Mobile Policy Case Studies Policy in practice

MarchMarch 20201515 This book belongs to: MAR 2015

Real-world initiatives and outcomes

Solutions to key regulatory challenges

Insights into the latest industry trends

Published by GSMA ISBN 978-0-9931653 Copyright © 2015 GSMA Mobile Initiatives

Connected Living Foreword mAutomotive Telefónica and Tesla team up for the connected car 04 mHealth Hello Doctor delivers health advice via mobile phone in South Africa 09 The advance of mobile innovation has been so swift and steady that policymakers Smart Cities NFC improves the efficiency of Dubai's transport system 14 and industry regulators must continually evaluate regulatory policy to keep up with eWaste Latin America's operators create new wealth from e-waste 18 the sector. Personal Data New technologies, such as near-field communications in smartphones, are Personal Data Simplified birth registration via mobile phone in rural Uganda 23 transforming how city dwellers pay for public transport. Mobile identity solutions Personal Data Using the mobile SIM to authenticate identity in Switzerland 27 are being implemented to create new levels of security and convenience for Digital Commerce online transactions. Connected cars are offering improved safety, services and NFC A strong industry alliance drives NFC adoption in South Korea 32 entertainment for drivers and their passengers. And in many countries, the original NFC An innovative NFC wallet supports payments and loyalty rewards in South Korea 36 2G spectrum licences are expiring, raising issues about technology neutrality and Mobile Money Reducing financial exclusion in Tanzania 41 how to manage licence renewal. Mobile Money Pragmatic regulatory approach delivers results in the DRC 46 Mobile for Development Although market intervention is often unnecessary to ensure there is sufficient Women and Mobile Turkey’s businesswomen benefit from mobile-driven social lending 51 variety, safety and quality of mobile products and services, many of these advances Disaster Response Dealing with disaster in the Philippines 55 do raise regulatory questions. Disaster Response A highly robust disaster response system helps save lives in Turkey 59 Green Power M2M and mobile money support micro-financing for solar systems in Kenya 64 In addition to setting the rules for mobile operators, it is important that mAgriculture Mobile helps India's farmers increase crop yields 69 governments also play an enabling role by pursuing visionary policies that support the establishment of mobile solutions and services in health, education and Business Environment ‘mobile money’, for example. And by adopting mobile solutions to provide better government services, the public sector can help amplify the benefits of mobile connectivity, expand the mobile economy, create jobs and reward innovation. Taxation Taxes on international mobile calls threaten long-term growth in Africa 75 USF Transparency helps Colombia make the most of its USF 79 This volume is a companion to the GSMA Mobile Policy Handbook — our first Environment Greener energy reduces network costs in Pakistan 83 collection of brief, incisive and illuminating case studies about regulatory policy, Taxation Brazil boosts M2M take-up via tax cuts 88 public-private collaboration and industry initiatives that align with government objectives. These real-world cases describe policy choices and public-private Spectrum Management and Licensing partnerships that are shaping how the industry delivers services to citizens. We hope you will find these stories useful and interesting, and that they spark new ideas about how to approach similar initiatives or regulatory challenges. Change of Use Reusing 2G spectrum to deliver mobile broadband in Africa 93 Spectrum Harmonisation How the APT700 band plan is helping connect the unconnected 98

Consumer Protection

Tom Phillips Illegal Content Industry alliance leads in the fight against child sexual abuse content 103 Chief Regulatory Officer, GSMA EMF and Health Arbitrary EMF limits threaten 4G roll-out in Europe 108 mAutomotive Mobile Initiatives

Europe and the US rev up M2M Strategic Challenge automotive innovation to drive richer M2M may not yet have entered the broader public consciousness, but by 2015 consumer experiences it is predicted that there will be over six billion ‘machines’ connected to the internet. As it gains traction, M2M will be increasingly used in new sectors and for new applications. The automotive industry is one of the sectors Policy Goal enthusiastically embracing M2M technologies, as in-vehicle connectivity promises a host of commercial and lifestyle benefts. Mobile technologies connect people, but also machines. In the automotive industry, wireless connectivity for vehicles can help deliver real-time vehicle Today, the industry generates over $20 billion globally but, given the right analytics, live trafc alerts and mapping data, as well as faster response times business and regulatory environment, it is estimated that this could grow by during emergencies. As a result, innovation in machine-to-machine (M2M) over $400 billion within a decade. As with any disruptive technology, society technologies for the automotive sector is creating a launch pad for new must be prepared for change. Seizing both the opportunities and challenges businesses, high-tech jobs and social benefts. of M2M demands close cooperation between governments, regulators, mobile operators and the automotive industry. Action Driven by innovation ▪ The SIM also allows the owner to Mobile operators and the automotive industry are coming together to create remotely lock or unlock the car, The GSMA’s Mobile World Congress innovative vehicles that ofer whole new driving experiences. European mobile fash the lights or sound the horn broke new ground in 2014 by network operator Telefónica has partnered with trailblazing US electric vehicle to make it easier to locate in a car including a stand that would more manufacturer Tesla Motors to create vehicles that not only include pioneering, park, and even adjust the level of usually be found at the International electric engines, but also innovative mobile technologies. air conditioning. Motor Show. Sitting alongside displays of new handsets, the ▪ Tesla can remotely solve problems Enablers Outcomes stand showcased the pioneering that may arise in the car, such as Model S sports car, the result of a electrical faults, and even inform the driver of possible failures ▪ Regulatory incentives to encourage ▪ A new innovation sector, growing in tie-up between Spanish operator before they become serious, collaboration in the mobile and value globally from $22 billion in 2012 Telefónica and US car manufacturer helping to improve safety and automotive sectors to an estimated $422 billion in 20221 Tesla Motors. At the cutting edge of design and zero-emission engine reduce repair bills. ▪ Flexible approaches to spectrum ▪ M2M capabilities in 90 per cent of use, allowing the merging of mobile all new cars by 2020 technology, innovation runs deep in ▪ Drivers can even locate the car the Model S, as it is fundamentally and automotive technologies ▪ 1.8 billion M2M connected vehicles remotely using their smartphone a new kind of car, ofering a new ▪ Regulation that encourages by the end of the decade (adding an additional layer of type of driving experience: security), receive diagnostic innovation, while respecting ▪ Safer, richer and more efficient driving ▪ A slotted SIM card provides the information and check fuel and privacy and personal freedoms experiences for consumers; significant benefits for the environment; and Tesla Model S with internet connectivity, battery levels. allowing it to access services such improved commercial opportunities for the automotive sector as online mapping and digital radio.

4 5 mAutomotive Mobile Initiatives

Current M2M technologies ofer a are important considerations in host of additional advantages: developing M2M automotive ▪ Congestion warnings, ofering live technologies, but policy and information on trafc fows and the regulation are critical issues too. severity of trafc jams In Europe, for example, the imminent ▪ Access to games and on-demand music 2G switch-of will have an impact, opening up the possibility that ▪ Access to remote computers 2G-based M2M systems will become and servers obsolete overnight. This has the ▪ Better location services, ofering potential to undermine consumer everything from suggestions on and business confdence in M2M, as restaurants to visit to a variety expensive in-car functions suddenly of route options become redundant. Clearly this is something that could have damaging Making it happen — bringing ramifcations, as it could potentially industries, technologies and discourage both M2M investment and the creation of new businesses policy together ‘piggy-backing’ on in-car platforms, This was no ordinary project, as such as apps and licensed services. it involved bringing together two Get this right, however, and in just a diferent companies from two few years M2M could herald massive diferent continents and two very changes in the ways consumers and diferent industries. Perhaps the businesses interact with their vehicles: most testing challenge was merging ▪ Insurance costs could potentially mobile and automotive technologies, be directly related to actual on-road which follow markedly diferent behaviour. This would reward development and product lifecycles. good drivers and penalise bad Clearly, future-proofng and ones, helping to encourage better allowing for retrospective upgrades driving and reduce accidents.

"As we accelerate our transformation into a digital telco, we see lots of opportunities to empower consumers. Connected cars that provide drivers with more information and a better and safer driving experience is a perfect example of this.”

Peter Rampling, Managing Director Digital, Telefónica Germany

6 7 mAutomotive mHealth Mobile Initiatives

▪ Emergency response systems, It is also important to note that Mobile health services ensure that such as Europe’s eCall and connected vehicles have the potential Russia’s ERA-GLONASS, where to deliver less desirable outcomes. ‘prevention is better than cure’ in the car immediately connects Cars have long been a symbol of South Africa and Indonesia with a nearby emergency centre personal freedom, and the ability to to request assistance in the pinpoint a car’s location or to control event of an accident. Even if the its systems remotely, for example, has Policy Goal vehicle’s occupants are unable clear safety and privacy implications. to speak, emergency services are Close collaboration between industry One of the most powerful applications of mobile network connectivity is in and regulators will ensure that automatically despatched as the the feld of healthcare. Mobile platforms create the opportunity for better, innovation is encouraged, but also more consistent and more efcient healthcare provision. By increasing access car passes on its exact location — managed responsibly so as not to to health services, mobile connectivity empowers individuals to manage saving time and potentially lives. encroach on personal freedoms. their own well-being more efectively — even if they live far away from their ▪ Connected vehicle feets that nearest health facility. As new standards, such as LTE, provide real-time data such as and ever-more innovative M2M load being carried, current applications become available, Action position and fuel level — policymakers, regulators and the increasing the efciency of each M2M sector need to work together Hello Doctor, a mobile-based health platform, was launched in South Africa and every journey to cut the closely. In so doing, they will in 2010. Since its inception, the service has proved efective in the delivery of number of vehicles, and time ensure that connected vehicles are preventative healthcare advice and support to communities where medical spent, on the road. As well as here to stay, driving lasting social, services may be difcult to access. The GSMA mHealth programme engaged delivering greater cost efciency, environmental and economic benefts. with the Hello Doctor platform in 2012 with the aim of helping it develop such feets would also ofer partnerships with mobile network operators and map areas of strategic signifcant environmental benefts. opportunity. As a result, Hello Doctor now has partnership agreements with operators across Africa and Asia.

1 Telefonica/Machina Connected Car Industry Report - P9: http://www.advancedmobilityproject. org/wp-content/uploads/2014/04/telefonica_digital_connected_car_report_english.pdf Enablers Outcomes

▪ Ability of operators to offer instant reach ▪ Over 600,000 users across all and scale to the mHealth providers they Hello Doctor platforms partner with ▪ Health advice at no, very low and low ▪ Willingness of stakeholders to work together cost — depending on need to identify opportunities, challenges and ▪ Services accessible via a variety of solutions for maximising the reach and mobile channels, including mobile- effectiveness of mobile health platforms optimised websites and smartphone ▪ Need for policymakers to remove apps, to achieve the broadest reach regulatory barriers to mHealth services

8 9 mHealth Mobile Initiatives

Strategic Challenge or access the latest healthcare advice provide access and reach that 24 hours a day, seven days a week, other channels cannot match. while also ofering advice on how Healthcare systems around the world are under ever-greater strain as they are to follow a healthier lifestyle. Making it happen — asked to do more with less. The main issues are the cost of delivering healthcare services and the level of access to, and quality of, those essential services. It is a ‘freemium’ business model healthy cooperation for that takes into account both the cooperative health One way that health providers are actively trying to address the increasing needs of users and their economic burden on health systems is by focusing on preventative care. This covers Hello Doctor could not have achieved situation: general, healthy living prevention of disease and severe illness as well as actively trying to reduce this success without cooperation advice is provided for free via re-admission levels to healthcare facilities (e.g., hospitals) and other critical between operators, healthcare an app; very low cost Q&A text intervention points. providers and the GSMA. consultations are available (typically To this end, they are actively encouraging people to do more to help for less than the price of a box of In delivering Hello Doctor: themselves. As many conditions can be treated successfully before they matches); and in-depth telephone ▪ Industry bodies, communications become serious, for example, they are targeting earlier intervention. This medical consultations are charged companies and healthcare allows healthcare services to reduce the incidence of avoidable health at less than $4. It is a service that providers are working together to problems, improve efciency, and potentially save more lives. The challenge brings peace of mind to many optimise the benefts of mHealth. is to deliver these preventative medical measures to individuals and thousands of people for whom a ▪ Operators and healthcare communities that may face geographic or economic barriers to access. doctor is traditionally inaccessible providers are creating services — due to cost, geography or both. The GSMA Mobile for Development mHealth Programme currently focuses that are accessible via a variety on 11 countries in sub-Saharan Africa and works with GSMA mobile operator Hello Doctor has proved so popular of mobile channels, including members, governments and development stakeholders to create sustainable that it is now spreading throughout mobile-optimised websites and mHealth services that can help address these issues. It supports operators Africa and Indonesia, led by operators smartphone apps, so they can reach and their partners in launching these services and advocates the integration Vodacom, MTN and Telkomsel. These the broadest range of consumers. of mHealth into health systems in a more scalable and sustainable way. three networks have a combined ▪ Patients are benefting from more subscriber base of around 350 million convenient access to healthcare people and as more networks join, on expensive medical interventions, advice due to the true cross-platform Reaching out — prevention the reach of the service is growing and as a result reduce the strain on nature of the service, which ties can be the best medicine rapidly. This clearly highlights healthcare services. The problem together mobile apps, websites and how mobile health platforms can There is a growing body of has been that the most vulnerable — evidence that certain mHealth often people living in remote areas or interventions can have a positive those lower down the economic scale “MTN is continually looking at ways to brighten impact when it comes to changing — have been the hardest to reach. the lives of customers through innovative and relevant health behaviours, especially in In 2010, the Hello Doctor service mobile solutions. We are excited by the partnership areas such as increased adherence was launched in South Africa. One with Hello Doctor as the service brings essential to antiretroviral therapy, improved of the country’s frst mobile-based healthcare information to our customers’ fngertips.” diabetes control and smoking health platforms, Hello Doctor gives cessation1. These interventions can users the chance to chat to a doctor Pieter Verkade, Group Chief Commercial Ofcer, MTN help people become less dependent

10 11 mHealth Mobile Initiatives

social media (Facebook pages, for the communications side tend to example) for maximum reach. believe that market competition can produce innovative solutions to ▪ Medical professionals have help fght common medical issues. the opportunity to reach much greater numbers of people than These regulatory pressures mean previously possible. For example, that Hello Doctor has had to clear in South Africa, where the service a number of hurdles in order to currently has just over 100 doctors realise its current level of success. trained and on-call, it is serving Nevertheless, this also means over 600,000 users. Similarly, in it provides a strong illustration Indonesia, where Hello Doctor of what can be achieved when launched in March 2014, an initial mHealth service providers 50 trained doctors will rise to more work closely with operators and than 500, providing capacity to industry groups to deliver on serve more than 10 million people. wider public health objectives.

The regulatory environment in The service is already helping large the markets where Hello Doctor populations access the health advice is currently operating has not they and their families need, while been particularly enabling, and preventative healthcare advice can in South Africa regulators have potentially lead to a reduction in actually created barriers to the avoidable health problems, especially implementation of the service. among poorer populations. In the These regulatory struggles are longer term, there is a possibility that symbolic of a clash between two these types of services could lead to cultures. Those on the healthcare substantial savings in the provision side favour a conservative, safety of national healthcare services. frst approach, while those on

1 http://www.plosmedicine.org/article/info%3Adoi%2F10.1371%2Fjournal.pmed.1001362

12 13 Smart Cities Mobile Initiatives

Dubai opts for NFC payments Strategic Challenge to provide passengers In 2008, for the frst time, more people lived inside urban centres than outside with seamless city transport them, and this trend is set to continue with the number of city dwellers expected to reach around 5 billion by the 2030s1. As cities become bigger and more crowded, they also become more complex to manage. One of the most pressing challenges Policy Goal for national and metropolitan governments is providing efective transportation systems to carry people and goods across densely populated areas. Greater numbers of people are moving to cities, attracted by the abundant economic and social opportunities they ofer. As cities grow, they become Transport is clearly an economic and social issue: the cities that succeed, by ever more complex, and managing them efectively is a pressing issue for attracting new businesses and skilled workforces, will be those that can move governments. Mobile technologies deliver simplicity from this complexity people quickly, easily and efciently. through, for example, their ability to integrate with transportation systems to speed up fare payments and ease travel bottlenecks. Integrated transportation be moved into and around the city for efficient city living efciently and the transportation Action system needs to contribute to, not Dubai, one of the world’s fastest detract from, residents’ quality of life. growing cities, has a strong In 2013, the government of the United Arab Emirates (UAE) and mobile The RTA has worked with UAE-based commitment to maintaining an network operators collaborated to create a mobile-based transport ticketing mobile operators du and Etisalat on efcient transport network. The system. Passengers simply tap their mobile device against a reader to buy creating a more efective payment Roads and Transport Authority (RTA) a ticket. It eliminates ticket queues, makes travelling on the metro easier, system, launching the Smart Nol was established by the government removes the need for a separate and environmentally damaging plastic travel service in 2013. Using Near Field in 2005 and is responsible for both card and provides transport operators with real-time data for more efective Communications (NFC) technologies, public transport and the road planning and provision. it allows passengers to open ticket network in the Emirate of Dubai, barriers simply by tapping an as well as between Dubai and enabled mobile handset against a Enablers Outcomes the other emirates in the UAE. reader. Credit is stored on a virtual The RTA aims to increase the Smart Nol account hosted on the ▪ A single standard, to ensure all enabled ▪ A mobile-based transport ticketing share of journeys made via public SIM card inside their handset, rather handsets work with the payment systems system able to handle 440 million passenger journeys a year, integrating transportation in Dubai from 13 per than on a separate plastic card. ▪ Forward-thinking transport planning cent in 2013 to 20 per cent by 20202. and technology adoption, to anticipate Dubai’s road, rail and water networks Smart Nol delivers a seamless To help achieve this, it is creating an changes in populations and behaviours ▪ Contribution to the government’s goal public transport experience, integrated mass transit infrastructure that 20 per cent of all journeys be working on buses, the metro, taxis ▪ Government and mobile operator to ensure that policies anticipate made via public transport by 2020 and water taxis. Passengers no collaboration, to identify and deliver the and meet the population’s transport longer have to queue for tickets, potential of mobile connected cities needs. This is important both have the correct change or juggle economically and socially: people diferent payment systems for need to travel to and from work with diferent modes of transport. the minimum of fuss, goods must

14 15 Smart Cities Mobile Initiatives

The metro’s 75 km of track carried In Dubai, however, the RTA, du and over 33 million people in Q1 2013 Etisalat initially ran a pilot of the alone, and by improving ease of travel Smart Nol service to allow issues to it is likely to attract yet more users. be identifed before going live. For In addition, the RTA can now collect both operators, choosing the right SIM real-time data on public transport card supplier was a critical success use, informing its day-to-day travel factor. Both also had to overcome provision and identifying long-term inconsistent implementations of trends for efective future planning. the NFC standard by handset manufacturers. Actions included Making it happen — common extensive integration testing and the standards for the greatest returns development of optimised applications for diferent types of smartphone. The advantages of using mobile phones for public transport ticketing Both Etisalat and du see the Smart Nol are compelling, demonstrated by service as part of a wide range of smart a report from Juniper Research3 city services that are underpinned that predicts smartphone usage by mobile connectivity. Khaled El will triple by 2018 and account for Khouly, Chief Marketing Ofcer of the delivery of 16 billion transport Etisalat, said: “The launch of the latest and event tickets annually. NFC technology solution will be the beginning of a new era in how we The research, however, also empower our customers as well as uncovers a potential obstacle to cities service providers in the country. ” reaping the benefts of smartphone transactions, suggesting that a lack of implementation standards will hinder interoperability.

1 http://www.unfpa.org/pds/urbanization.htm 2 https://www.zawya.com/story/440m_passengers_used_public_transport_in_Dubai_in_2013- ZAWYA20140222074215/ 3 http://www.juniperresearch.com/viewpressrelease.php?pr=388

“We believe our role goes beyond providing telecom services — to be a catalyst for society’s advancement, through our involvement in projects such as this, which revolutionise the public transport experience and support the Dubai Smart Government vision.”

