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About the GSMA 1 1 An Introduction to Capacity Building © GSM Association 2017 Capacity Building Training Courses Reaching out to policymakers and regulators.

Policymakers and regulators play a key role in shaping the way the mobile industry responds to key issues.

As the global association of mobile network operators, the GSMA closely tracks changes in technology, policy and regulation worldwide.
Using this knowledge, we have created a range of high-quality, short training courses to offer insights into the latest industry, policy and regulatory thinking.
3 In-depth courses developed by experts Course Title Duration Advanced Spectrum Management for Mobile Telecoms 2 Days Children and Mobile Technology Competition Policy in the Digital Age Disaster Preparedness and Response Internet of Things Leveraging Mobile to Achieve SDG Targets Mobile for Socio-Economic Development Mobile Money for Financial Inclusion Mobile Sector Taxation Principles of Internet Governance Principles of Mobile Privacy Radio Signals and Health Weighing the Benefits of Universal Service Funds Women and Mobile 4 2 Days 1 Day 1 Day 2 Days 2 Days 3 Days 1 Day ½ Day 2 Days 1 Day 1 Day ½ Day 1 Day How we deliver our training The GSMA recognises that organisations, departments and individuals have varying training needs, which is why we can deliver our courses in a number of ways: Via local partners On-site Online 5 Global Reach, Local Impact • We have trained students from over 120 countries around the world, providing insights into the latest industry, policy and regulatory thinking.
Key Training Partners: 6 For more information www.gsma.com/publicpolicy/capacitybuilding www.gsmatraining.com capacitybuilding@gsma.com Mobile for Socio-Economic Development in Asia Pacific • Pat Walshe, GSMA Introductions 9 Welcome This course looks at the many ways mobile delivers socio-economic value.
The impact of the mobile sector on economies and employment Taxation and the affordability of mobile services How mobile money can help fight financial exclusion Digital literacy development for the underserved The role mobile technology can play in agriculture and healthcare delivery Issues related to gender inclusion and disaster preparedness and response 10 Course Objectives Day 1 – Discover how mobile drives economic growth and delivers socio-economic benefits Day 2 – Learn how Agriculture, Health, Connected Women, and Disaster Response can make a difference in the lives of people living in Asia-Pacific 11 Session 1: Mobile as a Driver of Economic Growth  The impact of mobile on the economy and employment  An overview of research on the impact of mobile  Regional case studies 12 Mobile technology is a huge success story Mobile Cellular Subscriptions and Fixed Line Subscribers 4’500 4’000 3’500 3’000 2’500 2’000 1’500 1’000 500 s n o i l l i M Source: ITU 4’10 0 Mobile cellular Fixed line 1’270 1998 2000 2002 2004 2006 2008 13  Even though the first mobile phone network was only built in 1979, data from the International Telecommunication Union (ITU) shows that the number of mobile subscribers had overtaken the number of fixed- line subscribers by 2002  Mobile technology is still growing and continues to enhance people’s lives in a multitude of ways Asia Pacific (APAC) leads in both mobile subscribers and connections ) 7 1 0 2 ( i c i f i c a P a s A y m o n o c E e l i b o M e h T , A M S G : e c r u o S  Although the region has reached its peak in terms of subscriber growth, Asia Pacific will account for almost two thirds of new subscribers globally by 2020, with most of the incremental growth coming from the two dominant markets, India and China.
14 Asia Pacific showing rapid migration to mobile broadband networks ) 7 1 0 2 ( i c i f i c a P a s A y m o n o c E e l i b o M e h T , A M S G : e c r u o S 15 Advanced services leading to data growth Source: GSMA, The Mobile Economy Asia Pacific (2017) 16 An overview of research on the impact of mobile The GSMA and a number of other organisations have carried out assessments of the socio-economic impacts of the mobile industry.
17 Research shows positive impacts The World Bank  Mobile broadband has a higher positive economic impact than fixed line broadband, particularly in emerging markets  A 10% increase in mobile broadband penetration drives a 1.4% increase in GDP for low-to-middle income countries Source: World Bank analysis 18 The power of mobile and data Increased mobile penetration and data usage reaps rewards.
A 10% increase in mobile penetration increases productivity by 4.2% 10 more phones per 100 people increases GDP per capita growth by up to 1.2% A 10% increase in 3G penetration increases GDP per capita growth by 0.15% A doubling of mobile data use leads to an increase in GDP per capita growth of 0.5% Sources: GSMA, Deloitte, What is the impact of mobile telephony on economic growth?
(2012) Waverman, Meschi and Fuss, The impact of telecoms on economic growth in developing countries (2005) 19 Mobile broadband uplift Mobile broadband brings huge benefits to economies: A 10% increase in the penetration of broadband services in low and middle- income countries accelerates economic growth by 1.38% A 10% increase in broadband household penetration delivers a boost to a country‘s GDP that ranges from 0.1 to 1.4% A 10% increase in broadband penetration translates into a 1.5% increase in a country’s labour productivity over the following 5 years Countries with 80% broadband penetration are more than twice as innovative as countries with 40% penetration Sources: World Bank, McKinsey & Company, Mobile broadband for the masses (2009), Booz & Company, Digital Highways: The Role of Government In 21st-Century Infrastructure (2009) 20 Research on the impact of mobile 21 How does mobile deliver these benefits in APAC?
Economic analysis of how mobile achieves its impact.

