Snapshot: Micro-izing the mobile phone
I wanted to see firsthand who owned cell phones and who did not.
It was 2006 and I was near the border of Zimbabwe and South Africa. Driving between villages with my two local guides, pushing further north, at first it was hard to find people without phones. To my untrained eye, there was little difference between a village housing people earning $2 a day and those earning $1.25 a day. Once I became aware of that, I asked the villagers directly about their earnings. I was quickly able to map the poorer villages and found that mobile phone ownership levels dropped once the person’s earnings went below $2 a day. If you’re earning $2 a day, a $25 handset is 10 months savings for the 2.5 billion people worldwide who live below the poverty line. There seemed to be a huge opportunity, not only for a low-cost mobile phone, but also an opportunity to make a difference for these people without access.
Why not put the identity in the cloud and allow people to log in and log out of any shared or public device that was nearby, just like accessing your email through a web browser?
Because I’d been involved in the mobile phone industry since its birth in the late 80s, I immediately started thinking about designing a low-cost handset.
After reading about the endeavors of Motorola and other handset vendors in that space and the very low product margins they had to endure I quickly backed off. Village pay phones was another model I investigated, but without a capability for users to have their own phone number and keep private calls and messages, the pay phones only provided a limited outbound calling service. Let’s create a pay phone with an external SIM card slot‚ I thought, but then after a little research, I understood the prices of such devices would be well over $700 a piece.
The scope of this opportunity kept churning in the back of my mind. Two years later I had the spark! My oversight was taking the product I knew, the mobile phone, and trying to find a way to make it cheaper. What I needed to do was rethink a new technical solution. Linking the mobile phone number to the handset was the mistake. Why not put the identity in the cloud and allow people to log in and log out of any shared or public device that was nearby, just like accessing your email through a web browser? I would use standard signaling technology that was available on any basic handset to provide the "Internet link" and access a phone in the cloud that would cost the user 20c a pop, instead of $25. I had managed to turn the problem on its head, and micro-ize the mobile phone.
I founded Movirtu to sell this technology to mobile operators, enabling them to offer these micro-ized mobile phones to the rural poor in Africa and South Asia. We use the mobile operator's existing distribution network of official and unofficial airtime vendors and existing village payphone operators. From there, Movirtu sets up its own specialized field training team who tour the country training and advising the airtime vendors and operators.
Separating the mobile phone number from the handset device, providing a unique number to individuals, and thereby opening up basic telephony services to the bottom of the pyramid with Movirtu’s Cloud phones had three primary social benefits:
- With a phone number, the rural poor can communicate more easily, thereby reducing travel and messenger expenses;
- Costs incurred by friends and family who are trying to send remittances using mobile banking are reduced; and
- Employment and new revenue streams for village payphone operators are created.
Other benefits exist as well. Access to personalized information on Internet-enabled smartphones or text on basic handsets about healthcare, farming and disaster planning provide valuable resources. Social community networks for youth and women have also been facilitated through these phones. In addition, formal and informal groups have been able to organize around farmers partitioning savings, accessing pricing information and empowering collective buying.
I frequently travel back to the rural villages in Sub-Sahara Africa to talk to villagers using the product and leaning more about their needs. The greatest lesson I have learned is to forget my preconceived ideas about shoehorning a solution using a lower cost version of a product I knew, but instead, to get out there and listen and learn about the problems while applying my experience and knowledge to think outside the box.