NGN = Next Generation of Broadcasting
Abstract
Title: An ICT-application study in Dominican Republic
Author: Marcus Lewold
Tutor: Ola Alexanderson, Department of Industrial Management & Logistics, Faculty of Engineering, Lund University.
Background: Welfare projects using applications of Information and Communications Technology (ICT) have proven to deliver significant results in a cost efficient way. Despite this a strong majority of project still fail to sustain once the initial welfare resources are depleted.
Purpose: The purpose of this thesis is to identify applications of ICT that can be valuable for society and at the same time present interesting business opportunities for a telecom operator.
Method: The study was divided into three different parts. Part 1; A broad selection of potential applications of ICT was matched with needs discovered during interviews with a broad range of local stakeholders (including stakeholders from; healthcare, education, agriculture, etc....). Part 2; each application were analyzed according to benefits and ease of implementation with the purpose to identify the 2 most attractive applications. Part 3; A more comprehensive analysis were conducted on each of the two applications identified in the previous phase – stakeholder analysis and value analysis – with the purpose to present a suitable business model.
Conclusions: Two applications of ICT are identified and a suitable business model applicable on the Dominican market is suggested for each application.
Keywords: Sustainability, ICT, Evaluation of applications, Pilot project, Aid, Welfare
Acknowledgment
First of all, I would like to thank my tutors at Ericsson, Johan Haeger and Erika Ernfors for giving me the chance to pursue my interest in ICT-strategies in developing countries, and for their comforting support throughout the process. I would also like to thank Mr. Edwin San Roman at Indotel for his tireless support; clearly this project would not have been possible without valuable contacts that I was given through Mr. San Roman. Finally, at The Faculty of Engineering at Lund University, I would like to thank my academic tutor Ola Alexanderson, for his valuable insights and advices during the work process.
I knew that my master thesis would be an inspiring and challenging project, but in retrospect I find that this project have been far more challenging and developing than I would ever imagine. Working in the Dominican Republic and conducting interviews on a language, that not so long ago was completely unknown for me, have probably been one of the most developing periods of my life. The people that I have met during my interviews have been incredible enthusiastic; I would therefore like to thank them all with great sincerity.
Finally I would like to take the opportunity to thank my family and friends for all the support that I have been given throughout my education.
Stockholm, January 2010
Marcus Lewold
Table of Contents
Abstract 1
Acknowledgment 2
Table of Contents 3
List of figures and tables 7
1. BACKGROUND 8
1.1 ICT creating value in an all communicating world 8
1.2 Specific examples of ICT projects from around the world 9
1.3 Applications, what is an application? 10
1.3.1 The scale factor 11
1.3.2 Cost is driven by complexity 12
2. INTRODUCTION 13
2.1 Problem Discussion 13
2.2 Purpose 14
Short version 14
Long version 14
2.3 Disposition 14
2.4 Glossary 16
3. METHODOLOGY 18
3.1 Definition of problem 18
3.2 Working process and timeline 18
3.3 General Study of Technology and Market 19
3.4 Application Research Study 21
3.4.1 Phase 1, Identify applications 21
3.4.2 Part 2, Evaluate applications 23
3.4.3 Part 3, Suggest suitable business practices 25
3.5 Strengths and weaknesses of the methodology 27
4. THEORETICAL FRAMEWORK 28
4.1 The basis of scientific innovation 28
4.1.1 Value creating culture 28
4.1.2 The innovative process 29
4.2 How to predict the success of an innovative application 30
4.2.1 The aspect of behavioral change 31
4.2.2 The Network effect 33
4.3 Stakeholder Analysis 34
5. PHASE 1 – IDENTIFY APPLICATIONS 38
5.1 Distribute Information 38
5.1.1 Broadcasting of SMS 39
5.1.2 Information Portal 41
5.1.3 Mobile Market Portal – level 1 42
5.2 Collect Data 44
5.2.1 Mobile Survey Tool 44
5.2.2 Remote Monitoring - Piix 46
5.3 Coordinate Resources 47
5.3.1 Electronic Medical Record Systems, OpenMRS 47
5.3.2 Mobile Market Portal (level 2) 49
6. PHASE 2 – EVALUATE APPLICATIONS 51
6.0 Short explanation of quantification 51
6.0.1 How to quantify addressable Value 51
6.0.1 How to quantify ease of implementation 51
6.1 Information Portal 52
6.1.1 Addressable Value 52
6.1.2 Ease of implementation 54
6.2 Broadcasting SMS 55
6.2.1 Addressable Value 55
6.2.2 Ease of implementation 57
6.3 Remote Monitoring of Heart-rate – Corventis Device 57
6.3.1 Addressable Value 57
6.3.2 Ease of implementation 59
6.4 Electronic Medical Record System - OpenMRS 61
6.4.1 Addressable Value 61
6.4.2 Ease of implementation 63
6.5 Mobile Survey Tool 64
6.5.1 Addressable Value 64
6.5.2 Ease of implementation 65
6.6 Mobile Trade Portal – Level 1 66
6.6.1 Addressable Value 66
6.6.2 Ease of implementation 67
6.7 Results 68
7. PHASE 3 – SUGGEST BUSINESS PRACTICE 70
7.1 Mobile Survey Tool 70
7.1.1 The need – Access to healthcare data 70
7.1.2 The product – The ability to use mobile phone as a device for collecting data 72
7.1.3 Understanding the value; how, where and for whom? 73
7.1.4 Stakeholders analysis 74
Business practice 78
7.2 Mobile Trade Portal 80
7.2.1 The need – access to information 80
7.2.2 The product – market information in your mobile 80
7.2.3 Stakeholders analysis 82
7.2.4 Business Practice 84
Summary 86
8. CONCLUSIONS 88
8.1 Which Services 88
8.2 A dynamic perspective 89
9. REFERENCES 90
9.1 Oral sources 90
9.1.1 General Study 90
9.1.2 Application Study 90
9.2 Published Material 91
9.2.1 General Study 91
Books 91
Articles & Reports 92
10. Appendix 94
10.1 Appendix 1, Mobile Trade Portal, Competitive landscape 94
10.1 Appendix 1 - Discussion Guide 96
List of figures and tables
Illustrations
Illustration 1: Basic analysis of how complexity affects scale and costs 12
Illustration 2: The overall working progress 19
Illustration 3: The working progress of the application study 21
Illustration 4: Illustration of the first phase of the application study, the identification phase. 22
Illustration 5: Illustration of addressable value 23
Illustration 6: The second phase of the application study; Evaluation of applications 24
Illustration 7: The third phase of the application study; stakeholder analysis and value analysis 26
Illustration 8: Breakdown of factors influencing the ease of implementation 31
Illustration 9: The 9x effects 32
Illustration 10: Three different patterns of needs 38
Illustration 11: Results from the evaluation of applications 69
Illustration 12: Organizational chart of healthcare system and map illustrating the locations of rural clinics 71
Illustration 13: How the process works today 72
Illustration 14: How the process could work with the Ericsson Mobile Survey Tool 73
Illustration 15: Breakdown of sources to value 73
Illustration 16: Stakeholder Mapping for MST 78
Illustration 17: Schematic illustration of the service 81
Pictures
Picture 1, A Dominican woman sending a SMS from her mobile phone 40
Picture 2, Local farmer sending SMS from his mobile phone 43
Picture 3: A doctor using her phone 45
Picture 4: A typical view in rural healthcare clinics 48
Picture 5: A young Dominican boy 88
Picture 6: A Dominican sunset on the north coast 89
1. BACKGROUND
This chapter gives the reader a basic introduction to how ICT can create value for society; in a general social welfare perspective and in specific examples from healthcare, education and agriculture. Furthermore, the problem of sustainability is introduced and discussed. The chapter ends with a short presentation of what defines an application.
1.1 ICT creating value in an all communicating world
There is a general consensus among stakeholders in the telecom industry that increased connectivity through the use of ICT, commonly known as Information and Communication technology, benefits society – a consensus backed up by studies conducted by both leading academics, such as Leonard Waverman at the London Business School, and leading consultancies such as McKinsey & Co (Broadband for the masses, McKinsey, Feb 2009). In short: the re-occurring argument is that there are a significant correlation between ICT penetration and growth of GDP.
Investments in telecoms generates a growth dividend because the spread of telecommunications reduces costs of interaction between stakeholders, expands market boundaries and enormously expands information flow.
The impact of Telecoms on Economic Growth in Developing Countries, Waverman et al 2004
Waverman’s argument is intuitive and it is easy to imagine how much harder our every-day life would be without the ability to communicate in a timely and reliable manner; so many processes, both on a personal as well as professional level are dependent on this ability.
But, what does penetration of ICT really mean? Surely level of penetration is a convenient indicator that can be used for research - research that can provide valuable guidance for policy-decisions regarding infrastructural investments - but Waverman does not investigate the operational level. The purpose of this study is to do just that; to investigate specific value creating applications of ICT. The Dominican Republic was chosen to be the
1.2 Specific examples of ICT projects from around the world
But, before we dive in to the specific example of the Dominican republic, it could be a good idea to start of with a short overview of projects that have been conducted around the world during the last 5 years. The first example, the Gandhigram project, is a powerful example demonstrating how ICT can facilitate healthcare in developing environments. The Gandhigram project is a healthcare project in the southern India, founded by the private healthcare company Apollo with the purpose to investigate how smart use of telecommunication can leverage scarce resources, such as doctors and other medical experts, and provide specialized healthcare to citizens in remote and rural areas – citizens normally out of reach of any advanced form of healthcare. The cost of transport - in both time and money - is simply too high and no business model (the Indian healthcare is mostly private) can cover the cost of neither specialized doctor nor advanced equipment, in this region. But, doctors and other crucial experts (such as x-ray technicians) can be centralized and mobile health centers, in the form of busses equipped with medical equipment can operate around the countryside with the support of centralized experts. Through the use of telecommunication each doctor can serve multiple health centers and his or her expertise is thereby leveraged – this leads to a more cost efficient usage of scarce resources.
Another specific example of how ICT can be used to create value for society is the well known project Text2Teach. Sponsored by Nokia, the project uses mobile phones and satellite links to provide teachers in rural areas in the Philippines with modern educational content in the form of video and audio clips. The teacher can use her mobile phone to browse a digital library with educational content and pick whatever suits her specific needs. Her choices will be downloaded over a satellite-link and made available for class the next day - a drastic improvement from 10-20 year old incomplete set of school books. The project is expensive, mainly because of hardware cost (mobile phone and satellite receiver) and high license fees for the satellite link. When 3G coverage reaches the region and prices on handsets goes down this method could actually be very cost efficient. The distribution costs associated with traditional literature is almost eliminated and alignment between curriculum and educational content is simplified.
A basic but equally powerful example is the African project with the similar name; text2change. The purpose of the project was to raise the awareness towards Aids and HIV as much as possible. Each week, thousands of SMS were sent out to mobile phones in Uganda with information regarding HIV/Aids. The information was structured as a short multiple-choice-quiz and free airtime – which’s a viable currency in Uganda – was awarded whoever responded to the questions. After three completed quizzes each participant was awarded not only free airtime but also an encouragement to visit a healthcare clinic and take a free healthcare examination along with an HIV test. But, apart from spreading information and encouraging people to take an HIV test, the application also collected information about the level of knowledge regarding Aids/HIV. The test results from the SMS-quiz could be broken down and analyzed on different socio economic levels, valuable data that was passed on to UNICEF.
These three applications are all good examples of how ICT can be used to create value for society. But, despite the fact that these projects all creates significant value for multiple stakeholders (institutions, individuals, society, etc) they are all configured to be 100% charity funded and in no case have the operator taken a business position. If the operator is involved – which is far from always - it is always with the incentive to create good PR and the project is seen as an alternative to traditional marketing activities and never as an business opportunity in it self.
1.3 Applications, what is an application?
The common denominator for the applications - the three specific examples just mentioned as well as the six applications that will be analyzed in the Dominican context - is their use of ICT; other than that, they differ hugely. From the mature technology of Broadcasting SMS, to Information Portals accessible through the mobile browser and ultimately the “state of the art” technology of Heart Rate Monitoring Devices. This broad scale makes it important to understand how the level of complexity impacts the scale and cost of the application – and ultimately the profitability for the operator.
1.3.1 The scale factor
Scale is driven by multiple factors, such as hardware demand, how easy the application is to install and how easy it is to use for the end-user. Mature technology such as SMS does not suffer from hardware demands (100% of the Dominican mobile phones can send and receive SMS) and there are no technical barriers for a 100% penetration rate. In contrast to more advanced and un-mature technologies, such as mobile internet browsing (20% of Dominican mobile phones have the ability to access internet), is much less likely to reach high penetration rates because hardware barriers - Important insights that can be used as an indication of the potential scale of a launched application.
