In Business Model, Internet Access, Mobile

Sustainability is among the most-important issues where it comes to providing Internet access to virtually everyone in South Asia, Southeast Asia, Africa and elsewhere.

The reason is simply that many consumers not able to use Internet access services are in that condition because we have not, so far, managed to create low-cost access networks, supply low-cost devices and create compelling applications that users understand and value.

Of those three requirements, compelling apps will likely continue to be the easiest problem to solve.

When the problems are solved, the issue will not be whether a big company solves the problem, but only which big companies will have done so. The reason is the need for scale, as a prerequisite for maintaining very low prices.

In India, for example, a 500 Mbyte mobile data plan costs about $3.40 a month. A smartphone to use such a plan might cost $248.

Perhaps 60 percent of rural residents in India have income of 57 cents a day, or $17 a month. So use of 500 Mbytes–ignoring the cost of the phone–could represent 20 percent of per-person income.

Some might argue a reasonable mass market price for 500 Mbytes or more of data, in such areas, would be 51 cents a month.

Others think many consumers will be able to pay only about 15 cents a month for service.

That illustrates the stringency of key business model inputs, ranging from backhaul to local distribution facilities, spectrum costs, licensing fees, taxes, marketing and operating costs. One might argue that all underlying recurring service provider costs have to be 15 cents to 41 cents or lower, per month, per subscriber.

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