Internet Connectivity

Stakeholder and market entry analysis

Himanshu Singh

Agenda

• Status: Internet access in the world
• Internet access providers, promoters and stakeholders
• Market entry framework
• Ideas to enter new markets
• How can I help?
• What have I done in the past?

Status: Internet access in the world

Around 3.5B people do not have internet access but growing penetration rates in developing world are encouraging

Only 41% of the developing world has internet access compared to 81% of the developed world

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Central Africa has the lowest coverage followed by rest of Africa and Southeast Asia

Internet users as percentage of population

There is a bigger rural and urban connectivity divide in developing world compared to the developed world

Share of adults in the United States who use the internet in 2018, by urbanity

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Internet user distribution in China from 2010 to 2017, by urban and rural region

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12% gap

46% gap

Developing countries have a big gender gap in internet usage

Internet users by gender as percentage of population by country and region

Facebook study

Internet is not only hard to access to but also more expensive in developing economies

Internet access providers and promoters

Governments, Private Companies and Telcos are working to provide internet

Governments

Technology Companies

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Telecom companies and ISPs

Facebook Connectivity

Plan to launch 4,425 small satellites in low Earth orbit

Key stakeholders and their incentives

Telecom operators

• Operate in profitable markets where users will pay for data, especially when initial infrastructure investments are high
• Operators might want to maintain monopoly on the spectrum
• Retain users by lowering user switching rate across service providers

Governments

• Control the use of spectrum
• Offer internet to citizens without restrictions and preferably with national operators
• Governments might also want to control content delivery

Infrastructure companies (Tower companies)

• Generate steady revenue from existing leases and renewals
• Participate in future expansions
• Maintain status quo in use of infrastructure

Market entry framework

Market entry framework

Understand incumbents and regulatory framework

Understand demographics

Identify right technology solution

Find right partners to execute

• Incumbent telecom players
• Government spectrum allocation policy
• Barriers to entry for new player

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• Infrastructure maps
• Population density (use data from Facebook, WhatsApp and Messenger)
• Income level
• Government spectrum allocation policy
• Barriers to entry for new player

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• Bandwidth requirements in the region
• Most cost effective solution that may use existing infrastructure but substantially better than existing solution and also considers future growth needs

• Incumbent telecom players
• Government spectrum allocation policy
• Barriers to entry for new player

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Ideas to enter new markets

Target countries with high population and low internet penetration rate

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Internet penetration rate in developed countries

Population

Low

High

Huge gap: lot of work ahead!

Target community hubs instead of households

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Maximize access at low cost by targeting densely populated areas

Post office

Bus station

Schools

Train station

Townships

Increase engagement at hubs by offering free resources

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Schools

• Offer free online courses in health, science, math, history
• Sponsor computers
• Organize adult education classes

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Townships

• Offer movie nights/ TV shows as community events sponsored by FB
• Allow video calls to family members
• Support government initiative on health, hygiene and education. Example - Clean India Campaign

Train/ bus stations and post offices

• Offer news updates, travel schedules, weather information
• Allow easy booking of trains, buses and hotels
• Encourage use of WhatsApp for money transfer
• Offer package tracking service by integration with local postal service

Intranet

• Set up intranet that allows users to share voice, video and photos without using data
• Create dedicated applications for the intranet

Business model template

• Market entrant may provide advance to local operators and infrastructure companies to cover initial investments
• Market entrant recovers advance using a revenue share model with Telcos and local entrepreneurs
• Service framework defines role of each party and is used to define revenue share
• Tiered revenue share model might be used to hold both parties accountable to hit access goals
• Market entrant uses Wi-Fi platform to track usage and offer additional services/ information (news, weather, health, education) for free
• Market entrant may provide hardware and software at a subsidy to infrastructure providers
• Both parties track adoption and make intervention as per detailed intervention plan
• No exclusive relationship. Market entrant can partner with multiple Telcos
• Long term contract to allow full implementation and assessment of project
• All parties follow strict user data sharing protocol specific to the country

Thank you