LIRNEasia ( email )
12, Balcomb Place
Colombo, 00800
Sri Lanka
Feedback to SSRN


Paper statistics
Abstract Views: 608
Downloads: 111
Download Rank: 148,160
Citations:  4
Footnotes:  81

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo1 in 0.391 seconds