22 The impact of mobile on the economy and employment ) 7 1 0 2 ( • In 2016, the total value added generated by the mobile ecosystem in APAC was around $411 billion (or 1.6% of GDP), with mobile network operators accounting for well over half of this.
i c i f i c a P a s A y m o n o c E e l i b o M e h T , A M S G : e c r u o S 23 Mobile internet access Increasing mobile internet access for underserved communities in developing countries has been demonstrated to deliver social and economic impacts: Increasing mobile internet access Enhanced employment and entrepreneurial opportunities Economic growth for populations and economies Improved productivity 24 Regional transformation in the Pacific Islands 25 Mobile connections and unique subscribers in the Pacific Islands ) 5 1 0 2 ( s d n a s I l c i f i c a P y m o n o c E e l i b o M , A M S G : e c r u o S 26 Smartphone adoption in the Pacific Islands ) 5 1 0 2 ( s d n a s I l c i f i c a P y m o n o c E e l i b o M , A M S G : e c r u o S 27 Mobile industry contribution in the Pacific Islands ) 5 1 0 2 ( s d n a s I l c i f i c a P y m o n o c E e l i b o M , A M S G : e c r u o S 28 Mobile industry contribution in the Pacific Islands ) 5 1 0 2 ( s d n a s I l c i f i c a P y m o n o c E e l i b o M , A M S G : e c r u o S 29 Mobile industry contribution in the Pacific Islands ) 5 1 0 2 ( s d n a s I l c i f i c a P y m o n o c E e l i b o M , A M S G : e c r u o S 30 Mobile industry contribution in the Pacific Islands ) 5 1 0 2 ( s d n a s I l c i f i c a P y m o n o c E e l i b o M , A M S G : e c r u o S 31 Positive impact on employment ) 5 1 0 2 ( s d n a s I l c i f i c a P y m o n o c E e l i b o M , A M S G : e c r u o S 32 Positive impact on employment ) 5 1 0 2 ( s d n a s I l c i f i c a P y m o n o c E e l i b o M , A M S G : e c r u o S 33 Beyond the industry ecosystem Even beyond its immediate ecosystem, the mobile industry strengthens every sector in the wider economy.
This effect is amplified in developing countries compared to developed economies.

Makes it easier to make purchases at anytime and from anywhere Increases productivity Offers people important new ways to learn and do business Source: 1 - GSMA, The Mobile Economy (2015)  Productivity increases related to the use of mobile technology contributes 2.2% to worldwide GDP1.
34 Mobile increases productivity As well as helping to create employment and entrepreneurial opportunities, mobile helps bridge the digital divide and improves education, health and agriculture productivity, leading to improved quality of life for individuals and their families.
 Among nearly 300 other mHealth products and services, associations such as Mobile Alliance for Maternal Action (MAMA) are providing mobile based health services to 2 million women, families and caregivers in Bangladesh and India alone.

 Airtel recently partnered with Million Lights — an online certification platform, to provide certified basic computing courses to consumers via mobile internet.
 Similarly, mobile operators are leading about one third of agriculture value-added services in the Asian continent.

Services such as Krishibazar (Bangladesh), Digital Mandi (India) and Nongxintong (China) are examples of these among nearly 50 other services in the region.

Source: GSMA, Mobile Economy Asia Pacific (2015) 35 India: A mobile-enabled ATM for Water In India, 700 million people do not have access to clean water.
This has serious consequences, as 60% of the diseases in adults and 85% of diseases in children are caused by contaminated water.

 The Sarvajal project equips a local entrepreneur with a ‘water ATM’ that provides safe drinking water at affordable prices.

 The ATM is embedded with 25 sensors and a SIM card, and transfers information in real-time in order to monitor water pressure and filtration, helping to reduce maintenance of the system.
 Customers pay for water using prepaid smart cards, with Sarvajal selling a litre of water for as little as INR 0.25 (<US$ 0.01), cheaper than large bottled containers or small water pouches.

 In India, where water is available but unsafe, these types of kiosk solutions are critical to increasing access to clean water.

 Sarvajal is now serving 300,000 people daily across 12 Indian states.
36 Skills training in Bangladesh BBC Janala is a large-scale mobile-based English teaching tool which has effectively transformed mobile phones into a low-cost educational tool.

 Users can dial a short code and access bi-lingual audio-lessons and also test their English language skills through their mobile phones.

 The service is easily accessible on any handset, across all networks and costs as low as $0.004 per lesson.
 In Bangladesh and much of South East Asia, English language proficiency is considered critical to improve employment and income opportunities.

 A user, Mishti, who lives in western Bangladesh and works for an insurance company, describes the transformative impact of learning English has had on her life and work.
By learning English through this service, she is no longer afraid of interacting with foreigners or her bosses and says, “I need English because if I want to do well in my career, knowing how to speak English is critical.” 37 Supportive regulatory policies spur investment and growth The potential of mobile technologies to deliver these socio-economic benefits depends on a supportive regulatory environment.
Operators and investors need stability and clarity to secure the huge investment needed to extend coverage and deliver higher speed connectivity Over regulation can stifle innovation, raise operating costs, limit competition and, ultimately, harm consumers Regulation is most effective when policymakers work closely with the mobile industry to keep abreast of trends and ensure policies support, rather than hinder, investment and innovation 38 Session 2: Case Studies • Financial Inclusion • Health service delivery • Rural communities • Gender inclusion • Disaster recovery 39 Financial Inclusion: Sri Lanka Sri Lanka adopts a progressive and innovative approach to mobile banking regulation 40 Sri Lanka — progressive regulation drives adoption of electronic payments The key issues:  Sri Lanka has a population of 20 million people and 9.3 million unique mobile subscribers.
 According to the International Finance Corporation (IFC), Sri Lanka has high penetration of bank accounts, but low access to electronic payments, such as debit and credit cards due to the slow rollout of ATMs and Point of Sale devices.