More than the hardware demands, scale is also driven by the ease of use of the application. Complex and hard to use applications will put higher demands on the users and hence their diffusion could be hindered. The aspect of usability is specifically critical in countries with high levels of illiteracy. Applications that are designed to be used in these countries should be configured in a way so that the user can interact with the application through voice control.
How easy the application is to install is another important factor influencing the rate of penetration. A good example is the (partly failed) introduction of MMS. When the service of MMS was first introduced in late 2001 users had to undergo a cumbersome installation process before they could send a MMS. And even after this process, they could not know for sure that the message would be delivered. The message would fail to arrive if the recipient had not installed the MMS through the same complicated installation process and it was not until this process was standardized and automated that the usage really took of.
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Illustration 1: Basic analysis of how complexity affects scale and costs
1.3.2 Cost is driven by complexity
Cost on the other hand is driven by the level of complexity of the application: a complex application will generally have higher demands on both hardware and software. For instance; advanced applications such as mobile TV (e.g. SVT Play) or streaming music (e.g. Spotify) puts high demands on both the terminal (the mobile phone in the hands of the user) and the performance of the network (owned by the operator). These applications are also expensive to develop and they must be filled with relevant content on a regular basis. The technology of SMS is in the other part of the complexity spectrum; SMS is very affordable; the underlying technology is highly standardized and it is very easy for an operator to create different applications based on a standardized core and neither the user nor the operator must do any investments in hardware.
2. INTRODUCTION
The purpose of this section is to give a brief introduction to the thesis - explain the purpose, problem discussion and give a short overview of the disposition – to help the reader put the work in to context.
2.1 Problem Discussion
It is not hard to find examples of how applications of ICT, commonly known as Information and Communication Technology, can be used to create tremendous value for society. Through the help of NGO’s, projects have been initiated in different parts of the world; healthcare workers in the rural parts of Uganda accessing remote consultation from specialists, Indian fishermen accessing market prices before deciding where to sell their catch, children in rural parts of the Philippines using internet as a source of education. Simple, yet powerful examples of how ICT can create value for society, demonstrated by pilot projects.
But, even though many of these projects are delivering results in a cost efficient way they are still associated with a cost – a cost that must be covered. Since these projects are configured as welfare projects, there is normally some sort of initial funding allocated to cover the costs. The funding could come from a Non Governmental Organization (NGO) such as the Red Cross or Doctors without borders, or it could come from a company such as Ericsson or Nokia; looking for a way to demonstrate the value of their technology. The problem is that when the initial funding is depleted the cost will be left uncovered - leading to a terminated project. In order to successfully achieve a lasting positive change the project needs to be sustainable and continue over time.
Research has shown (Gunnstam & Nordquist, 2008) that the sustainability of this type of ICT-projects is influenced by multiple factors and financial sustainability arguably being one of the most important. Since these projects many times are creating substantial value – both cost savings and quality improvements – one solution could be to configure the application and business model in such a way that some of the value created by the project is allocated to cover the cost and, hopefully, creating a surplus of value that can be awarded whoever is willing to take the risk and manage the project.
The telecom operator is in a particular good position to administrate such a project. The operator have already made significant capital investments in the infrastructure of the telecommunication network and maybe these applications -such as tele-medicine or rural education - could be an attractive opportunity to further capitalize on these investments.
2.2 Purpose
Short version
To investigate how telecom operators can capitalize on existing ICT infrastructure by providing service to society?
Long version
This report presents the result from a six week study made in the Dominican Republic during August and September 2009. The purpose of the study was to investigate how applications of Information and Communication Technology (ICT) can be beneficiary to society and at the same time present new and interesting business opportunities for the operator. A broad range of applications have been identified and analyzed based on their benefits to society and potential to be economically sustainable. The analysis and results are linked to the Dominican market but are applicable on comparable markets around the world.
2.3 Disposition
Chapter 1 – Background
The second chapter presents the reader with a few basic, yet valuable, facts regarding ICT-projects in developing environments. The chapter also contains a short discussion regarding applications of ICT – specifically how the level of complexity influences the cost and potential scale.
Chapter 2 - Introduction
The introduction presents the reader with the a description of; Purpose, Problem Discussion and Disposition
Chapter 3 - Methodology
The third chapter presents the reader with the project’s methodology. The workflow of the project is presented in chronological order and each phase is explained and motivated.
Chapter 4 – Theoretical framework
The forth chapter picks up were the previous chapter ends and presents the reader with the theoretical framework used during the study. General theoretical reasoning is combined with more hands-on models and a common framework for evaluating applications is created.
Chapter 5 – Phase 1 – Identify applications
The fifth chapter presents the result from the first phase of the study; the identification phase. The six applications of ICT that were identified are briefly presented.
Chapter 6 – Phase 2 - Evaluate applications
The sixth chapter presents the analysis and results from the second phase of the study; the evaluation phase. A summary of all relevant aspects that were raised during the discussion is presented. The chapter ends with a table and a diagram summarizing the quantified results.
Chapter 7 – Phase 3 – Suggest suitable business practice
This chapter presents a more in-depth analysis of the two applications that were chosen during the previous phase. Each application is analyzed according to the framework presented in chapter three and four (Methodology & Theoretical Framework).
Chapter 7 - Conclusions
This chapter presents the general conclusion that can be made from the study together with the author’s reflections.
References
A presentation of all references; oral, electronic and printed sources; that have been used in during the study.
2.4 Glossary
3G Third generation GSM technology
Broadband High Speed Internet Access
EDGE Enhanced Data rates for Global Evolution
GSM Global System for Mobile Communication
ICT Information Communication Technology
INDOTEL Instituto Dominicano de las Telecomunicaciones: The telecom regulator of the Dominican Republic
JAD Junta Agro Empresarial Dominicana: Cluster-Organization consisting of 180 000 Dominican agricultural producers with the purpose to provide support to its members in the form of agricultural education, technical support and to represent its members interests
UNAP Unidades de Atención Primaria en Salud: The primary level of care in the Dominican Republic healthcare system
Millennium Villages Project to reduce poverty in Africa by developing a number of villages, led by Columbia University in cooperation with the UN
Mobile Broadband High Speed Internet Access accessible through a portable USB-modem, telephone or other device.
SMS Short Message Service
Telecom Operator Service provider of telecommunications such as telephony and data communications
Telecom Regulator Governmental institution with the purpose to regulate the telecom market
3. METHODOLOGY
This chapter explains in a chronological order how the research study was conducted. Each phase of the study is reviewed and the chosen methodologies are explained and motivated. The chapter ends with a short discussion regarding the strengths and weaknesses of the chosen methods.
3.1 Definition of problem
Since the study was initiated by Ericsson (and initially meant to be an internship) the definition of problem was created with a strong focus on business benefits. In order to conduct the study as a master thesis this definition had to be generalized in a way so that it could also be of academic value. This was done in cooperation with the academic tutor from LTH. The solution was a 2 part delivery where Ericsson would receive a short (about 15 pages) report with only a brief description of the methodology and theory; instead there would be a strong focus on the results. This report was made available for governments and operators in the Ericsson Market Unit Central America and the Caribbean during late November 2009.
The second delivery is directed towards the academic institution and consists of a more comprehensive report; including detailed description of methodology, theory and analysis. However different formats, both the reports originate from the same data and analysis.
3.2 Working process and timeline
The project was divided into two separate studies, an initial general market & technology study accompanied with an application study. The purpose with the general study was to create an understanding for the technology (ICT) and the market characteristics of both the global ICT market as well as the local market of the Dominican Republic. The purpose of the application study – the main part of the project - was to identify applications that could be implemented in the Dominican market.
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Illustration 2: The overall working progress
The project spanned from July 2009 to December 2009, excluding vacation this made up a total of 20 weeks. The first part, the General Study, was conducted in Stockholm Sweden during July and August. The second part was conducted in both Sweden and the Dominican Republic with a total of 6 week of field studies on location in the Dominican Republic. Meetings and presentations with the marketing team from Ericsson were held in Costa Rica (at the regional headquarter) both before and after the 6 weeks in the Dominican Republic.
3.3 General Study of Technology and Market
In order to fully understand the behavior of the telecom-market it is imperative to understand the underlying aspects of the technology that are being marketed. Hence the general study was further divided into two parts, one with an technology perspective and one with a market perspective. During a 5 week period (July and early August 2009) the two studies where conducted in parallel and information was gathered from both primary and secondary sources.
Secondary sources consisted of academic studies, annual reports from regional operators, internal reports available from Ericsson as well as external reports from different consultancies. A complete list of sources can be found in the reference part of this report. The reports were summarized and an overall image of the situation was created.
Primary sources consisted of interviews with experts; market and technology analysts, R&D managers and marketers. The agenda of the interviews were typically led by the interviewees and took the form of a 1 on 1 lecture. The interviews were recorded to enable a greater focus on the question at hands.
Apart from providing a good foundation of knowledge, the general study did also provide the application study with a tangible starting point. This starting point included two important findings:
1. A list of around 40 potential applications
2. A list of hypotheses of what challenges the different institutions are facing
The list of applications was a summary of applications identified from both primary and secondary sources. These applications could be real cases, mainly from Africa or Asia, or merely ideas deriving from an open discussion with experts of new and innovative ways to use available technology.
Furthermore, a list of hypotheses of what challenges the different institutions are facing was created. As an example; according to the World Health Organization the Dominican Republic healthcare system suffers from many typical “third-world” diseases such as dengue fever and tuberculosis, at the same time the rate of welfare-diseases such as heart rate failure and obesity is becoming more and more common. Maybe it is possible to use ICT to help fight this development? If so, maybe there is a position for the operator? This hypothesis was used, together with many others, to prepare the interviews that were held with stakeholders from the ministry of health. In the same way hypothesis within many different areas were created.
All in all, the basic understanding for both technology and market together with the lists of applications and the list of hypothesis provided a good starting point for the application study.
3.4 Application Research Study
The major part (15 out of a total of 20 weeks) of the project consisted of the application study. This study was divided in to three phases; (1) Identification, (2) Evaluation of applications and (3) Evaluation of business models, and each phase held a specific purpose and method as illustrated in figure 3.2.
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Illustration 3: The working progress of the application study
3.4.1 Phase 1, Identify applications
The purpose of the first phase was to identify a selection of applications that could be analyzed in the Dominican context. This was done through a matching process between the 40 potential applications identified during the general study and the needs identified from the interviews with stakeholders.
Among these stakeholders were representatives from; government (ministry of health, ministry of education, etc.) institutions (trade organizations, universities and hospitals) and telecom operators. A total of 30 qualitative interviews were conducted during the 6 week period in the Dominican Republic. A complete list of the interviewees can be found in the reference chapter.
Before each interview a manuscript was created in order to make the interview as efficient as possible and prevent any important aspects to go un-noticed. Each manuscript was built on a common framework (appendix 1) but depending on the hypotheses from the general study an adapted manuscript was created before every interview. The purpose of the interviews was to gain an understanding of the challenges facing the stakeholders and, based on this knowledge, create an understanding of how ICT and ultimately the operator could help stakeholders overcome these challenges.
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Illustration 4: Illustration of the first phase of the application study, the identification phase.
Even though the stakeholders represented a broad range of different backgrounds they all shared some basic needs – creating three patterns of needs (these patterns are explained in chapter 5). This is important insight for the operator – if the same need is shared between different stakeholders it is easier for the application to reach a profitable scale. The result from the matching process was 6 applications that were to be analyzed in further detail in the Dominican context.
3.4.2 Part 2, Evaluate applications
The purpose of phase 2 was to analyze these applications with regards to addressable value and ease of implementation.
Addressable value is estimated in two steps. Step one is to identify the value that the application can create for the different stakeholders; society (different ministries, NGO’s, etc.) and end-users (patients, doctors, farmers, etc.). This value is an aggregation of multiple value drivers such as; efficiency improvements, safety improvements and cost reductions; each benefit is quantified and summarized. This was done in a workshop with employees from the Ericsson R&D department called Ericsson Research. The workshop was organized as a structured discussion where the author held the agenda and worked through the different applications and other participants held the role as experts within different areas. The purpose was to make a rough estimation of the potential value that each application could create in order to create a relative ranking between the different applications, not to calculate the exact value of each individual application.
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Illustration 5: Illustration of addressable value
The second step is to identify how much of this original value can be extracted by the operator. This analysis is slightly more complicated since it depends of what position the operator can take (indirectly as a provider of connectivity or directly as a service provider) and the level of competition – two highly dynamic factors. Hence, the dynamic behavior of these factors must also be analyzed – how likely is these factors to change over time and how does this influence the operator’s long term ability to extract value? As an example; new technology such as mobile broadband accessible from the phone can be an effective substitute for old technology such as premium SMS for distributing information – re-positioning the operator from service provider to supplier of connectivity and impacting the business model and ultimately the operator’s ability to extract value.