Fahad Al Hassawi, Chief Commercial Ofcer, du

16 17 e-waste Mobile Initiatives

Latin America’s mobile Strategic Challenge operators are recycling e-waste Electronic waste is on the rise. According to the United Nations University, in into economic opportunity 2012 the world generated 48,894 kilotons (kt) of e-waste and, by 2015, estimates suggest this will have increased to more than 57,000kt. Latin America’s e-waste levels will reach close to 5,000kt by that date, over eight per cent of the global Policy Goal total. Mobile handsets and network equipment form part of this waste stream, and their disposal presents both challenges and opportunities. As mobile handsets and other electronic devices proliferate, the challenges of disposing of end-of-life devices and network equipment grow. Electronic waste For example, when dealing with hundreds of thousands, or even millions, of — also known as Waste Electrical and Electronic Equipment (WEEE) — obsolete handsets, they become a valuable source of often scarce commodities, is the fastest-growing waste stream in the world, and has the potential to cause such as gold, aluminium and platinum. On the other side of the equation, signifcant environmental harm if not handled properly. To help negate this they also contain materials that, in large quantities, can be hazardous to the threat mobile network operators are working together to develop programmes environment and demand careful handling. that encourage responsible recycling and disposal of obsolete network Despite the importance of the issue, some regions lack robust e-waste equipment and mobile devices. frameworks. As a result, there is a need for regulators — with input from operators, mobile device manufacturers and the waste industry — to develop Action stronger extended producer responsibility regulations that promote safe disposal and responsible recycling of devices and equipment. In Latin America, where e-waste regulation is at an early stage, operators such as Telefónica Movistar Ecuador and Claro Perú are taking the lead on a range Recycling schemes turn anticipate regulatory requirements, of e-waste initiatives. The aim is not only to reduce the impact of waste mobile rather than respond to them. devices and network equipment, but to generate value from what was once just e-waste into new wealth The region’s operators have been thrown away. These operators are also now looking to work with governments By 2017, it is estimated that more ahead of the e-waste curve for many to develop stronger approaches to e-waste regulation that will deliver even than 58 per cent of the Latin years, with Telefónica Movistar more signifcant environmental and economic benefts. American population (around Ecuador and Claro Perú voluntarily 374 million people1) will use a establishing recycling schemes mobile phone. Market intelligence Enablers Outcomes and running public awareness company IDC expects the region’s campaigns between 2010 and 2013. smartphone shipments alone to ▪ Early stages of e-waste ▪ Metals reclaimed from used exceed 150 million in the same year2. Operators have also recognised the regulation in Latin America electronic devices potentially worth potential value of old handsets. as much as $21 billion a year As consumers buy new devices, ▪ Recycling infrastructure to extract valuable An old mobile phone can contain a however, what happens materials and process hazardous ones ▪ Consumer campaigns that bring treasure trove of recyclable materials, to those they replace? ▪ Proactive e-waste initiatives to encourage social and environmental rewards including plastics and precious greener design and disposal ▪ Mobile handsets saved from landfill In Latin America, it is a question metals. A ton of gold ore, for example used to make a range of products, from that is being answered by operators — mined at great environmental and new electronic devices to jewellery through proactive e-waste fnancial cost — contains just fve initiatives that have often needed to grams of gold, but a ton of readily

18 19 e-waste Mobile Initiatives

available, but outdated handsets, Brazil the operator Oi is investing Making it happen — unfortunately, governments have can contain as much as 400 grams. $10 million in fve recycling plants responsibility, commitment created rigid legal frameworks belonging to waste management without seeking input or consent Estimates suggest that if the metals specialist Descarte Certo. It has and consistency from the afected parties. used in electronic devices could be already collected 43,782 mobile extracted at the end of the lifecycle, Setting the pace on e-waste This has created some signifcant devices, batteries and chargers the market value would be around represents a major investment by issues. For example, most countries from Oi customers. Also in Brazil, $21 billion a year3. Recycled elements operators in their environmental, around the world accept the concept the combined eforts of operators from mobile devices can also be used sustainability and corporate of extended producer responsibility, TIM, Vivo and Oi meant 90.6 tons of to make everything from jewellery social responsibility programmes. which makes the manufacturer e-waste were collected in 2012 alone. to pet food containers. And yet, in It involves the creation of responsible for the entire lifecycle a country such as the US, close to Mobile operators have also taken very reverse logistics schemes for of the product, right up to how it is nine in 10 end up in landfll sites4. creative approaches to encouraging collecting, storing, categorising recycled. This type of requirement consumers to recycle their obsolete and disposing of e-waste, as incorporates comprehensive WEEE Early and far-sighted adoption of tech — in some cases ofering social well as investment in recycling management schemes and operators e-waste initiatives by operators rewards to improve recycling rates. plants and the establishment of are included in these schemes to in Latin America has resulted in In Uruguay, for example, when a reforestation programmes. ensure responsibility is balanced the region having many advanced person or institution gathers 25kg across all the parties involved in schemes in place. In Mexico, the In addition, mobile operators are of e-waste, operator Antel donates a the product’s lifecycle. However, national telecommunications forging ahead with awareness-raising wheelchair to a benefciary named the particular characteristics of association (ANATEL) encourages initiatives, both at the front and back by the collector. As part of another regulation in the Latin American operators to combine their eforts end of the mobile lifecycle. At the initiative in Panama, Telefónica market mean that operators have to to audit and improve the reverse design and manufacturing stage, for Movistar collected 44,500 obsolete assume the role of manufacturers for logistics needed to manage the example, operators are promoting pieces of mobile equipment and the purpose of WEEE compliance e-waste created by the industry. In International Telecommunication planted 52,000 trees in return. and as a result have been burdened 2013, Telefónica Movistar Ecuador Union (ITU) guidelines that with excess costs and obligations processed 112,321 obsolete mobile recommend new handsets be designed related to e-waste management. In phones, accessories, batteries and to be more easily and cheaply recycled efect, operators are being punished chargers from its users, while in and have a longer useful life; and that peripherals such as chargers are for taking a proactive e-waste stance. universally compatible. Operators 2: Infrastructure. This issue “Over the past two decades, the proliferation are also educating consumers on is compounded by an existing of technology and widespread adoption of the part they can play in ensuring recycling infrastructure that can’t electronic devices has led to an unprecedented their device is safely recycled. cope with the sheer volume of amount of electronic waste. The GSMA In Latin America, however, this mobile handsets that need to be is proud to see that mobile operators are commitment has left operators processed. According to Waste already working to address this issue in Latin at a two-fold disadvantage: Management World, for example, America, a region that will produce nearly a lack of capacity for coping with nine per cent of the world’s e-waste by 2015.” 1: Responsibility. Requirements solid waste management costs Brazil Sebastian Cabello, Head of GSMA Latin America for e-waste management in Latin around $13 billion a year. America are relatively new and,

20 21 e-waste Mobile Identity Mobile Initiatives

Also, most Latin American countries Ultimately, what’s needed is fairer Mobile birth registration in Uganda do not have the recycling plants regulation that promotes integrated needed to process hazardous e-waste management, encourages helps bring people living in rural materials such as mobile phone the creation of transparent audit communities closer to the government batteries — meaning they need processes and places equitable to be sent overseas for disposal. fnancial responsibility on all the parties involved. The best way to Policy Goal The particular characteristics achieve this is for governments of regulation in the Latin to initiate discussions with In most countries, proof of identity is a prerequisite for gaining access to American market mean that all stakeholders, including basic services, such as education and healthcare, or even for claiming rights operators have to assume the manufacturers, importers, service to an inheritance. In remote areas, however, poor communication between providers and the recycling industry, role of manufacturers for the local villages and administrative centres means obtaining something as as this is the path recommended fundamental as a birth certifcate is often a challenge. Thankfully, innovative purpose of WEEE compliance by a range of global institutions, use of mobile technology is now making it easier to extend the reach of and as a result have been including the ITU, the StEP government registration services to these areas. burdened with excess costs and Initiative, EMPA and RELAC. obligations related to e-waste management. In effect, operators The right regulatory environment Action are being punished for taking would not only encourage best Mobile network operator Uganda Telecom has developed the Vital Records a proactive e-waste stance. practices for reuse and recycling, but also bring signifcant economic System (VRS), which allows the safe and rapid transfer of birth registration advantages. According to the experts information from remote communities to central government. It is raising By taking a proactive approach from the e-Waste Academy, 320 registration rates in some of the country’s hardest to reach regions, ensuring to dealing with e-waste, the tons of gold and 7,500 tons of silver that these children are much less likely to have issues accessing government mobile industry in Latin America per year are required to produce services in the future. continues to deliver major social and electronic devices, such as mobile environmental benefts. However, phones and PCs, and if this material Enablers Outcomes these weaknesses in regulation could be efciently extracted from mean the industry is currently end of lifecycle devices, such as shouldering disproportionate ▪ Support from government for the creation ▪ Increase in birth registrations in the mobile phones, it would have a of a mobile-based birth registration system remotest areas from 25 to 80 per cent responsibility for processing e-waste. market value of $21 billion. ▪ Novel application of existing mobile ▪ Technology that works across 2G and 3G infrastructure to deliver low-cost access networks and with all mobile handsets 1 Article based on GSMA fgures: http://www.emarketer.com/Article/Latin-America-See-Steady- Growth-Mobile-Users-Connections-Through-2017/1010474 to a vital Ugandan government service ▪ Airtime stores act as official registration 2 http://www.idc.com/getdoc.jsp?containerId=prUS24461213 ▪ A flexible solution that recognises hubs, allowing citizens to access central 3 Figure quoted from EWA in ‘e-waste in Latin America — Exec Summary’: GSMA 2014. 4 http://www.electronicstakeback.com/wp-content/uploads/Facts_and_Figures_on_E-waste_and_ variations in local expertise and government services in local communities Recycling.pdf technology sophistication ▪ A sustainable model that delivers societal advantages and business benefits

22 23 Mobile Identity Mobile Initiatives

Strategic Challenge web-based registration portal — that can be printed at the hospital with connectivity delivered through or registration agent’s ofce — Uganda Telecom’s existing 3G typically, this whole process takes Figures from the World Bank and the Uganda Health Demographic Survey network. Data is transferred almost a single day. As an additional estimate that around 1.4 million children are born in Uganda every year, instantaneously, and it cuts the bonus, with digital records always but just 21 per cent of infants aged fve and below have had their births uncertainty about whether records accessible online, a lost paper birth ofcially registered1. will reach the national registration certifcate can be rapidly replaced. The lack of a birth certifcate can afect these children throughout their lives. ofce, which plagued the A key beneft of registration is the ability to prove identity, which in turn paper-based process in the past. Making it happen — mobile opens up access to services such as welfare, health and education. Ensuring technologies that turn To cover non-healthcare settings — that births are properly recorded is also essential in protecting citizens against where births take place in the home complexity into simplicity crimes that include human trafcking, child abuse and early marriage. In fact, or outside a hospital — SIM cards the importance of birth registration and proof of identity is so important that it VRS is designed to be adaptable to have been provided to a network of is enshrined within the UN Convention on the Rights of the Child2. a range of on-the-ground variables. registration agents (usually village To test whether the system would In Uganda and countries across sub-Saharan Africa, mobile operators are chiefs). The SIM is mapped to the work even in the most challenging working to apply mobile technologies in new ways to ensure a child’s right to registration agent’s name and circumstances, the pilot targeted an identity is respected, so children can beneft from all the opportunities this allows them to send information areas with the lowest registration brings in the future. on births from their mobile rates in the country. Even in these phone using an Unstructured hardest to reach regions, VRS drove In 2012, Uganda Telecom recognised Mobile boosts Uganda’s Supplementary Service Data (USSD) a rise in birth registrations from that its mobile infrastructure could birth registration rate application — which acts as a secure less than 25 per cent to over 80 per provide the secure links needed to gateway to a central database. cent. It is a system that doesn’t rely Uganda is the second most populous bring the right of an identity to all This information is then uploaded on expensive new technologies, landlocked nation on earth. of Uganda’s children. Working with to the same web-based registration but instead uses existing handsets As with many countries, government UNICEF and the Uganda Registration portal used by local hospitals. and networks in new ways to services in Uganda are concentrated Services Bureau, it has developed Receiving information from these overcome what was once considered in urban centres. However, with a mobile-based birth registration mobile sources, Uganda’s Registration to be a very difcult problem. a largely agricultural economy service known as the Vital Records Ofce then verifes the births and and a population spread across its System (VRS), rolling out a pilot For example, VRS relies on Uganda sends back a web-based certifcate 146,000 square miles, these services project that has already proved Telecom’s standard network can often be remote from the itself across much of the country. people who need to access them. VRS has been designed to work in As a result, birth registrations are both healthcare and non-healthcare “Before [VRS], it would take a month to register often complex and prone to delay. environments. For example, in a birth. Now it just takes a day. Most of the Unfortunately this means many births a healthcare setting where a institutions — like schools — now require go unregistered at the national level child is born in a hospital, local chilren to hae these certifcates so it’s reall — potentially denying government administrators simply enter had an impact and people appreciate it.” services to millions of citizens. and upload birth details to a Rwebuga Kizito, District Population Ofcer, Kiboga District

24 25 Mobile Identity Mobile Initiatives

infrastructure to deliver its benefts. To build on the success of VRS, there The mobile phone unlocks trusted As a result, the platform can be rolled are plans to expand the system to out quickly. Furthermore, as users of support other operators’ networks. and secure digital services in the system are dealing with a piece UNICEF is already working with Switzerland and around the world of equipment they probably already another Ugandan mobile operator, own and are thoroughly familiar with MTN, on a USSD menu that — the mobile phone — costs are kept will allow its users to send birth Policy Goal low and training needs are minimal. information to the VRS server. As well as expanding the service it will Secure user authentication is essential to the success of the digital economy, VRS also uses the right technology improve usability, with registration but managing multiple usernames and passwords has become unwieldy for in the right place for the right agents who are not Uganda Telecom most consumers. What’s needed is a simple, secure system that can be used people. In a country with variable customers able to register births across a range of websites and services. coverage, it takes a ‘lowest without having to swap their SIM. common denominator’ approach to technology. For example, VRS With interest growing across sub- Action can take advantage of greater 3G Saharan Africa, VRS promises to functionality where it is available, revolutionise registration of not just Mobile network operators around the world are working to deliver on the but it is still designed to operate births, but also other major events mobile phone’s potential to act as a key for secure digital services without on 2G connections. Similarly, the such a marriages and deaths. requiring users to share personal data to authenticate themselves. In application is USSD, rather than Uganda Telecom is now working Switzerland, Swisscom’s Mobile ID system is already demonstrating how a Java-based, so older and less towards using its network of airtime range of challenges can be overcome to create an easy-to-use, highly secure complex phones — which are sales agents to act as physical hubs system for accessing personal, business and government services. common in remoter at the end of the digital services regions — can be used. chain — with people able to print Enablers Outcomes their birth certifcate in the local Alongside the clear societal benefts, store, for example, rather than having VRS ofers business advantages ▪ SIM card-based digital key that ▪ Convenient, secure and trustworthy to retrieve them from their nearest too. It makes more and better use of leverages the popularity and personal access to digital services for individuals, hospital, which could be many Uganda Telecom’s data networks, nature of the mobile phone businesses and governments miles away. while the company also encourages ▪ Mobile operator investment in ▪ Potential savings to governments people to announce births using SMS VRS in Uganda demonstrates how technologies and systems that act as of $50 billion1 by 2020 and voice services. As an example, mobile communication is opening up the building blocks for national and ▪ Further eCommerce growth, helping hospitals in the pilot that didn’t new and unexpected opportunities global authentication solutions to boost digital economies already have a 3G connection were — bringing governments ever- ▪ Security offered by cryptographic provided with one — increasing closer to the people they serve. coprocessors on the latest SIM cards the range of institutions using ▪ Governments increasingly providing Uganda Telecom’s network and online access to key services the hospitals’ web capabilities.

1 http://www.mobilevrs.co.ug/home.php 2 https://www.unicef.org.uk/Documents/Publication-pdfs/betterlifeleafet2012_press.pdf

26 27 Mobile Identity Mobile Initiatives

Strategic Challenge of security tokens, for providing account at this exact moment’ authenticated access to remote (which requires a complex and rigid workstations, virtual private in-person identifcation process for People, governments and businesses are increasingly interacting online, networks, or customer relationship the user), Mobile ID simply states to as modern life becomes more digital, mobile and global. The revolution in management and enterprise the querying party that ‘the same mobile connectivity ofers compelling advantages, including faster commerce, resource planning systems. And user who established an account increased and more efcient access to a range of services (such as e-commerce for individuals, Mobile ID can act with service X (e.g., a personal and e-government) and greater convenience. as the key to online government, insurance account) is the same If the social and economic opportunities are to be fully realised, banking, health and retail services. individual who is trying to access however, being able to quickly and accurately establish identity online is this account now’. This system also Mobile ID has been widely recognised critical. Research suggests the benefts will be compelling. For example, allows the user to maintain a higher in the security community for governments could potentially shave as much as $50 billion of costs level of privacy, as they remain combining EAL 5+ levels of security associated with citizen engagement, while transaction times could be cut by anonymous to the service that is (an internationally recognised security as much as 65 per cent2. The challenge is to strike the right balance between requesting to know whether or not benchmark) with excellent ease of simplicity, privacy and security. they are entitled to have access. use that makes the service appealing to consumers and business users. Although this method simplifes the In early 2013, mobile operator Establishing authenticity — authentication process, it doesn’t Swisscom introduced Mobile ID, Swisscom and Mobile ID Making it happen — securing compromise security. In fact, a mobile authentication system Mobile ID conforms to the highest Digital services have the potential developed for use by both businesses access to the digital world standards of security — EAL 5+ to transform lives, but only if robust and consumers. The key to Mobile Swisscom’s solution difers from — due to its reliance on both PKI authentication systems can be used ID’s efectiveness is its use of a most other mobile signature technology and the cryptographic to secure them. Healthcare providers, secure encryption technology services, as although it uses public hardware found in the latest SIM for example, need to know that a tied to the user’s SIM card. key infrastructure (PKI) technology cards. Part of the service runs request to see confdential health for authenticating the user, the Mobile ID removes the need for users as a SIM Toolkit applet on this records is authorised, businesses only identity elements employed to remember an increasing number of hardware and is only accessible by need to be sure of an online buyer’s are the individual’s PIN number passwords and codes to access social the mobile operator ‘over the air’ identity and governments must and mobile telephone number. networks, banking services and more. using the correct identifcation key. know exactly who is trying to So, rather than seeking to verify Instead the mobile phone becomes the access their online services. that ‘John Smith is accessing this key that unlocks these online services, The key to securing digital access with each unique SIM card acting as is fnding a tool that virtually the authentication mechanism. It is a everybody owns, but that is also compelling solution for businesses, “Mobile ID can be used anywhere secure uniquely personal to its users. The governments, consumers and citizens. authentication is required. Digital identities mobile phone fts these requirements For example, in business and can be uniquely determined, and access perfectly and, as a result, operators government, Mobile ID has the an interaction are eectiel protecte.” are placing it at the heart of fexible potential to be used as a replacement and robust authentication solutions. for other measures, such as the use Adrian Humbel, Head of Identity and Access Management, Swisscom

28 29 Mobile Identity Mobile Initiatives

To help spur adoption of the system, systems are to truly achieve their Swisscom provided web developers full potential, they will need to with a standard interface that made work seamlessly across diferent it easy to connect their platforms countries and operators’ networks. to Mobile ID. And on the user This is the aim of the GSMA’s side, it frst tested the service Mobile Connect project. It is with its own internal employees, bringing together the technical and so it could perfect the system operational expertise of mobile before ofering it to customers. operators such as China Telecom, This careful preplanning has Etisalat, Orange, Telefónica, Telenor paid dividends, as the Mobile ID and Telstra to develop a single, user base reached 25,000 users interoperable system for mobile- shortly after launch, and adoption based authentication. Mobile continued to increase at a rate of Connect promises a security around 10 per cent per month. system that will simplify people’s Mobile ID shows that a mobile lives by freeing them from having phone-based authentication to memorise multiple diferent system that takes advantage of passwords and PINs. Instead, cryptographic hardware on today’s a single, mobile phone-based SIM cards can really deliver in authentication solution will provide the market. However, if mobile the only verifcation tool they need. phone-based authentication

1, 2 http://www.secureidentityalliance.org/fles/13-11-19-SIA_eGov_Study.pdf

30 31 Digital Commerce Mobile Initiatives

South Korea glides into a Strategic Challenge leadership position on contactless A cashless society has been a goal that many have pursued over the years. payments thanks to NFC In trying to realise this dream, most now agree that credit cards have come up short, as ‘plastic’ isn’t suited to all types of transactions. The result is that consumers currently feel they must simultaneously carry around cash and Policy Goal cards, both of which risk fnancial loss if they are mislaid or stolen.

