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Innovations to Accelerate Universal Internet Adoption

By Guest Writer on March 15, 2017

Mobile and internet services have the power to transform lives, offering life-enhancing financial, health, and many other services, as well as the simple ability to express oneself to one’s family and community.

Yet millions of people in emerging markets lack access to these services, and even those who have access often do not adopt services, because of constraints arising from limited affordability, perceived value, and ability to use the services. The resulting access and adoption gaps threaten to exacerbate existing economic and social inequities facing low-income, rural communities in emerging markets, particularly among women and girls.

The Market Alone Will Not Deliver

The market alone will not close the access gap. Over time, industry investment in mobile and fixed networks in the developing world may increase and extend existing network coverage, but will likely not expand to connect marginalized populations in unconnected and under-connected geographies because of the high capital and operational costs and low profit potential.

This market frontier, or the point at which economic incentives to expand and deliver connectivity fall to zero, will for the foreseeable future leave hundreds of millions of people unconnected as they reside beyond the point at which current service delivery, via the dominant model of network operators, makes economic sense.

The Digital Impact Alliance (DIAL) commissioned Closing the Access Gap: Innovation to Accelerate Universal Internet Adoption to understand potential business model and technology innovations for accelerating access and adoption of mobile phones and the internet at the emerging markets frontier.

Innovation in Key

This is where innovation has a role to play. A growing set of non-traditional service providers are testing new business models and technologies to reach consumers who otherwise might reside beyond the market frontier. Thus far, few, if any, of these innovations have yet to reach the type of scale that are substantially shifting the access and adoption equations. These diverse efforts, however, are important as industry, governments, and the development community explore how to close this gap.

To address the access gap, academics, technologists, and entrepreneurs, from major Silicon Valley firms to start-ups in rural Mexico, are testing new business models and technologies to extend the reach and affordability of mobile and internet beyond what the current mobile footprints and business models support.

Though these models all address the basic issue of internet access and adoption, they approach the challenge in quite different ways, providing a variety of potential solutions that may or may not be appropriate for a given market. A review of some recent and ongoing efforts provides both a framework to help decision makers consider where innovation can best address gaps in their specific contexts, as well as some lessons and opportunities for action across the ecosystem.

Three main conclusions:

1. A portfolio of diverse, innovative access solutions is required to meet unique market contexts. A range of innovative models are beginning to serve communities at the base of the economic pyramid. It is unlikely that a single “silver bullet” will emerge to close the access gap for billions of people across dozens of markets. Each model offers features that are appropriate in specific markets, but no single innovation will apply in every context.

Market dynamics, geographic conditions, regulatory constraints, and community characteristics all play a role in the potential success of different business models and the applicability of different technologies. To enable this portfolio to emerge, governments, donors, industry and investors all have a role to play in supporting greater innovation and experimentation to identify and accelerate scale-up of sustainable solutions.

2. An active community of innovators is implementing solutions, but many require risk capital to fully explore alternative business models. The business case for last-mile innovations for the most marginalized populations is still to be determined given the high costs for deployment and currently low profit potential. To help support entrepreneurs innovating for the last mile, risk capital is needed to help offset immediate infrastructure costs but must be carefully structured to avoid dependency.

Although industry will remain the chief source of investment in the sector, governments, bilateral donors, and impact investors have key roles to play in supporting innovation. Governments, donors, industry, and investors can all play roles with greater support through appropriate financing and risk capital, which supports testing of new business models and technologies.

3. Greater collaboration and knowledge sharing across the community, within bounds of market competitiveness, can play a role in accelerating innovation. Both innovators and investors alike require more actionable market intelligence (for example on end users, geographic characteristics, existing infrastructure, and regulatory constraints) in order to tailor different market models.

The type of market data commonly used to base investment decisions in mature markets is more expensive and difficult to obtain in low-resource environments. Most innovators, particularly smaller actors, struggle to navigate regulatory, technical, and financial challenges on their own, as well as to understand and foster the demand-side drivers needed to drive low income end user adoption. Both innovators and investors alike are hungry for better knowledge and more data and what works for different models. Greater government and donor investment to support research and knowledge sharing can help address these gaps and uncover these data.

Implications for Action

To realize the potential growth and adoption of innovation in this sector, a range of market participants all have roles to play. In addition to creating constructive enabling environments to expand traditional network connectivity in their countries, policymakers can consider how their policies and regulations encourage innovation, as well as provide risk capital in the form of grants or short-term subsidies to enable small companies or social enterprises to test the viability of potentially game-changing access innovations.

Access innovations are blossoming in policy environments that foster competition, provide flexible and streamlined licensing, and are open to trials and experimentation.