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Illustration 6: The second phase of the application study; Evaluation of applications
Ease of implementation on the other hand is an aggregation of technical and behavior aspect that influences the implementation. The technical aspects are analyzed in a very straightforward manner; does the operator have the necessary technical competence and equipment to administrate the application or must they acquire this from the outside? Is the application compatible with the operators own systems? Broadcasting of SMS is a good example of an application with very low technical barriers; almost all modern telecom-system have the ability to broadcast SMS and it does not require any additional technical modifications.
The behavioral aspects are a bit more complicated to analyze and they require a more theoretical approach, an approach that will be explained in detail in chapter 4;The Theoretical Framework. In brief, the behavioral aspects are divided into two different aspects; behavioral change and network effects. The first aspect to be estimated is the behavioral change that the costumer must undergo in order to adapt and use the new application; consumers are reluctant to behavioral change and this hinders the adoption of radical innovations. The other aspect, the Network Effect, takes into account the bi-lateral dependences between suppliers, costumers as well as competitors. The more developed a network is, the more inert it will be towards innovation – it is hard for one player to change if the others don’t follow.
One important aspect to point out is the precision of the estimated parameters; addressable value and ease of implementation. Since the goal is to identify the two most suitable applications the emphasis is not to find absolute values but rather establish the relative positions between the different applications; hence the precision of the estimates is sufficient when these positions are static.
3.4.3 Part 3, Suggest suitable business practices
The purpose of the third phase is to suggest the most suitable business practice for each of the two applications identified during the second part of the application study. This involves understanding what role the operator should take - active as a service provider or passive as a supplier of connectivity – and also for whom and how the application should be marketed. This was done by complementing the previous results with more in-depth analysis. The base consists of a stakeholder analysis combined with a analysis of value-perception for each stakeholder, as can be seen in illustration 3.6.
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Illustration 7: The third phase of the application study; stakeholder analysis and value analysis
The stakeholder analysis seeks to explain which stakeholders are necessary to involve and what incentives drives them? The analysis of incentives is closely correlated with each stakeholder’s perception of value. A more detail explanation of the theoretical aspects will be presented in the following chapter, Theoretical Framework.
The stakeholder analysis was based on data collected from follow-up interviews with stakeholders and further field studies. The field studies focused on two specific areas, rural farmers and rural healthcare clinics.
The study of the rural clinics aimed at creating an understanding of how the process of data collection worked today and specifically how this process could be improved with the use of ICT. These interviews were different from the interviews held during phase 2 - they were much more focused in order to map the specific process. In parallel with the study of the healthcare system a study of the agricultural market was also conducted. This included follow-up interviews with stakeholders from the ministry of agriculture, a local farmer-organization and individual farmers. The purpose was to understand how the flow of information affects the market; specifically how information regarding supply/demand is valuable for both the local farmer and society as a whole.
3.5 Strengths and weaknesses of the methodology
The first and most important weakness of the methodology is the scope of the project – it is very broad for being a one-man project. Fortunately, the support from both Ericsson and the local telecom regulator INDOTEL enabled me to make the most out of the six weeks that I had available in the Dominican Republic. As an example, most of the interviews could be booked in advance through the help of INDOTEL and since the project was sanctioned by the regulator it was fairly easy to gain access to senior management within the government.
But, even considering the help given from both Ericsson and Indotel, the ambitious scope of the project still limited the precision of the analysis. As an example; the analysis of the six applications during the second phase had to be finished very early since the third and following phase demanded that two applications was identified already halfway through the six weeks of field studies in the Dominican Republic - therefore the analysis had to be conducted in parallel with the data collection. Maybe it would have been better to split up the period of data collection in two parts; one for phase 2 (data is collected for all six applications) and one for phase 3 (focus on only the two applications that have been chosen) and conduct the analysis in between and separately. However, this was not an option due to constraints in time and resources.
4. THEORETICAL FRAMEWORK
This chapter introduces the reader to the theoretical frameworks that were used to support the conclusions. Each framework is explained and put in to context.
4.1 The basis of scientific innovation
4.1.1 Value creating culture
David Matheson and his father Jim Matheson, both researchers and consultants within strategic innovation, describes in the book The Smart Organization (Harvard Business School Press, 1998) how companies should organize in order to maximize their return on investments in R&D and innovations. Matheson & Matheson argues that – after a comprehensive study of several best in class innovative companies - there are a few common denominators shared between organizations that are prominent innovators; they call these factors the nine principles of smart organizations. The first, and arguably most important, principle has been used as a guideline and inspiration for this study – the principle of value creating culture.
The purpose of the organization is seen by everyone as maximizing the value created for costumers and captured by the organization
Matheson & Matheson, The Smart Organization, Harvard Business School Press, 1998
The primary objective of the organization and its members should, according to Matheson & Matheson, not only be to create maximum value, but also about understanding how the organization best can capture this value. It might sound obvious, but an extensive track record of promising ICT projects that have failed to sustain, in spite of the fact that they create substantial value for society, proves the opposite; hence the principle of the value creating culture is a guideline for this project.
4.1.2 The innovative process
The process of innovation is dynamic and can take on many different forms; from the linear models of Science-Push, in which emerging technologies are pushed out into business; Demand-Pull, in which the business pulls in technology as a response to needs and opportunities; to more complex network models with built in feedback loops between innovator and user - combining the benefits of both push and pull. Mark Dodgson, professor in management at the Australian national University, provides in the book The Management of Technological Innovation (Oxford, 2008) a comprehensive overview of the historic development of the process of innovation – a useful theoretical baseline for a study centered on innovation.
Science Push, the first generation of innovative process (Dodgson, 2008), was the dominating approach during the 1950’s and 1960’s. Innovation was a linear process and a majority of products came to be as the result of basic research and the business aspects were subordinated the scientific aspects.
The Demand Pull approach on the other hand is driven by the needs of the consumers and the R&D department has as a sole purpose to meet these demands – business aspects stands above the scientific aspects. Companies in the consumer goods industry, like Procter and Gamble, did early embrace the process of Demand-Pull. Consumer surveys conducted on a regular basis created a direction for the innovative process. Dodgson calls this the second generation of innovation process.
The third generation of innovative process is a combination of pull and push. The periods are organized in a sequential pattern – subsequent but separate from each other.
The fourth generation of innovative process is a development of the third, but rather than sequential, the processes are conducted in parallel which leads to shorter lead times and a more efficient use of resources.
The fifth generation is according to Dodgson similar to the fourth. But, more than just a parallel process of push and pull, this process also involves key-costumers (e.g. Ministry of Health), key-suppliers (e.g. Ericsson technical experts) and strategic partners (e.g. telecom operators) in the process. Relationships are organized in networks of stakeholders and there is a trend towards long-term strategic relationships. Hence, there is a strong focus on costumer-value already during the early design process. This study aims to emulate an innovation process similar to what Dodgson calls the fifth generation innovation process; meaning that the design of the applications were a direct result of a close collaboration with stakeholders (e.g. ministries, doctors, operators) and technical experts at Ericsson in a continual process with no sharp boundaries between pull and push.
4.2 How to predict the success of an innovative application
Introducing new applications can be a gamble for a telecom operator; the process is costly and far from every application will get the chance to generate enough revenues to pay back the investment costs. In order to improve the odds it is important to understand what factors determine whether an innovation is a success – received and praised by both buyers and users – or a failure – banished into oblivion leaving the development costs un-covered?
The consensus among marketers have long been that the answer can be found in the value proposition; if the new service/product offers the user increased benefits to the same or lower cost compared to the current option - the new service will be awarded by the market and take the position as the new incumbent. However, this approach is one-dimensional and it fails to fully explain the complexity of the modern market. A more complex model must be developed in order to handle different characteristics such as behavioral aspects and intricate relationships between buyers and sellers.
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Illustration 8: Breakdown of factors influencing the ease of implementation
Hence, the concept of value proposition was complemented by two factors/effects that cannot be overseen and together they formed the basis for assessing the ease of implementation of the applications:
1. The double edged bias effect
There is a double edged bias which leads to a constant discrepancy between how sellers and buyers value innovations (Gourville, 2006)
2. The network effect
The market is organized in a network of stakeholders and these networks influence how new innovations are received. (Chakravorti, 2004)
4.2.1 The aspect of behavioral change
First, the double-edged bias between buyers and sellers is a universal phenomenon that can be found in many different situations where innovations are introduced. These biases are the result of a difference between the buyer and the seller’s perception of value – a difference that arguably is specifically significant when it comes to new innovations.
"Many products fail because of a universal, but largely ignored, psychological bias: People irrationally overvalue benefits they currently possess relative to those they don’t. The bias leads consumers to value the advantages of products they own more than the benefits of new ones. It also leads executives to value the benefits of innovations they’ve developed over the advantages of incumbent products."
Eager sellers & stony buyers, John T Gourville, Harvard Business Review June 2006
Briefly, the theory suggests that buyers constantly under-estimate the value of new innovations with a factor 3, while the seller constantly overvalue innovations with a factor 3. Combined, these biases represent a discrepancy of a factor 9 – Gourville calls this the 9x effect. The immediate consequence of the 9x effect is that innovation must be truly superior (about 9 times better than the current alternative) if they shall stand a chance to be accepted by the buyers.
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Illustration 9: The 9x effects
Innovations outperforming previous alternatives with a factor 9 are not very common and the 9x effect can at first sight feel like an impenetrable barrier. But, there are shades of grey and by studying the sources to these biases it is possible to develop marketing strategies that minimizes their effect. Gourville argues that the key reason why buyers are resistant and constantly – seemingly irrationally - under value innovations can be derived to the buyer’s unwillingness to behavioral changes; to counter this, managers should seek to develop innovations that require minimal behavioral change.
Gourvil call’s this making “behaviorally compatible products” and he exemplifies with the Toyota Prius. Different types of environmental cars – propelled by bio-gas and electricity – have been around for a long while without gaining any considerable market share; they can simply not compete with the convenience of the traditional gasoline car and the user is forced to a behavior change which is seen as a significant loss. With the Prius, Toyota managed to create an environmental friendly car that the user could use in the exact same way as a traditional car – innovations were mainly kept under the hood and did not require any change of behavior from the users side.
As a conclusion, marketing managers should seek to develop products that require minimal behavioral change on the user’s behalf. This is important insights and it will constitute the first part of the behavioral analysis; each application will be evaluated on the basis on the behavioral change that consumer need to undergo in order to use the service.
4.2.2 The Network effect
The second factor, the network effect, is the consequence of a development towards increasingly complex market structures – where stakeholders (eg. suppliers, buyers and competitors) are interrelated to each other through intricate networks built on mutual dependence.
When a new product’s adoption by one player depends on its adoption by other participants, there has to be a systemwide switching of behaviors before change can take place.
New Rules for bringing Innovations to market, Bhaskar Chavroti, Harvard Business Review March 2004
These relationships prevent stakeholders to “go at it alone” and introduce new products without the “consent” of the market. Instead there must be an alignment between the stakeholders, thus creating inertia in the market towards new innovations.
However, the network effect is not entirely a bad thing. Chavroti argues that there is a tipping point and once an innovation has been accepted by the market the network effect will reinforce the diffusion and the innovation will eventually take the role as incumbent.
“Once enough players in the market decide to switch to a new product, other player’s motivation to do so becomes stronger, beyond that threshold, the network becomes the innovations ally rather than it’s foe.”
New Rules for bringing Innovations to market, Bhaskar Chavroti, Harvard Business Review March 2004
Another interesting theory that can be useful when dealing with the introduction of innovations in networked markets – specifically in communication-networks - is the theory of network externalities. Robert Metcalfe – inventor of Ethernet and one of the founders of the innovative company 3Com - suggest that the value of an (communication) network grows exponentially with numbers of members - this is many times referred to as the Metcalfe’s law.
The network effect will constitute the second part of the behavioral analysis; each application will be analyzed on the network properties of the market.
4.3 Stakeholder Analysis
Stakeholder analysis is a rather broad concept and it includes many different models and methods. However different, these models all share a common purpose; to analyze and illustrate how stakeholders are affected by a process, and through the analysis rank and sort stakeholders according to certain criterion – giving executives support in their interaction with stakeholders.
The criterion being used as a basis for selection differs between different methods. One of the most popular methods aims to rank stakeholders according to their influence vs interest of the project outcome (Mitchell, Agle et al. 1997) and the results are commonly plotted on a 2 dimensional chart called stakeholder mapping. This information helps project management to identify which stakeholders requires attention and which does not, important information since resources that can be used to manage stakeholders are scarce. This method is through its simplicity a powerful tool, especially for internal organization issues. But it has one major flaw; it fails to capture the stakeholder’s different perception of value - important information when dealing with stakeholders from different backgrounds such as corporations, ministries and non governmental organizations; all guided by different value functions.
The stakeholder circle on the other hand, developed by Dr. Lynda Bourne, goes a long way when it comes to defining stakeholder’s perception of value. Bourne even identifies the perception of value as the most important factor when managing different stakeholders and she argues that a profound understanding for value is the very foundation for a successful project.
