1. Telecom use on a shoestring: Some findings from a study of the Financially Constrained in South Asia Ayesha Zainudeen, Rohan Samarajiva, Harsha de Silva, Avanti Moonesinghe and Ayoma Abeysuriya, with thanks to Sriganesh Lokanathan

2. www.lirneasia.net www.lirneasia.net Objectives of the Study  Understand the use of telecom services by the ‘financially constrained’ in South Asia To what extent do they use it? What benefits do they gain from use? How do they use it? Why they do what they do?

3. www.lirneasia.net www.lirneasia.net Survey Sample  Surveys in India (2099) & Sri Lanka (1100)  Not representative of India and Sri Lanka as wholes  ‘Users’  those who have used a phone in the last three months  ‘Financially constrained’ users:  Monthly household income < USD100  Socio-Economic Classification (SEC) groups B,C,D & E  Mix of urban (37.5%) and rural (62.5%) respondents

4. www.lirneasia.net www.lirneasia.net Sri Lanka: 1100 respondents, 4 locations, 2 languages Colombo - capital city, urban landscape Badulla – rural, plantation economy, hill country Jaffna – post conflict area, high migration Hambantota – rural, tsunami affected

5. www.lirneasia.net www.lirneasia.net India: 2099 respondents, 7 locations, 5 languages Dehradoon – agrarian economy, foothills of Himalayas Sivaganga – trading, fishing & agrarian economy Kasargod – fishing economy Neemuch - small arid area Cuttack – poor area, high migration Gorakhpur – agrarian economy Mumbai – metropolitan, urban landscape ‘Northern’ ‘Southern’

6. www.lirneasia.net www.lirneasia.net Survey  ‘Mode’ of access: fixed, mobile, ‘public access’  Reasons for selecting mode  What does user do with it  Ownership  How telecom services are used  Difficulties faced  Use of Internet & telegrams

7. www.lirneasia.net www.lirneasia.net Ownership patterns by income Doubling of phone ownership in the higher income bracket within the survey groups in both India and Sri Lanka Sri LankaIndia < USD 50> USD 50< USD 50> USD 50 Landline Only 2201937 Mobile Only 212838 Landline and Mobile 1416

8. www.lirneasia.net www.lirneasia.net How do the financially constrained communicate? Fixed (49%) Mobile (19%) ‘Public’ access (66%) 21% 2% 11% 3% 23% 3% 37% Base: 3199

9. www.lirneasia.net www.lirneasia.net Mobile users talk longer than fixed users (incl. public phone users) 0 10 20 30 40 50 60 outgoingincomingoutgoingincoming fixedmobile average number of calls per month Sri LankaNorthern IndiaSouthern India

10. www.lirneasia.net www.lirneasia.net Mode: still primarily public phones... 0 10 20 30 40 50 60 70 80 90 Sri LankaNorthern IndiaSouthern India % of respondents who use... Public access Fixed phone Mobile Bases : Sri Lanka =1100 North India =1195 South India = 904

11. www.lirneasia.net www.lirneasia.net Analysis based on two income levels within samples in some cases 0 10 20 30 40 50 60 70 80 90 100 Sri LankaIndia % of respondents USD50-100 per month <USD50 per month

12. www.lirneasia.net www.lirneasia.net Subscribers per 100 inhabitants (2004) Sri LankaIndia Mobile11.44.37 Fixed5.144.07 Source: ITU, 2004 Availability of service  India & Sri Lanka almost same on fixed  Sri Lanka higher in mobile but India gaining fast Sri Lanka had mobile since 1989; India since 1994  India converted to CPP in 2003; Sri Lanka is still RPP

13. www.lirneasia.net www.lirneasia.net Reasons for choosing mode: Cost on fixed; convenience on mobile..

14. www.lirneasia.net www.lirneasia.net Some intra-regional variations  Southern India differs from rest of sample: as though on ‘steroids’  ‘Social status’ (57%) and ‘fashion’ (60%) rated higher in (South) Indian locations for mobiles (SL: 7%, 7%)  Higher rating of ‘most economical way to receive calls’ on mobiles in Indian locations (72% vs. 35% in SL) Despite India being CPP since 2003!  More concern for mobility and privacy amongst Indian mobile users; ability to call any time is a big concern amongst Northern Indian mobile users

15. www.lirneasia.net www.lirneasia.net Uses of telecom: It’s relationships… INSTRUMENTAL RELATIONSHIP MAINTAINANCE