 In 2007, the Central Bank of Sri Lanka (CBSL) authorised National Development Bank to launch a mobile money service called eZ Pay with Dialog, a leading Sri Lankan mobile operator.
 However, the service failed to take off, and by 2012 there were only about 13,000 registered eZ Pay users.

41 Sri Lanka — progressive regulation drives adoption of electronic payments The approach:  With eZ Pay struggling to take off, the CBSL, Dialog and Hatton National Bank PLC (another commercial bank), worked together to understand why the service was unsuccessful.
 After analysing the experiences of countries where mobile money was thriving, the CBSL issued new guidelines in 2011 on two distinct mobile money products: an e-wallet linked to a bank account and an e-wallet provided by a non-bank.

 In 2012, Dialog was awarded a licence to provide non-bank, mobile money services, under the eZ Cash brand.
The CBSL also agreed to let Dialog register users without requiring them to have a bank account and opted for proportional, risk- based KYC requirements for new users.

42 Sri Lanka — progressive regulation drives adoption of electronic payments The outcomes:  The evolution of CBSL’s approach created an open playing field for bank and non-bank providers, allowing mobile operators to launch a competitive set of mobile money products.
 This enabling regulatory environment extended the benefits of sending and receiving money electronically to a broad segment of society that had previously been excluded.

 In the first month, over 300,000 customers signed up to eZ Cash, and after a year it had more than a million customers.