The key to forming successful project relationships is understanding that different stakeholders have different expectations of the project and different definitions of project success.
Dr. Lynda Bourne, Project Relationships and the stakeholder circle, 2006
The drawback of Bournes stakeholder circle is its complexity. The underlying analysis is extensive and the graphical presentation lacks the intuitiveness of the two dimensional chart - stakeholders are not represented by a dot on a scale but as a sector of a circle. The width of the sector represents the stakeholders influence on the project at each given time, the distance from origo represents the stakeholders ability to kill the project. Even the pattern of the sector bears information regarding the internal organization of the stakeholder (homogenous or heterogeneous). All in all, the stakeholder circle provides a powerful tool but it is far to complex for this study.
Thus, instead of using a pre-developed framework a new model was developed with the basis from both these methods; trying to combine the simplicity of the stakeholder mapping with the value centric perspective of the stakeholder circle.
This was done in a few steps:
Step 1 – Identify and define Stakeholders
The purpose is to identify all stakeholders that in some way influence the execution of the project. Each Stakeholder is analyzed according to;
• What is their role (e.g. partner, competitor or catalyst)
• What resources are they expected to contribute to the project (e.g. knowledge, financial support, connections, etc.).
Step 2 – Understand Stakeholders incentives (analysis of value perception)
What are each stakeholders incentives? What is their definition of success (monetary goals, societal benefits, elimination of risk, etc.)? This question is closely correlated with the perception of value. As an example, the Ministry of Agriculture has resources – both financial and manpower – to use in order to educate local farmers in the latest agricultural techniques. Thus, a successful project is a project that raises the level of knowledge of as many farmers as possible, as high as possible. A telecom operator would have a very different perception of value such as; direct revenues from direct sales of the service or increased subscriber loyalty that leads to lower churn rates. Hence, a project that is considered a success by one stakeholder is not by default a success for the other stakeholders. The purpose of step 2 is to understand what incentives drives each stakeholder and what they expect as an outcome from the project.
Step 3 – Plot relations between stakeholders
Identify and illustrate relationships between stakeholders. Who interact with whom and what is the nature of the interaction (e.g. revenue sharing, knowledge support, etc.)?
Step 4 – Rank stakeholders according to the Stakeholder mapping
Complement the analysis with a classic stakeholder mapping – interest vs influence – to identify which stakeholder should receive the most attention.
Together these 4 steps constitute a comprehensive analysis of stakeholders, their perception of value and their mutual relationships – important insights that will enhance the possibilities for a successful project.
5. PHASE 1 – IDENTIFY APPLICATIONS
This chapter presents the results from the first phase of the application study – the identification phase. A short description of the identified needs is followed by a brief presentation of each one of the six applications.
Early during the matching process – the process of matching applications with stakeholders needs - three patterns of needs were identified; the need to distribute information, the need to collect data and the need to coordinate resources. These needs were universal and found to be shared between all participating institutions; healthcare, education, agriculture, etc. – important insights for the continuation of the matching process.
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Illustration 10: Three different patterns of needs
5.1 Distribute Information
Even though the need to distribute information is universal, the scale and the nature of the information still differs between institutions and different situations; the National Civil Defense department wants the ability to effectively send out emergency warnings on an national scale – simple messages that should be broadcasted as widely as possible - while the department of education wants to make educational content available for rural teachers – a more complex message but directed towards a smaller and more well defined target group; aspects impacting how the application should be configured.
Even though almost all participants from this study had an intuitive understanding that ICT could be a cost efficient alternative to traditional information channels it was very few institutions that really had taken advantage of this knowledge and created a strategy for how to best use ICT to distribute information. This delay of be an opportunity for the operator to shape the demand.
When taking into account local conditions and demands, three applications were chosen that could correspond to the need of distributing information; Broadcasting of SMS, Information Portal and Mobile Market Portal.
5.1.1 Broadcasting of SMS
Broadcasting of SMS is a cost efficient way to distribute information directly to the recipient’s mobile phone
The Dominican Republic lies in the ”Hurricane Belt” and it is not uncommon that tropical storms and hurricanes hit the island during the stormy season (August - October). As an example, during the season of 2008 the Dominican Republic was hit by a total of 5 tropical cyclones and over 800 people were reported dead or missing. To minimize the damages from these storms it is important for the government to have the ability to timely and efficiently warn the population. This is currently done through radio, daily newspapers and TV. These traditional channels are effective, but broadcasting of SMS could prove to be a complementary channel that could deliver the message to users currently not in the range of a TV or radio.
This is particularly true for the part of the population that are the most exposed towards these emergencies - farmers and fishermen in rural areas – since they are most likely not in the range of either a TV or radio when they need the message. But, they are likely to own a mobile phone since 92% of the population has a mobile phone at their disposal (Ericsson Consumer Lab Study 2009) and 100% of these phones have the capability to send and receive SMS.
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Picture 1, A Dominican woman sending a SMS from her mobile phone
But, SMS can be used as more than just as a channel for emergency information. It can also be used for educational purposes on a national scale. During the pandemic of H1N1 in the Costa Rica, the local operator ICE used SMS to educate the public in important aspects regarding the pandemic. Each subscriber received three messages. The first telling them how to avoid getting infected – how to most effectively wash your hands - the second telling them how to know if they were already infected – describing common symptoms to be aware of - and the last telling them what to do if they were infected – where to go to find healthcare.
For the operator this could prove to be an attractive opportunity to capitalize on existing equipment since the networks are already built and therefore the capital costs are covered. Furthermore, SMS is normally configured so that it uses excess capacity in the network which keeps down the marginal cost; hence the operating costs are very low.
Since the need is well defined and the technology is mature and widely available, how come the Dominican institutions do not use broadcasting of SMS today? The answer is a combination of barriers but the most frequent answer during the interviews is that the lack of knowledge of how and for whom to buy the service. The SMS service is traditionally marketed as a one to one communication tool and not as a way to communicate to a broad group of people.
5.1.2 Information Portal
An Information Portal is a framework for distribution of information in a way that enables users without extensive knowledge of computers to easily access relevant information.
There are medical-clinics in the rural parts of Dominican Republic that through an experiment, supported by INDOTEL (the local telecom regulator), have gained access to Internet even though it normally would be too expensive and complicated. In a healthcare institutions access to the wealth of information that Internet can provide can be extremely valuable. Unfamiliar symptoms can be looked up in online encyclopedias and recent news regarding drugs and treatments can be immediately accessed. However, in the Dominican clinics that have been part of this study the personnel do not have the competence to use a modern computer and the access is mainly used for simple e-mail purposes and basic chores. As a consequence the majority of the potential value that this access could create goes unnoticed. The complexity of the Internet is simply too overwhelming.
It is clear that only access to Internet is not enough - a user needs a certain level of knowledge and skill before he or she can fully take advantage of the possibilities. There is typically two ways to approach this problem, raise the level of knowledge or lower the bar needed to access the information. The purpose of the information portal addresses the latter by streamlining the interface and making the content available in its easiest form.
There is a good local example of an information portal, developed and used be the Ministry of Education in the Dominican Republic, called ”PIM Aprende” (). The purpose is to provide the same educational content to all schools in the public system; no matter if they are in a rich urban neighborhood or in a poor and remote rural area, and by doing this the ministry has a mean to coordinate the education and provide the students with up to date educational content. The portal is still under development but already today it contains around 3000 videos, 5000 audio files and thousands of e-books. The content is aligned with the curriculum and every video is accompanied with a note telling the teacher what to do before, during and after the video is used. The portal is designed with the user in mind – a user that do not have prior experience with computers nor internet - and the user-interface is very intuitive.
The problem however is connectivity – only 600 out of 10 000 schools have access to internet – a fact that severely limits the initial goal of aligning the rural schools with the urban since it’s mostly rural schools that lacks connectivity.
Since the cost of this service is mainly driven by content creation, a factor that is not affected by the number of users, there should be a strong focus from the ministry of education to connect the remaining schools and further leveraging the investments made in the portal.
5.1.3 Mobile Market Portal – level 1
A Mobile Market Portal enables mobile users to access information regarding supply and demand through their mobile phone
In all markets access to the right information equals power – in particular information regarding supply & demand. An asymmetric distribution of information opens up for arbitrage opportunities that lead to a lower market efficiency. It is typically the smallest players that take the biggest blow since they are less likely to have access to the right channels of information - this influences their power during negotiation. Research has showed that improved flow of market information can significantly improve market efficiency and ultimately benefit society.
One typical market that benefits from an enhanced flow of information is the market of agriculture. Agriculture has been the backbone of the Dominican economy for centuries. Even though it declined in importance as the tourism sector grew to be the largest sector, agriculture still employs around 16% of the total labor force and there is approximately 250 000 individual producer of agricultural goods active in the country and the production is still contributing to 12% of the GDP according to the World Bank.
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Picture 2, Local farmer sending SMS from his mobile phone
There are several documented cases where access to market information has played an important role in negotiations between local producers and their buyers. A fact that has attracted the interest from the local agricultural association Junta Agro Empresarial Dominicana (JAD), who every week collects information regarding local market prices and posts them on their webpage as a service to its members. But, because of relative high costs associated with computers and traditional internet, only a fraction of JAD’s members have currently access to the information when they need it the most; during negotiation. Taking the role as a distributor of market-information to the members of JAD could be an attractive business opportunity for the operator.
5.2 Collect Data
Another universal need that is shared between institutions is the need to collect data – many times in remote and demanding conditions. In these conditions the use of ICT can prove to be not only cost efficient, but also provide superior performance over the traditional alternatives. When data is digital from the point of collection it is not only less likely to get corrupt – resulting in a more complete coverage of data - but more important is the fact that the lead-time between the time of collection and the time of availability is almost eliminated – an important aspect that opens up to many new uses of the available data.
The scale of these different uses is significant; it could be automated surveys conducted on a national level through the use of multiple choice questions through SMS, or it could be more specific applications that demands special sensors and continuously monitoring by personnel.
Two applications were identified to be specifically interesting in the Dominican Context; Mobile Survey Tool and the Remote Monitoring of Cardiovascular data.
5.2.1 Mobile Survey Tool
The mobile survey tool is an application that transforms the mobile phone into an advanced device for remote and mobile collection of data.
Imagine that you are the Minister of Health, responsible for the wellbeing of you citizens in a Caribbean nation. Every day your country and your people are struggling with a broad set of health related problems and you have limited resources to meet these challenges. If you don’t have access to timely and accurate statistics, how can you know when and where your resources are the most needed? Furthermore, how can you measure the effects that these efforts have – a very important aspects if you are dependent on external welfare. Basically, the more complete and up to date information you have the better decisions you can make.
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Picture 3: A doctor using her phone
According to the World Health Organization underregistration of healthcare data in the Dominican Republic can be as high as 60% - a fact that severely complicates the work of policymakers. But it is not just within the healthcare sector, collecting information is a universal need that can be found within such different institutions like Ministry of Agriculture, Ministry of Education, Customs Service and Boarder Control – all sharing the need for timely and accurate data. Meeting this need could be an interesting opportunity for a mobile Operator.
Mobile phones are particular well suited to be used for data collection. First of all, they are affordable and widely available, in particularly in the Dominican Republic (92% of the population owns a mobile phone). Secondly, they are pre-configured for wireless communication that covers most parts of the Dominican population. Through the use of simple software, any modern phone can be configured so that it can interact with a central database – as a spider in the web of mobile phones, the operator is in a good position to market this service to institutions.
The Mobile Survey Tool - originally developed by Ericsson to aid the mobile collection of statistics in the African Millennium Villages - can transform almost any modern mobile phone into a device for data collection. UN-personnel used the MST during complicated data-collection operations out in the field. It is normally quite hard to administrate collected data when working in remote areas, but with the MST data is instantly uploaded to a central database – backed up and ready to be analyzed - and there is no risk that papers gets lost and no need to allocate resources for administration (digitalization) since the data is digital from the point of collection. All in all, the MST is a versatile tool for collection of statistics.
5.2.2 Remote Monitoring - Piix
The basic principle of remote monitoring is to remove the significance of the physical distance between the subject and the operator; specifically in the healthcare case the distance between the patient and the doctor.
These types of situations are common within the context of healthcare, and arguably particularly common in developing countries. These countries have generally a serious lack of trained physicians and the cost of transportation, both in time and resources, is often higher than in the developed world. An application that enables the physicians to operate without the restriction of physical distances would enable the system to leverage existing resources and deliver a more efficient healthcare.
A trend among countries with a similar healthcare pattern as the Dominican Republic is that chronic diseases - such as heart failure and diabetes - are becoming more and more common as the population are adapting to lifestyles similar to the western world. This puts pressure on an already strained healthcare system. Remote monitoring of high-risk patients in order to detect and pro-actively treat critical situations could prove to be a cost efficient alternative to the traditional re-active healthcare.