16. www.lirneasia.net www.lirneasia.net Use of mobiles: relationships in SL; also some instrumental use in India 0 20 40 60 80 100 keeping in touch (national) keeping in touch (international) send news & messages receive news & messages financial transactions business transactions/enquiries arranging logistics access Internet SL India Bases: SL: 374 India: 242

17. www.lirneasia.net www.lirneasia.net How fixed-line payment made? Higher reliance on finance in SL 0 10 20 30 40 50 60 70 80 90 100 full sampleSri LankaIndia % of fixed line owners Had to get finance from somewhere else I had the money (or someone in my household did Base: full sample: 847 SL: 212 India: 647

18. www.lirneasia.net www.lirneasia.net Sri Lanka and India fixed connection charges compared  Sri Lanka incumbent=USD 180 (min.)  Sri Lanka entrants=USD 120  India incumbent=USD 16

19. www.lirneasia.net www.lirneasia.net 0 10 20 30 40 50 60 70 80 90 100 Sri LankaIndia % of fixed line owners Paid in installments paid full amount at once Base: full sample: 847 SL: 212 India: 647 Slightly higher use of payment plans for fixed lines in Sri Lanka

20. www.lirneasia.net www.lirneasia.net How was mobile connection paid for? More relied on finance in India 0 10 20 30 40 50 60 70 80 90 100 full sampleSri LankaIndia % of mobile owners Had to get finance from somewhere else I had the money (or someone in my household did Base: full: 509 SL: 322 India: 187

21. www.lirneasia.net www.lirneasia.net Getting handsets: 10% got it free 0 10 20 30 40 50 60 70 80 90 100 bought it brand newbought it second handreceived it as a gift / got it free % of mobile owners Full Sample Sri Lanka total India total Bases: full:509 SL: 322 India: 187

22. www.lirneasia.net www.lirneasia.net Mobile is perceived to be the least affordable 0 10 20 30 40 50 60 70 80 90 100 fixedpublicmobile mode of access % of users who find the cost... extr.high/v.high/high affordable Full sample Bases fixed: 1580 public: 2106 mobile: 616 extremely high / very high / high affordable

23. www.lirneasia.net www.lirneasia.net Mobiles perceived to be more affordable by Indian respondents affordable extr.high/ v.high/ high extr.high/ v.high/ high 0 10 20 30 40 50 60 70 80 90 100 SLIndia Mobile % of users who find the cost... affordableextr.high/v.high/high Bases SL: 374 India: 242

24. www.lirneasia.net www.lirneasia.net 0 2 4 6 8 10 12 Sri LankaNorthern India Southern IndiaIndiafull sample % of income spent on fixed communication less than USD 50 USD 50 -100 Percentage of income spent on fixed: higher than norm ‘typical’ amount that people can afford to spend on telecom services

25. www.lirneasia.net www.lirneasia.net 0 2 4 6 8 10 12 Sri LankaNorthern India Southern IndiaIndiafull sample % of income spent on mobile communication less than USD 50 USD 50 -100 Percentage of income spent on mobile: Much higher... ‘typical’ amount that people can afford to spend on telecom services

26. www.lirneasia.net www.lirneasia.net Cost perceptions: change patterns – fixed lines Perceptions of affordability are higher amongst the respondents of the rural survey localities. This could be a result of two factors – the existence of an access deficit charge in rural India which ensures lower costs and also an implicit telecom/transportation trade-off where affordability is measured in terms of savings in cost and time incurred during travel. Base: users of landlines only Change in usage if costs were halved Perception of current costs

27. www.lirneasia.net www.lirneasia.net Cost perceptions: change patterns - mobile Users of mobile phones tend to select it as a mode of communication primarily for the ability to make calls while on the move – thereby convenience overrides the cost factor when choosing to use a mobile. However despite this, the survey respondents indicate that costs are high and that they would increase usage if costs reduced by half. Base: Mobile phone users Base: users of mobile phones only Change in usage if costs were halved Perception of current costs

28. www.lirneasia.net www.lirneasia.net Cost perceptions: change patterns (PCO) Change in usage if costs were halved Perception of current costs Despite respondents in India perceiving current costs to be affordable, they are willing to increase phone usage if costs were halved. Base: users of PCOs only

29. www.lirneasia.net www.lirneasia.net Difficulties in getting fixed connections: Only 20% complain of wait 0102030405060 difficulty in finding the money had to wait for service to become available lack of information on phone options had to go to another town to get connected waiting time of over 1 year too much paper work had to make many visits to office had to pay bribes wasn't treated well because didn't have 'contacts' phone did not get connected immediately no difficulties % who faced difficulty full sample Base: 847 (fixed owners)