 In May 2013, 330,535 transactions were conducted through eZ Cash with a total value that exceeded Rs435 million ($3.32 million).
43 Mobile Health: South Africa and Indonesia Hello Doctor brings mobile-based health services to South Africa and Indonesia.
44 Hello Doctor – The doctor will call you now The key issues:  Healthcare services around the world are struggling to deliver medical services to communities that face geographic or economic barriers to access  Hello Doctor, a mobile-based health platform, was launched in South Africa in 2010 with the aim of addressing these issues  One of the country’s first mobile-based health services, Hello Doctor gives users the chance to chat to a doctor or access the latest healthcare advice 24 hours a day, seven days a week, while also offering advice on how to follow a healthier lifestyle 45 Hello Doctor – The doctor will call you now The approach:  Hello Doctor operates a ‘freemium’ business model – healthy living advice is provided for free; Q&A text consultations are available at very low cost; and in- depth telephone medical consultations are charged at less than $4  Regulators have not been receptive, especially the Health Professions Council of South Africa which opposes the service, so Hello Doctor has had to clear a number of hurdles in order to achieve its currently level of success  As a result, the service is a strong illustration of what can be achieved when mHealth service providers work closely with mobile operators and industry groups to deliver on wider public health objectives 46 Hello Doctor – The doctor will call you now The outcomes:  Serving over 600,000 users in South Africa with just over 100 doctors on-call, it proves mHealth services can achieve significant scale  Following its initial success, Hello Doctor is starting to expand throughout Africa and Indonesia, led by mobile operators Vodacom, MTN and Telkomsel 47 Rural Communities: India mKisan delivers much needed agricultural information and advice to farmers in India 48 mKisan — agricultural information and advice via mobile phone The key issues:  Over 20% of India’s GDP is generated through agriculture, but just 40% of farmers have regular access to farming data  The mKisan initiative — a mobile phone- based mAgri platform serving
 subscribers in six states across India — seeks to address this issue  It delivers a wealth of agricultural information, including advice on: – Crop agronomy – Animal health – Weather forecasts – Market prices 49 mKisan — agricultural information and advice via mobile phone The approach:  mKisan is provided by value added service provider Handygo and operator Bharti Airtel  It costs one Rupee a day and farmers buy access in blocks of days rather than through a monthly subscription model, ensuring they only pay for what they need  Information is delivered through a variety of channels, including – Interactive Voice Response – SMS – Helpline – Video  This means farmers can access the service, irrespective of their educational background, digital literacy or economic circumstance 50 mKisan — agricultural information and advice via mobile phone The outcomes:  More than a million farmers have used the service since its launch in mid-2012 and 327,000 have purchased on-going subscriptions  A fifth of mKisan users fall below the international poverty line with incomes below $1.25 a day, and two thirds of users either own small farms (less than two hectares) or work on them, suggesting the service is providing value to some of the poorest farmers in India  There is still some way to go as mKisan has so far only reached 1 per cent of the potential 13 million-strong market of farmers and agricultural workers in India 51 mKisan – Video © GSMA 2014 52 Gender Inclusion: India Uninor and Hand in Hand work together in India to empower female entrepreneurs 53 Uninor and Hand in Hand — supporting female entrepreneurs The key issues:  Globally, 21% fewer women than men have a mobile phone  Operators are now starting to address this issue by bringing women into the retail chain  In India, operator Uninor and NGO Hand in Hand worked together to encourage female entrepreneurship in poor communities  The collaboration has built a network of citizen information centres, managed
 by female entrepreneurs, in low income areas  These centres provided entrepreneurship opportunities to other women by training them to sell mobile products and services  These women then train their peers, so skills are passed on 54 Uninor and Hand in Hand — supporting female entrepreneurs The approach:  Hand in Hand loaned each woman entrepreneur INR 30,000 ($613) to purchase equipment including a computer, printer, desk, chairs and a power generator  Every month the entrepreneur made an INR 2000 ($40) repayment towards this loan over 24 months  All entrepreneurs received business training in bookkeeping, commission structures and how to complete Customer Acquisition Forms  They also received training on how to use a mobile phone, how to activate new SIMs and how to sell Mobile Top Ups 55 Uninor and Hand in Hand — supporting female entrepreneurs The outcomes:  The women have proven to be highly successful entrepreneurs and mentors – between August 2010 and July 2011, sales of SIMs and Top Ups rocketed from 30,000 to 120,000, and women entrepreneurs were training 75,000 people across Tamil Nadu  The initiative is snowballing, with each centre catering to around 4,000 people and more centres spreading from Tamil Nadu to states across the country  The project was found to be so significant internally at Uninor that the pilot has been scaled up and integrated into Uninor’s core business strategy 56 Disaster Recovery: Philippines The Philippines prepares for the worst to deliver the best mobile communications when disaster strikes 57 The Philippines — preparing for when disaster strikes The key issues:  Sitting within the Pacific’s geologically volatile ‘ring of fire’ and the region’s typhoon belt, the Philippines is subject to a range of natural threats including earthquakes, volcanic activity and severe weather events  This has prompted government, mobile operators and aid agencies to come together to develop a coordinated communications response
 strategy  The Government has been very responsive in producing strong legislation and has also made the mobilisation of the private sector key to the success of the strategy 58 The Philippines — preparing for when disaster strikes The approach:  Regulation has helped encourage mobile operators to invest in building resilient infrastructure designed to withstand all but the most severe shocks  One of the Philippines’ leading wireless providers, SMART Communications, has tightly integrated itself into both governmental and NGO disaster relief services  SMART has also developed good relations with national meteorological institutes, which have co-located weather monitoring equipment at SMART’s base stations, ensuring that it has virtually real-time access to severe weather warnings 59 The Philippines — preparing for when disaster strikes The outcomes:  Mobile phone operators in the Philippines now lead the field in effective cooperation to save lives in disasters, as they are highly responsive to the needs of affected populations and the various government agencies involved in disaster recovery  The government’s disaster response systems now uses a range of channels including text, internet and social media in times of emergency to reach as many people as possible, as quickly as possible  Collaboration ensures that mobile operators, in concert with government and NGO agencies, can act swiftly to restore communications links should disaster strike 60 Mobile Apps Demo and Break: 10:45 – 11:30 61 Session 3: Enhancing Affordability Through Best-Practice Taxation • Government policy and affordability • Taxes on mobile consumers • Fees and levies on operators • Other telecom-specific taxes • Regional case-studies 62 Mobile services must be affordable to have most impact Despite the widespread growth of mobile, the cost of mobile devices and services remains a significant barrier to further adoption of mobile technology In order to be able to reach the poorest, whose
 lives the mobile phone has the most potential to change, mobile services must be affordable Government policy has a significant influence on the ‘cost of ownership’ for consumers and businesses 63 Policy and affordability Licence fees and annual charges Spectrum allocation and costs Supporting infrastructure (e.g.
power, roads, security) Taxation Operator Costs Competition Policy Universal service funds Stable regulatory environment Level playing field  Policy decisions taken across a range of areas flow through to costs to the consumer  Operational costs determine the economic viability of base station sites, directly impacting coverage  To bridge the digital divide the overall regulatory environment must encourage investment and use 64 Policy and the digital divide Source: PwC, Regulation and the Digital Divide (2006) 65 Principles of effective taxation General principles of taxation based on research by the World Bank, IMF and OECD: Taxation should be broad-based Taxes should account for the wider socio-economic effects of the sector and products The tax and regulatory system should be simple, easily understandable and enforced Different taxes have different economic properties, with a general consensus in favour of broad-based consumption tax 66 Principles of effective taxation Taxation works best when it is broad-based Taxation alters incentives for production and consumption Economic distortions will generally be minimised where the burden of taxation is spread evenly across the economy In practice, this equates to putting in place broadly defined bases for taxation, limited rate variations and the effective enforcement of tax compliance Taxes should reflect wider effects The case for taxation to address the negative effects of certain sectors or products, such as tobacco, is well recognised The same logic also applies in the case of industries that create positive effects There may be a strong case for taxation policy to encourage sectors that have a positive social and economic impact 67 Principles of effective taxation Simplicity is best The tax and regulatory system should be simple, easily understandable and enforced Consumption tax – less distorting Different taxes have different economic properties A lack of transparency over taxation systems and liabilities may deter investors and is also likely to increase enforcement costs for government There is a general consensus that, for most products, a broad-based consumption tax is less distorting than taxation on income or profits 68 Mobile taxation Taxes on the mobile sector takes a number of different forms.
Taxation on mobile consumers Taxation on mobile operators Other telecoms- specific tax issues Handset purchases Telecoms Equipment Regulatory related (e.g.
universal service funds) Connection activation Revenue charges Licence Fees Voice, messaging and data usage Special communication taxation Lack of exemptions compared to other sectors 69 Balancing taxation and affordability Affordability of mobile services can be affected when governments impose sector specific taxes and fees These include special communication taxes, such as excise duties on handsets and airtime, and revenue-share levies on mobile operators Best practice taxation strikes the right balance between encouraging the growth of the digital economy and fair revenue collection 70 Problems of unbalanced taxation If taxation fails to strikes the right balance it can ultimately prove counterproductive — especially in the developing world.
Unbalanced taxation policy has the potential to: Discourage mobile take-up and use, and reduce the multiplier effect in the wider economy Limit the significant impact mobile can have on the poorest in society Hinder investment in networks and services Restrict economic development that could otherwise be achieved for the benefit of all Cause governments to lose out on the advantages of growth that could outweigh shorter- term benefits of tax receipts 71 High and increasing mobile tax burden in some countries The GSMA and Deloitte have conducted an in-depth comparative analysis of mobile taxes and fees across 26 markets including Brazil, Cameroon, Croatia, Kenya, Mexico and Turkey.
Key findings include: In 11 of the 26 countries studied, over $3 in every $10 of mobile revenue was transferred to the government in the form of taxes, regulatory fees or other charges High taxes on mobile restrict the growth of the sector and the use of networks Countries that have reformed taxation (e.g.
Uruguay and Kenya) have seen growth in the sector and a boost in vital economic activity Source: GSMA and Deloitte, Digital inclusion and mobile sector taxation (2015) 72 Mobile sector tax and fee payments (2014) t a a d 4 1 0 2 , : e c r u o S 73 Sector-specific taxation There is discrimination against mobile in raising tax revenues 74 Research into effects of taxation Research data shows the significant impact taxation has on foreign investment and the adoption of mobile services.
A 1% tax reduction on mobile broadband would result in an up to 1.8% increase in penetration and an up to 0.7% increase in GDP over five years More affordable mobile services (due to reductions in taxes, for example) lead to economic growth that is high enough to offset the direct medium term negative effect on tax revenue A review of over 400 different studies found that, on average, a 1% increase in the rate of tax on capital led to a 4% decrease in the level of foreign direct investment Empirical research has identified a negative relationship between uncertainty over future taxation and investment GSMA and Deloitte, Global mobile tax review 2006-07 (2007).
GSMA, The impact of taxation on the development of the mobile broadband sector (2012) GSMA, Taxation and growth of mobile in East Africa (2007) Mooij and Ederveen, Explaining the variation in empirical estimates of tax elasticities of Foreign Direct Investment (2005) Edmiston, Tax uncertainty and investment: A cross-country empirical examination (2004) 75 Taxation versus mobile growth Higher taxes can hinder the adoption of mobile technology Sector-specific burden and mobile penetration across countries Chad Bangladesh Kenya Turkey Cameroon Ghana Thailand Tunisia Nigeria Sri Lanka Colombia Mexico Egypt Hungary Brazil Croatia Jordan South Africa Gabon 1.20% 1.00% 0.80% 0.60% 0.40% 0.20% 0.00% P D G % .
0% 20% 40% 60% 80% 100% Penetration Rate, % 120% Source: Mobile taxes and fees: A toolkit of principles and evidence, February 2014 140% 160% 180% 200% 76 Transitioning to a more balanced tax policy Address problems early, especially for new services:  This offers countries the potential to maximise the economic/productive opportunity from those services with lower fiscal costs Consider alternatives:  The research shows that even for broad-based taxes, mobile is making an undue contribution  Moreover, World Bank research finds that most governments have significant capacity to increase tax on economic ‘bads’ such as pollution, tobacco and alcohol Phased reductions may help:  Studies show tax cuts can be fiscally neutral within a few years due to a combination of stimulated economic growth and general sector expansion 77 Balanced tax policy – positive impact 78 Uruguay – case study The Uruguay government abolished an airtime tax in 2007 that had accounted for between 30 and 50 per cent of calling costs.
 In the year immediately following, prices fell by over two thirds, from UYU 3.75 per minute to around UYU 1.00 per minute  Penetration has since more than doubled from 65% in 2006 to 141% in 2011  Network use has risen from just under 400 annual minutes per subscriber in 2006 to 1,600 in 2011 79 Croatia – case study In 2009, as part of its response to the economic crisis, the Croatian government imposed a six per cent tax on mobile gross revenues related to voice, SMS and MMS.
 In the year following the introduction of the tax, Croatia suffered the first ever fall in voice and SMS volumes  Volumes of mobile calls decreased by 4% and volumes of SMS messages decreased by 14%.