One such application, which has recently been approved by the FDA, is the Piix. Developed by the California based company Corventis, the Piix offers the ability to remotely monitor the heart rate functions of patients as they go about their daily routine. A small sensor is placed directly on the patient’s chest and the data is continuously collected and transmitted to a global web server. The data is made available through this server 24 hours a day, seven days a week, allowing clinicians to analyze and detect abnormal situations. The system is designed in a way so it can be incorporated in to an operator’s network, using standardized technology that already today covers most of the Dominican population.
5.3 Coordinate Resources
The last and most complex need is the need to coordinate resources. The complexity derives from the two-way flow of information - increasing the demands on both hardware and end-user knowledge.
Two applications were identified and studied; Firstly, an Electronical Medical Record System and secondly a further development of the Mobile Trade Portal.
5.3.1 Electronic Medical Record Systems, OpenMRS
Electronic Medical Record Systems are digital databases allowing storing, retrieval and editing of patients’ medical history.
One area that can benefit hugely by digitalization and connectivity is the medical record system. Today, the Dominican medical record system is complicated and cumbersome. Information is mainly stored on paper and the information is scattered between institutions and healthcare givers. Besides from being inefficient, the system is also vulnerable due to the lack of backup - the data can easily be lost in the case of fire or flooding.
This situation is in no way unique for the Dominican Republic. In fact, many highly developed countries shares the same problems and are struggling to transform their medical records - from traditional analog and stand-alone systems to online and integrated electronic medical records (eMRS). Multiple studies have showed that this transformation can create major cost savings as well as creating tremendous value by improving patient safety and ultimately improving health.
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Picture 4: A typical view in rural healthcare clinics
There have been several trials of different eMRS in the Dominican. But, even though the systems proved to be efficient and improve healthcare, the associated costs made it impossible to scale up on a national level. The cost derives from several sources such as hardware equipment and education of healthcare givers, but the critical cost was identified to be the license fee. Besides the costs, hardware demands were also identified to be a major barrier - it is not realistic to provide all healthcare locations with a computer connected to the Internet. To be a realistic alternative to the existing system the solution needs to meet these challenges; high license fees and unrealistic hardware demands.
Open Source software such as the OpenMRS could be a solution to these problems. OpenMRS was formed in 2004 as an open source medical record system platform for developing countries and is to date implemented in over twenty countries around the world - including neighboring country Haiti. Apart from being free, the system also offers robustness regarding hardware demands since the user can interact with the database through a wide range of devices; including computers and mobile phones
5.3.2 Mobile Market Portal (level 2)
The Mobile Market Portal (level 2) enables mobile users not only to access market information but also post their own offerings and enabling direct contact between buyer and seller through a virtual marketplace.
The first level of the Mobile Market Portal enabled individual farmers to access market information – shifting the balance of the market in favor for the local producers and the also benefiting the overall market performance. The second level (level 2) further challenges previous conditions – giving the farmers not only access to information but also access to new channels of distribution. Instead of just using the phone to access information and then use this information in the negotiation with the traditional channels the user can now post their own offerings and directly come in contact with new buyers and hopefully be able to sell their goods through new channels.
This application requires a two-way flow of information. As a buyer I want to both access information regarding prices but also the ability to post my own offerings. This puts new demands on both hardware and the user. The use of SMS technology is possible but hardly optimal, instead mobile internet through the second generation of GSM like EDGE or possible the third generation such as WCDMA is better. Furthermore the handsets used should be equipped with larger displays capable of displaying multiple lines of information at the same time.
6. PHASE 2 – EVALUATE APPLICATIONS
The purpose of the second phase was to establish relative positions – based on addressable value and ease of implementation - between the identified applications. This chapter reproduces a summary of aspects discussed during the workshops as well as the result summarized in a table.
6.0 Short explanation of quantification
6.0.1 How to quantify addressable Value
Primary Value
Primary value will be graded – following the guidelines as presented in chapter three and four - on a relative scale from 1-10 (10 being greatest).
Ability to charge
The ability for the operator to capture the primary value (described as the ability to charge) will be graded on a scale from 0-100%; 0% means that the operator cannot capture any value at all, 100% means that the operator can capture 100% of the value.
E.g. if the primary value is 8 and the ability to charge is 50%, the addressable value is 4.
6.0.1 How to quantify ease of implementation
Technical aspects
The technical aspects will be graded on a scale of 1-5. The higher the grade the lower the barriers: a grade of 5 means that there are no significant technical barriers, a grade of 1 means that the technical barriers are prohibitive.
Behavioral aspects
The technical aspects will be graded on a scale of 1-5: A grade of 5 means that there are no significant behavioral barriers and a grade of 1 means that the barriers are prohibitive.
E.g. if the technical barriers are considered to be medium (grade 3) and the behavioral barriers are considered to be very low (graded 5) the total grade of ease of implementation is 8 (3+5=8).
6.1 Information Portal
6.1.1 Addressable Value
Primary Value
The value created by an Information Portal is closely correlated to the nature of the portal; healthcare, education, entertainment etc. This analysis has been focused on the example of a healthcare portal and the Swedish Vårdguiden was used as a basis for discussion.
The Swedish healthcare portal Vårdguiden is funded and administrated by the regional public health of Stockholm (Region Stockholm). The purpose of the portal is to act as the first level of care out of a total of four levels - the second level of care is a visit to a physical primary clinic. The discussion focused on the value created for the patient (end-user) and the ministry of health (the society).
One important aspect affecting the value is usability. Even if you are not an experienced user of computers you will be able to navigate easily around the portal. The content is created and regularly edited by professional physicians and the user can be confident that the information is both correct and up-to date. He or she can easily find answers to basic health related questions such as symptoms for common diseases, how to use a certain drug or instructions for treatments. This information will sometimes be enough and the patient do not need to investigate their problems any further and there is no need for a visit to the clinic - thus reducing costs for both the patient and the clinic. An interesting aspect of this cost is the fact that it is many times significant higher in a rural and developing country due to bad infrastructure. A citizen in Stockholm can probably reach a clinic in less than 30 minutes, the same can service can be hours or even days away in a developing country.
However, if the patient still needs to seek out medical help the portal will provide the patient with all the information necessary in order to make the process as efficient as possible.
The Swedish healthcare portal is almost exclusively directed towards the patient. A similar healthcare portal in the Dominican Republic should also be directed towards healthcare workers and provide them with relevant healthcare information that would help them do a better job. This would create value for the patient; the quality of the healthcare that she receives will improve, and for society; improved level of health for the population.
As a conclusion; a healthcare portal designed with un-experienced internet users (both patients and healthcare workers) in mind would create significant cost savings for both the individual as well as society in a whole.
Ability to charge
Many operators tried to take the position as a service provider for mobile information portals in the early days of 3G. These portals were called walled gardens and the user could access the portal without any traffic fees. Revenues were generated from content – such as news articles, music and video clips –sold on a pay per view basis. The business has evolved and this model is no longer viable. As a user I don’t want to be restricted by my operator; I want the freedom to choose the best service provider for every given service – eg. YouTube for videos, Spotify for music and whatever portal suits my specific needs when I want information. I only expect my operator to provide me with connectivity; a so-called bit pipe. Thus it is not realistic for the operator to generate revenues directly from an information portal.
But, even though the operator has little chance of generating revenues directly from content, it could still be a good idea to promote the development of a healthcare portal. A well-designed healthcare portal could generate value for the operator by increasing the user’s willingness to pay for the enabling service (broadband) and thus; attracting new broadband-subscribers and making current broadband-subscribers more profitable users. As an example; a non-subscriber that previously been unable to see the benefits from the use of Internet because of lacking computer-skills could through a well designed Healthcare portal experience significant value – access relevant information and get answers to healthcare questions - and maybe their willingness to pay for an connection will increase enough to generate a new subscription. For current subscriber a healthcare portal could fill a previous empty gap of information and potentially increase the perceived value from a subscription and increasing the monthly spending on broadband.
These drivers, attracting new broadband-subscribers and making current broadband-subscribers more profitable are minor relative to the primary value created by the portal; hence the operator’s ability to extract the value created by an information portal is considered to be low.
Primary Value = 8
Ability to charge = 25%
6.1.2 Ease of implementation
Technical Aspects
A modern information portal can be built on an open source framework such as Wordpress – used by CNN, Ford, Wired – or a license based framework– used by Vårdguiden. The portal can be administrated completely outside the operators network and no complicated integration is needed. All traffic uses the highly standardized HTML protocol and the compatibility is very high. Hence; no significant technical barriers.
Behavioral Aspects
Even if the information portal is designed with the un-experienced user in mind, it will still require a change of behavior from both patient and healthcare workers. Patients must first find a way to access internet-device (computer or mobile phone), either buy a device, borrow from a friend or visit an internet café, and on top of this learn how to use it. But, in some cases the benefits from the portal will make it worth the trouble. As an example; if a patient has a simple healthcare question he or she would normally have to visit their closest clinic and ask a doctor – an inconvenient visit that would cost both time and money. There is a good chance, if the patient learns how to use the portal, that the she can find the answers to her questions and avoid the visit to the clinic altogether. The question is, are these benefits strong enough, even when the effect of the double edged bias is taken into account? The conclusion from this analysis is partly yes.
The situation is similar for the healthcare worker, many doctors and in the rural parts of the Dominican Republic are used to traditional literature when searching for information and a computer would require a change in behavior. But, the benefits experienced through the ability to search and the fact that the information can be kept up to date will heavily outweigh the losses, even taken into account the effect of the double edged bias.
The second behavioral aspect, the network effect, will not hinder the adoption. Both patients and healthcare workers can start use the service without any consideration of what every one else is doing. The network effect will more likely facilitate the adoption; users will be inspired if their colleagues or friends starts using the service. Hence, the network effect will not present a barrier for adoption.
As a conclusion, there are no significant barriers, neither deriving from behavior change nor network effects.
Technical Aspects = 4/5
Behavioral Aspects = 3/5
6.2 Broadcasting SMS
6.2.1 Addressable Value
Primary Value
The market for broadcasting SMS is significant and the business is growing on a global scale. Eager to meet this demand, several operators are introducing services within mobile advertisement - using SMS and MMS as a medium for commercial messages. However, using direct messaging towards mobile phones as a channel for marketing is not uncomplicated. One of the main strengths – the ability to directly put a message in the hands of the user – can also be a problem; it can easily be seen as intrusive. This risk is probably less significant if the message is of societal value: e.g. hurricane warnings or epidemic outbreak warnings.
Comparing broadcasting of SMS towards traditional channels - such as newspapers, TV and radio – can be a good method for understanding the magnitude of the perceived value. But, broadcasting SMS is not just a substitute for the traditional channels, the service actually outperforms the alternatives in a few aspects and this should be taken into account. For example; 92% of the Dominican population can – in any given moment - be reached through a mobile phone; significantly more than TV and radio put together.
Ability to charge
If broadcasting of SMS shall be an acceptable alternative to use for distribution of hurricane warnings the sender must have the ability to send out the message to all mobile phones in the whole country and not only the ones in a specific network. A possible solution to this is the use of an aggregator, a middleman between the costumer – e.g. the Civil Defense force who wants to send out a hurricane warning - and the 4 different operators each controlling a part of the total market of subscribers. The aggregator will receive an order and then distribute the message to the different operators who in turn distributes the message to their users. The aggregator can be a joint venture between the operators and each operator would get revenues corresponding to their market size in the addressed segment (e.g. north coast fishermen).
Primary Value = 5
Ability to charge = 100%
6.2.2 Ease of implementation
Technical Aspects
Broadcasting SMS is a mature technology and operator will most likely already have the ability integrated in the network. Hence, there are no significant technical barriers (provided that a deal regarding the aggregation of subscribers can be reached).
Behavioral Aspects
There are two dimensions to the behavioral aspects, the costumer who wants to distribute a message, and the end-user receiving the message. There is today three different channels that holds the position as incumbent; TV, Radio and Newspaper. The interface towards the costumer could easily be configured in a way so that it either replicates the incumbent alternative or, even better, provides an even easier alternative. The end-user on the other hand will not be forced change their behavior in any way, the message will arrive to their phone as a normal SMS.
The network effect is significant; all network operators must cooperate and create an aggregator in order to make the service competitive towards the alternatives - a typical example of a networked market as described by Chakravorti.
Hence, there are no significant technical barriers but a minor behavioral barrier derived from the network effect.
Technical Aspects = 5
Behavioral Aspects = 3
(Score between 1-5, higher is better)
6.3 Remote Monitoring of Heart-rate – Corventis Device
6.3.1 Addressable Value
Primary Value
Remote monitoring of heart rate status is an important part of a pro-active treatment used to detect potentially life-threatening occurrences before they turn critical. Not only is this good for the patient, it is also a potential cost saver for society as a whole. Critical care as a consequence of a failed heart is much more costly than pro-active treatments - that could potentially avoid the critical situations altogether.