Near Field Communications (NFC) contactless technology promises to What’s more, as consumers’ lives have become increasingly digital, they are revolutionise lives around the world. NFC-enabled mobile devices ofer people required to use ever more passwords and PINs to access their home, a fast, simple and safe way to pay for goods and services. As well as facilitating places of work and electronic records. These barriers can stife personal commerce, leadership in NFC can lead to the creation of signifcant numbers freedoms and commerce, and also cause signifcant inconvenience for of new jobs and open up fresh revenue streams in national economies. But its consumers and businesses. The challenge is to create a system that gets potential goes even further than that, as NFC can potentially act as a secure around these issues by providing simple and, importantly, secure access to digital key, granting authorised access to everything from buildings goods, services and information. to sensitive personal data. Korea pioneers NFC — and standard supported by the GSMA Action reaps substantial rewards to ensure seamless contactless payments, no matter where The Republic of Korea is realising its ambition to be a global leader in NFC In 2011, the Korean Communications customers are in the world. Commission (KCC), the country’s technologies. This has been made possible by a model alliance between the In just three years, South Korea has telecoms and media industry country’s mobile network operators, regulators, handset makers, payment card achieved the KCC’s original objective, regulator, set a clear goal for South providers and point-of-sale suppliers. South Koreans can now simply tap their bringing valuable benefts to the Korean companies to lead the global handset against a reader to complete a host of everyday tasks. country’s economy and citizens rollout of mobile NFC technology. as well as reinforcing the nation’s standing as a technology leader. Enablers Outcomes Some cafes and restaurants ▪ Economic beneft. The KCC allow diners to order estimates that NFC will generate ▪ Government, mobile industry, regulatory and ▪ Widespread network of NFC readers by tapping an NFC tag. business cooperation acts as global model allows a range of transactions to be around $1.2 billion for the South for mobile technology implementation completed via mobile devices Korean economy every year. This is likely to increase as use of the ▪ Clear leadership from the national ▪ Broad NFC adoption by NFC is a contactless technology telecoms regulator ensures that businesses and consumers that allows people to simply tap technology expands globally and their mobile handset against a the country starts to export its South Korea is best placed to benefit ▪ South Korean global leadership in NFC, reader to complete a range of NFC expertise. from new mobile technologies ahead of European and US markets tasks, such as making payments, ▪ Significant operator investment, driven ▪ Employment opportunity. The ▪ Economic benefits including world- validating tickets and gaining by confidence in the regulator and a leading South Korean handsets and a KCC estimates that by 2016 around access to buildings or data. NFC clear understanding of its goals substantial number of new jobs supporting 5,700 jobs will be created in South is being implemented to a global NFC and related technologies Korea to support NFC.

32 33 Digital Commerce Mobile Initiatives

▪ Technological advantage. South Making it happen — South rollout of compatible handsets, the advertising to receive coupons, Korean handset manufacturers Korea’s Grand Alliance UICCs, point of sale equipment and discounts and free products. are well ahead of the game in the transport validation systems. It has More than 200 district merchants development and sale of NFC-capable NFC’s broad adoption in South Korea given each link in the NFC chain the accept payments made with NFC mobile devices. To date, operators is the result of model cooperation. confdence to proceed without the handsets, with some cafes and have sold in excess of 10 million NFC The KCC encouraged collaboration paralysis that often aficts major restaurants allowing diners to handsets within South Korea alone. by setting up what it called the Grand projects as one group of stakeholders order by tapping an NFC tag. Alliance. This brought together South waits on the actions of another. ▪ Comprehensive coverage. With South Korea is building on its lead Korean mobile operators — KT, SK support from providers such as in NFC by expanding services Telecom and LG U+ — with a range of MasterCard and Visa, there are an The active support of the KCC internationally. South Korean card partners including Hana SK Card, estimated 200,000 NFC readers in underlines the potentially pivotal operators have been working in BC Card, Shinhan Card, MasterCard South Korea, and there are more role of regulators in the successful Japan to roll out NFC-compatible and KB Kookmin Card. Naturally than 22,000 NFC tags deployed at deployment of mobile NFC services. services, initially in Tokyo, but with the alliance also includes device bus stops and railway stations. In plans to go nationwide. Work in manufacturers, such as Samsung, LG, shops without a dedicated reader, China is helping to build a pan- Pantech, UbiVelox, KEBT, MtekVision On an operational basis, it has users can still initiate NFC payments Asian network, while South Korean and 3A Logics; and telecoms billing also resulted in wide-ranging by scanning QR codes or entering expertise is also supporting projects service providers, including Danal, compatibility where, for example, a shop’s special membership code, in France, Germany, Italy, Spain Mobilians, KCP and Galaxia. a vendor’s discount coupons will which then transfers funds to the and the UK — bringing a global work across diferent operators shop owner’s handset. This means Central to its success has been the NFC network closer to reality. and handsets. It is precisely this NFC payments can be made adoption of the global standard, comprehensive coverage and ease The active support of the KCC virtually anywhere. which is backed by the GSMA. This of use that is encouraging consumers underlines the potentially pivotal stipulates that sensitive data relating ▪ Widespread adoption. NFC and businesses to adopt NFC for role of regulators in the successful to the NFC service is stored in a payments for travel services have daily transactions. deployment of mobile NFC secure domain on the handset’s UICC proved particularly popular — services. By putting together the (commonly known as a SIM or USIM The alliance has also been innovative 2 million people have used NFC to Grand Alliance, the KCC has set card). It also mandates the use of the in its eforts to showcase the benefts pay transit fares (reducing queues the benchmark in collaboration ‘Single Wire Protocol’ to connect the of NFC to consumers. It has, for and delays at stations). and established a precedent UICC to the handset’s NFC chip. example, created special zones such On one service in 2011 alone, it was that can help to replicate the as the one in Myeong-dong, Seoul’s used 30 million times to pay $9.5 By working together, it has been economic, employment and busiest shopping district. NFC million in fares. possible to coordinate the simultaneous social benefts of speeding up the services include payments, loyalty adoption of innovative mobile programmes, digital receipts and technologies around the world. smart posters, where customers tap “The right regulatory framework is very important. Government regulation actually sets the role of stakeholders in the ecosystem. t also inuences the usiness moel an maret actiation.”

HyeYun Chung, NFC Business Development Manager, SK Telekom

34 35 Digital Commerce Mobile Initiatives

Twinning loyalty schemes with an innovative Strategic Challenge mobile wallet brings a wealth of opportunity The technology to use a mobile phone as a wallet is now available, but building to South Korea’s operators and retailers the ecosystem to make sure mobile payments are widely accepted is still a challenge in many countries, mainly because it requires the alignment of several complex technologies, systems and processes. Policy Goal For example, a regulatory environment that promotes and rewards both The ubiquity and ‘go anywhere’ nature of the mobile phone is driving cooperation and innovation is needed, as well as a willingness on the part of businesses to develop innovative ways for consumers to use their handsets operators and handset manufacturers to support interoperable technologies. to discover and purchase goods or services. But mobile wallets can ofer Banks and payment networks must also play their part to ensure these consumers much more than just convenient ways to pay, they can also support technologies can support safe and secure transactions, while businesses must loyalty card schemes and location services, allowing users to redeem discount be encouraged to update point-of-sale (PoS) terminals so they support mobile vouchers via their handset or quickly fnd their nearest store. All this has been payments. And customers also usually need educating on the benefts of made possible through cross-industry cooperation between mobile operators, mobile wallets. payment networks and retailers. It is a big challenge, but one that operators around the world are accepting. Working with all the relevant players, they are creating mobile payment Action platforms that will ultimately mean the end of bulky wallets, plastic cards and the need for consumers to remember multiple PINs. South Korea is realising the potential of mobile commerce with world- leading mobile wallet technologies that support loyalty schemes as well as their personal details, as well as a cross-network payments. South Korean mobile operator Korea Telecom (KT) MoCa means business — verifcation number sent via SMS, to launched its MoCa mobile wallet system in 2012 to bring consumers new levels simplicity that improves link their phone to the wallet. Once of convenience and value, and businesses ever more efective and proftable the customer experience this step is completed they can join ways of engaging with their customers. In 2011, South Korean operator loyalty schemes from a wide range Korea Telecom (KT) set about of companies with just one click, Enablers Outcomes working with regulators, banks and rather than having to go through businesses to build the environment repetitive sign-up processes for each ▪ Cooperation between the regulator, ▪ A feature-rich mobile wallet solution and infrastructure needed to create one. As soon as they’ve joined a banks and business to build the attracting 2 million users in just two years a feature-rich mobile wallet. The loyalty scheme they can download environment and infrastructure for ▪ A comprehensive network of result is MoCa, a wallet system reward points, discount ofers and a feature-rich mobile wallet 55,000 NFC-enabled Point of Sale that launched in 2012, ofering coupons directly to their handset. ▪ Mobile and payment technologies terminals across South Korea much more than just the ability Using a secure digital verifcation that support interoperability ▪ Discount offers and coupons delivered to make payments via a phone. process, customers can also link ▪ Front-end investment to deliver directly to customers’ handsets By downloading the MoCa app for their traditional ‘plastic’ credit and long-term returns to encourage commerce Android or iOS handsets, customers debit cards to the MoCa wallet, with of any South Korean operator payments authorised via a single PIN. (not just KT) can simply enter Once their cards are linked to the

36 37 Digital Commerce Mobile Initiatives

wallet, consumers can use it to both through automatic barriers), MoCa make payments and take advantage was designed to be able to authorise of money-of ofers, saving them payments at almost the same speed the inconvenience of having to as a contactless travel card. juggle multiple plastic cards. MoCa also ofers the potential for greater security. Today, if a consumer MoCa has recruited the most loses his wallet, he must contact a popular payment providers, host of companies to cancel bank including the big three credit cards, credit cards, travel tickets card companies in South Korea and loyalty schemes. Should a – Visa, MasterCard and BC customer lose his MoCa-enabled Card. The wallet also supports mobile device, however, one call the T-money and eBCard cancels the whole mobile wallet. transport ticketing schemes. Simplicity is the key to MoCa’s success. Customers need to carry Widespread adoption means there fewer (if any) plastic cards and can are already over 55,000 Near Field validate a range of actions with a Communications (NFC)-enabled single PIN. In addition, the system PoS terminals across South Korea, keeps track of every loyalty scheme, allowing MoCa users to pay for items showing the coupons, ofers and and redeem money-of coupons points available, as well as directing in-store. Even when a compatible consumers to their nearest store. terminal isn’t available, shopkeepers can scan a barcode displayed on the Making it happen — regulation, customer’s mobile device manually. technology and partnerships It means MoCa has the potential Creating the right environment for to be used in virtually every store MoCa to be successful demanded in the country. cooperation between regulators, MoCa is also making life easier technology companies, retailers for consumers in other ways. For and payment providers. example, travellers on South Korea’s Regulation. While MoCa is an mass transport networks no longer undoubted triumph of technology have to carry a travel card — instead and inter-industry working, it would they can pay via the MoCa wallet on never have been possible without their phone using contactless NFC a secure regulatory foundation. technology. With ticketing demanding The Korean Communications faster validation than other forms of Commission (KCC) has provided payment (as customers quickly pass

38 39 Digital Commerce Mobile Money Mobile Initiatives

that platform, supporting initiatives coupons. MoCa has also recruited Tanzania’s pioneering ‘test and such as a three-month promotional the most popular payment providers, trial of mobile wallet services in including the big three credit card learn’ mobile money regulation one of Seoul’s major shopping companies in South Korea (VISA, drives financial inclusion districts. This 2011 government- MasterCard and BC Card), debit and driven pilot allowed operators credit cards from 10 issuers and four and credit card issuers to test and major banks, and KT’s MoCa Pay Policy Goal demonstrate the system, ensuring and ZooMoney payment services. the successful integration of all the The MoCa Wallet also supports Mobile technology has the power to connect millions of people around the components before a full roll-out. the T-money and eBCard transport world to fnancial services that were previously out of their reach. This means payment/ticketing schemes. that mobile network operators can now work in collaboration with governments, Technology. The success of MoCa Operator-led standardisation is regulators, banks and merchants to bring digital fnancial inclusion to those has been driven in large part by the acting as a springboard for cross- who have, in the past, struggled to access traditional fnancial services. fact it is available across diferent border cooperation, with the By working closely with mobile operators and banks — and allowing regulation mobile networks and operating participation of China Mobile and to follow innovation in mobile money services — the Bank of Tanzania (BOT) systems. This has demanded a lot of NTT DOCOMO meaning that MoCa has seen the popularity of mobile money services in the country soar. innovative thinking and cooperation can now be used in China and Japan. from operators and other technology providers. For example, the ability for In countries such as South Korea, Action NFC-enabled services to work across where innovation in mobile diferent networks was achieved technology is actively encouraged The Bank of Tanzania (BOT) has adopted a highly successful ‘test and learn’ by the operators coming together and supported by signifcant approach to mobile money regulation that allows both banks and non-banks to create the Korean Standard (KS) investment, the mobile phone is to deploy the latest mobile payment services, while it applies safeguards for Payment Applet Specifcation. The becoming even more of an essential customer’s funds and carefully monitors developments. As a result, Tanzania is operators also worked together on a tool for life, thanks to its ability today a mobile money and digital fnancial inclusion success story. It is the frst standard specifcation for handling to make travel and shopping so country in Africa to have interoperable mobile money services as well, and is one digital vouchers and loyalty schemes, convenient. What’s more, these of the few countries is the world where a mobile money service is distributing as well as a common interface for new mobile payment technologies profts from the returns generated by its trust account back to its customers. NFC-enabled point of sale terminals. are driving new business models and opening up fresh avenues for Retailers and payment providers. Enablers Outcomes growth, all while delivering an ever- To date, 33 retail brands are using improving customer experience. the MoCa wallet to support their ▪ Innovative application of banking ▪ One-third of Tanzanian households loyalty programmes and deliver regulation allowing for rapid, risk-assessed has at least one mobile money user deployment of mobile money services ▪ More than 31 million registered mobile ▪ ‘Test and learn’ regulation from the money accounts by December 2013 BOT that allows the market to flourish ▪ The cumulative value of mobile while protecting consumers money transactions surpassed ▪ Highly collaborative relationships $27 billion in December 2013 between government and industry ▪ Interoperability among mobile money services

40 41 Mobile Money Mobile Initiatives

Strategic Challenge Making it happen — pragmatic providers have to adhere to a regulation for rapid deployment range of safeguards, including: For most people today, access to formal fnancial services is taken for granted, ▪ Presenting plans to BOT before Mobile money ofered an ideal route but for over a billion people it is a luxury that simply isn’t accessible. This can approval for bringing access to fnancial have a profound impact on their life. How can entrepreneurs build a business services to Tanzania’s unbanked, ▪ Obtaining a Tanzanian that creates economic independence for them and their community? How can but a signifcant barrier stood in Communication Regulatory people send money securely to friends or family who live miles away? Where the way: the country lacked national Authority (TCRA) licence for the can people who are saving for a brighter future put their money so it is safe? payment systems legislation. provision of value-added services Effective mobile money services. It also made a progressive The BOT closed the regulation gap ▪ Providing a risk management plan to BOT regulation reaps rich rewards decision: to let regulation follow by advising mobile operators to innovation and support fnancial partner with a commercial bank ▪ Establishing safeguards for In 2008, the BOT began its mobile inclusion while managing risks. to deliver services. Banking customer funds money regulatory journey when a regulation is up to date, and As a result, it introduced an ▪ Building in consumer protection visit from one of the country’s mobile this link allowed appropriate innovative ‘test and learn’ regulatory mechanisms operators introduced the idea that governmental oversight of mobile system that speeded up mobile a simple mobile handset could do money services without the ▪ Implementing Know Your money deployment, provided the much more than make calls. From need to wait for new regulations Customer (KYC) standards legal certainty that service providers this frst meeting, the BOT was keen to be passed into law. needed to justify investment and ▪ Imposing maximum transaction to engage with the mobile industry brought citizens vital fnancial Mobile operators and their partner limits to learn more about the potential inclusion and consumer protection. banks were issued with ‘letters of of digital fnancial inclusion — a ▪ Imposing restrictions on the use of The results speak for themselves. no objection’, which allowed the new and unfamiliar topic to the interest As of December 20131: BOT to see how markets developed bank. In December 2013, Tanzania before introducing appropriate and launched its National Financial ▪ 35 per cent of Tanzanian This progressive approach supports mobile money-specifc regulation. Inclusion Framework that set out a households had at least one mobile the country’s mobile money market clear goal to reach 50 per cent of the money user The BOT has mitigated risks and allows it to fourish. By engaging closely with mobile operators (and population with formal fnancial ▪ 11 million mobile money accounts through close engagement with their respective partner banks), services by 2016. Its defnition of were active mobile operators and their fnancial inclusion has been updated partner banks. Mobile money the BOT has been able to ofer the ▪ The cumulative value of mobile to include mobile money services. money transactions surpassed TZS In Tanzania, a high proportion of the 53 trillion ($27.1 billion) population remain unbanked, but the “I use my phone for communication, but also for ▪ 87 per cent of users found mobile country has experienced huge growth fnancing. igo esa has reuce m costs for money cheaper than any other in mobile, and by 2014 there were over sening mone on’t nee to go to the an service available to them, and over 17 million unique mobile subscribers. no. erthing is easier after getting a phone.” 80 per cent fnd it both quicker and Consequently, the BOT quickly saw easier to use than alternatives the potential of mobile payment Rachel, Nurse, Morogoro in Tanzania

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private sector a degree of freedom in The move follows a circular issued by agreement on interoperability and money fowing through the rolling out new products, responding the Governor of the BOT in signed between three of the system, improve the sustainability with sufcient safeguards where February 2014, which states that country’s mobile money providers of mobile money services and necessary. The result is the emergence interest accrued on the trust — Tigo, Airtel and Zantel — the ultimately create a ubiquitous of four highly competitive mobile accounts of mobile money services frst interoperable service went digital fnancial ecosystem. money providers — ensuring the should directly beneft mobile live in late October 2014. All of these developments have been market remains very dynamic. money customers and agents. Interoperability allows subscribers made possible due to the supportive Now, as long as Tanzanians on diferent mobile money regulatory environment created by have access to a mobile phone Tanzania now leads the way platforms to directly send and the BOT. Its approach, of allowing and can get a signal, they can in Africa when it comes to receive funds between their mobile regulation to react to the market, connect with banks to access their interoperability between mobile money wallets. Previously, if value has proven so successful that today accounts via a mobile money mone platforms ith the frst was being transferred between the Tanzanian regulator deals wallet. Similarly, village savings interoperable service having diferent operators’ services, the with mobile operators directly as a and loan associations are piloting gone live in October 2014. funds had to be cashed out frst. trusted party, without their bank mobile money services to perform partners. This one-to-one dialogue The introduction of interoperability loan disbursements, insurance generates a positive, mutual According to Tigo, for the past is important, not just because it is products are becoming available, understanding that balances the three and a half years the Tigo convenient for users, but also farmers are receiving payments needs of the mobile operators with Pesa Trust Account has achieved because it is likely to increase and other information services the regulatory objectives of the BOT. a return of between fve and 12 the volume of digital transactions through the Connected Farmer per cent, and aims to continue to Alliance, and energy companies achieve a competitive return in the 1 http://www.gsma.com/mobilefordevelopment/wp-content/uploads/2014/03/Tanzania-Enabling- use mobile payment services to Mobile-Money-Policies.pdf future. Tigo plans to pay all of this help fnance, manage and receive money back to its customers. With payments for solar power systems. infation in Tanzania running just One of Tanzania’s mobile money over six per cent, this represents providers, Tigo Pesa, has now also a signifcant return on customers’ introduced a new initiative, called Tigo investment in mobile money. It Wekeza (Swahili for ‘Tigo Invests’), will not only create a powerful that makes proft-share distributions loyalty incentive for customers, from returns generated on the Tigo but the strategy is also expected to Pesa Trust Fund. The pay-out takes result in a substantial increase in place every quarter and will be money held in customers’ wallets, calculated as a proportional share as the efective rate of return is based on the average of the customer’s attractive relative to market rates. Tigo Pesa daily balance. It is an Tanzania now leads the way exciting development that represents in Africa when it comes to a unique long-term addition to the interoperability between mobile mobile money value proposition. money platforms. Following an

