Mobile Usage at the Base of the Pyramid in Kenya December 2012
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Mobile Usage at the Base of the Pyramid in Kenya December 2012 An infoDev Publication prepared by iHub Research and Research Solutions Africa OFFICIAL DRAFT Mobile Usage at the Base of the Pyramid in Kenya December 2012 OFFICIAL DRAFT 2 The report “Mobile Usage at the Base of the Pyramid in Kenya” is available at http://www.infodev.org/en/TopicPublications.34.html. © 2012 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved This work is a product of the staff of The World Bank with external contributions. Note that The World Bank does not necessarily own each component of the content included in the work. The World Bank therefore does not warrant that the use of the content contained in the work will not infringe on the rights of third parties. The risk of claims resulting from such infringement rests solely with you. 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Under the Creative Commons Attribution license, you are free to copy, distribute, transmit, and adapt this work, including for commercial purposes, under the following conditions: Attribution—Please cite the work as follows: Mobile Usage at the Base of the Pyramid in Kenya; website: http://www.infodev.org/en/TopicPublications.34.html. License: Creative Commons Attribution CC BY 3.0 Translations—If you create a translation of this work, please add the following disclaimer along with the attribution. This translation was not created by The World Bank and should not be considered an official World Bank translation. The World Bank shall not be liable for any content or error in this translation. All queries on rights and licenses should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW,Washington, DC 20433, USA; fax: 202-522-2625; e-mail: [email protected]. Cover photographs: iHub Cover design: infoDev 3 About infoDev infoDev is a global partnership program within the World Bank Group which works at the intersection of innovation, technology, and entrepreneurship to create opportunities for inclusive growth, job creation and poverty reduction. infoDev assists governments and technology-focused small and medium sized enterprises (SMEs) to grow jobs, improve capacity and skills, increase access to finance and markets, ensure the appropriate enabling policy and regulatory environment for business to flourish, and test out innovative solu- tions in developing country markets. We do this in partnership with other development programs, with World Bank/IFC colleagues, and with stakeholders from the public, private and civil society sectors in the developing world. For more information visit www.infoDev.org or send an email to infoDev@worldbank. 4 Acknowledgements This case study of Mobile usage at the Base of the Pyramid in Kenya has been commissioned by infoDev, a global partnership program within the World Bank, and conducted by iHub Research and Research Solutions Africa. It is part of a broader research project looking at how the poorest of the world's citizen use mobile phones to enhance their lifestyles and livelihoods. A comparator study for South Africa has been commissioned and other studies are planned as part of infoDev's Mobile Innovation program. The Task Team would like to thank Ilari Lindy (World Bank Institute), Kevin Donovan (University of Cape Town), Toni Eliasz and Nicolas Friederici (infoDev), Monica Kerretts Makau (Communications Commission of Kenya), Angela Crandall (iHub Research) and Rohan Samarajiva (LIRNEasia), for their assistance throughout the project. The authors of the report are Angela Crandall, Albert Otieno, Leonida Mutuku and Jessica Colaço (iHub Research) and Jasper Grosskurth and Peter Otieno (Research Solutions Africa). The Task Team Leader on behalf of InfoDev is Tim Kelly and the Task Manag- er is Maja Andjelkovic. The authors would to thank the peer reviewers for the project, Kevin Donovan (University of Cape Town), Toni Eliasz and Nicolas Frie- derici (infoDev), Monica Kerretts (Communications Commission of Kenya) and Rohan Samarajiva (LIRNEasia), for their editorial review and the Research ICT Africa team, notably Christophe Stork and Alison Gillwald, for providing additional household data and for their insights. The research program has benefitted from funding from UKaid and the Ministry for Foreign Affairs of the Government of Fin- land. For further information contact: iHub Research Research Solutions Ltd. 2nd Floor Bishop Magua Center, off Ngong Road PO Box 16832 Nairobi, Kenya 00620 Nairobi, Kenya www.research.ihub.co.ke www.researchsolutionsafrica.com All dollar amounts are US dollars unless otherwise specified. 