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Innovations in emerging economies
Alex Leslie - Nov 4, 01:38 PM
BillingViews recently spoke to Nigel Waller, a billing veteran who has branched out in an unexpected direction, and is now managing director of new company Movirtu.
BillingViews (BV): I have read about you recently doing business in Africa – is that right?
Nigel Waller (NW): That’s right. I spent a lot of my time when I was in billing working in emerging markets and much of the time companies were asking me where they could find mobile phone solutions that would be affordable to those at the ‘Bottom of the Pyramid’, in other words those who live on less than $2 a day.
BV: And Movirtu is the answer to the question?
NW: I think so. We launched the company two years ago. The premise is simple yet different. You simply cannot take a European or ‘western’ solution, cut the price and present it to these markets. We actually looked at the lowest cost of producing a mobile phone but when you add up the components, even the cheapest, you still come to a figure of around $20. We think there is a barrier at around $2 for this market.
BV: So what is the answer?
NW: The answer we came up with is to separate the phone from the phone number. Essentially you have thin client phones that allow customers to access their own phone account. We think that one billion people will share phones or use phones provided by street vendors or their communities.
BV: So, how does it work?
NW: Essentially a customer can access his account, his number, from any phone. The phone account is hosted in a switching centre. He then makes a call and we double rate it. We charge the customer for the call and work out a revenue share with the owner of the phone. This could be free airtime or cash. This is a good incentive to get people to share their phones in the first place.
BV: And you provide this service yourselves.
NW: No, we partner with service providers, generally on a revenue share basis with them. We currently have a pilot scheme going in East Africa.
BV: This is a brave move – what made you jump in?
NW: Well, I think my experience in billing and Value Added Services helped – I could see the problem and understood how to solve it, and I have been working in emerging markets for 15 years. We think that as many people will share phones as own phones and I think the potential for good things to happen is enormous and will be enormously satisfying.
BV: And you want to make money out of this or is it a non-profit venture?
NW: It is with profit, for sure, and although I am passionate about how mobile technology will revolutionise the economies of emerging markets, I believe we can make money too.
BV: It doesn’t sound like an obvious opportunity.
NW: Perhaps not, but it is a $30billion a year opportunity. It is also worth remembering that people at the bottom of the pyramid spend a greater percentage of their income – between 5-30% – than their western counterparts.
BV: Why do they do that, it doesn’t seem to make sense?
NW: Let me answer with an example – if you could make a phone call to the market 15 miles away and make a decision about whether it is a good day to sell your goods – - even make an advanced sale or two, it makes it more efficient. It actually encourages traders to congregate at the same time and thus creates a bigger market.
BV: OK – and I suppose there are the possibilities of virtual markets and buying and selling goods without actually going to the marketplace.
NW: Absolutely.
BV: What is the scope of this innovation?
NW: We were talking to an HIV/AIDS clinic in southern Africa. They see 10,000 people, 40% of whom do not have a phone. With phone sharing they can contact them, keep them up to date with messages. Suddenly there is a support network where before there was nothing.
There are also more commercial opportunities. In a very real sense if you have a phone number you have an identity and companies can sell you things – intelligently we hope – and the economy itself benefits. And with the coming of mobile payments via phones the same will happen – you will be able to transfer money to people even if they are sharing a phone.
BV: It sounds fascinating and exciting – I wish you the best of luck with it. Keep in touch.
NW: Thank you, I will indeed – via Twitter probably!
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