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The DRC’s competitive Strategic Challenge mobile money market helps An inability to access fnancial products represents more than an widen financial inclusion inconvenience — it can limit the economic opportunity of millions of people and stife growth. Policy Goal Traditional fnancial services often fail people who live in remote, less populated or unstable regions. For example, in the DRC many factors have A lack of access to fnancial services hampers growth in some of the world’s made it challenging to develop a solid and functioning fnancial sector, not poorest regions, denying millions of people the chance to transfer funds safely least the exceptionally low population density (29.3/km2) in sub-Saharan and securely, take out loans or buy insurance products. However, widespread Africa’s largest country (by area), and widespread public distrust of banks access to mobile services and supportive fnancial regulation have the after many people lost their deposited savings during the national crises of the potential to deliver a wealth of fnancial products and services — literally into 1980s and 1990s. people’s hands. Therefore it is clear that new methods and technologies are needed to provide fnancial services to the underserved. If the right regulatory environment can Action be created by policymakers, mobile money platforms have the potential to bring fnancial services to everyone who has access to a connected Introduced in the Democratic Republic of Congo (DRC) in 2011 by the Central device — irrespective of geography, demographics or political environment. Bank, new and future-facing fnancial regulations have made it possible to extend economic inclusion and opportunity to those underserved by Creating competitive allow new mobile money services traditional fnancial services. Working with four mobile operators, the DRC mobile money services to succeed in extending services has rapidly built a competitive mobile money market that ofers a range of to those currently underserved by secure fnancial services — accessed via mobile handsets — to Congolese Most people living in the DRC have traditional fnancial institutions. households and businesses. little or no access to traditional A mobile banking task force was fnancial services. In fact, less than established, known as Le Comité 4 per cent of the population hold Enablers Outcomes Mobile Banking Task Force (CMTF), an account at a formal fnancial with the aim of putting in place institution. Mobile penetration, ▪ Strong awareness by the government ▪ Reliable and safe financial services delivered enabling regulation that would however, is much higher, at just of the benefits of mobile money to 2.8 million Congolese citizens create a competitive mobile money under 44 per cent and rising1. ▪ Clear commitment from the government to ▪ Mobile money transactions in market. The CMTF brought together the rapid delivery of mobile money services the DRC totalling more than $30 In 2011, the Banque Centrale du key stakeholders, including the Congo (BCC) moved to harness ▪ Inclusive and transparent regulatory million in December 2013 fnance industry, non-governmental environment that ensures maximum ▪ Four mobile money providers the growing reach of mobile organisations (NGOs) such as the value for all stakeholders offering competitive services to networks in the country to Bill & Melinda Gates Foundation, DRC’s unbanked population expand fnancial inclusion. Key to mobile operators, government achieving this was the creation of a agencies and telecoms regulators. ▪ An estimated increase in financial inclusion pragmatic and efective regulatory of 22 per cent in just two years The combined expertise of all these environment — one that would groups delivered rapid results, with

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a new legal framework for mobile and the total value of all transactions allowed the BCC to issue a single, and to identify opportunities money services — known as Directive added up to more than $30 million. consistent and coherent regulatory to fne-tune regulation. #24 — approved by the BCC in framework to mobile operators — This rapid growth has been helped A number of other measures to December 2011 just 10 months after with compliance made easier owing by the creation of an extensive protect customer funds have also the task force was established. to the fact that rules have been network of 32,000 mobile money been put in place. For example, all discussed and agreed in advance. The move from regulation to agents across the country. licensees must maintain a ring- realisation was equally swift. Between fenced account of capital that February and November 2012, mobile Making it happen — transparent The Central Bank hosts regular matches the value of e-money operators Bharti Airtel, Tigo-Millicom and inclusive regulation meetings with providers to ensure they have issued. This provides and Vodacom all launched mobile the market is operating properly customers with the confdence Collaboration between stakeholders money services in DRC. Orange and to identify opportunities that their e-money is always proved critical in the development joined the market — bringing yet to fnetune regulation. backed up by sufcient funds. of the DRC’s mobile money market. more choice for consumers — in 2014. For example, the formation of The DRC has also taken a By the end of 2014, mobile money in the collaboratively-driven CMTF In opening up the market for proportional, risk-based approach the DRC had developed into a highly facilitated the creation of efective fnancial services to non-traditional to transaction limits and Know competitive and diverse market, regulation within a tight timeframe providers, building customer trust Your Customer checks. This bringing new opportunities and in a number of ways. For example, was clearly important, so a number safeguards the administration of choice to citizens and businesses. it helped the BCC assess diferent of safeguards were put in place. For mobile money services, but at the As of December 2013, there were scenarios and gain a common example, Directive #24 allows for same time ensures that poorer around 2.8 million people signed up understanding of the opportunities banks, other fnancial institutions users, who often lack ofcial ID, to mobile money services, with each and challenges. At the end of the and special legal entities called are not excluded from the benefts of the three original providers having project, it also allowed the BCC to ‘electronic money (mobile money) of these services. For example, attracted approximately a third of identify the best solution for the institutions’ to obtain licences to low volume users can self-certify all transactions. Of the 1.2 million beneft of the entire ecosystem. issue e-money. However, mobile their identities, but are not allowed customer transactions carried out in operators must establish an to exceed a transaction value of It is this pragmatic, transparent December 2013, the average value incorporated e-money subsidiary $100 a day. In comparison, higher and inclusive approach that has for each transaction equated to $24 that holds a minimum of $2.5 volume users, who face tougher million in capital. Stringent checks identity checks, have an increased are made both into the company daily transaction limit of $500. he fnancial inclusion rate in the is er and the products it plans to ofer. The Central Bank has also lo an uiling the pament an aning What’s more, the BCC monitors netors in a countr ith this etension mandated minimum levels of an infrastructure gap is not feasile using mobile money providers closely customer service and protection the traitional ricsanmortar approach. and has stipulated monthly that providers need to adhere ut toa moile technolog gies us the reporting requirements. The to. These include a call centre to opportunit to connect people an fnancial Central Bank also hosts regular deal with customer issues, ‘lost proiers at a fraction of that cost.” meetings with the providers, either PIN’ services, systems to deal jointly or separately, to ensure with allegations of agent fraud, Jean-Claude Masangu Mulongo, Governor, Banque Centrale du Congo, January 2011 the market is operating properly and a cash reversal service that

48 49 Mobile Money Mobile and Women Mobile Initiatives

allows the rapid recovery of lost As this young market matures, Mobile brings crowdfunding or misdirected transactions. however, there is real opportunity for growth. For example, future and social lending to Turkey’s The mobile money market that services from mobile money has grown out of Directive #24 women entrepreneurs providers could include loan and is expected to have increased insurance products. Using the access to fnancial services for pragmatic, transparent and inclusive DRC’s citizens by 22 per cent Policy Goal regulatory model pioneered by the in just two years, according to BCC and its CMTF, it is clear that Mobile phones provide women with a stronger sense of security, greater estimates by the BCC. This is all the DRC is well placed to ensure independence and increased economic opportunity, yet women are 21 per the more impressive considering responsible, secure and rapid cent less likely to own a mobile phone than men. Estimates suggest that in the fact that mobile money is still growth in its mobile money market. low to middle income countries alone, this gap equates to 300 million women a young market in the DRC. who might otherwise be connected. In economic terms, it adds up to around $13 billion of lost revenue for mobile operators1, but its negative economic 1 GSMA Intelligence impact for the wider economy is far greater. Now operators are working to bridge this gender gap through innovative programmes that are not only helping women gain access to mobile technology, but also encouraging them to become entrepreneurs.

Action

In Turkey, mobile operator Turkcell is working with non-governmental organisations, government and innovative fnance providers on the ‘Women Empowerment in Economy’ initiative. Launched in 2012, this project uses a combination of technological, fnancial, educational and business levers to start tens of thousands of women across the country on the road to founding and expanding their own business.

Enablers Outcomes

▪ Access to crowdfunding and micro-finance ▪ On target to reach 100,000 women by 2016 during the critical start-up phase of a business ▪ Over one million Turkish Lira raised ▪ Education to encourage effective through crowdfunding to support business practices female entrepreneurs by 2014 ▪ A thriving e-commerce platform to bring ▪ More than 2,700 products brought to products and services to a wider market market from women across 81 cities ▪ Recognition of gender in Turkey’s National Broadband Plan

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Strategic Challenge loans — from around $220 to $6,600 Education resources include videos as — via a platform built by Turkcell. well as face-to-face training sessions. These loans can be a huge help Turkey is one of the world’s fastest growing economies, with GDP in the Alongside fnance, banking during the challenging start-up region of $820 billion. However, Turkish women make up only 29 per cent2 of and education, the project also phase of business development. the country’s labour force. This compares to a global average of more than 57 provides these businesswomen Borrowers pay back the loans in per cent — placing Turkey in 120th place (out of 135) in the World Economic with an online ‘shop window’, small, afordable instalments over Forum’s Global Gender Gap Index3. opening up access to bigger and 46 weeks7, with monies fed back potentially more lucrative markets. Global studies suggest this gender divide could be having a signifcant into the system to help yet more negative impact on the wider Turkish economy. For example, in a 2013 budding businesswomen. Making it happen — mobile discussion note from the International Monetary Fund4 on the worldwide The loans are funded through situation, experts reported that per capita GDP losses resulting from the makes the right connections crowd-sourcing, the frst example of gender gap may be as high as 27 per cent in some regions. For the Women Empowerment in a mobile operator partnering with Economy project, Turkcell is using To help close the gap, mobile operators in Turkey and around the world are a microfnance institution to ofer a its mobile communications expertise working in partnership to use the power of mobile to connect women with social lending product. People can and infrastructure to connect project technology, business opportunities and markets — unleashing their potential lend money via online and mobile partners with Turkey’s female in the workplace. payments, with the micro-loan model entrepreneurs. overseen by the Turkish Foundation Realising the potential of In partnership with The Turkish for Waste Reduction, the Turkish One of the key elements of the project Turkey’s businesswomen Foundation for Waste Reduction, Grameen Microfnance Programme is the platform the operator has built the Ministry of Family and Social — an extension of the innovative to underpin the crowdfunding and In Turkey, the penetration of feature Policies and the Turkish Grameen micro-fnance initiative started by social lending services provided phones has reached 59 and 62 per cent Microfnance Programme, Nobel Prize-winning Professor by Turkish Grameen Microfnance. among men and women, respectively, Turkcell has developed the Muhammad Yunus in Bangladesh. It allows donations or loan capital whereas smartphone penetration ‘Woman Empowerment in to be paid in a number of ways, The programme also provides among women lags behind at 17 Economy’ programme. including by mobile phone via women with invaluable education in per cent compared to 21 per cent for online payments or wire transfer. The project recognises that starting efective business practices so they’re men5. The problem is hardly unique any new venture can be demanding, equipped with the skills to make the It is the frst time a mobile operator to Turkey, as 21 per cent fewer women but challenges are amplifed when most of every business opportunity. in Turkey has collaborated with a than men, globally, have a mobile that business is run by women in phone. However, Turkey is one of a traditionally male-dominated the few countries to recognise the environment. As a result, it aims to importance of gender in its National deliver the right support, through “Meeting women’s organisations in all parts of Broadband Plan6, and in 2012 Turkish the right channels at precisely the the world, I was impressed to see how the use mobile operator, Turkcell, started right time to help women make a of a mobile phone can improve women’s access an ambitious programme to help success of their new business. to literacy, health, banking, employment and women — and women entrepreneurs, business opportunities, to mention just a few.” in particular — beneft from the The programme provides women Cherie Blair, Founder, The Cherie Blair Foundation for Women power of mobile communications. entrepreneurs with access to small

52 53 Mobile and Women Disaster Response Mobile Initiatives

social lending organisation to deliver of mobile, video and face-to-face The Philippines prepares for the micro-fnance. Also, Turkcell doesn’t training sessions. Courses on sales just provide the platform for others and marketing, communication and worst to deliver the best mobile to make and receive payments, it personal development have been communications when disaster strikes also uses it to donate its own funds designed and provided in association into the project. As of October 2014, with the Turkcell Academy and the lending platform had crowd- Özyeğin University. So far the sessions Policy Goal sourced over one million Turkish have been delivered to around 500 Lira to help female entrepreneurs. women across six Turkish cities. In the event of a disaster, access to timely information is as critical as the need for food, shelter and medical assistance. Mobile networks play a critical role The operator’s expertise has The fnal major element of the in disaster response eforts, helping to mobilise and coordinate local, national proved instrumental in delivering programme was the e-commerce and international relief eforts when people, governments and humanitarian the project’s banking services, platform, known as the ‘Mobile agencies need robust and reliable communications the most. too. Turkcell has ensured that Bazaar’. Created by Turkcell and microcredits can be dispersed and delivered through the operator’s collected easily via mobile phones online infrastructure, it has Action that have contactless Near Field already brought more than 2,700 Communications technology built- products from women in 81 cities The Philippines is a country familiar with devastating natural disasters such in. Since July 2013, all micro-credit to a wider buying public. as Typhoon Yolanda (Haiyan), which caused huge destruction in 2013. Despite transactions have been delivered in the existence of some strong coordination between mobile network operators The Woman Empowerment in this way. In some instances, however, and government, it showed that the Philippines needed to raise its benchmark Economy project demonstrates how these businesswomen need quick for disaster response preparedness. It prompted government, mobile operators the combination of NGO know- access to cash. As a result, Turkcell and aid agencies to develop an even more coordinated communications how and mobile communications has also distributed over 65,000 ATM response — ensuring that during an emergency mobile networks continue to expertise brings real benefts cards to women on the programme. help mobilise and coordinate emergency responses. to — and levels the playing feld As technical and fnancial literacy was for — socially and economically identifed as a key issue for many of disadvantaged groups. In Turkey, Enablers Outcomes the businesswomen being targeted where one in fve women live on the by the programme, it was decide verge of poverty8, it will see 100,000 ▪ Supportive regulatory environment ▪ Rapid, comprehensive mobile it should also include educational female entrepreneurs gain access to encouraging the creation communications, delivering time- elements. These have taken the form new economic opportunities by 2016. of resilient networks critical emergency messaging ▪ Strong government/mobile operator ▪ Robust mobile networks that are better 1 http://data.worldbank.org/country/turkey#cp_cc relationships to improve the effectiveness able to withstand disasters and more 2, 3 http://www.ebrd.com/pages/news/press/2014/140307b.shtml of mobile disaster response messaging easily repairable when damage occurs 4 https://www.imf.org/external/pubs/ft/sdn/2013/sdn1310.pdf 5 http://www.nielsen.com/content/dam/corporate/uk/en/documents/Mobile-Consumer-Report-2013.pdf ▪ Regular investment in disaster response ▪ Coordinated local, national and 6 http://www.broadbandcommission.org/Documents/publications/bb-doubling-digital-2013-highlights.pdf systems by operators, as well as international responses 7 http://www.turkcell.com.tr/en/aboutus/corporate-social-responsibility/entrepreneurship/women- empowerment-in-economy the creation of dedicated disaster 8 http://www.turkcell.com.tr/en/aboutus/corporate-social-responsibility/entrepreneurship/women- response teams and protocols empowerment-in-economy

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Strategic Challenge The Philippines is ideally placed to SMART’s base stations, ensuring harness the power of mobile networks that it has virtually real-time access due to the high levels of mobile phone to severe weather warnings. The United Nations’ frst General Assembly in 1946 recognised freedom of usage among the population, despite information as a basic human right. Resolution 59(1) called it ‘the touchstone of Similarly, another leading operator, relatively low per capita incomes. As all the freedoms to which the United Nations is consecrated’. This is no more Globe Telecom, has put in place a result, the government’s disaster powerfully demonstrated than in the event of natural or man-made disasters. its Disaster Risk Reduction and response systems use text, internet Management program. It has Mobile networks that are resilient during a disaster, and that can be quickly and social channels in times of provided municipalities with an repaired when damaged, are invaluable during times of emergency. Not only emergency to reach as many people SMS broadcast facility so mayors do they facilitate the coordination of national and international eforts, they as possible, as quickly as possible. can have direct contact with local also provide people on the ground with the ability to self-organise local relief One of the Philippines’ leading leaders for faster coordination during eforts before outside help arrives. wireless providers, SMART emergencies, and has also partnered As a result, over a relatively short space of time, mobile communications have Communications, has tightly with the WeatherPhilippines become a critical component of any emergency response. Success depends integrated itself into both Foundation so it can provide localised, upon the integration of mobile operator resources and know-how with governmental and NGO disaster real-time weather updates to help government and humanitarian bodies — establishing the rules, processes and relief services, including the the public prepare for typhoons, mechanisms needed for efective cooperation. National Disaster Risk Reduction heavy rains and severe fooding. and Management Council and The Philippines — integrating Technology for Development the Philippine Red Cross. SMART Making it happen — to ensure mobile networks for effective (ICT4D), promoting the idea that has launched a range of services the best, prepare for the worst more and better communication including free disaster updates, links Mobile networks are an important disaster response helps a society grow in a range of to which are available on ofcial channel in helping government areas such as education and health, government websites. Furthermore, The Philippines sits within both the and NGO agencies share as well as disaster response. The it has developed good relations Pacifc’s geologically volatile ‘ring warning messages and other country recognises that robust and with national meteorological of fre’ and the region’s typhoon vital information to help mitigate well-functioning mobile networks institutes, which have co-located belt. Consequently, it is subject to a the impact of adverse events. range of natural threats including make a signifcant contribution weather monitoring equipment at earthquakes, volcanic activity to efective disaster response. and severe weather events. Long The Philippines Government has experience of these phenomena is taken a collaborative approach to this “The pervasive use of the mobile phone has spurring a coalition of government, private sector partnership through its made it an ideal communications tool before, non-governmental organisations Natural Disaster Management Law. during, and after disasters. With the increasing (NGOs) and industry to help the In addition, ICT4D has acted as the vulnerability of the country to extreme weather country deal with disaster in the foundation of the Philippine Digital events and other hazards brought on by most efective way possible. Strategy 2011-2016, embedding private climate change, we at Smart continue to work on utilising mobile technologies This coalition is based on the sector organisations, such as mobile for disaster preparedness.” internationally recognised concept operators, into the preparedness of Information and Communication strategies from the very beginning. Ramon R. Isberto, Head of Public Afairs, SMART Communications

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Successful mobile-based disaster helps ensure that messages suit Turkcell’s disaster management response approaches demand the channel. SMS, for example, comprehensive government and is usually most suited to short, system sets the benchmark for mobile operator pre-planning and concentrated bursts of information mobile network emergency response cooperation across a range of areas. and is best used in conjunction with other channels — such as For example, regulation can help the web, TV and radio — that can encourage operator investment in Policy Goal provide more detailed instructions. building resilient infrastructure Mobile communication is increasingly recognised for revolutionising the designed to withstand all but the There also needs to be agreement on way governments, non-governmental organisations (NGOs), businesses and most severe shocks. And should the technology used for sending and citizens cope with disasters. Thanks to their power to facilitate recovery eforts communications failure occur, it can receiving these emergency messages. in remote locations, track displaced populations and channel aid rapidly to help ensure that operators, in concert For example, cell broadcasts and those in need, mobile communications are now a critical component of disaster with government and NGO agencies, SMS messages may be dependent response across the globe. act swiftly to restore communications on specifc handsets and settings. links. What’s more, regulation In Japan, NTT DOCOMO ofers free should enable operators to aid relief disaster response messaging via cell Action eforts during a crisis by permitting broadcast and the government has them to increase cell power in order mandated that all handsets sold since Turkish mobile network operator Turkcell is leading the way in developing the to expand coverage and compensate 2007 must be able to receive them. systems, processes and technologies needed to deal efectively with disasters. for damaged cells. It may also be It works with government and other partners to build a highly robust disaster It is important to note, however, necessary to streamline customs and response system — coordinating the capabilities of a host of organisations that emergencies can be political immigration procedures during a to ensure its network is better able to survive a disaster and can be rapidly as well as natural, and mobile crisis, so operators can quickly get repaired if damaged. communications can be used to expert personnel and replacement share messages and data that limit equipment into the country. Often personal freedoms and privacy. Enablers Outcomes minimum service agreements need Cooperation, therefore, must to be relaxed to take into account also extend to clear protocols ▪ Detailed, preplanned disaster response ▪ Resilient networks better able to extensive damage to networks. between governments and mobile systems to focus expertise on survive a disaster and that can be Cooperation on messaging is also operators detailing how mobile re-establishing damaged mobile networks repaired quickly if damaged key. Governments and mobile networks can and should be used. ▪ Strong partnerships that combine and ▪ SMS, voice and mobile internet operational operators should cooperate to amplify the strengths of the government, within 8, 12 and 24 hours, respectively Responsible and efective ensure that messages originate from mobile operators and NGOs cooperation — delivering the best ▪ Information services that help to ensure the a legitimate agency, complement of mobile communications by ▪ Disaster-appropriate regulation that well-being of customers caught in a disaster messages issued through other preparing for the worst of disasters flexes to recognise dramatic changes channels and, ultimately, that they — will ensure efective pre- and in on-the-ground conditions are trusted by and useful to the post-emergency response and people they are intended to help. help to save millions of lives. What’s more, cooperation also