 Continuing the differential treatment of MNOs, by taxing them at a higher rate than other businesses in Croatia, risked reducing productivity and consumer benefits.
 In 2012, the tax was finally abolished as part of an attempt to promote additional infrastructure investment 80 Lunch: 12:30 – 13:30 81 Activity Group discussion From your own experience, give examples of how technology and mobile have benefitted the wider economy.
One example per group:   Jobs and skills Innovation and investment  Growth  Productivity 82 Break: 15:15 – 15:30 83 Session 4: Financial Inclusion  Benefits of mobile money services  Mobile money vs mobile banking  Financial compliance 84 Mobile can be a catalyst for financial inclusion 2.5bn adults without access to the financial system 1.7bn have a mobile phone 5 4 3 2 1 0 n o i l l i B 24% 1.3 47% 3.0 39% 2.3 n o i t a r t e n e P 50% 40% 30% 20% 10% 0% 2007 2012 2017 Active subscribers Penetration 85 World Bank’s global Findex data Account at a financial institution Percentage of age 15+ with an account, 2017 No data 86 Source: World Bank, The Global Findex Database, March 2017 Mobile money continues to extend reach 556 m registered accounts globally with 174 m active accounts The industry processess over 43 m TRANSACTIONS PER DAY There are 277 SERVICES in 92 COUNTRIES Mobile money is now available in TWO-THIRDS of low- and middle-income countries.
87 Bringing financial inclusion to new regions SOUTH ASIA 40% of all new registered accounts in 2016 were in South Asia.

