The Broadband Effect Enhancing Market-Based Solutions for the Base of the Pyramid

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The Broadband Effect Enhancing Market-Based Solutions for the Base of the Pyramid The Broadband Effect Enhancing Market-based Solutions for the Base of the Pyramid Prepared by Hystra for Opportunities for the Majority at the Inter-American Development Bank Authors Disclaimer Olivier Kayser, Hystra Managing Director Hystra is the author of this report. The opinions expressed in this publication are those of the authors and do not necessarily reflect the views of the Inter- Lucie Klarsfeld, Hystra Project Manager American Development Bank, its Board of Directors, or the countries they Simon Brossard, Hystra Consultant represent. Contributors Image credits Unless otherwise noted, all images were provided by case study teams and are Inès Mazas, Hystra Consultant copyrighted by the providing organizations. The following images are reproduced Caroline Nehls, Hystra Consultant from Wikimedia Commons under Creative Commons license with the following attributions: Larry.vt.300 (p25), Gustavo Benítez (p26). IDB Internal Reviewers María Lourdes Gallardo de Montoya (Team Leader), Mónica Copyright The unauthorized commercial use of Bank documents is prohibited and may be Fernández Álvarez de Lugo, Antonio García Zaballos, Félix punishable under the Bank’s policies and/or applicable laws. González, Enrique Iglesias, Nathaniel Jackson, Dana Martin, Copyright © 2014 Inter-American Development Bank. All rights reserved; may Enrique Moreno de Acevedo, Lina Salazar Ortegón and Ana be freely reproduced for any non-commercial purpose. Silva. Cataloging-in-Publication data provided by the Inter-American Development Bank Felipe Herrera Library The IDB team would like to thank the following individuals for Kayser, Olivier. their contributions: Rafael Anta, Johnny Jirón, Jorge Godoy, The broadband effect: enhancing market-based solutions for the base of the Daniel Granada, Francisco Hernández, Sergio Juarez, Claudia pyramid / Olivier Kayser, Lucie Klarsfeld, Simon Brossard. p. cm. Martínez, Elizabeth Mondl, Mario Torres, and Eunjiin Kim. 1. Business enterprises—Technological innovations. 2. Broadband communication systems—Social aspects. 3. Broadband communication Please direct queries to: [email protected]. systems—Economic aspects. 4. Telecommunication policy. I. Klarsfeld, Lucie. II. Brossard, Simon. III. Inter-American Development Bank. Opportunities for the Design Majority Sector. IV. Title. TRUTHstudio (www.truthstudio.com) IDB-BR-144 About the IDB About Hystra Opportunities for the Majority Hystra is a global consulting firm that works with business The Opportunities for the Majority (OMJ) initiative promotes and social sector pioneers to design and implement BOP and finances market-based, commercially viable business business approaches that are profitable and scalable, and that models that engage private sector companies, local mitigate social and environmental problems. In order to “be the governments, and communities in the development and change we want to see in the world,” Hystra itself is a hybrid delivery of quality goods and services for the base of the consulting firm – a for-profit tool for social change. Since its pyramid (BOP) in Latin America and the Caribbean. creation in 2009, Hystra has conducted in-depth sectoral studies on clean energy, safe water, affordable housing, Created in 2007 as part of the Private Sector Group of the and ICT-based business models for development; analyzed Inter-American Development Bank (IDB), OMJ provides winning marketing strategies in micro distribution; designed financing to small, medium-size, and large companies, financial new models to serve low-income communities with home institutions, and funds that support the development or improvement packages, irrigation pumps, solar lights, safe expansion of business models that serve BOP markets. OMJ water, and improved nutrition products; prepared business has supported BOP business models in 18 countries of the plans for pioneering BOP businesses; and supported the region in different sectors such as health, education, housing, creation of a social impact fund. and financial services, among others. Hystra has served over 40 clients from 17 countries, The Broadband Initiative supporting business models that change lives in low-income The Inter-American Development Bank, through its communities across the globe. Clients have included large Institutional Capacity of the State Division, offers operational corporations, international aid agencies, foundations, and instruments and knowledge products to support its clients, governments. with the aim of accelerating broadband access and promoting broadband use through public policies that foster the implementation of broadband development plans and digitalization strategies, strategic regulations, infrastructure, and human capital in the public and private sectors. The Broadband Effect Enhancing Market-based Solutions for the Base of the Pyramid Prepared by Hystra for Opportunities for the Majority at the Inter-American Development Bank Contents List of Acronyms ....................................................................................................................................................................................iii Acknowledgements .............................................................................................................................................................................. iv Foreword .................................................................................................................................................................................................. 1 Executive Summary ............................................................................................................................................................................... 2 Three Market-based, Broadband-enabled Business Models ................................................................................................................................................................ 3 Key Success Factors of Each Model ........................................................................................................................................................................................................................ 4 Socio-economic Benefits of Broadband for the BOP ................................................................................................................................................................................ 5 Lessons Learned for Policymakers: Promoting Broadband-enabled Businesses at the BOP ................................................................................. 6 Chapter 1 Introduction .......................................................................................................................................................................... 7 Context ............................................................................................................................................................................................................................................................................................... 7 Scope and Terminology ........................................................................................................................................................................................................................................................ 7 Methodology .................................................................................................................................................................................................................................................................................. 9 Limitations and Caveats ....................................................................................................................................................................................................................................................... 9 Chapter 2 Three Business Models .................................................................................................................................................10 Overall ..............................................................................................................................................................................................................................................................................................10 Geography ....................................................................................................................................................................................................................................................................................11 Sector ...............................................................................................................................................................................................................................................................................................11 Business Models .....................................................................................................................................................................................................................................................................12 Chapter 3 Key Success Factors .......................................................................................................................................................14 Shared Success Factors ...................................................................................................................................................................................................................................................14
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