58 59 Disaster Response Mobile Initiatives

Strategic Challenge know-how from across the business, sends parents their child’s location including fnance, ICT, network via SMS when an earthquake occurs. operations, consumer marketing Mobile communications can play a crucial role when disaster strikes, Turkcell also helps customers involved and human resources. providing a lifeline to regions where other communications and public in emergencies overseas, identifying infrastructure have been knocked out. When the fate of many may depend For example, in the event of an and locating subscribers, ofering upon the speed of response, mobile networks have the ability to link local, earthquake, BCPs coordinate to them free calls and SMS, and even national and international relief eforts with people on the ground — saving establish emergency sites that reactivating suspended accounts time and lives. are linked to form a standalone during an emergency. Incoming calls emergency cell before being from disaster areas are also prioritised Most mobile networks, however, were never designed to provide this kind connected to the rest of the at Turkcell’s call centres, and the of disaster support — where call volumes can rise by as much as 6,000 per network. Once this process has company can make direct contact with cent after a disaster. Coping with these types of spikes in the number of calls been completed, those afected on its customers (known as Care Calls and is difcult enough under normal network conditions, let alone when power the ground, emergency responders Care SMS) to establish their well-being. sources have failed, infrastructure has been destroyed and non-emergency and external relief agencies can regulatory frameworks may be getting in the way of rapid action by mobile The results of Turkcell’s eforts coordinate to get aid to where it is operators to restore connectivity. to help its customers involved in needed as efciently as possible. overseas emergencies were clearly Ensuring networks can cope more efectively with disasters demands careful BCPs ensure that Turkcell is able to demonstrated following an earthquake planning and cooperation between mobile operators, NGOs and governments. meet a range of objectives during in China in 2013. The company Mobile operators are taking the lead around the world to not only build these times of emergency. For example, identifed over 1,000 customers in key relationships, but also add resilience to their networks so they deliver the Turkcell can be sure that equipment the disaster area within 21 minutes best possible communications in the worst possible conditions. from blankets to helicopters will be of the event and allocated them free available in crisis zones due to the calls and SMS messages within half demanding post-event responses Turkcell — a model for 46 critical suppliers that have been an hour. Contact with these customers that include: 100 per cent cell mobile disaster response pre-approved and the streamlined using Care Call and Care SMS was broadcast services within eight hours, procurement processes put in place. established in just over six hours. Turkcell’s frst major disaster response low-quality calls within 12 hours, Similarly, it knows it has power Suspended customer accounts were initiative was created as a response to minimum-speed mobile internet reserves on tap, including mobile reactivated within 32 minutes and a severe earthquake that hit Turkey services within 24 hours and the generators and 200,000 litres of fuel. held open for 15 days. Thirty minutes in 1998. It has since evolved into the ability to deliver 99 per cent of SMS after the earthquake, Turkcell was Business Continuity Management messages within 15 seconds with a 95 What’s more, meticulous planning, also using social media to share System (BCMS), which is constantly per cent success rate within 24 hours. rigorous training, life-like simulation information with afected customers. updated to incorporate lessons exercises — with internal and external To achieve this, Turkcell has learned from recent disasters, such partners — and resilient infrastructure In 2013 alone, Turkcell’s BCMP made developed 27 internal business as 2011’s devastating earthquake combine to ofer wide-ranging support 10,000 calls to customers, allocated continuity plans (BCPs). They bring in the eastern city of Van. to people caught up in a disaster. This half a million free minutes and together the people, technologies includes the Earthquake Information reactivated 1,800 suspended accounts. BCMS sets exacting targets for and systems needed to rapidly Service, which sends text alerts to all It is now one of the few operators Turkcell’s reaction when damage re-establish communications in a Turkcell subscribers in an afected certifed to international standard ISO is inficted on its mobile network, crisis situation — calling on area and the Reach Me service, which 22301 — indicating that its systems

60 61 Disaster Response Mobile Initiatives

act as a standard for others to follow Good regulation is essential if these Power. Power levels and backup Immigration and customs. — and Turkcell’s BCMS generated challenges are to be overcome, while power often need to be altered Subject matter experts and 1.8 million positive comments on poor regulation can exacerbate the during an emergency. emergency equipment may social media in the same year. situation during times of emergency. This requires clear guidance from need to be moved rapidly into The best regulation is that which governments on rules governing afected countries, which could Making it happen — planning, is fexible enough to refect the the increase of the maximum require streamlined immigration partnership and preparedness dramatic changes in circumstances power of a cell in order to enlarge and customs procedures. brought on by disasters. its coverage area, use of directional Turkcell has set the benchmark Data laws. Big data, such as analysis antennas and how back-up for disaster response and Turkey’s Countries looking to create an of anonymised call detail records power can be used at cell sites. experience provides powerful enabling environment within (CDR), can be useful in disaster lessons for other countries as they which their mobile operators Frequency. In order to optimise response for tasks such as predicting formulate their own approaches. can develop efective disaster networks after damage occurs, population displacement and Perhaps the most striking success response systems should include mobile operators should be able to disease outbreak. The benefts of factor is partnership. No single pre-planned responses to: quickly and easily secure permission big data can be better harnessed if organisation can create an efective to use a frequency for a diferent use there is clarity from governments Government interaction. disaster response system — or service from which it was licensed. on how and when this type of Building strong relationships with governments, NGOs and mobile analysis can be performed legally. government agencies in advance and Siting. During a disaster, mobile operators need to work together knowing which agency is in charge operators need the fexibility to In countries such as the United in the event of an emergency. of each regulatory area of concern be able to quickly erect temporary States, the Philippines and Japan, Mobile operators face difcult in an emergency is critical, as it is transmitters, something which these lessons are already being challenges in the event of a disaster, not obvious once an emergency should not be hindered by non- learned with regulation that fexes with equipment damaged or occurs. This should not only include emergency, tower-siting regulation. as appropriate to accommodate destroyed, non-existent or unreliable guidelines on which is the right crisis situations. While no-one Satellite backup. When normal supply of power, damaged transport agency for each substantive area, can foresee all the implications backhaul links are damaged, mobile infrastructure, loss of personnel, but also information on specifc of a disaster, the impacts can be operators often rely heavily on stress on engineering resources personnel or contact mechanisms mitigated by careful planning and satellite links (VSAT) to provide and increased service demand. to use in emergency situations. the creation of strong partnerships emergency backhaul connectivity. between key stakeholders. As As a result, there may be a need Turkcell has proved, efective disaster for temporary relaxation of VSAT management — based on long- licensing for these types of links. "Turkcell is preparing for disaster and emergency standing experience, strong internal situations across its entire business. We Minimum service obligations. and external relationships and hae ientife our critical suppliers those Most mobile licences require meticulous scenario planning — can hich coul aect urcell’s elier of its operators to meet minimum rapidly re-establish communications, key product and services. To this end we have service levels and report outages. focus relief eforts and help protect put some liabilities for business continuity However, these rules may not be the well-being of citizens. in the critical suppliers’ contracts.” workable during a crisis situation.

Tamer Demir, BCMS Manager, Turkcell

62 63 Green Power Mobile Initiatives

M2M and mobile money enable Strategic Challenge affordable solar power to energise Access to energy can bring huge benefts to some of the poorest people on Kenya’s poorer communities the planet. It can provide heat and light for food and shelter, power pumps that bring water from deep wells and allow people to charge mobile phones so they can communicate with each other and access services such as Policy Goal education and healthcare.

Mobile network operators are joining forces with innovative energy services Worldwide, however, 1.4 billion people struggle to access electricity, with 85 1 companies to bring clean and afordable power to those who need it most. per cent of them living in rural, hard-to-reach, of-grid areas . The communities By combining solar power systems with lease-to-own schemes that leverage that could most beneft from reliable and low-cost power usually depend on mobile technologies, they are delivering afordable and life-changing green unreliable and relatively expensive energy sources such as kerosene, exposing power to those who previously had to rely on expensive and harmful energy them to fuctuating oil prices and uncertain supply. Perversely, it means that sources that sufer from fuctuating prices, such as kerosene. a middle class family in Europe can pay less for energy than a poor family in a country such as Bangladesh2. Kerosene is also a toxic source of energy, with the World Health Organization estimating that 4.3 million people a year die Action prematurely from the efects of kerosene fumes3.

In Kenya, a ground-breaking collaboration between energy service company Today, M2M technologies and mobile payment systems are helping in the fght M-KOPA and mobile operator Safaricom is bringing clean, reliable and against energy poverty by enabling innovative business models that provide low-cost solar power — and ultimately energy independence — to tens of afordable, dependable power to mobile customers. thousands of Kenyan households. The project’s unique combination of a low- cost solar power system and a fnancing model that leverages both machine- M2M and mobile money shed on low incomes and without a to-machine (M2M) technology and mobile money payments is allowing it to new light on an old problem bank account — aford to cover the energise many of Kenya’s poorest and most remote communities. investment in solar equipment? UNICEF estimates that 46 per cent In 2012, start-up company M-KOPA of Kenyans live in poverty4. With Solar teamed up with Kenyan Enablers Outcomes energy costs swallowing up around operator Safaricom to deliver 30 per cent of income for people afordable access to solar energy by ▪ Affordable solar power systems ▪ 100,000 Kenyan households using at the bottom of the global for safe and reliable energy M-KOPA solar as their energy source using mobile technologies as the economic pyramid5, changes foundation of its fnancing system. ▪ A combination of M2M technology ▪ 12.5 million hours of kerosene-free in price and supply have a and mobile money services to enable lighting per month in rural communities signifcant impact. Customers purchase M-KOPA asset finance of energy systems ▪ $750 per year savings on each solar systems — which are currently Kenya enjoys more than six hours ▪ A regulatory environment supportive powered household’s energy bill based on an 8W solar panel with of sunshine a day6, on average, so of mobile money services Increase in revenues for Safaricom two LED lights, a portable lamp ▪ solar power ofers an attractive ▪ No VAT on solar products in Kenya, and a phone charging point with a solution. Yet costs and logistics allowing prices to remain affordable standard USB connections — on a have hampered adoption: how lease-to-own scheme. They start with ▪ Partnership with Safaricom covering can users — many of whom live distribution and revenue sharing a small down payment of KSh3000

64 65 Green Power Mobile Initiatives

($33) and then make afordable Asset fnance. Many poorer Kenyans making household budgeting much services to their community, micro-payments of KSh40 ($0.45) would fnd it impossible to aford more predictable. The ability to allowing them to earn additional for access to energy on a daily basis. the M-KOPA home energy system if buy credits in advance also means income. For business owners, having After making 365 daily payments they had to purchase it by making that customers can, in efect, bank access to lighting often results in they own the system outright. a one-of payment. However, the energy reserves for future needs. an uplift in sales and can lead to They can also choose to pay of the M-KOPA model brings it well other business opportunities, as Viability. The success of M-KOPA cost of the unit faster if their cash within fnancial reach, as they can shops and other business premises has been driven through the viability fow allows. This approach allows make a single $33 down-payment can stay open well after dusk. of its business model. It has been them to manage their payments and repay the balance over time, able to scale the project through its Creates a credit history for unbanked depending on their household until they own the unit outright. partnership with Safaricom, with customers. M-KOPA builds a credit fnances and energy needs. Flexibility. Customers can now the additional reach of Safaricom’s history of its unbanked customers by Credits are paid for via mobile buy energy ‘on demand’ — agents meaning M-KOPA is now tracking the regularity of their mobile phone using the M-PESA mobile accessing solar power when they available through a network of money repayments. This allows it money service. The GSM/GPRS need it and can aford it. Using a over 750 agents. As a result, by to produce a credit risk assessment M2M module embedded in the mobile phone as their payment October 2014 it was being used to that can be used to support future M-KOPA unit acts as a credit control system also means people who power more than 100,000 homes. loan applications by unbanked mechanism, allowing M-KOPA to fnd themselves economically or customers for other assets or services. Low cost. M-KOPA energy costs lock or unlock the unit over the geographically excluded from are much lower than less reliable air, based on customer credit. traditional fnancial services can Making it happen — solutions and non-renewable alternatives. still purchase the M-KOPA system. that reflect economic realities M-KOPA’s marriage between Each day of solar energy credit mobile technology and solar power Safety and reliability. Kerosene costs about $0.45 — between 25 M-KOPA shows that mobile allows it to overcome the issues is not just harmful to people and per cent and 75 per cent lower than technology can be a major enabler that stopped poorer individuals the environment, it also sufers the equivalent power provided for pioneering services that have and families from adopting solar from fuctuating prices. In contrast, by kerosene or batteries7. the power to transform the lives energy in the past, while also M-KOPA provides clean and of some of the world’s poorest Energy independence. The total ofering additional benefts. reliable solar energy at stable cost, people. Access to energy is a cost of the system is paid of over pressing development issue right time — typically 12 months — and now, and by hitching a ride on once the fnal payment is made, the the rails of existing infrastructure “M-KOPA Solar is designed around a game- solar energy equipment is wholly and technology, the M-KOPA changing technology — mobile money. We owned by the customer. From this system has found a commercially saw that being able to move a small amount of point on, power is free, bringing sustainable way to deliver afordable money around, at a low cost, could revolutionise energy independence to some of energy to poor households. energ access. e no oer orlclass the world’s poorest people. solar energy systems, collecting payments M-KOPA is possible because of Supports entrepreneurship. Phone in small amounts and allowing customers two critical mobile technologies — charging is a business in most to choose when and how much they pay.” M2M and mobile money — which African countries, so M-KOPA are the foundation of its asset Jesse Moore, Co-Founder and Managing Director, M-KOPA Solar customers can provide charging fnancing and payment model.

66 67 Green Power mAgriculture Mobile Initiatives

However, similar uses of these Mobile operators could also play their Mobile information feeds agricultural technologies in other areas could part by ofering inexpensive data potentially open up opportunities services targeting low bandwidth development in some of India’s in a range of markets such as mobile applications. Providing the poorest farming communities agriculture, health and education. tools that entrepreneurs need to better integrate mobile money and/ Operators can play their or M2M platforms would also lead Policy Goal part oering inepensie to a more reliable experience for end data services targeting low users and allow these types of services Globally, close to 900 million people below the poverty line live in rural bandwidth applications. and products to be scaled-up more areas, while the vast majority of the world’s poor — 86 per cent — depend quickly to reach a broader audience. on agriculture for their income. The World Bank states that “a more dynamic and inclusive agricultural sector could dramatically reduce rural poverty”. Finally, the wider telecoms sector M-KOPA is currently gaining good One way to improve the performance of the agricultural sector is to provide — including regulators and mobile traction in Kenya and Uganda; farmers with the information they need to increase crop yields, fght diseases, operators — has a role to play in terms however, energy service companies and get the best price for goods at market. New mobile services are equipping of exploring a range of issues including still face challenges in deploying farmers with the necessary knowledge to achieve these aims. As a result, these spectrum costs, taxation, licensing and expanding the reach of these services are transforming the lives of low-income smallholder farmers. and pricing of M2M technology, so it types of mobile-enabled solutions. can be supported and developed as an Although the cost of mobile M2M enabler for delivering next generation Action modules has decreased over recent services to poorer consumers. years (they have now dropped to In India, the mKisan initiative is one project that is bridging the information below $10 per module), the cost If this combination of wide industry gap for farmers and agricultural workers. It is a partnership between non- of integrating cellular technology cooperation, afordable hardware, governmental organisations (NGOs) and mobile value-added service provider into small home solar systems still innovative entrepreneurial services (VAS) Handygo. It provides farmers with practical and timely advice on crops, represents a signifcant fraction of the and appropriate data pricing can be animals, weather forecasts and market prices via mobile phone, with services fnal unit price. A continuous price efectively leveraged, there’s a real tailored to the user’s needs. decrease could further democratise chance to bring better opportunities the use of M2M modules for a range to poorer communities — energising of equipment and services that the lives of people at the bottom Enablers Outcomes could beneft poorer consumers. of the economic pyramid. ▪ Cooperation between NGOs and the ▪ Evidence of more effective and efficient 1 2010 International Energy Agency fgures quoted in Sustainable Energy and Water Access mobile industry to deliver effective small farms, helping to drive job and wealth through M2M Connectivity: GSMA and low-cost advice to farmers creation in poor and remote regions 2 2011 Endeva fgures quoted in Sustainable Energy and Water Access through M2M Connectivity: GSMA ▪ Tailored and refined agricultural ▪ Farmers equipped with the information 3 http://www.who.int/mediacentre/factsheets/fs292/en/ content based on user need they need to access the most lucrative 4 http://www.unicef.org/kenya/overview_4616.html 5 BOP500 fgures quoted in Sustainable Energy and Water Access through M2M Connectivity: ▪ Regulators can help boost adoption markets and secure the best prices GSMA of mAgri initiatives by avoiding ▪ Continued development of the service 6 http://www.bbc.co.uk/weather/184745 7 http://www.gsma.com/mobilefordevelopment/a-look-at-m-kopa-an-interview-with-nick-hughes legislation that makes it more difficult despite a tough regulatory environment for users to sign up to VAS services governing VAS activations

68 69 mAgriculture Mobile Initiatives

Strategic Challenge

Over two thirds of people living in India today rely on agriculture for their income, with many of the poorest earning their living from small farms1. As well as providing food, these farms create jobs and other economic opportunities. Development, however, is hampered by a lack of up-to-date agricultural information. More than a ffth of the country’s GDP is generated through agriculture, but just 40 per cent of farmers have regular access to farming data2.