30. www.lirneasia.net www.lirneasia.net Difficulties in getting a fixed line: More in India? 0102030405060 difficulty in finding the money had to wait for service to become available lack of information on phone options had to go to another town to get connected waiting time of over 1 year too much paper work had to make many visits to office had to pay bribes wasn't treated well because didn't have 'contacts' phone did not get connected immediately no difficulties % who faced difficulty India Sri Lanka Base: SL: 212 India: 647 (fixed owners)

31. www.lirneasia.net www.lirneasia.net Difficulties after connection (fixed) 05101520253035 phone is often disconnected repair time is too long repair costs are too high innaccurate billing bill is not reader-friendly have to travel far to pay bills get disconnected without warning (red notice) no difficulties % who faced difficulty Base: 847 (fixed owners)

32. www.lirneasia.net www.lirneasia.net Difficulties as users: Sri Lankans unhappy re dead phones... 01020304050 phone is often disconnected repair time is too long repair costs are too high inaccurate billing bill is not reader-friendly have to travel far to pay bills get dis connected without warning (red notice) no difficulties % who faced difficulty India Sri Lanka Base: SL: 212 India: 647 (fixed owners)

33. www.lirneasia.net www.lirneasia.net Problems with connection (fixed) 051015202530 Cannot get a call through Poor audio connection (including cross connections) Weak signal Line disconnection due to not paying the bill on time Customer service is not efficient Call getting cut off (calls dropped) % who face difficulty full sample Base: 847 (fixed owners)

34. www.lirneasia.net www.lirneasia.net Difficulties with connections: Indians less happy? 051015202530 Cannot get a call through Poor audio connection (including cross connections) Weak signal Line disconnection due to not paying the bill on time Customer service is not efficient Call getting cut off (calls dropped) % who face difficulty India Sri Lanka Base: SL: 212 India: 647 (fixed owners)

35. www.lirneasia.net www.lirneasia.net Obtaining a connection: Happier with mobile... 01020304050607080 difficulty in finding the money had to wait for service to become available lack of information on phone options had to go to another town to get connected waiting time of over 1 year too much paper work had to make many visits to office had to pay bribes wasn't treated well because didn't have 'contacts' phone did not get connected immediately no difficulties % who faced difficulty Base: 509 (mobile owners)

36. www.lirneasia.net www.lirneasia.net Even in getting mobile, a little more unhappiness in India... 01020304050607080 difficulty in finding the money had to wait for service to become available lack of information on phone options had to go to another town to get connected waiting time of over 1 year too much paper work had to make many visits to office had to pay bribes wasn't treated well because didn't have 'contacts' phone did not get connected immediately no difficulties % who faced difficulty India Sri Lanka Base: SL: 322 India: 187 (mobile owners)

37. www.lirneasia.net www.lirneasia.net Minor gripes about mobile use 010203040506070 phone is often disconnected cannot make calls despite having credit some features don't always work Difficult to make/receive calls no difficulties % who faced difficulty India Sri Lanka Base: SL: 322 India: 187 (mobile owners)

38. www.lirneasia.net www.lirneasia.net Using mobile: bad signals in SL; bad service in India 02468101214161820 Cannot get a call through Poor audio connection (including cross connections) Weak signal Line disconnection due to not paying the bill on time Customer service is not efficient Calls dropped have to go to locations where there is signal % who face difficulty India Sri Lanka Base: SL: 322 India: 187 (mobile owners)

39. www.lirneasia.net www.lirneasia.net Pre-paid v. post-paid mobile: Pre- paid by a mile in both countries Base: all respondents 0 10 20 30 40 50 60 70 80 90 100 Less than USD5 More than USD5 Less than USD5 More than USD5 Sri LankaIndia % of mobile owners Pre-paid Post-Paid Bases: SL: 322 India: 187

40. www.lirneasia.net www.lirneasia.net India: Prepaid cheaper than postpaid

41. www.lirneasia.net www.lirneasia.net Sri Lanka: Prepaid cheaper than postpaid

42. www.lirneasia.net www.lirneasia.net More on basket methodology on Friday...  The tariffs are monthly tariffs  Low user basket has 25 minutes of use per month  Medium user basket has 75 minutes of use per month  High user basket has 150 minutes of use per month

43. www.lirneasia.net www.lirneasia.net In conclusion  Neglected, silent group of consumers  What do regulators need to know?  What can regulators do?  What can operators do?  More findings on Friday 5-6 articles in preparation