Furthermore, providers were able to sustain strong registration growth and activity rates.

In the five-year period between 2011 and 2016, active mobile money accounts in South Asia grew nearly thirty-fold.

88 LATIN AMERICA AND THE CARIBBEAN Latin America and the Caribbean has also experienced noteworthy growth in recent years.
Active mobile money accounts grew from less than a million in December 2011 to more than 10 million by the end of 2016.

The number of live mobile money services in the region grew from 9 to 30 during this period.

What is mobile money?

Mobile money • The use of information and communication technologies (ICTs) and non-bank retail channels to extend the delivery of financial services to clients who would not be reached profitably with traditional branch-based financial services.
- Customers can sign up for the service without an existing bank account - Customers get money into and out of the service by going to a network of transactional agents outside of bank branches - Customers initiate transactions using an interface that is available on basic mobile handsets 89 In contrast, mobile banking is… … the extension of banking services delivery through a mobile phone • Characteristics: - Typically additive (additional to other access channels) - Deposit taking/banking principles apply - Provided by traditional banks, e.g., Equity Bank 90 Differences between mobile banking & mobile money Mobile banking Banking business: deposit-taking and credit services.
Bank can take risks (intermediate) customer deposits.

Bank is liable for the customer deposits which are typically protected under some deposit insurance or deposit protection scheme.

Agents appointed by the bank are licensed to provide agency services and are subject to a proportionately higher compliance standard.
Their activities are restricted to taking deposits on behalf of the bank, facilitating withdrawals (much like ATMs), card collection and receiving (but not processing) applications for new accounts, loans, etc.

91 Mobile money Payment service: limited to the provision of money transfer services – domestic remittances, international remittances in some cases.

No credit provision.

Payment service provider/EMI/mobile money provider prohibited from intermediating customer funds.
Funds must be ‘ring-fenced’ away from the service provider’s own funds to protect against insolvency.

Ring-fencing requires the placement of the pool of funds in trust by a trustee appointed by the service provider or under escrow by a bank in liquid assets.

This ensures the service provider’s proximity to the funds is so remote that even upon a service provider’s insolvency, its creditors cannot attach the customer funds.

It also ensures that the funds are available on demand.
Typically non-bank retail traders may be appointed as agents to facilitate new customer registration and cash in / cash out (CI/CO).

They also act as the customer-facing points of information for the customer.
Evidence of demand Microfinance loan Microfinance savings account Shopkeeper credit Remittance to home village Interest free loan from neighbours Savings held for neighbours Rent arrears Wage advance Formal Informal Life insurance Home saving Cash in hand • Poor households actively manage their financial ‘portfolios’ using a range of formal, semi-formal and informal services.

Loans to others Savings with a moneyguard Source: Collins, Daryl et.

al.. 2009.
al.. 2009.

Portfolios of the Poor: How the Worlds Poor Live on $2 a Day.

New Jersey: Princeton University Press.

Slide from Collins, et al.

May 2010 92 Social impact of mobile money • Support families to keep children in school • Improves access to healthcare • Provision of social benefits to vulnerable groups 93 Comparative cost of financial access points $250,000 $250,000 Traditional branch $50,000 $50,000 Branch in store $10,000 $10,000 ATM $2,000 Agent with POS terminal $400 Agent with mobile $?
No agent (cashless) Source: CGAP 94 Mobile money regulatory models Non-bank or mobile network operator-led model Mobile network operator (MNO) authorised to offer the services directly.

Bank-led model Bank authorised to offer the service in partnership with MNO.

Bank responsible for compliance.

Narrow Bank model New institution created and licensed under banking laws but restricted from offering credit.
Emerging ‘controlled’ model Central banks issue the e-money and manage the central transaction processing platform.

95 Non-bank or MNO led model • Commonly seen in Eastern, Southern and part of West Africa.

• MNO signs up customers to use the mobile money service, which is run by the MNO, but variations exist – e.g., in Uganda, MNO does not have access to central bank or does not hold license from regulator.
• The MNO model is most flexible, and allows for evolution of appropriate regulation in tandem with products and services.

• Many markets that implement the MNO model have a ‘wait and see’ position allowing for innovation and thereafter introduced regulation.

Others have introduced new regulation to accommodate the service.

96 Bank led model • Bank is the service provider.

Role of MNO is more peripheral – limited to provide communications infrastructure.
• This model can be seen in Nigeria, South Africa, and parts of Asia and Latin America.

• Bank model faces stringent banking and regulatory challenges, and is less likely to scale as fast as MNO model.

• Slower to innovate new products and services, and non-banks are disincentivised from participating fully, leading to lack of adequate investment.

• Despite some exceptions (such as Pakistan and Bangladesh), banks have not scaled mobile money services and lack incentives to make necessary investments.
97 Narrow bank model • New type of institution licensed under existing banking laws is created, which is more limited in terms of services it can provide.