Thus, there is an economical incitement for governments to invest in pro-active methods in general, and remote monitoring of heart related problems in particular. However, this incitement is based on the concept of opportunity cost (the cost for the next best mutually exclusive alternative) – if there is no opportunity cost there is also no potential cost saving. In the particular case of heart rate failure in the Dominican Republic; it is only patients with an extensive private health insurance that would be in question for the expensive treatments. There are just not enough resources in the public insurance to cover for example the local farmer in the case of heart failure – thus there is no opportunity cost to benchmark against.
In fact, pro-active healthcare is not very common in developing environments at all. Medical spending is directed towards the most acute cases and very little resources are used for pro-active treatments. Hence the market for cardiovascular solutions such as the Corventis device will in the Dominican Republic be limited towards the private healthcare sector; Small (private) hospitals serving only the wealthy part of the population. This would in practice correspond to an estimated number of 10-20 hospitals each using between 1-5 devices each.
In conclusion; the service will create significant value but only for a small and privileged part of the population.
Ability to charge
A critical part of the value proposition of the Corventis Deviece is its ability to continuously send healthcare data over the normal telecom network. Hence, reliable network access is a very important part of the product, potentially giving the operator an important and lucrative position in the value chain. But, since there are four different operators with networks comparable in both quality and coverage, Corventis can choose to work with either one; the operators is forced to compete with on the basis of price. It is also likely to assume that Corventis – in a long term strategic perspective - is developing their device so that it in the future does not need to be specifically configured and integrated into the operators network, thus the device will only need a simple mobile broadband subscription and the operators is further re-positioned towards a true bit-pipe (supplier of connectivity).
As a conclusion, the value created for the service is significant, but only for a small fraction of the population and the operator’s position in the value chain is not very strong - and it is a fair assumption that it will get even weaker in the future.
Primary Value = 5
Ability to charge = 20%
6.3.2 Ease of implementation
Technical Aspects
The device (the correct name of the hardware is PiiX©) is placed directly on the patient’s body, continuously monitoring the heart rate and then uploading data to the central database for further analysis - as already stated, this requires an integration with the operators network. This integration is not complicated – it took technical personnel 2 hours to perform the integration during a demo in Trinidad Tobago during the yearly telecom conference in 2009 - and does not require any significant modifications or investments in the network; technical barriers are low.
Behavioral Aspects
The patient must wear the device directly on the body during long periods of time (several days), but the benefits – the ability to collect crucial health data and the ability to detect critical situations - will probably compensate for inconvenience.
The doctor on the other hand must be prepared to undergo a slight change of behavior. The incumbent method is to make an EKG, which provides the doctor with a snapshot of the patient’s heart status. The Corventis method offers the doctor a more comprehensive set of data, but he or she must learn how to best make use of this new information. Furthermore, the personnel that are going to administrate – mount and de-mount - the device must be trained accordingly. Other than that, the need for behavioral change is not high. Corventis have all the technical expertise needed for assistance and also a team of trained physicians working in California monitoring the results from the device.
The start-up costs for Corventis when they want to enter a new market are significant and therefore Corventis will not be interested in marketing their product in Dominican Republic (or any other market outside the US) if the numbers of costumers do not exceed a certain level – the fixed cost are simply too high compared to the revenues. On the other hand, if that certain level is reached and a number of private clinics starts to use the service, costumers will expect this as a normal service and others are bound to follow. Hence, the market will behave much similar to what can be expected from a networked market: in the beginning the network will work against the innovation but after a certain level of penetration it will “…be it’s allied rather than its foe” (Chakravorti2006).
In conclusion; neither the technical nor the behavioral barriers are significant.
Technical Aspects = 4
Organizational Aspects = 4
(Score between 1-5, higher is better)
6.4 Electronic Medical Record System - OpenMRS
6.4.1 Addressable Value
Primary Value
An electronic Medical Record System covering all levels of the Dominican healthcare system would generate substantial value for both patient (end-user) and the medical institutions and the system as a whole (society).
The value for the patient (end-user) comes from increased convenience; if the record is stored electronically and centralized it will be easier for the patient to transfer between clinics and institutions. The patient will also benefit from the increased safety; the data can be easily backed up and will not be lost in the case of a flooding or fire.
The medical institution benefit from several efficiency improvements; it is easy and fast to enter patient data, data becomes searchable; less time is needed to find relevant patient information, the data is transferable between clinics; facilitating cooperation’s between different clinics and institutions and a prerequisite for an effective medical referral system. The sum of all these small parts makes up a significant efficiency improvement.
Ability to charge
OpenMRS is developed as an Open Source project and it is not possible to generate revenues through license fees. But, the value created through an implementation of OpenMRS could be used to cover costs associated with necessary investments in hardware equipment and broadband subscriptions – generating revenues for the operator through hardware sales and broadband subscription fees.
Several countries in Europe are struggling with a digitalization process of their medical record systems. The goal for most of these projects is to create an integrated system where data can be shared between medical institutions in real-time without any transfer cost. The hardware used for these systems is almost exclusively standard desktop computers connected with a fixed line Internet connection.
The potential benefits from the system are the same in the Dominican Republic but the perquisites are totally different. Lack of electricity and fixed line Internet severely hinders the possibilities to configure this type of system on traditional desktop computers. However, these technical barriers could work to the advantage for the operator; if the Ministry of Public Health in the Dominican Republic wants to invest in electronic medical record system the only viable hardware option would be smartphones or cheap netbooks with built in modems for mobile-broadband – two products marketed by the operator but normally only to a small and privileged group of consumers. If the ministry of health decided that the value created by a national implementation of OpenMRS is sufficient to motivate the procurement of the hardware needed – this could prove to be a very interesting business opportunity for a bundled package consisting of mobile broadband and pre-configured terminals.
There are currently about 1200 rural clinics, about 180 municipal clinics and about 20 regional clinics. If each rural clinic need 1 unit (either a smartphone or a netbook), each municipal clinic need 20 units and each regional clinic need about 50 units, this would corresponds to a total of 5800 units. If each unit held an average price of 200 USD this would add up to a total of 1 160 000 USD in hardware revenues.
Each of these devices must also be connected to Internet through some sort of mobile broadband subscription. 5800 subscription with an ARPU of 10 USD/month (an estimated subsidy of 75%) = 58 000 USD/month adding up to a yearly revenue of 6 960 000 USD.
This is a rough estimate illustrating only one potential scenario. But, it gives the reader a basic understanding to how the operator can capture the value created by the primary service (OpenMRS) without breaking the laws of open-source.
Primary Value = 10
Ability to charge = 50%
6.4.2 Ease of implementation
Technical aspects
OpenMRS have been under development since early 2005 and have already been successfully implemented in several countries such as Peru, Haiti and Uganda. But, so far these implementations have been on a small scale and only on regular desktop computers. A new version enabling interaction with mobile phones is under development and planned for release during 2010, a feature that is critical if the system shall be successful on a national scale in the Dominican Republic.
Furthermore, a system integration on a national scale requires an extensive analysis of the underlying organization and the system must be adopted accordingly, an important aspect in the frontier between technology and organizational behavior.
It is clear that the technical barriers are significant.
Behavioral aspects
A considerable change of behavior is needed – on an individual as well as organizational level - in order to successfully implement OpenMRS (or any other eMRS solution). The individual must change from an analog to a digital behavior; learning the “craftsmanship” of how to best make use of computers and relevant software. The organization must implement new work-processes in order to fully take advantage of the potential benefits.
Furthermore, an implementation of any eMRS solution will be highly affected by network externalities (as described by Economides). A single clinic would experience increased efficiency in their daily work as a consequence to more efficient work routines - but the major benefits would go unnoticed since they require integration between clinics. A cluster of clinics would experience a few of the potential benefits, but it is only when the whole market (in this case all available public healthcare clinics) adapts to the new system that the full potential can be discovered. Hence, the network effect could potentially work as a catalyst.
In conclusion, there are several technical as well as behavioral barriers that must be overcome in order to achieve a successful integration.
Technical Aspects = 2/5
Behavioral Aspects = 2/5
6.5 Mobile Survey Tool
6.5.1 Addressable Value
Primary Value
As described in the precious chapter; the purpose of the Mobile Survey Tool is to turn an ordinary mobile phone into a versatile tool for collection of statistics. The data collected can be of almost any type – e.g. number of patients with malaria in a certain village, tons of rice produced in a region, number of cars crossing the boarder in each direction between two countries – and it is instantly uploaded to central database and made available for further analysis. The basis of discussion focused on the improvements MST could provide over the incumbent method; paper and pen, when collecting epidemiological statistics within the healthcare system.
The value from the MST comes from two categories, cost reduction and delivery improvements. The cost reduction derives mainly from two sources; less resources needed to administrate the process – data is digital already from the point of collection hence no need to digitalize halfway - and less resources needed to transfer data.
The delivery improvements derive from two sources; increased coverage and real time data. Today’s data suffers from substantial losses during the collection process; either it is not collected in the first place or it lost during the transfer. With the MST the data would go directly from the point of collection to the database and there would be no losses during the transfer. The coverage would also increase when regional management can see which clinics are inactive and these clinics could be directly contacted and encouraged to adhere.
Even though an increase in coverage would generate substantial value, the aspect of timing could prove to be even more valuable. Since the data is uploaded directly into the database it is also immediately available for statistical analysis. This makes it easy for medical management to early detect abnormal situations that needs attention. As an example; if the presence of rabies goes from 1 to 20 in a certain region during the course of a week, this would be immediately detected and management would be warned - a feature much appreciated by the national level of epidemiology.
Ability to charge
The operator may choose to offer a complete package; pre-configured handsets and subscription of both mobile service and the MST applications or only sell the MST service to already existing costumers; either way, the operator controls the value chain and its ability to charge can be considered to be high.
Primary Value = 8
Ability to charge = 95%
6.5.2 Ease of implementation
Technical Aspects
The application is robust from a technical perspective. The technology used for information transformation can be adapted to whatever technology is available at the given situation; from the simple technology of SMS were simple data can be transferred 180 bytes at a time, to more modern technology like EDGE or WCDMA allowing for continual data streams of high speed (up to about 7MBit/s). The expansion of EDGE have in the Dominican Republic almost reached the same coverage as traditional technology, hence the technical barriers can be considered to be low.
Behavioral Aspect
It is clear that a change from traditional paper based surveys to digital surveys, such as the Mobile Survey Tool, will require a behavioral change for both doctors - responsible for the operative aspects of the collection - as well as for the department of epidemiology - who is responsible for the administration. But, this has been taken into account during the development of the Mobile Survey Tool and the digital surveys resemble their paper-based originals as much as possible- an attempt to make the transfer as easy as possible also fore the non-computer-experienced user in mind. Furthermore, the efficiency improvements delivered by the MST over the incumbent method are probably big enough to convince even the most technology resistant users.
Technical Aspects = 5/5
Behavioral Aspects = 4/5
6.6 Mobile Trade Portal – Level 1
6.6.1 Addressable Value
Primary Value
The mobile trade portal creates value directly for the farmer (end-user) by providing him/her with information regarding market prices – information that can be used during negotiations helping the farmer to reach a better deal. There are currently 250 000 local producers and around 1 million citizens are involved in the agricultural business in the Dominican Republic (the total population is about 9 million). Hence, the potential market for a service marketed for this segment is significant
Ability to charge
There are basically two stakeholders being part of the value chain; the operator – as a distributor – and the content creator – as a collector and administrator of market information. These players will share the value created for the end-users. The operator has a very strong position in the value chain due to the more or less exclusive access to the channel of distribution (the network and the register of subscriber). Summarized; it is easier for the operator to replicate the role of a content creator than it is for the content creator to replicate the role of the operator. This puts the operator in a good position to dominate the value.
Primary Value = 8
Ability to charge = 80%
6.6.2 Ease of implementation
Technical Aspects
There are two sides of the technical aspects, the user side and the operator side.
The technology of Premium SMS is mature and there are no obvious technical barriers for the implementation as long as the service is only marketed towards in-network subscribers (the operators own subscribers).
A service marketed towards all subscribers – inside & outside network subscribers - will demand a more complicated implementation and some sort of agreement between operators, similar to the joint venture aggregator as in the case of Broadcasting SMS.
Behavioral Aspects
There are two players that must undergo some sort of behavioral change, the local agricultural organization JAD (content creator) and the farmer (end user).
JAD works already today with content creation – collecting information regarding price and volume from local markets around the country - and the information is continuously posted on their webpage. To make the same information available also through premium SMS will not present any significant burden, neither in additional administration nor change of behavior.