Mobile information to feed work more efectively. Similarly, India’s poorest farmers information provided by the service on animal health highlights Agriculture is the primary source the most proftable breeds, latest of income for more than two thirds animal husbandry techniques of the Indian population3 and 216 and most efective vaccinations. million out of the 269 million Indians The service also includes weather existing below the poverty line live in forecasts to help farmers make rural areas4. It is clear that boosting better planning decisions, and agriculture is one of the most up-to-date market prices to help efective ways of alleviating poverty them better negotiate prices for — the World Bank estimates that produce and maximise returns. improvements within agriculture Farmers buy access to mKisan are, on average, at least twice as services in blocks of days (10, 20 or efective in reducing poverty as 30 days) at a cost of 1INR per day, improvements outside agriculture5. with subscriptions set to auto-renew The mKisan initiative is a mobile until the user chooses to unsubscribe. phone-based platform serving Information is delivered through a subscribers in six states across variety of channels, chosen so that India. The service delivers a wealth as many farmers as possible can of agricultural information to help access the service, irrespective of agricultural workers improve their educational background, digital farming techniques and maximise literacy or economic circumstance. yields. Crop agronomy advice, for These channels include: example, provides information on ▪ Interactive voice response (IVR). crops that are better suited to specifc The IVR service provides users areas, seed variants that can deliver with access to a pre-recorded higher yields, and pesticides that encyclopaedia of farming

70 71 mAgriculture Mobile Initiatives

knowledge. It allows them to select with the service using information launch in mid-20126. In total, over Telecoms Regulatory Authority of a topic, such as a type of crop, and drawn from its Direct2Farm database. 2 million mKisan subscriptions India (TRAI) in July 2013. These then drill down to fnd out about The International Livestock Institute have been sold during this period. new measures introduced ‘double specifc issues, such as pests and also provided information from its confrmation’ guidelines aimed at The average farm size of mKisan diseases. This content has been research into better animal husbandry protecting consumers from being users is 5.5 acres, and those who only prepared by CABI. to improve efciency, while mKisan’s wrongfully charged for content. access the service’s push content video content came from Digital As a result, customers now have to ▪ SMS. Short bulletins are broadcast (SMS messages) generally own or Green, which creates videos based agree twice in order to be signed up to farmers alerting them to work on smaller farms — averaging on its work across the globe helping to any VAS — once on the platform potential issues, solutions or 4.8 acres in size. This suggests that farmers to share and beneft from itself, and once through a third weather events. the service is providing value to best practices. The service also party channel. The regulations some of the poorest farmers in India. ▪ Helpline. Farmers connect to received funding and technical have had unintended consequences subject experts directly and support from the GSMA’s mAgri — they’ve drastically reduced the immediately for specifc and programme between 2012 and 2014. Many farmers said that mKisan number of VAS activations in India. time-sensitive queries. is helping them improve their In fact, by August 2013 the number Making it happen — delivering ▪ Video. Helpful tips and ‘how to’ farming techniques. The 2014 of VAS activations in the country guides for farmers are currently education to build greater trust report foun that a signifcant had fallen by half. Unsurprisingly, mKisan also experienced a small part of mKisan’s services, Mobile technologies can help number of repeat users had blowback from these measures, but it is predicted that it will economically excluded and changed their farming or with new customer acquisitions grow as more farmers adopt geographically remote farmers to marketing practices based on dropping by half after July 2013. newer technologies, such as beneft from the information age. advice received from mKisan. smartphones, and gain access to The service also needs to overcome An evaluation of mKisan by the 3G or 4G mobile services. several other hurdles. Even though GSMA in April 2014 showed that However, there’s still room for its user base has more than doubled A number of NGOs came together to over 800,000 unique mobile numbers improvement. By April 2014, a in size since March 2013, its most make the service possible. CABI, for had bought at least one subscription total of 279,494 farmers had used valued customer base — those who example, was a principal knowledge package, and almost 280,000 of these mKisan’s IVR channel since launch, use the IVR service — has not seen partner for the mKisan platform, had used the IVR service since its and the channel had an active the same level of growth. This is monthly user base of around 15,000 despite the fact that those who do farmers. It is an impressive number access the IVR features are more of users for a service that is still “With mKisan, I’m far more knowledgeable likely to report satisfaction with relatively young, but at the same about farming than I used to be. I have learned the service and become repeat about soil fertility, crop rotation and irrigation. time it represents a little more than users. In fact, they’re much happier We weren’t as well-informed before we started two per cent of the estimated 13 with the quality of the information using our phones. Most farmers, even if they’re million-strong potential market. they receive than those who are poor, use mobiles these days and, at one rupee a One of the challenges to growing just using the SMS service. This is day, mKisan represents good value for money.” the user base of mKisan is the in part due to a lack of awareness among farmers of the breadth Jaipal, Farmer, Uttar Pradesh in India changes put in place by the of services on ofer, as well as a

72 73 mAgriculture Taxation Business Environment

common perception that services their farming or marketing practices Short-lived tax gains from international which add more value (i.e. voice based on advice received from channels) must be more costly, mKisan. And of those customers mobile calls threaten long-term when in fact they are included in who reported making changes, economic growth across Africa the standard package. It is also 33 per cent saw better yields. a symptom of mKisan’s almost mKisan has already brought better total reliance on one marketing farming information to hundreds Policy Goal channel — blast SMS — when of thousands of farmers across other channels, such as face-to- The mobile ecosystem has contributed $60 billion to GDP in sub-Saharan India, but this is just the tip of the face marketing, are also needed to Africa, including $21 billion contributed to public funding via taxation. iceberg. India now boasts more than educate potential customers about However, recent sector-specifc taxes levied on mobile consumers and 300 million unique mobile phone the depth of the service. Some users operators are acting as an inhibitor to mobile development. One such tax — subscribers and by 20177 this fgure also report difculty in tracking the Surtax on International Inbound Call Termination (SIIT) — demonstrates is expected to have grown to more down the specifc information the danger of pursuing short-term tax revenue at the expense of longer-term than half a billion. By targeting they’re after via the IVR channel. boosts in economic activity and related tax income. this new wave of mobile users, Despite these issues, many farmers listening to and learning from report that mKisan is helping them farmers, and refning marketing Action improve their farming techniques. and education activity, services For example, the 2014 report found such as mKisan can continue Between 2009 and 2014, a total of 15 African countries imposed SIITs on that a signifcant number of repeat to deliver compelling benefts mobile network operators, often using third-party organisations to monitor users (31 per cent) had changed to India’s agricultural sector. international incoming calls (IICs) for these levies. A 2014 report from the GSMA and consultancy frm Deloitte on six of these countries reveals that

1, 2, 3 http://www.cabi.org/projects/project/19242 despite providing a short-term boost to tax revenues, these measures have 4 http://www.rbi.org.in/scripts/PublicationsView.aspx?id=15283 potentially damaging impacts on domestic and regional competitiveness, 5 http://web.worldbank.org/WBSITE/EXTERNAL/EXTDEC/EXTRESEARCH/ EXTWDRS/0,,contentMDK:21501332~pagePK:478093~piPK:477627~theSitePK:477624,00.html mobile usage and economic growth. 6 mKisan Baseline Report Executive Summary (2013), mKisan Midline evaluation (2014) - http:// www.gsma.com/mobilefordevelopment/programmes/magri/focus-areas/data-insights 7 Source: GSMAi Barriers Outcomes

▪ The mobile-specific surtax on ▪ Brakes were put on mobile development international incoming calls dampens and trade, amounting to direct demand for mobile services economic costs of $78 million ▪ Third-party international call monitoring ▪ 1.2 billion minutes (and associated revenue) is unnecessary, inefficient and intrusive were lost due to the resulting fall in demand ▪ This discriminatory tax is at odds with ▪ Up to 50 per cent of the government international trading norms, as promoted surtax was lost to third parties by the International Telecommunication ▪ Price hikes of up to 247 per cent were borne Union (ITU) and World Trade Organization by operators, customers and businesses

74 75 Taxation Business Environment

Strategic Challenge unwelcome outcomes for the six into question the need for third-party, African economies studied2. often more intrusive, monitoring. In addition, there are no guarantees The mobile ecosystem brings great benefts not just by creating employment One of the most immediate outcomes that the revenues recouped by the and economic opportunity, but also through the industry’s contribution to of SIITs in the six countries has been third-party organisations — often 50 public funds via taxation. a hike in international call prices. In per cent of the total surtax — will be Tanzania, these leapt by 90 per cent, Nevertheless, taxation presents governments with a challenge. The law of spent in domestic or even African closely followed Gabon (82 per cent) demand dictates that, all things being equal, as the price of a product or markets, potentially ‘leeching’ money and Uganda (60 per cent). In Burundi service increases, demand will fall. The issue then, is for governments to strike from local and regional economies. and Rwanda, outside the scope of the the right balance between taxation and afordability, so they can raise revenues study but part of the wider African without signifcantly dampening demand for products and services. This is economy, prices rocketed by 247 per When prices rise rapidly, especially true of telecoms-related taxation because while new or increased cent and 145 per cent respectively. taxes may generate short-term gains, they can ultimately undermine economic consumers look for alternatives Across the continent, SIITs have driven competitiveness, hinder growth and actually reduce tax revenues collected — both legal and illegal. prices up by an average of 97 per cent. over the longer term. Higher prices have signifcantly When prices rise rapidly, consumers SIITs — the long-term costs as well as the local and regional dampened demand for mobile look for alternatives — both legal competitiveness of operators. communications. Benin, for example, and illegal. The former often take the Fifteen African countries have saw healthy growth in incoming When introducing SIITs, form of increased use of Voice over introduced SIITs, imposing a international call volumes the year governments are looking to Internet Protocol (VoIP) calls, which set charge on every incoming before introducing SIIT (+38 per increase tax revenues and reap are difcult to tax and deliver little in international call (IIC). Call volume cent) evaporate and turn into a 1.6 economic and social benefts, but the way of government revenue. The monitoring is often carried out by per cent drop the following year. the cost/beneft analysis of this latter encompass the use of illegal SIM third-party organisations, with All six countries saw falls in call form of taxation reveals more boxes, which bypass terminations and, revenues then shared between the volumes, with Gabon and Ghana complex consequences, providing consequently, the surtax. third party and governments. experiencing 27 per cent and 57 greater insight into the long-term A Ghanaian mobile operator saw a 279 per cent slumps, respectively. It is In 2014, a study by the GSMA and cost of this short-term gain. per cent increase in the use of illegal consultancy frm Deloitte1 looked a phenomenon mirrored globally, SIM boxes between 2010 and 2013 and at the results of the introduction Assessing SIITs — with the OECD seeing demand cut the Ghanaian government estimated of SIITs on six African economies: by 53 per cent in countries that have revenues of $5.8 million were lost unforeseen, unintended and 3 Benin, Democratic Republic of introduced SIIT, such as El Salvador . due to the practice in 2011 alone. Congo (DRC), Gabon, Ghana, unwelcome outcomes The use of third-party organisations On average, the SIIT adds $0.14 to Tanzania and Uganda. SIITs artifcially increase incoming that track incoming international the price per minute of incoming international call prices — distorting Findings cover both the direct and calls and capture a share of the international calls in the six study what was formerly a marketplace — equally important — indirect surtax receipts presents additional countries. Clearly, this acts as a driven by competition. While some outcomes of these surtaxes, including problems. Existing mobile operator disincentive for consumers and of the impacts of introducing the the impacts on consumer pricing, practices allow for the monitoring of businesses to make international tax were predictable, there were demand, business cost, economic call volumes without impinging on calls to the countries involved. It also unforeseen, unintended and activity, government revenues, an individual’s privacy, and this calls is estimated that Ghana has lost

76 77 Taxation Universal Service Funds Business Environment

in excess of 679 million minutes, African businesses generated an While many USFs struggle Gabon 161 million minutes and estimated 1.6 billion minutes of Benin 147 million minutes. Across intra-African calls to SIIT countries. to achieve their mission, the six study countries, operators Based on this volume of calls, GSMA Colombia has bucked the trend have lost approximately $86 million research suggests that as a result of in potential termination revenue and SIIT the direct cost to businesses in it has cost these economies around the six countries was $48.1 million, Policy Goal $78 million in economic activity. plus an additional $29.8 million of lost economic activity between 2010 and Making telecommunications accessible to the widest number of people at Beyond this, increased costs to local 2014 for the economies as a whole. afordable prices is a policy goal for many governments. This is understandable, businesses are likely to reduce profts, as communications services — and mobile services in particular — bring a broad further restricting government SIITs are also at odds with the range of socio-economic benefts to citizens. domestic tax income. The imposition guidelines from respected international of the SIIT generates signifcant extra bodies: the UN’s International To drive this goal, some governments have created universal service funds costs to African businesses that trade Telecommunication Union (ITU) (USFs), fnanced by levies on telecoms sector revenues. Unfortunately, USFs are with (and hence call) businesses in states that taxes on international usually inefective, due to poor management and a lack of fnancial transparency. countries in the region where the SIIT services should normally only be One exception is Colombia’s USF, known as FONTIC. Thanks to FONTIC’s has been imposed, and to consumers, levied on customers inside the levying clear roadmap of planned projects, record of delivering projects in a timely including emigrants in neighbouring country, and the General Agreement manner and focus on fnancial transparency, it epitomises best practice in the countries calling their home countries. on Trade in Services (GATS) requires administration of USFs. This may represent a particular concern governments to ensure reasonable to policymakers in the region, given and non-discriminatory conditions that a large proportion of international for all forms of access to network and Action calls are to other countries within public telecommunications services, Africa. Evidence from operators including termination charges. Colombia frst introduced a USF in 1976, but the current structure of its fund suggests that on average across the is a refection of the reshaping that took place in 1999. One of the fund’s key However, the most profound fve countries analysed, nearly 40 aims is to fnance projects that increase the provision of telecoms services to all evidence against the introduction of per cent of all international incoming unserved or underserved locales, particularly those in rural areas. SIITs is the numerous unintended trafc is from countries in the region. negative impacts on local consumers, FONTIC sets itself apart from other USFs because it is fnancially autonomous, Call and tax revenues are not the businesses, operators and governments highly transparent about how funds are awarded and delivers projects in a only casualties of higher international that they produce — especially as timely manner. costs. There is a very real risk that most of these consequences do not SIIT is helping to make the six target respect borders, bleeding across Enablers Outcomes countries specifcally, and Africa boundaries with the potential generally, a less competitive global for long-term economic damage ▪ Financial autonomy of the USF ▪ Strong USF management with a market. From 2009 to March 2014, for all of sub-Saharan Africa. ▪ High levels of transparency across clear roadmap of future projects all the fund’s activities ▪ Prioritisation of infrastructure funding 1 Surtaxes on International Incoming Traffc in Africa: Deloitte 2014 2 OECD Quote: http://oecdinsights.org/2014/06/13/time-to-terminate-termination-charges/ ▪ Nearly full disbursement of fund ▪ A public bidding process for USF-funded 3 International Traffc Termination: OECD Digital Economy Papers No. 238 contributions every year projects that is open to all interested parties

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Strategic Challenge managed. For example, fnancing FONTIC also exhibits high levels for projects was not always of transparency across all of its allocated in a competitively and activities. For example, it uses a While competition has succeeded in delivering telecoms services to the vast technologically neutral way, and four-year planning cycle for projects. majority of the world’s population, gaps still exist. As a result, governments the funds often prove to be counter- This makes it clear which schemes have explored a number of regulatory options to increase access in these hard productive, as taxing commercial are currently being fnanced, and to reach areas, including USFs. investors in this way can make where money will be spent in the However, USFs usually struggle to produce efective results. They often rural investments less likely. The near future. It also ensures that accumulate large sums of money, yet fail to disburse some or all of these report recommended that regulators projects are delivered in a timely funds. Nevertheless, of the USFs in operation today, Colombia’s management investigate alternative solutions, manner. What’s more, projects are of its fund is a good example of best practice. including public-private partnerships awarded via a public bidding process that have delivered more efective that is open to all interested parties. Given the huge benefts that mobile results in countries such as Finland. USFs rarely achieve their aims The fund sponsors a range of connectivity ofers to citizens, it is However, of all the funds surveyed initiatives; not just those aimed at The liberalisation of telecoms markets understandable that governments globally, Colombia stood out as an improving access to communications and the promotion of competition still seek to extend coverage to these outstanding example of best practice. services for the previously have succeeded in extending access areas. Attempting to achieve the underserved, but also projects that to communications services to universal service goal, many have Making it happen — Colombia educate these users in how they can most of the world’s population. opted to create USFs. These funds focuses on transparency make the most of the technology. Mobile has played a huge part in usually require telecoms companies However, the largest proportion this. With the number of mobile to contribute a portion of their So, what makes Colombia’s of its spend has historically subscribers currently standing revenues to the fund, with these management of FONTIC so gone towards infrastructure at around 3.2 billion, nearly half contributions used to fnance projects exemplary? The success of the schemes, such as the creation of of the people in the world now that aim to address access gaps. USF relies on a number of factors, a national fbre-optic backbone. use mobile communications. It is not least of which is its strong Unfortunately, most funds do not expected that a further 700 million focus on fnancial transparency. More recently, Colombia has also achieve their aims. A study carried subscribers will be added by begun to attach coverage obligations out for the GSMA in 2013 estimated Importantly, the fund was set up 2017 and the 4 billion-subscriber to new spectrum licences and 1 that more than one-third of the 64 as an independent agency, working milestone will be reached in 2018 . licence renewals, something funds surveyed had yet to disburse under the auspices of the Ministry which may ultimately reduce its However, there are still areas that any of the contributions they had of Information Technology and reliance on the USF for extending lack coverage, due to a variety of collected2. As a result, more than Communications (MINTIC), and coverage to underserved areas. factors. For example, it is often not $11 billion remains undisbursed is structured to be fnancially economically viable for operators — money that could otherwise be autonomous. It has also tended Nevertheless, there is room for to build network infrastructure used to extend rural coverage or to make use of nearly the entire improvement. For example, under in areas that are geographically lower the cost of mobile ownership. sum of contributions to the fund the terms of the fund, operators are remote, sparsely populated, or every year. This is uncommon, not required to contribute 2.2 per cent The report also unearthed a range where income levels are so low the only for USFs in Latin America, of their gross revenues to FONTIC. of problems concerning how most local population would struggle but around the rest of the world. This places a high burden on the of the funds were defned and to aford mobile services. telecoms industry and, according

80 81 Universal Service Funds Energy Efficiency Business Environment

to a recent OECD report, “may The broad scope of the fund and Pakistan powers ahead with greener be in excess of MINTIC needs variety of its programs also make to promote ICTs in Colombia”3. it difcult to accurately measure technology to generate annual In most other markets, operator its efciency and efectiveness. cost savings of over $6 million contributions to the local USF are As a result, there may be cases closer to one per cent of revenues. where money from the fund is being used for projects where Also, the proportion of the money Policy Goal private investment could achieve from the fund used to fnance more impact at a lower cost. As demand grows for mobile services, so does the demand for energy to infrastructure improvements, power the network infrastructure behind those services. Providing energy at such as backhaul, backbone and Despite these issues, Colombia still remote sites can be especially challenging, which is one of the reasons why fbre upgrades, has fallen over the serves as a commendable model many of them rely on diesel generators. Unfortunately these generators can past two years. As infrastructure of USF management, due to its be expensive, fnancially and environmentally. Mobile network operators improvements have long-tail benefts clear roadmap of planned projects, see energy efciency as a key priority, and by trialling and implementing — operators and consumers continue tendency to deliver projects in a innovative power solutions, as well as other energy-saving technologies, they to beneft from them years into the timely manner and transparency in are lowering their energy bills as well as their carbon emissions. future — these projects should be how monies from the fund are spent. prioritised over other developments. Action

1 http://www.gsma.com/newsroom/gsma-calls-for-re-evaluation-and-reduction-of-the-universal- service-fund-levy/ In Pakistan, one operator is fnding new, greener ways to reduce energy 2 GSMA, Universal Service Fund Study (2013) consumption and costs, while also making its network more reliable. Results 3 OECD, Review of Telecommunication Policy and Regulation in Colombia (2014) of a trial by Warid Telecom published in 2014 show that innovative battery, cooling and electricity-generation technologies deliver cleaner, cheaper and more reliable results than traditional alternatives, providing new opportunities for mobile operators to make their networks more sustainable.

Enablers Outcomes

▪ An industry push towards using new ▪ New battery and cooling technologies technologies to reduce emissions and costs deliver more than $6 million in ▪ Internationally recognised metrics, such annual energy efficiency savings as the GSMA’s Mobile Energy Efficiency ▪ Use of fuel cell technology reduces Benchmarking service, that help operators exhaust CO2 emissions by 40 per cent continually improve energy efficiency compared to diesel generators

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Strategic Challenge

Global energy price volatility, unreliable grid, increasing demand for mobile connectivity and stif price competition for mobile services means that minimising energy consumption is a clear priority for operators. Greater energy efciency gives mobile operators the ability to reduce energy consumption, costs and the environmental impact of their network infrastructure. Operators spend about $15 billion on energy to power their networks every year, so improving energy efciency is a strategic priority for them.

Mobile network operator outages lasting between 10 and brings power to the people 16 hours. Warid Telecom operates backup power generators at its Abu Dhabi-based Warid Telecom is mobile sites to cover these power a major mobile operator in Pakistan. outages and ensure high availability. Since 2010, it has been comparing its In 2013, the operator partnered energy usage against other operators with telecoms energy solution using the GSMA’s Mobile Energy provider Cascadiant and the GSMA Efciency (MEE) Benchmarking in a Mobile Energy Efciency service. This has helped Warid Optimisation (MEEO) project. The improve its energy efciency by 15 aim of the project was to identify the per cent per connection over the past equipment consuming the greatest three years. The MEE Benchmarking amount of energy in Warid’s radio service compares the network energy network and to trial equipment that efciency of an operator against could signifcantly reduce energy that of its peers around the world. consumption and environmental More than 40 mobile operators have impact, while ofering improvements participated in the benchmarking, in performance. Launched in accounting for over 200 networks 2011, the GSMA’s MEEO service worldwide. Greater energy efciency helps mobile operators lower their is important because it allows energy costs and carbon footprint operators to reduce their carbon by trialling energy efciency emissions while reducing costs. solutions on cell sites, and then Pakistan is a particularly analysing their technical and challenging market for power fnancial performance so the most supply. It is not unusual for areas efective solutions can be rolled in Pakistan — even though they out. MEEO is a follow-on service to are on-grid — to experience daily the GSMA’s MEE Benchmarking.