5 Table of Contents Executive Summary 9 CHAPTER I 11 Introduction 11 1.1 Background 11 1.2 Methodology 12 1.2.1 Base of the Pyramid 13 1.2.2 Sample Size 14 1.2.3 Face-to-Face Interviews with BoP Individuals 15 Age distribution 15 Gender 17 Education level 17 Employment status 17 1.2.3.1 Diaries with BoP individuals 18 1.2.4 Focus Group Discussions (FGDs) with BoP communities 18 1.2.5 Face-To-Face Interviews With Existing Mobile Application Developers 19 1.2.6 Key Informant Interviews 19 1.2.7 Analysis and Reporting 20 CHAPTER II 21 Key Findings 21 2.1 General Usage of Mobile Phones 21 2.1.1 Acquiring of Phone 21 2.1.2 Mobile Service Providers 25 2.1.3 Phone Functionalities 28 2.1.4 Phone Functionality Usage 30 Mobile Internet Usage 31 Time for Making Calls 34 SMS 35 Other Phone Functions 36 2.2 Mobile Money Making Potential 37 2.3 Phone Expenses 39 2.3.1 Sacrificing 39 2.3.2 Mobile Services Spending Habits 41 2.3.3 Charging mobile phone battery 42 2.4 Mobile Phone Services, Products, and Applications 43 2.4.1 Awareness of Applications and Services Amongst BoP 46 2.4.2 Use of Mobile Applications and Services by the BoP 47 M-Kesho 48 2.4.3 Mobile Applications Uptake 49 Creative Marketing Strategy 49 Memorization of USSD and SMS short-codes 49 Case Study: MPrep 50 2.4.4 Mobile Services Desired 51 Case Study: MFarm 50 2.5 Impact of Mobile Phones on Kenyan BoP 53 2.5.1 Decrease In Travel Costs And Time 54 2.5.2 Social and Work-related Communication and Relationships 55 6 2.5.3 Lost Money Due To Lack of Technical Know-How 55 2.5.4 Security Concerns And Conning 55 2.5.5 Sacrificing (especially of food stuffs) 56 CHAPTER III 57 Opportunities and Challenges in the Kenya Mobile Eco-system 57 3.1 Developers 57 3.1.1 User Needs 57 3.2.2 Ponder your platform choice and partnerships 58 3.2 Government 59 3.2.1 Promote cooperation between the various stakeholders 59 3.2.2 Become a key customer 59 3.3 Donors and Investors 59 3.4 MNOs and Phone Manufacturers 60 CHAPTER IV 61 Conclusions 61 General Usage 61 Mobile Money Making Potential 61 Phone Expenses 62 Mobile Phone Applications 62 Impact of Mobile Phones 62 Platforms and Partners 62 Future Developments 62 LIST OF TABLES Table 1. Definitions and Concepts of M-apps ecosystem 15 Table 2. Highest level of education achieved by survey respondents 17 Table 3. Current employment status of survey respondents 18 Table 4. Interviews conducted with start-up mobile application developers 19 Table 5. Key informant interviews conducted in September 2012 19 Table 6. Method of acquisition of current phone 23 Table 7. Reasons for multiple phone ownership 24 Table 8. Phone sharing amongst survey respondents 24 Table 9. Network usage by survey participants 26 Table 10. Numbers of network providers used 26 Table 11. Cross tabulation between network chosen and reason for choosing network 27 Table 12. Reasons given for choosing a particular mobile network operator service 28 Table 13. Mobile devices and their capabilities 28 Table 14. Count of Phone Functionalities based on Survey Respondents 30 Table 15. Usage of Phone Functionalities and Services by survey respondents compared to nationally representative data 31 Table 16. Daily Average Mobile Usage based on diary respondents 33 Table 17. Total count of calls recorded over the four-day period of the diary study 35 Table 18. Average duration of calls by time of day based on diary respondents 35 Table 19. Count of respondents sending SMS per period 35 Table 20. Money made through the use of mobile phones based on survey respondents 37 Table 21. Activities which made money through the mobile phone 37 Table 22. Cross-tabulation between the activity conducted and money amount received based on survey respondents 38 7 Table 23. Source of money for reloading airtime on mobile phone 39 Table 24. Foregoing of expenses in order to use mobile phone 39 Table 25. Expenditures forwent and approximate frequency 40 Table 26. Daily spending on mobile services 41 Table 27. Mobile phone activity and average associated cost based on diary respondents 42 Table 28.