Typically, cannot offer credit services.

• Some elements of bank regulation to ensure management of risks associated with credit are waived, but generally, the “know your customer” (KYC) requirements remain.

• Narrow bank model can be seen in India, Mexico and Colombia.
• Narrow banks such as Payment Banks in India may be solution for markets that have a conservative view regarding mobile money.

• This model is very new and it remains to be seen if it will deliver scale.

98 Emerging ‘controlled’ model • Central banks issue e-money and manage central processing platform, essentially becoming a market player.

• Emerging ‘controlled’ models such as in Jordan or Sudan feature the central • banks playing key role in mobile money business.
In Jordan, the central bank, for example commissioned development of a central switching platform that acts as a payments switch.

• Payments service providers are required to connect their platforms to the government’s switch, in a sense mandating interoperability from the onset.

In Sudan a more restricted model has been mooted where the central bank issues the e-money and operates the payments platform.

• These are relatively new models that need to be tested for • their efficacy.
99 Mobile money regulatory models Telecom channel (e.g.

USSD, STK) Brand & marketing Distribution / agent network Product / platform License holding Regulatory engagement Custody of customer funds MNO (or MNO subsidiary) activities Joint activities, led by bank Bank activities Kenya, Rwanda, Tanzania, Liberia Uganda Nigeria India, Mexico, Colombia (narrow banks) 1 2 3 100 Activity Group discussion What are some of the key differences between mobile money and mobile banking?
101 Case Studies 102 Case study: Sri Lanka The key issues • • • Sri Lanka has a population of 20 million people and 9.3 million unique mobile subscribers.

According to the International Finance Corporation, Sri Lanka has high penetration of bank accounts, but low access to electronic payments, such as debit and credit cards, due to the slow rollout of ATMs and Point of Sale (POS) devices.
In 2007, the Central Bank of Sri Lanka (CBSL) authorised National Development Bank to launch a mobile money service called eZ Pay with Dialog, a leading Sri Lankan mobile operator.

• However, the service failed to take off, and by 2012 there were only about 13,000 registered eZ Pay users.

103 Case study: Sri Lanka The approach • With eZ Pay struggling to take off, the CBSL, Dialog and Hatton National Bank PLC (another commercial bank), worked together to understand why the service was unsuccessful.
After analysing the experiences of countries where mobile money was thriving, the CBSL issued new guidelines in 2011 on two distinct mobile money products: an e- wallet linked to a bank account and an e-wallet provided by a non-bank.

In 2012, Dialog was awarded a licence to provide non-bank, mobile money services, under the eZ Cash brand.

The CBSL also agreed to let Dialog register users without requiring them to have a bank account and opted for proportional, risk-based KYC requirements for new users.
• • 104 Case study: Sri Lanka The outcomes The evolution of CBSL’s approach created an open playing field for bank and non-bank providers, allowing mobile operators to launch a competitive set of mobile money products.

This enabling regulatory environment extended the benefits of sending and receiving money electronically to a broad segment of society that had previously been excluded.

In the first month, over 300,000 customers signed up to eZ Cash, and after a year it had more than a million customers.
In May 2013, 330,535 transactions were conducted through eZ Cash with a total value that exceeded Rs435 million (US$3.32 million).

• • • • 105 Case study: Philippines The key issues • • The Philippines is an archipelago nation with a population of 92.34m spread over more than 7000 islands.
In late 2007, just under two thirds of the population were mobile subscribers and the Philippines was named the ‘texting capital of the world.’ • Only 31.3 per cent of Filipino adults have a formal account (Findex 2014).

• 36 per cent of municipalities do not have a banking office (NSFI 2015).

106 Case study: Philippines The approach Bangko Sentral ng Pilipinas (BSP) was willing to work with mobile operators Globe and Smart to understand the proposed mobile money service so it could ‘test and learn’.
Satisfied with the experience and soundness of these non-banks, as well as management of security risks, BSP Monetary Board granted preliminary approval letters to Globe, the non-bank, to launch the service with conditions around reporting, reconciliation of the float, and supervision.

In 2001 and 2004 respectively, Smart communications launched SMART Money in partnership with Banco d’Oro and Globe Telecom launched Gcash.

In 2009, the BSP permitted both banks and non-banks to issue electronic money.
Via Circular 649, it offered guidelines governing the issuance and operations of electronic money in the Philippines.

• • • • 107 Case study: Philippines The outcomes • Although there are an estimated 7million+ mobile money clients in the Philippines, only 4.2 per cent of Filipino adults have a mobile money account.
• The presence of other FSPs, such as pawnshops, remittance agents, money changers, e-payment service providers, mobile banking agents and NSSLAs reduce the percentage of underserved municipalities from 36% to 12%.

(NSFI 2015) • On the frontier of mobile money: both Smart and Globe are evolving their mobile money service offerings to grow the ecosystem by offering merchant payments, companion cards and connections with transport payments.
In late 2015, the two operator-led mobile money schemes are moving towards account-to-account interoperability, The role of non-bank providers is recognised by the BSP, evidenced by participation in the ongoing National Retail Payments Strategy and the National Financial Inclusion Strategy (2015) • • 108 Break: 15:15 – 15:30 109 Session 5: Digital Literacy  Defining digital literacy  Barriers to digital literacy  MISTT and policies to enhance digital literacy 110 The UN states That literacy is a fundamental human right and the foundation for lifelong learning.
It is fully essential to social and human development in its ability to transform lives.