84 85 Energy Efficiency Business Environment

Warid and Cascadiant gathered of carbon dioxide emissions per compared to diesel. Also, while the of the road). Unsurprisingly, Warid data across 10 cell sites and trialled year. It would also repay the reliability of diesel generators can has decided to roll out the technology new, energy-efcient equipment investment in the advanced battery be as low as 85 per cent, the fuel to other sites on its network. at four cell sites. The frst two sites technology within 18 months. cell system achieved 99.5 per cent The combined work of Warid Telecom, were used to trial more efcient reliability in the trial. Another major The advanced cooling trial used Cascadiant and the GSMA to deliver air-conditioning systems, the third beneft was that it led to a 40 per cent Coolsure UTS 55W air-conditioning more efcient network infrastructure used a new form of battery and the reduction in exhaust CO2 emissions units at two cell sites. It delivered highlights how investment by mobile fourth replaced a diesel generator and close to 100 per cent cuts in a 58 per cent cut in cooling energy network operators can support with a methanol fuel cell. carbon monoxide, oxides of nitrogen consumption at the Islamabad wider government objectives, and particulate matter emissions. Making it happen — more test site and a 57 per cent cut at including meeting increasingly effective and efficient power the Lahore site. If rolled out to all When the results of using these stringent national and international suitable cell sites in Warid Telecom’s three innovative technologies are environmental targets while The new technologies used across network — 2,100 indoor cell sites combined and extrapolated across providing more reliable connections the various sites have produced in total — the advanced cooling Warid Telecom’s network, they have to consumers and businesses. impressive results. The advanced technology would lead to $2.6 million the potential to cut energy costs by To fnd out more about the GSMA’s battery trial employed a General in annual energy savings. It would $6.2 million per year and reduce Mobile Energy Efciency Programme Electric Durathon E4810 battery at also slash 10,000 tonnes of carbon emissions by over 19,500 tonnes visit www.gsma.com/publicpolicy/ an outdoor cell site. This battery dioxide emissions per year and repay of carbon dioxide annually (the mobile-energy-efciency. uses a sodium nickel chemistry the investment in the new cooling equivalent of taking over 4,000 cars and managed to halve the diesel technology within just 14 months. generator running time, which would The methanol fuel cell trial mean a third less fuel could be used employed a Ballard ElectraGen-ME compared to a continuously running fuel cell system. It delivered total 20 kilovolt-ampere diesel generator. cost of ownership fgures on par Extrapolating the results across with a traditional diesel generator Warid Telecom’s network in Pakistan, when factoring into the business case the new battery would provide both its increased reliability versus annual savings of $3.6 million in diesel generators and the reduced energy costs and cut 9,650 tonnes fuel thefts associated with methanol

“The MEE Optimisation project in Pakistan has alrea emonstrate signifcant cost saings and emission reductions, and is clearly showing the enefts of the serice to our memers.”

Tom Phillips, Chief Regulatory Ofcer, GSMA

86 87 Taxation Business Environment

Brazil’s tax reduction on M2M Strategic Challenge connections paves the way for The mobile ecosystem has, until recently, concentrated primarily on connecting the rise of the machines people, but now its focus is widening to include connections between machines. Adding connectivity to machines allows them to make smarter, autonomous decisions, and support new services such as remote health monitoring and Policy Goal intelligent heating control for buildings. These machines rely on M2M SIM cards for their connectivity and, for the M2M market to grow, these connections The Internet of Things (IoT) is built on machine-to-machine (M2M) must be priced at appropriate and afordable levels. communication, where electronics devices, vehicles, sensors and a whole host of other items communicate with each other, as well as automated services, over Prior to the reduction in the tax rate on M2M connections, the Brazilian wireless connections. The GSMA forecasts that global M2M connections will Government’s tax policy did not distinguish between M2M SIMs and hit a quarter of a billion this year. The popularity of the technology is hardly traditional SIMs used by consumers for voice and data services. However, M2M surprising, as M2M has the potential to reduce healthcare costs, lower carbon connections produce a lower average revenue per unit (ARPU). Under certain emissions, improve transportation safety and much more. To reap the rewards circumstances, the high level of taxation meant operators would actually lose of this burgeoning market, policymakers need to ensure the right taxation money on the provision of certain M2M connections. As a result, they had no frameworks are in place to encourage investment in the M2M ecosystem. incentive to support or invest in the market. Once the Brazilian Government recognised the risk, it decided to take action by introducing a tax cut. Action Changing taxation policy BRL28.63 ($11.56) was charged on Recognising that its existing taxation policy on M2M connections was stifing to incentivise investment all new SIMs, including M2M SIMs, the growth of this potentially lucrative market, the Brazilian Government but following the reduction this fell decided to signifcantly cut the levies it imposed on M2M SIM cards. The move Mobile operators, along with almost 80 per cent to BRL5.68 ($2.29). manufacturers and resellers of took efect in 2014 and is providing a stimulus for mobile network operators The second tax is the Operation M2M devices, had long campaigned to develop services such as smart metering, car tracking and remote health Inspection Fee (TFF). This is applied for a reduction in the M2M monitoring. As a result, adoption of M2M technology in Brazil is set to grow on an annual basis to all active connection tax. They believed rapidly, with the number of M2M connections expected to increase from 7.8 SIM cards. This has now been the combination of high levels million in 2013 to 23.8 million by 2016. reduced by over 80 per cent, from of taxation and the low ARPU of a yearly fee of BRL8.94 ($3.61) to M2M connections were putting the an annual rate of BRL1.89 ($0.76). Enablers Outcomes brakes on a market that otherwise had huge potential for growth. In a statement, Brazil’s ▪ Forward-looking government policy designed ▪ Brazil set to lead the way in M2M Communications Ministry In Brazil there are two taxes levied to help a budding market grow in value adoption in Latin America announced that the new regulations on mobile SIM cards under the would not have an impact on the ▪ Strong communication between mobile ▪ Increased investment in M2M technologies Telecommunications Inspection Fund 2014 fscal budget1. In 2015, the operators and the government on measures and services by Brazilian mobile operators (Fistel). The frst is the Installation government expects the loss of tax needed to boost the M2M market ▪ M2M market in Brazil predicted to Inspection Tax (TFI). This a one-of revenue will equate to around BRL110 ▪ Significant reduction in tax grow from its current level of 7.8 million tax applied to all new connections. million ($49.3 million). At the same on M2M connections connections to 23.8 million by 2016 Before the tax cut, a TFI charge of

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time, however, it also predicts the cut how it would be implemented, regulator, Anatel. In a market the development of the Brazilian will hugely increase the take-up of followed two years later. that is constantly evolving due to M2M market. For example, it M2M devices and services. This M2M rapid innovation, the list would has provided a positive stimulus The presidential decree contained growth has the potential to open up quickly have become outdated. for Brazil’s operators to develop a clause stating that a monitoring new streams of taxation revenue for M2M services and strategies. body for M2M devices should be In the end, the regulator took a the government, which will more Shortly after the tax cut was put established and should include more pragmatic view. It decided than compensate for the loss. in place, the country’s operators representatives from the Ministry to allow the market and mobile announced plans to invest a total of Communications, the telecom operators to decide what did Making it happen — new of BRL13 billion ($6 billion) in the regulator Anatel, and a number and did not constitute an M2M laws, pragmatic regulation and development of M2M technologies of other key stakeholders. This connection, with the understanding over the next four years2. forecasts of huge growth body, known as the Chamber of that it would perform an audit Due to the nature of the Brazilian Management and Development in the future to make sure there According to data from Machina legal system, the Fistel taxation of M2M Communication Systems, was no abuse of the system. Research, there are approximately was ofcially created on October 7.8 million cellular M2M connections rules could only be changed by a The fnal piece of the jigsaw was the 2014, and its role will be to promote currently active in Brazil, with combination of a presidential decree need for Anatel to update the online cooperation between members of the this fgure predicted to skyrocket and a new law. The Brazilian Minister system used by operators to declare ecosystem and support policies for to 23.8 million by 2016. Brazil’s of Communications recognised that SIM card usage for tax purposes. the development of the M2M market. Communications Minister, a change was necessary, but the This change was necessary to allow Paulo Bernardo, has said that the tax cuts weren’t initially supported operators to stipulate whether a Ministry’s own fgures project by the Minister of Finance. The regulator took a pragmatic SIM card was being used for an the number of M2M devices in view, allowing the market and M2M connection (which qualifes Eventually, however, the Finance Brazil to leap to 23.3 million by mobile operators to decide what for the tax break) or any other form Ministry became convinced the 20163 as a result of the tax cut. move could have signifcant long- did and did not constitute an of connection (excluded from the term economic advantages and M2M connection, with the tax break). Once this system was The decision by the Brazilian so agreed to the changes, albeit understanding it would perform updated, the new M2M tax measures Government to reduce this tax is with the proviso that mobile an audit in the future to guard went live on 12 September 2014. a signifcant move to stimulate the growth of M2M services, but point-of-sale (PoS) connections against abuse of the system. The tax cut has already had a the Brazilian administration is not would be excluded from the M2M signifcant positive impact on tax breaks. The thinking behind The decree also included an initial this exemption was that PoS defnition of what constituted connections were already growing an M2M connection for taxation “We need to better harness the creativity and didn’t need tax reductions purposes, but there was an added of Brazil in this area. When we look at to stimulate their adoption. clause stating that further regulation the Brazilian market, there are important The initial law authorising the would be necessary to clarify this indications of growth. Yet, there is room M2M tax cut was passed in 2012, in the future. However, creating an for investment, because only 3.1 per cent of and the presidential decree, extensive list of what is and is not connections in the country are currently M2M.” an M2M device would have been which stipulated the level of the Paulo Bernardo, Minister of Communications, Brazil (2011-2014) tax break and the mechanics of problematic for the Brazilian telecoms

90 91 Taxation Business Environment Spectrum Management and Licensing

resting on its laurels. It is continuing M2M is a new market that can be Swapping old for new gives to take a lead in promoting IoT encouraged to grow by government connected services by mandating through policies of low taxation Angola and Namibia a head the installation of vehicle tracking and light-touch regulation. start for mobile broadband devices in new vehicles under By introducing this tax cut, Brazil the proposed SIMRAV scheme, is not only encouraging the growth and putting in place rules that are of M2M services, but ensuring that it Policy Goal steering energy suppliers towards will be the frst to beneft from the use of smart meters to help Customer demand for high-speed data access is accelerating at a rapid space, the social, environmental and with better grid management and but providing mobile network operators with new spectrum to service this economic opportunities of to support more fexible, time- demand can take time. As a result, it is important for operators to be able to this important new sector. of-use tarifs for consumers4. repurpose frequency bands assigned for 2G services for newer, more efcient technologies such as 3G and 4G — a process known as spectrum refarming. 1 http://m2mworldnews.com/2014/05/06/34989-brazil-cuts-taxes-on-m2m-services/ By allowing operators to maximise the use of existing spectrum in this way, 2 TelecomEngine, May 7th 2014, “Brazilian operators invest $6 billion in M2M”, retrieved from http://www.telecomengine.com/node/87301 regulators pave the way for mobile broadband services to be delivered to 3 Data extracted as of October 2014 citizens before additional spectrum becomes available. 4 https://blogs.siemens.com/smartgridwatch/stories/525/ Action

With the digital switchover (DSO) yet to be completed in Angola and Namibia, regulators in both countries supported the refarming of spectrum originally allocated for 2G services to be used for new mobile broadband services supported by 3G and 4G technologies. While more spectrum will be needed in the future to satisfy customer demand, refarming existing spectrum is allowing these operators to bridge the ‘supply gap’ until that extra spectrum is released.

Enablers Outcomes

▪ Emergence of mobile as the technology ▪ Mobile operators are free to maximise the of choice for internet access in Africa potential and efficiency of available spectrum ▪ Support from regulators for the ▪ Consumers gain access to mobile broadband refarming of spectrum to support services before the DSO is complete mobile broadband services ▪ Desire of mobile operators to move quickly to meet consumer demand for faster data access

92 93 Spectrum Management and Licensing

Strategic Challenge

The lack of fxed-line infrastructure for broadband access in sub-Saharan Africa (SSA), combined with the relatively high cost of such services where they exist, has resulted in very low fxed-line broadband penetration across the region. For example, in Angola the fxed-line broadband subscriber rate sits at just 0.22 per cent, while in Namibia it is approximately 1.3 per cent, according to fgures from the World Bank1.

As a result, mobile technology has emerged as the main medium for accessing the internet in these countries, as well as across the sub-Saharan region as a whole. But, with customers using more and more data, how can operators fulfl demand when new spectrum will take time to become available? In Angola and Namibia, operators have found the answer by utilising spectrum originally allocated for 2G services for faster 3G and 4G technology. This has enabled operators to bring mobile broadband to market sooner than would otherwise have been possible.

Accelerating mobile broadband it is likely that many countries in using existing spectrum SSA will not meet this target. Worldwide, there are 42 countries Frequencies below 1GHz are ideal that are likely to miss the ITU’s for mobile broadband as they deadline and, according to the African ofer good geographic coverage, Telecommunications Union, both improved in-building cover, Angola and Namibia are on this reasonable capacity and availability list. Due to the scarcity of available in large blocks, usually, for the spectrum, operators in these two efcient delivery of services. countries have had to look at alternative However, this spectrum isn’t always frequencies to provide mobile available to operators. For example, broadband services, the demand for the 800MHz band is still being used which continues to grow rapidly. for analogue television broadcasting in many African countries. This With falling demand for 2G services spectrum will be freed up once (based on older GSM and CDMA these countries complete their technologies), regulatory bodies digital switchover. The International in both countries have supported Telecommunication Union (ITU) has moves by operators to reuse the set a deadline of June 2015 for this to frequencies currently employed happen, but for a variety of reasons for these less utilised services —

94 95 Spectrum Management and Licensing

upgrading the underlying technology These higher bands ofer good With the blessing of CRAN, its take-over of another Namibian to 3G and 4G to hasten the roll capacity, but they’re not as efective Namibia’s largest mobile operator, operator called Leo. Once the switch out of high-speed data services, a in achieving coverage as sub-1GHz Mobile Telecommunications Limited was complete, the CDMA 800 service process known as ‘refarming’. spectrum. Because of the propagation (MTC), introduced the country’s was decommissioned and a new characteristics of higher-frequency frst LTE service in May 2012 by LTE network was built to replace it. Refarming 2G spectrum is providing spectrum, both operators chose to refarming the 1800MHz band, the breathing space needed for mobile The experiences of Angola and frst provide services in the Angolan previously used for 2G services, to broadband services to take hold, Namibia show that by allowing capital of Luanda followed by other support 4G mobile broadband2. but as demand for data continues spectrum licence holders to change or cities, rather than rural areas. to grow, operators will require In common with other markets upgrade the underlying technology additional spectrum in the future to Nevertheless, the use of the 1900MHz where the 1800MHz band is being of their service — in these instances adequately serve their customers. and 2100MHz bands has provided a refarmed for this purpose, MTC’s by refarming spectrum from 2G good short-term solution to the lack service currently only targets to 3G and 4G use — governments Making it happen — refarming of available new spectrum for mobile urban customers. The company is can generate positive outcomes for supports faster roll-out broadband services. Refarming these waiting for spectrum in the 800MHz consumers. Refarming underutilised bands has had a signifcant impact band to become available before spectrum also allows operators The relatively slow pace of the DSO in on the communications landscape in it rolls out LTE to rural areas, as to bridge the mobile broadband Angola has resulted in a lack of sub- Angola and has been successful in the propagation characteristics of supply gap by delivering 3G and 1GHz spectrum available to use for providing millions of Angolans living this sub-1GHz spectrum make it 4G services far sooner than would the launch of 4G Long-Term Evolution in urban areas with access to mobile much more suitable for providing have been possible had they waited (LTE) services. Despite this, with broadband services years earlier than wide coverage in rural areas. for the digital migration process the blessing of the Institut Angolias would otherwise have been possible. in broadcasting to be completed. des Communications (INACOM) In contrast, Namibia’s second largest — the Angolan telecoms regulator Angolans will soon also beneft mobile operator, Telecom Namibia, Refarming existing spectrum also — operators in the country have from LTE-A technology, as Unitel does have access to 800MHz spectrum. illustrates why regulators should been able to reuse the 1800MHz and has struck a deal with Ericsson to It was already using the 800MHz amend any licences that have 2100MHz bands that were traditionally upgrade its network to support this band to ofer 2G CDMA services, been issued under technology- allocated to 2G technologies (voice more advanced form of LTE. This and planned to refarm it for 4G use. specifc conditions in the past, and messaging services only). followed a successful demonstration as it enables operators to deploy However, before Telecom Namibia of the technology being used on both the latest technologies more In 2008, Unitel (the country’s second could refarm the 800MHz band for the 900MHz and 1800MHz bands. quickly. This approach makes it largest mobile operator) began to 4G mobile broadband use, it needed possible for operators not only refarm the 2100MHz band for 3G In Namibia, a positive stance by the to move a small number of customers to serve more subscribers, but technologies, while in April 2012 the telecommunications regulator — still using its CDMA service to a to provide each subscriber with country’s largest operator, Movicell, the Communications Regulatory higher band. Telecom Namibia better, more innovative services. launched Africa’s frst commercial Authority of Namibia (CRAN) acquired the higher frequency LTE service using the 1900MHz — enabled the country to become spectrum it needed to do this through band. Unitel then followed up in just the second nation in SSA to December 2012 with the launch of launch an LTE service, despite 1 http://data.worldbank.org/indicator/IT.NET.BBND.P2 2 https://lteconference.wordpress.com/2014/10/13/interview-ceo-mtc-namibia-in-terms-of- its own LTE service, which reused the fact it has a relatively small maintaining-business-mobile-sustainability-into-the-future-the-price-per-gigabyte-is-critical/ spectrum in the 2100MHz band. population of 2.1 million people.

96 97 Spectrum Management and Licensing

Rapid adoption of the APT700 Strategic Challenge band plan will help mobile operators The mobile industry has brought connectivity to billions of people around connect the unconnected the globe, delivering substantial socio-economic benefts in the process. Nevertheless, over half of the world’s population remains unconnected. Policy Goal Due to the lack of fxed-line infrastructure in many developing countries, mobile will be the enabling technology for getting the vast majority of these There are now over 3.6 billion unique mobile subscribers worldwide, but people online in the future. Bridging this digital divide will remain one of the despite this a large proportion of the world’s population remains unconnected. key goals of the mobile industry over the coming years, with GSMA research 1 To connect the unconnected operators really need access to sub-1GHz showing that afordability of services will be crucial to achieving this aim . spectrum, as it is most efective for extending coverage afordably to remote regions. What’s more, if this spectrum is harmonised around the world, it can Creating a 4G ecosystem The EMEA region is also working on lead to economies of scale that drive down handset prices and amplify the a plan for a second digital dividend The APT700 band plan was potential of sub-1Ghz spectrum to bring underserved populations online. using the 700MHz band, and it has developed over a period of two and a been proposed that this will have half years through close collaboration Action technical alignment with APT700 between governments, operators, — based on the reuse of the lower equipment manufacturers and The APT700 band plan details how Asia Pacifc countries can make duplexer of the APT plan — to enable trade associations. It is generally roaming and handset interoperability. harmonised use of the 700MHz band for mobile services. Widely adopted accepted to be a technically robust in the Asia Pacifc region, the plan is also being taken up in Latin America, In fact, the United Arab Emirates plan, and an excellent platform for announced in May 2013 that it would while the Europe, Middle East and Africa (EMEA) region is aligning technical connectivity in the years to come. elements of its second digital dividend with APT700. use the APT700 plan in this way. The plan was designed to support Due to this growing momentum, The combination of the excellent coverage provided by the band and its huge the needs of countries in the Asia addressable market will reduce connectivity costs. However, adoption is only it now looks likely that Pacifc region, including Australia, APT700 will form the biggest the frst step. By accelerating both digital switchover and spectrum awards to India, Japan, New Zealand, Malaysia, mobile operators, regulators can help speed up the deployment of services to harmonised ecosystem for 4G Singapore and South Korea. However, services around the world. the digitally excluded. because it makes very efcient use of spectrum, it has also drawn interest Making it happen — Enablers Outcomes from other regions. For example, a driving down costs via large number of countries in Latin spectrum harmonisation ▪ Close collaboration between government ▪ Adoption of the APT700 band plan in Latin America have committed to using and industry, ensuring the APT700 band America, as well as the Asia Pacific region the plan, including the four most For early adopters, choosing the populous nations — Brazil, Mexico, APT700 plan was not without risk. plan makes very efficient use of spectrum ▪ Likely future compatibility with the Colombia and Argentina. As a ▪ Commitment from national regulators 700MHz band plan for the EMEA region The United States had already result, a regional consensus is now chosen its own plan, known to adopt a harmonised APT700 plan, ▪ Economies of scale, helping developing that will most likely see as US700, and despite the fact creating a vast 4G ecosystem equipment manufacturers drive South America harmonise on APT700. that it was highly fragmented, down costs for consumers

98 99 Spectrum Management and Licensing

manufacturers already had cross-border interference and the network equipment and devices promotion of international roaming, under development. However, the release of the 700MHz spectrum they hadn’t started developing may have an even bigger impact hardware compatible with APT700, in developing nations such as and some were even worried that Afghanistan, Bangladesh, India or APT700 might never achieve scale. Pakistan, where large portions of the population remain unconnected.

