OMJ & Hystra: Three Things You Don’t Know About Broadband

Photo: Bridge International Academies

By Monica Fernandez Alvarez de Lugo, Opportunities for the Majority, IDB and Lucie Klarsfeld, Hystra 

In the past year MIT and NASA have been working hard at setting up broadband connectivity in the moon. The results have been so positive, that you can actually have better connectivity in the moon that in many countries on earth, including the United States. At the same time Mark Zuckerberg, founder of Facebook, created, to provide connectivity to every single person on Earth.

Broadband has proven to not only increase economic development but it can also have a positive impact on the productivity of private firms. And while aliens could benefit greatly from improved connectivity, here on earth we still have a long way to go. Today, around five billion people still lack access, and a great effort from both the public and the private sector is needed to overcome this gap by developing the necessary infrastructure and providing access, so that each one can take advantage of these benefits, and in particular to those companies targeting the base of the pyramid (BoP).

Through a deep dive in 8 cases in countries like Mexico, India or Kenya, a new report produced by Hystra and commissioned by the Inter-American Development Bank (IDB), to be released soon, makes the case for broadband adoption for more efficient and productive value chains serving the BoP. Results are impressive and they evidence how broadband has allowed for new business models to develop, ones that are more effective and efficient accessing, creating and distributing goods and services to the BoP.

In Kenya, for example, Bridge International Academies has become the world’s largest chain of nursery and primary schools delivering high-quality education at low-cost. It currently serves 80,000 students and employs 2,700 teachers in 259 academies. Bridge aims to break even in 2016 and to operate in at least 4 countries serving 4.5m pupils by 2022.

The cases of Barared in Mexico—which invested in building the necessary broadband infrastructure with Wi-Fi antennas in order to set up service booths equipped with tablets and located in mom and pop shops, providing low-cost telecommunications, financial transactions and other services to the BoP, and Narayana Health in India—a private group of hospitals that leverages ICT and broadband to increase its efficiency and provide quality healthcare at affordable price, all show that broadband is a powerful tool to upgrade service access, quality and cost-efficiency. 

Among others, three things are clear from the report:

  • Broadband provides BoP end-users with better information and connection to the world. By allowing large data transfers, it gives them access to key information and improved quality contents (e.g., in education, for Enova in Mexico, Bridge International Academies in Kenya, or Urban Planet Mobile in several countries) while enabling real-time interactivity with the digital community (e.g. for Skype medical consultation at Narayana Health hospitals), or real time financial services (e.g., FINO business correspondents going door to door with a device allowing remote Indian rural clients to conduct financial transactions).
  • Broadband empowers BoP intermediaries, employees or entrepreneurs. By providing support for complex tasks, broadband allows hiring and training lower-skilled BoP workers. For example, franchised entrepreneurs or small shop owners in both India (e.g., with eKutir) and Mexico (e.g., with Barared) have been able to multiply their revenues by at least two thanks to the provision of broadband-enabled services.
  • Broadband and data connectivity make inclusive businesses more efficient and hence allows them to better serve poorer customers as it enables optimization of organizational processes and lowers costs through centralized process management. For example, Kilimo Salama offers low-cost yet sustainable crop insurance thanks to weather data gathered via satellite technology, to small farmers who could not access traditional insurances, too costly due to the need for in-person due diligence.

This report is must read for those interested in learning more about broadband and how it can benefit the BoP. It makes the case that broadband is a determinant tool to improve and leverage current and potential business models looking to serve the BOP and that a proactive public policy is necessary in order to set in motion broadband penetration.

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