The incumbent method for the end-user to access relevant market prices is to contact a friend currently present at the market - either by a phone call or by SMS. This is much cheaper and more effective than traveling to the market. But, the user must still make one phone call per market, and the quality of the information is dependent on the personal relationship with the informant. It would be better and more cost effective if all relevant market information could be obtained through one single SMS – and if the information at the same time was quality ensured by a large organization such as JAD.
This service would not require any behavioral change from the end user since the target group is already today avid users of SMS (77% of the mobile user base use SMS at least once a week, Ericsson Consumer Lab 2009).
Technical Aspects = 4
Behavioral Aspects =5
6.7 Results
| |1 |Primary Value |
| |2 |Ability to charge |
| |3 |Addressable Value (1*2) |
| |4 |Technical Aspects |
| |5 |Organizational Aspects |
| |6 |Ease of implementation (4+5) |
| |1 |2 |3 |4 |5 |6 |
|Information Portal |8 |25% |2 |4 |3 |7 |
|Broadcasting SMS |5 |100% |5 |5 |3 |8 |
|Remote Monitoring |5 |20% |1 |4 |4 |8 |
|Electronic Medical |10 |50% |5 |2 |2 |4 |
|Record System | | | | | | |
|Mobile Survey Tool |8 |95% |8 |4 |4 |8 |
|Mobile Trade Portal – |8 |80% |7 |4 |5 |9 |
|Level 1 | | | | | | |
Table 1: Summary of Value/Ease of implementation analysis
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Illustration 11: Results from the evaluation of applications
From this analysis two applications stands out, the Mobile Trade Portal and the Mobile Survey Tool. The following chapter will explain these two applications in further detail.
7. PHASE 3 – SUGGEST BUSINESS PRACTICE
This chapter presents each of the two applications chosen for in-depth analysis in the context of the Dominican Republic. Each application is a response to a specific and local need and the presentation starts with a description of this need. Thereafter follows a detailed presentation of the application and the stakeholders involved. The chapter ends with a recommendation of suitable business practice and model for each application (a short description of the competitive landscape can be found as an appendix).
7.1 Mobile Survey Tool
7.1.1 The need – Access to healthcare data
Tropical diseases such as dengue fever, malaria and bacterial diarrhea are common in the rural parts of the Dominican Republic. Being infectious by nature, it is important for the government to track the spreading of these diseases – a challenging task in a rural setting.
The Dominican Healthcare system is divided into three clinical levels; regional hospitals, municipal hospitals and rural clinics. The total number of clinics are 1400 and about 1200 of these are rural clinics called UNAPS (Unidades de Atención Primaria en Salud) and each clinic is staffed by a team of 1-2 doctors and 2-4 nurses. The location of these clinics (Illustration 12) implies that they have limited access to electricity – the power is disruptive and of low quality - and limited access to internet – no fixed lines but access to GPRS or EDGE.
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Illustration 12: Organizational chart of healthcare system and map illustrating the locations of rural clinics
Regardless of the remote location, these clinics – representing the primary level of care - are every day receiving thousands of patients seeking medical care. Data from these meetings is very valuable for decision and policy makers, especially in the field of epidemiology because this is the patients first contact with the healthcare system. Today, this data is collected on a piece of paper and this paper is sent through the organization to be collected and digitalized at the regional level of epidemiology. The transfer between the rural clinic and the regional office can take many forms; normal mail, physical delivery, faxes and in some cases e-mail (normally sent from a nearby internet café). But, even if the data is transferred through e-mail, it will today be printed out at the regional level and put in the same pile as the other papers later to be digitalized. It would be much more efficient if the healthcare worker could upload the data directly in to the database using a computer.
[pic]
Illustration 13: How the process works today
But, because of implications already mentioned, limited access to electricity and internet, it is not realistic to supply each clinic with their own desktop computer connected to the internet. Mobile phones - already widely available at these clinics – could prove to be an attractive substitute; they do not need a continuous supply of electricity and they are already capable of transferring data over the mobile network. Instead of being dependent on computers, the system should be configured in a way so that the users can access it also through their mobile phones.
7.1.2 The product – The ability to use mobile phone as a device for collecting data
The Ericsson Mobile Survey Tool, developed by Ericsson Innovation Center in South Africa, was initially developed as a tool for mobile data collection in cooperation with the Millennium Villages in Africa. The application offers an attractive robustness, both regarding connectivity – it can use a variety of standards such as; sms, mms, USSD, GPRS, EDGE, etc – and handset hardware demands – it can either be installed as a Java client or accessed through a browser - making the application available for a vast number of devices and situations.
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Illustration 14: How the process could work with the Ericsson Mobile Survey Tool
The service is configured in a way enabling anyone with a computer connected to the internet to create their own surveys through an intuitive browser interface and the digital survey can more or less replicate the paper copy. The digital survey is then accessed - either as a Java client or through the mobile browser - from the mobile phones or computers participating in the survey and the data submitted will be directly uploaded to a database.
7.1.3 Understanding the value; how, where and for whom?
As already stated in the previous chapter; the value from the MST comes mainly from two categories, cost reduction and delivery improvements. If we break down the sources of cost reduction we find that it mainly comes from two cost sources; cost of administration and cost of transfer. In more detail; less resources is needed to administrate the process – data is digital already from the point of collection and there is no need to digitalize the data halfway - and less resources needed to transfer data.
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Illustration 15: Breakdown of sources to value
The other side of the coin; the delivery improvements can also be derived from two sources; increased coverage and the ability for real time data. Today’s data suffers from substantial losses during the collection process; either it is not collected in the first place or it lost during the transfer. If the data is digital from the point of collection it can be instantly uploaded into the database and the losses would be eliminated; hence the coverage of data would increase. An interesting, and potentially useful, side effect of an implementation of MST is the fact that all rural clinics will be equipped with a mobile phone; if the regional management discovers that a clinic fails to upload the data in time the clinic can now be contacted directly.
Increased coverage of data in all the glory, but the aspect of timing could prove to be even more valuable. If each of the 1187 rural clinics continually used the MST to report all incidents (considered to be critical from an epidemiological perspective), managers and policy makers would have the ability to monitor the health status of the population and, if an outbreak is detected, act accordingly.
7.1.4 Stakeholders analysis
There are five different stakeholders that must be taken into consideration; the operator, the ministry of health (SESPAS), the regulator (INDOTEL), the head of the rural clinic (UNAPS) and the national institution for statistics (ONE). All of these stakeholders have a part to play if the implementation of MST shall be successful.
Operator
|Role: | |
|Service provider |The operator will take the role of service provider and host the |
| |application. |
|Resources | |
|Technical Expertise |The operator must be ready to contribute with technical expertise – |
| |both during the implementation and afterwards with support. |
|Incentives | |
|Revenues |The main incentives is to generate direct revenues from the service |
|Positive PR |The value that MST creates for society is obvious and can be used to |
| |create positive PR in strategic marketing. But, this is a positive side|
| |effect and should only be considered as a secondary purpose. |
ONE
|Role: | |
|Expert on statistics |ONE (oficina national de estadistica) is the national statistical |
| |institution and as such has the role of administrator of the national |
| |statistical database. In 2007 an initiative was taken to homogenize all|
| |statistical functions into one central database, hence it is imperative|
| |that ONE can influence the implementation of MST to make it compatible |
| |with the overall strategy. |
|Resources | |
|Assistance during the design process |ONE should influence the implementation process so that the data |
| |collected through the MST can be used directly in the national database|
|Incentives | |
|To find new and better ways to collect and |If the implementation of MST is successful it can be scaled up and |
|administrate statistics |exported to other institutions with similar demands. |
Indotel
|Role: | |
|Catalyst |The support of Indotel will give the project credibility and also put |
| |pressure on stakeholders to live up to agreements. |
|Resources | |
|Contacts |Indotel is a spider in the governmental net and, if needed, can provide|
| |the project valuable contacts with other governmental institutions |
|Financial support |All telecom operators must pay a luxury telecom-tax on their revenues. |
| |These revenues go directly in to the “development fund” administrated |
| |by Indotel. The purpose of this fund is to give financial support for |
| |telecom and this fund could help co-finance the service together with |
| |the ministry of health. |
|Incentives | |
|Promote the use of ICT in the Dominican |Indotel’s main mission is to promote the use of ICT and a successful |
|Republic |implementation of MST would be a good example of how ICT can be |
| |beneficiary for society. |
Ministry of Public Health
|Role: | |
|Costumer |The Ministry of Health is the customer |
|Resources | |
|Management |The ministry of health will hold the overall responsibility managing |
| |the application. |
|Education |Personnel from rural clinics must be educated in the use of MST, an |
| |education administrated by the ministry of health. |
|Incentives | |
|System for early warning |The ability to early detect abnormal situations |
|Increase coverage of data collection |Increase the coverage of data collection and improve the statistical |
| |database of healthcare information and ultimately improve the |
| |healthcare status of the population- |
Head of the rural clinic
|Role: | |
|User of the application |The head of each rural clinic is responsible to make sure that every |
| |week all epidemiological cases shall be reported through the MST |
|Resources | |
|Time |Time must be devoted (approx 1 hour) each week. |
|Incentives | |
|Increased job satisfaction due to greater |MST is both easier to use and more efficient than the alternative, less|
|efficiency |time is dedicated to fill in the reports, yet the benefits are greater.|
Step 2: Map stakeholders according to level of interest and power
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Illustration 16: Stakeholder Mapping for MST
It is clear from the stakeholder mapping (Illustration 16) that Indotel and ONE are passive stakeholders, both are interested but neither one have any real influence of the outcome of the project. The most important player is the operator itself, the main incentive for the operator is revenues and if the operator does not believe in the commercial potential the pilot project will not be continued. The next most influential stakeholder is the end-user who every week shall use the service, if he or she does not fully commit the results will be suffering. The ministry of health has slightly lower influence but higher level of interest and is also considered to be a key player. Since it is the ministry that will ultimately pay the bill (possibly with the support of Indotel) it is imperative that the ministry feels that the application is worth the investment.
Business practice
The value created by the MST is mostly created for the ministry of health and hence the business model should be directed towards the ministry. Hence, the most appropriate business model for the MST is a license model with a semi-fixed fee. It is important for the ministry to know the cost in advance so that it can be addressed during the budget process. The buyer, in this case the ministry of health, buys the service through a license and the fee is based on the maximum number of surveys allowed per year.
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Illustration 8, Business model for the MST in the Dominican Republic
7.2 Mobile Trade Portal
7.2.1 The need – access to information
Access to market information – price and volume – is critical during negotiations between farmers and resellers, and the Dominican market is not an exception. The Dominican farmers are a heterogeneous group, spanning from small families cultivating crops for the local market to large scale cattle farms serving the global market. But, even though they are different in size, they all value access to market information. 180 000 of these farmers are members of the cluster organization JAD (Junta Agro Empresarial Dominicana). JAD is aware of the importance of market information and they are - as a service to their members - continuously collecting local and global market prices to be published on their webpage. The problem is that only a fraction of their members have access to a computer with an internet connection.
7.2.2 The product – market information in your mobile
This gap could present an interesting business opportunity for an operator. Instead of relying on a technology that very few of the target audience can afford JAD should use a technology that is available and easy to use for as many end-users as possible – a basic SMS service is probably the best option. SMS have the advantage of being widely used (77% of Dominicans use SMS once every week[1]) and compatible with practically all available handset on the market (100% of Dominican handset are capable of sending and receiving SMS).
[pic]
Illustration 17: Schematic illustration of the service
Let’s say that you are a middle-sized producer of avocado and you want to sell your crops. You have two options; either you sell your crops at your farm to a middleman or you transport them yourself to one of the close by markets. Before the introduction of mobile phones this situation would be controlled by the middleman, who by position has an information advantage. But, with the use of a mobile phone you can get this information by calling a friend present at the market. The drawback is that this would be quite costly and you would have to make one phone call for each market - and you would also need one friend at each market. It would be better if you could send an SMS with the code #avocado to a number provided by JAD and you would receive a message with both local prices from the 5 nearest markets together with a selection of global prices. This information can help you decide if it is worth the trouble to transport the goods to the market and consequently you are in a better position to negotiate with the middleman - ultimately the service would help you increase your income.
7.2.3 Stakeholders analysis
How should the application and business model be configured? Who should pay and how? There are a few of stakeholders that must be taken into consideration; the operator, the local trade-organization (JAD), the end-user (the farmer) and, if the operator chooses not to take the role as service provider, an external service provider.
