Sustainable business models are a challenge for mobile and Internet service providers in South Asia, Southeast Asia and Africa where many would-be customers are hard to reach and cannot afford to pay too much for service.
As with products such as laundry detergent, mobile minutes of use are sold in bite-sized quantities. Mobile usage typically is sold on a prepaid basis. So customers limit use when their prepaid cards approach the limit.
So Channel IT, a Nigerian mobile operator, allows customers to borrow about $1 in airtime, paying back $1.10, even if the loan is only for a day. That increases usage dramatically.
The default rate is less than one percent, since customers aren’t allowed back on the network until they’ve repaid the loan.