The network infrastructure Sub-1GHz spectrum has the potential requirement for operating to help these people get online in in the 700MHz band can be two key ways. First, the propagation up to 70 per cent lower than characteristics of the 700MHz band in the 2100MHz band. make it ideal for providing mobile services to rural areas. Fewer base stations are required to provide Nevertheless, Australia and New coverage using this band, compared Zealand decided that APT700 was to higher frequency bands. This has the best option for their markets signifcant impact on the levels of and became the frst two countries investment need by operators to to adopt the plan. Japan soon establish coverage in rural areas. followed, scrapping its own band For example, research by the GSMA plan in favour of APT700. It also found that the network infrastructure became the frst country to license investment requirement for part of the 700MHz band to mobile operating in the 700MHz band can operators, while Taiwan became be up to 70 per cent lower than in the frst country to have a live the 2100MHz band, and a report by 4G network based on APT700, the Boston Consulting Group found when mobile operator FarEasTone that halving capital expenditure launched its service in June 2014. requirements to establish network With countries in Latin America coverage can lower service costs now also lining up behind the plan, by between fve and 10 per cent2. the addressable market is estimated Second, because APT700 will have to be around 2.1 billion people, an enormous addressable market, it but in the future this market could will allow manufacturers to achieve grow to over three billion people. economies of scale when producing While all the countries involved network hardware and handsets. will gain benefts from alignment For example, handsets designed to with APT700, such as reduced work in Asia will also work in Latin

100 101 Spectrum Management and Licensing Illegal Content Consumer Protection

America, Europe and Africa. This puts When it was standardised in 2012, Industry alliance helps downward pressure on the prices there were questions about whether of these devices, making them more the ecosystem could become large halt the spread of afordable. In fact, research shows that enough to drive down the costs abusive imagery harmonisation of spectrum can lead of infrastructure and devices, to a reduction of 10 per cent in the bill yet today the large number of of materials for handsets3. countries committed to using the Policy Goal This is an important factor when plan mean it has the potential to trying to connect the unconnected, touch the lives of well over three Mobile networks not only ofer traditional voice and messaging services, they as mobile services in developing billion people, many of whom will also provide access to virtually all forms of digital content via the internet. countries are particularly sensitive be going online for the frst time. Unfortunately this means they are inevitably used by some to access illegal to higher handset prices. content, including images of child sexual abuse (child pornography). Mobile It is now up to governments and network operators use a number of technical and legal measures to fght The speed at which the APT700 regulators to accelerate the release of against this. To further back up these measures, the industry has also come band has succeeded in getting this spectrum, so mobile operators can together to form a strong alliance focused on preventing the spread of child buy-in from several regions begin to deploy the types of services sexual abuse content (CSAC). around the world is astonishing. that overcome digital exclusion.

1 http://asiapacifc.gsmamobileeconomy.com/GSMA_ME_APAC_2014.pdf Action 2 http://www.gsma.com/spectrum/wp-content/ uploads/2012/03/27796700asiapacifcimpact21oct10egsin.pdf The Mobile Alliance Against Child Sexual Abuse Content was founded by an 3 http://www.gsma.com/spectrum/wp-content/uploads/DigitalDividend/DDtoolkit/importance-of- harmonisation.html international group of mobile operators and the GSMA to work collectively on obstructing the use of the mobile environment by individuals or organisations wishing to consume or proft from CSAC. By combining co-operation and information-sharing with a range of technical procedures, it has put in place signifcant barriers to the misuse of mobile networks and services for hosting, accessing or profting from this type of content.

Enablers Outcomes

▪ Willingness of the mobile industry to work ▪ An alliance of mobile operators taking together to combat the spread of CSAC proactive action against the spread of CSAC ▪ Collaborative working between a worldwide ▪ A knowledge-sharing culture that draws network of groups with shared aims on, and adds to, the collective expertise ▪ Co-operation between law enforcement of a range of groups with similar aims agencies, regulators, voluntary ▪ An industry body that acts as a model of organisations and industry groups self-regulation thanks to its robust policies and record of delivering real-world results

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Strategic Challenge systems? And although data showed As well as working closely with the majority of abuse content was law enforcement as required being shared and consumed through by local legislation, members Mobile networks bring enormous benefts to people around the world, the fxed internet, with mobile agreed that they would make connecting them to friends and family, putting information at their fngertips broadband growing at such a rapid three specifc commitments: and boosting employment opportunities. However, like any medium, rate, wasn’t it likely that issues mobile networks also have the potential to be used for illegal activities by ▪ Implement processes to deal such as the spread of CSAC would unscrupulous individuals. Unsurprisingly, a big concern for operators is the with notices and take downs for transfer into the mobile sphere? possibility of their networks being used to disseminate CSAC. removing CSAC. It seemed obvious that the global The industry’s response was the creation of the Mobile Alliance Against ▪ Work with local national hotlines nature of the crime required a Child Sexual Abuse Content. Although a relatively young organisation (it was on processes to enable removal of response that was also global in formed in 2008), by taking a collaborative approach to the issue, the Mobile CSAC. reach. With this in mind, the GSMA, Alliance has been successful in creating signifcant barriers to the misuse of with its worldwide membership ▪ Restrict access to URLs known to the mobile environment for spreading this type of content. of mobile operators, formed the contain CSAC. Mobile Alliance Against Child Sex such as Visa, Mastercard, American Although these principles sound Stronger together Abuse Content in early 2008. Express, Google and Paypal. straightforward, putting them into With growing worries surrounding action was not. For example, most Soon after the formation of the Making it happen — working the potential use of mobile European countries have national Financial Coalition, a group of networks to disseminate CSAC, collaboratively to close down hotlines, but there are several technology companies including mobile operators were united opportunities for criminality regions around the world where Microsoft and Google came together in their desire to put in place they are relatively uncommon. under the banner of the Technology The members of the Mobile Alliance measures to help combat the threat. As a result, the Mobile Alliance Coalition. This coalition aims to were very keen that the group works closely with the INHOPE In 2007, the GSMA started use technologies such as digital would not become a ‘toothless Foundation, which develops discussions with mobile operators fngerprinting of known CSAC to stop tiger’ — the consensus was that it national hotlines worldwide to and key stakeholders to decide these images from being uploaded needed to have real bite, with strong, increase the number of countries on the approach it would take to and shared on their networks. The defned and deliverable goals that with efective hotlines. For tackle the issue. These discussions founding of both of these coalitions would be efective in stemming and example, Mobile Alliance member took place in a climate where represented positive steps in the reversing the spread of CSAC. several other industries were fght against the spread of this type already forming action groups. of content, but they also raised For example, the Financial questions for the mobile industry. “The Mobile Alliance is a prime example of the Coalition against Child proactive action industry can take and, together For example, if payments to sites with government and law enforcement support, Pornography was founded in 2006, dealing in CSAC were blocked with a mandate of tackling the e can mae signifcant progress in the gloal by credit card or online payment fght against chil seual ause content online.” commercial exploitation of child systems, was there now a possibility sexual abuse images. It included that this economic activity could Hamadoun Touré, Secretary General, International Telecommunication Union (2007–2014) key players in the credit card be displaced onto mobile payment and online payment industries,

104 105 Illegal Content Consumer Protection

Telefónica is currently working to other types of content should whether mobile payments are at The results achieved so far, and get hotline organisations set up be dealt with in the future. risk of being misused to monetise the continued important work in Latin American markets where CSAC by seeking feedback and carried out by the Mobile Alliance, From the beginning, the Mobile they have not yet been established. input from national hotlines, demonstrate how efective the Alliance also realised it needed to Also, the third principle was a the Financial Coalition and law industry can be when it unites establish strong links with a number politically sensitive area for mobile enforcement agencies. It has also behind a common cause, while of external stakeholders in order to operators to navigate. At the time produced guidelines for mobile also drawing on the knowledge succeed in its goals. For example, the Mobile Alliance was formed, operators on preventing abuse and expertise that external the GSMA became a member of the there were discussions, particularly of mobile payments services stakeholders have to ofer. As such, Internet Watch Foundation (IWF) so in Europe, around the possibility and has completed research the Mobile Alliance stands as a that the Mobile Alliance could take of legislation being introduced into current levels of misuse. model of efective self-regulation, advantage of the IWF’s existing list to require mobile operators to showing that the industry can of child sexual abuse URLs as well This research found that it is still block some types of content, be trusted to come together, do as its technical support and cutting- rare for mobile payment mechanisms such as copyrighted material the right thing and put in place edge research. It also engaged with to be implicated in the commercial that was being shared illegally. efective measures to protect Interpol, so members could opt to exploitation of this type of content. children from being exploited. implement the Interpol ‘worst of’ As with any type of criminal list of child sexual abuse URLs. activity, conditions on the Furthermore, the Mobile Alliance ground can change rapidly, so the works collaboratively with groups Mobile Alliance takes a proactive such as the International Centre for approach to monitoring areas Missing and Exploited Children that could potentially develop and United Nations Children’s into trouble spots in the future. Fund (UNICEF), which seek to ensure an appropriate legislative Mobile operators were backdrop is put in place countries understandably worried that if where it is not clear that this they blocked one type of content — type of content is illegal. Without child sexual abuse images — scope strong local legislation, mobile creep could mean they would be operators cannot take an efective asked to police all kinds of trafc stand against this type of crime. travelling across their networks, As with any type of criminal which would be unworkable. activity, conditions on the ground Despite the sensitive nature of the can change rapidly, so the Mobile task, the members agreed there was Alliance takes a proactive approach a very specifc need to block this to monitoring areas that could particular type of abuse content and potentially develop into trouble that this should have no bearing spots in the future. For example, on discussions surrounding how it keeps on top of the question of

106 107 Base Station Siting Consumer Protection

Arbitrary EMF limits Strategic Challenge threaten Europe’s mobile Europe boasts an innovation-led economy that has embraced the benefts communications evolution of mobile communications. It has the highest level of mobile penetration in the world, and estimates suggest that the number of mobile connected devices across Europe will surpass 1 billion by 2020. Connectivity brings Policy Goal huge economic benefts: by 2020, for example, mobile communications will represent €234 billion worth of market revenue opportunity for the The mobile industry in Europe provides services that touch the daily lives European economy. of almost every citizen. To continue to provide faster connection speeds and greater coverage, the industry constantly needs to enhance existing base Europe, however, is in danger of falling behind in the connectivity race. For stations or build new ones. Rightly, base stations must meet a range of criteria, example, at the end of 2013 one in fve mobile connections in the US were made 2 including radio frequency/electromagnetic feld (RF/EMF) exposure limits. using super-fast 4G/LTE technology, according to a recent industry study . The However, inconsistency in national regulatory limits in the region adversely same study found that in Europe this fgure was just one in 50. Furthermore, afects network upgrades, increases costs and can ultimately stife innovation. European connection speeds are falling, with US subscribers predicted to be enjoying connections that are 100 per cent faster by 20173. Action One reason for Europe’s poor performance against global competitors is a lack of consistency on key areas of mobile policy — including RF/EMF exposure In 2014, the GSMA released a report on how strict regulations covering RF/EMF limits applicable to mobile base stations. The mobile industry is working for exposure limits within the European Union are afecting the deployment of new the adoption of harmonised limits and to ensure that all European citizens, mobile technologies. The study — focusing on Belgium, France, Italy, Lithuania businesses and organisations can beneft from the latest and most feature-rich and Poland — found potentially damaging variations in approach across mobile services. these countries. The mobile industry is working with the EU to close this gap. Ultimately, the onus is on member states to adopt harmonised exposure limits Multiple limits damage Non-Ionizing Radiation Protection based on international scientifc recommendations to ensure that certain regions the single market (ICNIRP) and recommended by the within Europe don’t continue to lag behind in terms of mobile network investment. World Health Organization (WHO). While Europe aspires to a single, The ICNIRP recommends an unifed and globally competitive Enablers Outcomes exposure level of 41 V/m (equivalent market, European policy on to 4.5 W/m2) at 900 MHz in all public acceptable base station RF/ ▪ Harmonised EMF levels based ▪ A globally competitive Europe fully able to places, but a recent GSMA report on EMF limits is far from consistent on international guidelines exploit the €235 billion market opportunity fve target EU countries illustrates across member states. ▪ Regulatory support for EMF levels offered by mobile communications the level of variation faced by mobile that protect public health and allow ▪ Europe-wide 4G/LTE network This is despite the fact that the network operators when upgrading optimisation of existing and emerging coverage bringing mobile broadband European Council recommends existing network infrastructure. harmonised limits based on 1998 mobile network technologies connectivity to EU citizens Belgium. In 2009, responsibility guidelines (Recommendation ▪ Europe-wide, rather than national and intra- ▪ High-speed connectivity supporting for setting RF/EMF limits was 1999/519/EC) set by the national, compliance with EMF regulation investment, jobs and innovation in the EU devolved to the regions, which International Commission on resulted in policy fragmentation.

108 109 Base Station Siting Consumer Protection

In Flanders, for example, antennas are simulations. The fndings showed It is an often impossible balancing station using 2100MHz equipment limited to just 3 V/m in residential that levels at 99 per cent of the act, with coverage and quality cannot also use the recently awarded areas, while a general cumulative exposure simulation points were frequently sufering as a result. 1800MHz band for 4G/LTE. norm of 20.6 V/m is applicable to less than 1/10th of national safety Regulation has recently been Operators must build an entirely all RF/EMF sources — four times limits. It concluded that further updated with a slight easing of new base station and, even then, stricter than the ICNIRP guidelines reductions in EMF levels would restrictions, but implementation of cannot optimise potential services. expressed as power density limits. lead to a sharp deterioration in the new guidelines has been delayed In light of the upcoming coverage. As a result of the country’s because the technical rules to assess In Brussels, overall levels are set 800MHz/2.6GHz auction and the adherence to ICNIRP guidelines, compliance have not been published. at 3 V/m — about 200 times more investment obligations announced 4G/LTE roll-out has accelerated. stringent than the ICNIRP power Lithuania. Limits in Lithuania in the consultation process, there are density limits — with each operator In the capital, however, the situation are set at 6.1 V/m — between 30 serious doubts as to the ability of subject to an individual quota of 1.5 is more complicated. The City and 50 times stricter than ICNIRP operators to fulfl the targets set out V/m. A 2011 study4 found this left of Paris (as a major landlord) has recommendations, depending on by the national regulatory authority. operators needing an estimated 400 negotiated separate agreements frequency. Perversely, this saw additional base stations to cover with mobile operators covering mobile operators forced to close Making it happen — the same area, and also demanded RF/EMF levels. Working to the base stations as they attempted to a level and scientifically technical modifcations and upgrades terms of these agreements there is improve connectivity by rolling out supported playing field to 10 per cent of existing base stations. a risk that existing networks could 3G networks between 2005 and 2010. What’s more, it led to increases in become saturated, threatening the The arbitrary RF/EMF limits have a The roll-out of 4G/LTE services energy consumption by as much as deployment of 4G/LTE services. severe impact. They reduce fexibility is, once again, exacerbating the 40 per cent, and limited coverage and These agreements can also cause in terms of network deployment problem of restrictive RF/EMF connectivity, particularly at indoor delays in the roll-out of base stations, and lead to a decrease in coverage limits: operators have had to close locations. In April 2014, the total as operators are required to present (particularly indoors). They also around 10 per cent of their base allowable level was increased to 6 and then gain additional approval reduce site sharing opportunities stations and redesign the remainder V/m, however, this still represents for computer simulations from and, consequently, force operators to cope with the loss of capacity. a level that is 50 times stricter than the City of Paris before any new into using more base stations and As new technologies arrive, such ICNIRP recommendations. The installation can be put into operation. compromising service levels. as LTE-Advanced, problems will operator Base has stated that the Italy. Since 1998, the Italian multiply, as it is estimated that In Italy, for example, a study into the standard will need to be raised in Government has imposed a blanket 6 between 30 and 50 per cent of city implications of expanding 3G sites two to three years to enable operators V/m public exposure limit across all sites will not meet requirements. together with 4G/LTE deployment to meet the expected 4G demand.5 frequencies. It means that operators has shown that between 44 and Poland. The permitted RF/EMF France. France presents a mixed must try to reconcile coverage and 77 per cent of existing base station exposure levels in Poland (7 V/m picture. The regulatory limits are quality of service issues against sites would be unusable for new for frequencies from 300MHz based on the ICNIRP guidelines — the requirements of compliance LTE services. Were Italy to follow to 300GHz) are too low to allow an approach that was vindicated by with RF/EMF exposure limits, ICNIRP guidelines, however, all optimal network deployment in a comprehensive four-year review while also navigating a strict and sites would be LTE-capable. numerous frequency bands in one of exposure limits that included long authorisation process that location. This means that in large The problem of inconsistent and 300 million base station exposure varies among municipalities. urban areas, for example, a base unscientifc RF/EMF limits is

110 111 Base Station Siting GSMA Contacts

Through direct engagement with governments, the GSMA’s advocacy team strives to shape the regulatory hugely damaging to Europe’s Committee on Emerging and Newly agenda in ways that benefit the mobile ecosystem, as well as mobile-using citizens and businesses. communications infrastructure, and Identifed Health Risks (SCENIHR) The team comprises the association’s government and regulatory affairs organisation, whose policy experts the solution lies with the member — specifcally, that policies governing are distributed around the globe, as well as Mobile for Development, which provides technical assistance states. The European Commission exposure limits should be based through a number of programmes to maximise the socio-economic benefits of mobile in developing countries. can help the region to regain its on international science-based mobile communications competitive guidelines. By working together and Please e-mail [email protected] with any questions or comments about the Mobile Policy Case Sudies. advantage by promoting good following evidence-based policies, practice in member states through the European Commission and its the harmonisation of RF/EMF member states can promote the rapid exposure limit policies based on deployment of mobile broadband existing international guidelines. technologies that beneft citizens.

It is clear that, in countries where The problem of inconsistent and EMF exposure limits are signifcantly unscientifc limits is below ICNIRP guidelines, the roll out Tom Phillips John Giusti Matthew Bloxham Belinda Exelby hugely damaging to Europe’s of next-generation mobile services will Chief Regulatory Officer Head of Policy Head of Policy Research Head of Institutional communications infrastructure. be severely hampered. However, by [email protected] [email protected] [email protected] Relations [email protected] adopting internationally recognised standards, these regions would Furthermore, member states should beneft from high-speed connectivity follow the EC 1999 recommendation that helps boost investment, creates and the latest opinion of the new jobs and drives innovation. European Commission’s Scientifc

1 http://www.gsma.com/publicpolicy/wp-content/uploads/2014/03/Arbitrary-Radio- Frequencyexposure-limits_Impact-on-4G-networks-deployment_WEB.pdf

2 http://www.gsmamobilewirelessperformance.com/ Zouhair Khaliq Lawrence Yanovitch Sebastian Cabello Isabelle Mauro

3 Cisco Visual Networking Index: Global Mobile Data Traffc Forecast Update, 2012–2017, Cisco, Managing Director, President, GSMA Foundation Head of GSMA Latin America Head of GSMA Africa and February 2013 Mobile for Development [email protected] [email protected] Middle East 4 AMEC Earth & Environmental GmbH for the GSMA [email protected] [email protected] 5 http://www.kpnbasefacts.be/network/4g-in-brussels-an-agreement-that-does-not-resolve- everything/

Irene Ng Martin Whitehead Head of GSMA Asia Head of GSMA Europe [email protected] [email protected]

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