For individuals, families, and societies alike, it is an instrument of empowerment to improve one’s health, one’s income, and one’s relationship with the world.
Source:- http://www.unesco.org/new/en/education/themes/education-building-blocks/literacy/ 111 The UN on Information Literacy in a digital world The Alexandria Proclamation of 2005 describes information literacy and lifelong learning as the "beacons of the Information Society, illuminating the courses to development, prosperity and freedom.
Information literacy empowers people in all walks of life to seek, evaluate, use and create information effectively to achieve their personal, social, occupational and educational goals.

It is a basic human right in a digital world and promotes social inclusion in all nations."

112 What is Digital Literacy?


113 Barriers to coming online Affordability Network Coverage Digital Literacy Locally Relevant Content The future growth in mobile internet adoption will come from infrequent or new internet users 114 Global landscape Delivering digital inclusion to the still unconnected population The number of individuals accessing the internet over mobile devices across the developing world has grown from around 870 million subscribers in 2010 to nearly 2.5 billion at the end of 2015.
GSMA Mobile Economy Report 2017 115 Mobile connectivity in developing nations 2.5b out of 6b connected to mobile internet 1.4b using mobile broadband (3G/4G) Source: GSMA Intelligence Access gap 23% Usage gap 48% % of population not covered by 3G/4G, vs. covered but not using the mobile internet 116 Digital literacy barriers to mobile internet use 757 million adults illiterate globally, 37% of which are in India.
40% of people in sub-Saharan Africa are illiterate 21% Indian and 39% African respondents to GSMA survey stated lack of digital skills was their main barrier to coming online But by the end of the decade, more than 40% of the population will still lack internet access, with most of the excluded population living in rural areas 117 Customer Awareness and Use Journey User’s Awareness Journey Trial and Use I’m using the internet I’m not aware of the internet Unaware Aware Understands Internet Access Trial Regular Use Connect Create Content Never heard of mobile internet services Aware of mobile internet services and knows what it does Understands the value of the mobile internet, the use case, the costs and trusts in the service Gains access to the internet on mobile either via data plan, pay-as- you-go or Wi- Fi Interacts with the mobile internet via search, app and uses other functions Uses the mobile internet for social and business purposes Creates content for sharing 118 Mobile Internet Skills Training Toolkit (MISTT) • Introduction to the mobile internet on an entry-level android smartphone • For MNOs, NGOs, Governments or Development Organisations • Teach the benefits and how to use the mobile internet 119 Bitesize Training  Quick, Functional, Introduction to mobile internet  All six modules 120 Why does increased internet access matter?
Individuals Businesses Governments Increased the number of ways we have to communicate, shop, socialize, entertain ourselves, work and learn Efficiencies in delivery of products, opened up new markets and business models Reduced transaction costs communicating with citizens and delivering government services 121 Internet access enables participation in the digital economy GSMA Mobile Economy Report 2017 122 Enabling people with digital literacy leads to… • Contribute towards improving life skills • Support economic opportunities - job searches, business development & accessing government services • Improve communication between governments and citizens Source: GSMA Intelligence, Global Economy Report, 2016 and UNESCO Enabling digital literacy supports SDGs Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all Achieve gender equality and empower all women and girls Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation Strengthen the needs of implementation and revitalise the global partnership for sustainable development 124 How GSMA advances digital literacy 125 Case Studies 126 United Kingdom: Free training in basic digital skills BBC Research found that 21% of the UK’s population lack basic digital skills.
In 2016, the Government in partnership with Go ON UK, the digital skills charity, reduced the number of people who are offline by 25% and aim to continue the reduction every 2 years, so that by 2020 everyone who can be digitally capable, will be.
127 United Kingdom: Making digital inclusion part of wider government policy • Make digital inclusion part of wider government policy, programmes and digital services Establish a quality cross-government digital capability programme • • Give all civil servants the digital capabilities to use and improve government services Agree a common definition of digital skills and capabilities Boost Go ON UK’s partnership programme across the country Improve and extend partnership working Create a shared language for digital inclusion Bring digital capability support into one place Deliver a digital inclusion programme to support SMEs and VCSEs Use data to measure performance and improve what we do • • • • • • • 128 Digital India’s commitment to empower citizens with digital skills • Making one person in every family digitally literate is an integral component of Digital India • From 2017, Digital India are targeting 60 million people – 40% of rural India’s population, to become digitally literate over 3 years.
129 Digital Literacy policy recommendations Governments/policy makers must dedicate sufficient funding and support to improve literacy digital skills: • Education: Expedite the work in offering strong education systems at primary school level • ICT: Promote use of ICT and internet as a medium of learning in schools, colleges and universities allowing students to master technology use • Engagement: Ensure collaboration across all government ministries and departments to deliver ICT skills to schools, colleges and universities • Rural engagement: Devote sufficient resources to extend a supportive learning environment to rural areas 130 Digital Literacy policy recommendations • e-government services: Deliver services in education, health and financial disbursements and other life-enhancing services through mobile • Partnerships: collaborate with operators, development organisations, NGO’s and internet players to maximise the potential for improving literacy and digital skills • Empower rural communities with knowledge of the mobile internet and its benefits through advertising campaigns that raise awareness of the relevant use cases • Stimulate interest in the mobile internet by showcasing social, cultural and economic advantages of mobile internet in rural communities.
131 ACTIVITY 132 Day 1 Close