Innovators, including start-ups and forward-looking traditional operators, can learn from prior telephony and internet expansion efforts where history demonstrates that simply building infrastructure is not enough; thoughtful distribution that improves affordability and strengthens the incentives and ability of low-income end users to adopt service also is required to support economically sustainable models.

Bilateral and multilateral donors and other investors have an opportunity to accelerate adoption by providing risk capital to enable promising, early-stage innovations.

Market-based finance will be the key driver of sustainable, large-scale connectivity, but many potentially interesting models are at risk of being lost to the ‘valley of death’ between proof-of-concept and positive cash flow. Access advocates—comprising the growing set of global alliances, advocacy groups, academics, donors, NGOs, and corporate policy shops—can enhance their voices and effectiveness through stronger coordination.

Finally, given the magnitude and complexity of the challenge, governments, innovators, donors, and other investors, as well as access advocates, may want to consider a more coordinated approach to testing the viability of these innovations, including greater investment in testing such models, and more structured approaches to undertaking and sharing data and insights.

By establishing clear definitions of success, identifying areas of respective comparative advantage, harmonizing research agendas, and improving knowledge sharing, these groups can help accelerate sustainable access for and adoption by the underserved.

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4 Comments to “Innovations to Accelerate Universal Internet Adoption”

  1. James BonTempo says:

    Is there a reason why there’s so little mention of the potential of Universal Service Funds, or similar mechanisms, to support extending access? In the end, someone has to pay for these efforts. And the report seems to imply that much of that funding would (should?) come from investors or international donors, or directly from users themselves, rather than looking to those already making money of off providing the services to help—not completely, but at least to some extent—subsidize extending access. But maybe I missed something…

    • Wayan Vota says:

      James,

      Agreed, USF should be the way to go, however there seems to be many issues in actually using the funds – over $12 Billion USD isn’t spent, so the report authors may omit them out of practicalities in using them.

      • James BonTempo says:

        Indeed. And the funds can also be misspent. But some do get used & to good ends. Of course, improvements can definitely be made to make them more accessible & ensure they’re being used responsibly. Just wondering if there’s a market orientation or bias implicit in the report (and, consequently, perhaps in those that paid for it)…

  2. I appreciate this very succinct summary. I find myself being one of those small motivated developers looking for partnerships that is running into a brick wall. I have taken the mesh network concept mentioned in the White Paper as a solution with possible merit to what I believe can be quite transformative under the right circumstance.

    About 3 years ago I approached Inveneo about such a vision. I met with Andris Bjornson and Clark Ritchie. They liked the idea but it was only in the incubation phase and they were in no position to take it on. I was working as a Silicon Valley software engineer at the time so it was just a hobby for me. I have now retired and have put a lot more time developing the prototype. I have had no recent response from Inveneo and have spoken to a number of other Bay Area NGO’s who are not really in a great position to partner. I would so much like to find an NGO willing to test this prototype in a real world situation. I too would be prepared to spend the time on the ground training the local entrepreneurs and helping to set up a local self sustaining business for not a large capital outlay.

    I also have solved some of the issues that are explicated in the referenced White Paper.

    “Such networks can be useful, but have
    limits. Given the limited reach of WiFi
    routers, the approach is difficult
    to deploy in very remote or widely
    distributed rural communities.”
    Using a $5 Raspberry PI battery powered enables easier deployment without a huge risk of theft. The batteries can be solar powered.

    “More critically, routers within these
    networks both transmit and receive data,
    but cannot do so simultaneously; as the
    number of routers in a network increases,
    the efficiency of the overall network
    decreases.”

    The Raspberry PI’s are not data sources but are just very low cost routers. Furthermore, they run the very latest Linux kernel enabling deployment of all the recent research and breakthroughs in managing bufferbloat/network jitter. The Android devices that are users of the network are just that and are not used to route packets so do not become writer/reader nodes. Any Linux laptop can also join the network and can be used as proxy servers and sources of content including multicasting video.

    I have very reason to believe that my mesh network solution might work in very remote areas where GSM mobile phones or existing Ethernet routers can be extended into villages or homes. Also, to scale a mesh network, multiple mesh networks can be connected through designated multiple network nodes.

    So how does a frustrated retired engineer like myself find my way out of this quagmire. I am hoping that like minded individuals within this group can give me guidance. I cannot proceed without partnering. I have a working prototype that needs further development to fully productise. The long term vision of of building an enterprise by having people donate their old Android devices for a tax deduction is a long way off and requires others with that particular skill set to realise.

    For more information, please look at my rudimentary web site http://www.3WDroid.org