The Operator
|Role: | |
|Alt. 1 Supplier of Connectivity |The operator can choose to either take the a passive role - as supplier|
|Or |of connectivity - or active - as service provider. (details regarding |
|Alt. 2 Service Provider |these positions will be presented in the following chapter) |
|Resources | |
|Technical Expertise |The operator must be ready to contribute with technical expertise – |
| |both during the implementation and afterwards with support. |
|Incentives | |
|Revenues (Both Alt. 1 & 2) |The main incentives is to generate direct revenues from the service |
|Positive PR (Only Alt. 2) |The value that the mobile trade portal creates for the individual |
| |farmer and for society can be used to create positive PR in strategic |
| |marketing. But, this is a positive side effect and should be considered|
| |to be a secondary purpose. |
The local trade organization
|Role: | |
|Content creator |The content consists of market data (mainly price and volume) and JAD -|
| |as content creator - is responsible to collect this information |
| |regarding a selection of goods (e.g. bananas, avocado, rice, etc.) and |
| |make it available through the mobile trade portal. |
|Resources | |
|Local personnel |Local personnel that can collect data regarding price and volume |
| |directly from the 5 biggest local markets + personel |
|Incentives | |
|Service for members |JAD’s main purpose is to provide service to its members; each member |
| |pays a yearly memberships fee and expects JAD to deliver value in |
| |return. |
The end user
|Role: | |
|Consumer and end-user of the service |The local farmer will be the consumer of the service |
|Resources | |
|Monetary |The user will pay for the service |
|Incentives | |
|Increase income from sales |By using the mobile trade portal the farmer will have access to market |
| |information that will help him/her during negotiations and ultimately |
| |improve their income. |
External service provider
|Role: | |
|Service provider |A specialized service provider – such as the African IT company Esoko |
| |(see appendix 10.1) – is specialized in delivering market services. |
|Resources | |
|Service |Esoko will provide the service |
|Incentives | |
|Generate income from sales |Esoko is a private held company with the main mission to generate value|
| |for it’s shareholders. |
7.2.4 Business Practice
There are basically two positions for the operator to choose between, passive as supplier of connectivity (called the bit pipe scenario) or active as supplier of the service (called the service provider scenario); connectivity position being the easiest and service position being the most lucrative.
If the operator chooses to act as a supplier of connectivity someone else will take the role as a service provider. There are a few global players, mainly in Africa and Asia, and this analysis will be based on the models and prices used by the Nigerian service supplier Esoko (for more information regarding competitors read chapter 10.1).
[pic]
Illustration 10, Scenario 1: Bite Pipe: Operator takes position as supplier of connectivity
A major drawback in the Bit pipe scenario is the fact that connectivity is a commodity, making it hard for the operator to differentiate and avoid harsh price competition. Hence, the value created by the service is mainly absorbed by the service provider and the operator can only hope for an increase in traffic.
[pic]
Illustration 11, Scenario 2a: Operator takes position as supplier of connectivity and users pay per view
A vertical integration towards service supplier could improve the potential revenues; Instead of just supplying connectivity, the operator could partner with JAD and directly distribute the information. This option could then be modulated in two different payment models, either pay per view (illustration 7) or based on a yearly membership fee (illustration 8).
[pic]
Illustration 12, Scenario 2b: Operator takes position as supplier of connectivity and users pay through membership fee
If the operator acts early enough to gain a first mover advantage there is one additional aspect adding to the value; This service will create a very attractive offering directed towards a well-defined and comparably large market (about 250 000 individual Dominican farmers) and through differentiated pricing – inside-network users vs. outside network users - this service could attract new subscribers and help retain current subscribers and ultimately lowering the rate of churn – particularly interesting in the Dominican Republic since the introduction of number portability in September 2009. One example could be to offer the service for free (or to a very low price) to own subscribers and charge a premium for external users.
Summary
The target audience, rural Dominican farmers, does not consist of early adopters and will not be persuaded to adapt to a new technology just for the sake of technology. Instead there should be a focus on affordability and ease of use. During the introduction JAD could be a valuable channel, both for marketing and for educating the users in how to use the service. Since free trials are a strong trigger for new services in the market this could be a way to drive the introduction.
In conclusion, it is obvious that even a mature technology as SMS can be used to create significant amount of previously unidentified value. But, in a dynamic perspective this service has the potential to evolve in to something even more valuable. As the price of advanced handsets - with built in browsers and broadband abilities - goes down, more advanced features can be built in. As an example Esoko is launching a fully integrated marketplace in the African market during the end of 2009. This marketplace will give the farmers not only the ability to access information but also the ability to post their own offerings and communicating directly with potential buyers. An interesting glimpse of what is yet to come.
8. CONCLUSIONS
This chapter presents the major conclusions that can be drawn from the study.
8.1 Which Services
There are several conclusions to be made from this study. Firstly, it adds to the general understanding that ICT can be valuable for society. Secondly, it highlights two specific and tangible opportunities that derive from a dialog with a broad selection of stakeholders. Two of these opportunities were deemed to be interesting enough – from both society and the operator’s point of view – to be analyzed in the Dominican context.
[pic]
Picture 5: A young Dominican boy
Even though this analysis has been significantly costumed to fit the local conditions, it is the author’s belief that these findings can be used as an inspiration in similar markets. The underlying patterns of needs such as; distribute information, collect data and coordinate resources are shared between institutions and countries from all around the world. Furthermore, this study contains an analytical approach to cost and value. These applications will almost always be accompanied by some sort of cost, a cost that must be covered. That is why it is so important to understand how, where and for whom the value is created –because this value shall in some way be allocated to cover the costs. In the case of the Mobile Survey Tool the value is created by improving the general healthcare status, ultimately on the top of the agenda for the ministry of health, hence the business model is configured as a license towards the institution. The mobile trade portal on the other hand creates the majority of value directly for the user; hence the business model is directed towards the user.
[pic]
Picture 6: A Dominican sunset on the north coast
8.2 A dynamic perspective
Finally, these findings should always be seen in a dynamic perspective. The key trends defining the development of technology is the same today as have been for the last decade; lower costs, better performance and an increasing convergence between technologies – drastically impacting the factors defining the business. An application that is deemed un-tangible today because of high hardware-demands – such as high usage of data or access to positioning systems – could very well be tangible on a broad scale in a few years. The same goes for scale as the penetration of both mobile telephony and mobile broadband continues to surge. With both scale and availability of technology - two important factors defining the business – moving in the “right” direction, the potential for ICT to play a major role in the development of tomorrow’s society is bright.
9. REFERENCES
This chapter contains a register of all references being used during the study.
9.1 Oral sources
9.1.1 General Study
Haeger, Johan; Strategic Marketing Manager, the Company; (several occasions)
Byléhn, Monica; Analyst Strategic Marketing , Ericsson; (several occasions)
9.1.2 Application Study
Beijner, Hans; Portfolio Marketing Manager; Ericsson (7 June 2009)
Paul, Anjali; Innovation Director; Ericsson (13 August 2009)
Håkansson, Peter; Senior Research Engineer; Ericsson (several occasions)
Carlsson, Rolf; EDC, Head of Operations; (several occasions)
Osmar C. Benitez; Vice President; Junta Agroempresarial Dominicana Inc; interview
Santiago Duran; Director IT-Department; Dominican Republic Department of Agriculture
Yacine Khelladi; Executive Coordinator; Fundacion TaigUey
Darwin C. Munoz; Director of Information and Communication Technologies; UNIBE
Carloz Sanchez; Vice Secretary of Youth Development;
Lorenzo Guadamuz; Advisor to the Secretary of Education; Department of Education
Dr Nelson A Rodriguez; Vice Secretary of public Health; Department of Public Health
José Luis Actis; Manager Economical Statistics; National Statistical Office
General Luis Antonio Luna Paulino; Executive Director; Department for National Emergencies
Alcides de Jesús Bivieca Arias; manager of computer centers; Department of tourism
Karina Mena; Technical Advisor to the Secretary; Department of public health
Dr Maria Zunilda Nunez; Specialist Internal Medecine (several occasions)
Dr Jesús Feris-Iglesias; Specialist Epidemiology
Edwin San Román; Consultant (former director of the Peruvian Telecom Regulator); INDOTEL (several occasions)
Amparo Arango Echeverri; Coordinator; INDOTEL (several occasions)
Fernando Rojas; Specialist Epidemiology (several occasions)
Ernesto Aguero; Account Manager; Ericsson (several occasions)
9.2 Published Material
9.2.1 General Study
Books
Articles & Reports
Ericsson AB, Accelerating global development with mobile broadband, Feb 2009
Ericsson AB, Assessment of M-Content Requirements in India and Uganda, 2008
Ericsson AB, From voice to data How the Internet improves life in emerging markets; 2008
Ericsson AB, Technical overview and performance of HSPA and Mobile WiMAX; Dec 2008
GSMA, Frequently Asked Questions about Mobile Broadband;
Pyramid Research; Low-cost Mobile Business Models: Strategies for Profits at the Bottom of the Pyramid; Dec 2006
Pyramid Research, From 3g to LTE: Latin America’s path to Mobile Broadband; June 2009
Pyramide Research, The Battle for Central America: Tigo Attacks, Claro Strikes Back; Dec 2007
Pyramide Research, Mobile Markets in the Caribbean Service Adoption Trends and Revenue Drivers; Aug 2008
LECG, 3G mobile networks in emerging markets: The importance of timely investment and adoption; Jan 2009
McKinsey & Co, Mobile broadband for the masses: Regulatory levers to make it happen; Feb 2009
McKinsey & Co, The true value of mobile phones to developing markets; Feb 2007
TIA, ICT Market Review and Forecast 2009, 2009
Yu, Latin America: mobile market trends; March 2008
10. Appendix
10.1 Appendix 1, Mobile Trade Portal, Competitive landscape
There are currently 4 players providing applications with similar features as the mobile trade portal, these are; Nokia, Reuter, Esoko and Kace-Kenya.
Nokia Life Tools (Nokia)
Nokia Life Tools is a package of tools developed for the Indian and Indonesian market. The collection includes tools for; education, agriculture and entertainment. Nokia Life tools comes be pre-installed on certain mobile phones and cannot be accessed unless the user have the right model – a feature that makes it much different from the mobile trade portal - and the application is currently compatible with only 9 handsets (all Nokia).
The agricultural tool is configured as an information portal divided in to three categories; Market Price, Weather Information and News & Advice. Nokia have partnered with several content providers - among others is Reuter Market Light.
The business model is a monthly subscription and the consumers a can choose between 2 plans. The basic plan, available across India at Rs 30/month ($ 0.65), provides daily weather updates and relevant agriculture-related news, advice and tips. The premium plan, at Rs 60/month ($ 1.3), will be available in 10 states and provides the closest market prices for three crops chosen by the subscriber, as well as weather, news and advices.
The application was launched in the Indian market the summer 2009. The application is planned to be launched in the Indonesian market during late 2009. It comes pre-installed on compatible handsets and is available in local language.
Reuter Market Light (Reuter)
Reuter Market Light (RML) launched in October 2007 as a cooperation between Reuters and the Indian Minister of agriculture and about one year later (January 2009) the service reached 100 000 subscribers. As of November 18 2009 this the number of subscriber were 135 000.
The service is based on a subscription model and the user subscribe for a quarter at a time and the cost is about 200Rs (4,3 $/quarter). The subscription includes price information of crops, daily weather updates for the next 24 hours and news related to the agricultural business. The user configures location and type of crop and the information is distributed in the form of a SMS message – no installation needed and compatible with practically all available handset.
The strength of the RML offering is the scope of the information: around 1000 different markets, 250 different crop types and weather forecast from 2500 locations – all available through the use of SMS.
Esoko (former )
Esoko was founded in 2005 under the name in partnership with Foodnet (an African market research institute). Esoko offers a wide range of services spanning from simple price information distributed through SMS (directed to individual farmers) to more complicated services integrated with the website (directed towards larger producers and organizations). The simple configuration is compatible with all available handset while the more complex configurations might demand more advanced handsets or even a computer.
There are several business models available but a monthly subscription fee seems to be the preferred method. The service is currently being re-branded to Esoko and will be available in the end of 2009 in 10 African countries.
KACE-Kenya
The KACE-Kenya (Kenya Agricultural Comodity Exchange) is a marketplace for agricultural goods active on the Kenyan market since 1997.
The technology being used is FM-radio in combination with mobile phones and FAX. Farmers can submit bids or offers through phone, SMS or FAX to their local KACE administrator. The offers contains information regarding quantity, quality, price and type of crop and they are broadcasted over the FM-radio. The listeners have the opportunity to respond with their own offers and bids, also through the use of phone, SMS or Fax.
The business model is a typical trading model, every bid is accompanied with a fee of $ 0.14 and every successful transaction is charged with 0.005-0.05%.
10.1 Appendix 1 - Discussion Guide
1. Opening
1.1 Short(!) presentation of me
1.1.1 Academic Background
1.1.2 Professional Background
1.2 Short(!) presentation of project
1.2.1 Purpose
1.2.2 Method
1.2.3 Delivery
1.3 Presentation of the interviewee and his/hers organization
1.3.1 Mission / Vision
1.3.2 Funding
1.3.3 Size, number of employees and turnover
1.3.4 Co-operation with other stakeholders
1.3.5 Track Record of activities in rural parts
1.S1 Should be very short, approx ................
................
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