Voices From Emerging Markets: Innovative Electricity Generation in Rural India

By Rama Siva in India

I have been in rural Eastern India for the past few weeks in villages that have had no electricity for most of its history. Then about 2 years ago, Husk Power Systems(www.huskpowersystems.com) came on the scene with small scale power plants that create electricity from rice husk. The changes in the villages since the coming of electricity have been enormous.

The technology of gasification and power generation is many decades old. So why is it that these and thousands of other villages rich in agricultural waste are yet to be electrified? The answer may lie in the challenges of operating such a set up in a sustainable way in a rural setting. It is tough to find and train operators from the village level labor pool. The costs have to be kept well within the ability of the local consumers to pay for it. Even when the price is reasonable, it is a huge effort to get the consumers to pay regularly month after month.

Husk Power Systems is active on the field finding solutions to some of these challenges. Rich in venture capital funding and grants from the likes of Shell Foundation, they plan to set up 60 of these power plants in 2010 reaching a quarter of a million people in India. This is technology from early 20th century being harnessed on a large scale with 21st century management tools.

Landlines a viable competitor to mobile phones

by Karen Coppock
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With the incredible expansion of mobile phones in the developing world, it is easy to overlook the role of the simple landline phone. This is a mistake. Although landline phones are much less prevalent in emerging markets - ITU data shows a greater than 25:1 ratio of mobile phones to landlines in emerging markets - they are still a viable competitor to mobile phones, especially as you go further down the economic pyramid.

I was very surprised to see how many people were using public pay phones in the streets of Mexico last week. During a 20 minute coffee break in a cafe in the Zocalo (historic center of Mexico City), I saw a half dozen people use the public pay phone. This was true across the city - pay phones were very frequently used.

I should not have been surprised, however, as the use of landlines and pay phones were found to be a substitute for mobile phones in primary research Vital Wave Consulting conducted among low-income (and non-mobile phone owners) citizens in Mexico and six other emerging markets 18 months ago. From Ke in China to Siem in Cambodia and Mona in Egypt the people that we interviewed as a part of this research noted that "it was not an inconvenience" to seek out and use a public pay phone and that it was their primary mode of communication. Pay phones are an increasingly rare site in the US, yet they may continue to play an important role in emerging markets for the foreseeable future.

Rural India Provides a New Lab for mServices Scale

Entertainment may not be the first thing that springs to mind when people think about the basic human needs that mobile phones can help to fulfill. But for many it is a fundamental contributor to quality of life. This fact is illustrated in a recent Wall Street Journal article on the growth of entertainment in rural India provided via mobile phones. mEntertainment, as it is called, is one of many mServices growing rapidly in India, as customers pay to call and listen to the latest Bollywood tunes or receive text messages with the day's cricket scores. Other services, such as mAdvertising and mBanking, are also taking off. A full 31% of car-buying decisions in the country are now influenced by mobile phone advertisements, and increasing demand for mobile financial services has led Nokia to begin offering its new 'Nokia Money' service in India.

y developing countries are striving for scale in mServices. But India appears to be leading the pack with accelerated growth of offerings and adoption. This is, in part, due to the extremely low mobile voice and text prices that Indian mobile subscribers pay. Customers in India are paying less than a penny a minute for voice calling, a result of fierce competition among a large number of mobile operators. This dynamic is stimulating greater mobile phone adoption and use, but it is hard on mobile operators who are struggling to make a profit; average revenue per user (ARPU) has been declining while the market grows rapidly into lower-income customer groups. Operators are now responding by providing additional services - mServices - to stimulate incremental customer spending, over and above what is already spent on normal voice and texting capabilities.

Operators - and handset manufacturers - around the world are hoping mServices will address growth and margin requirements that traditional voice and texting services cannot. mServices provided through existing voice and texting capabilities can increase revenues through higher volume. And over time, the offering of more sophisticated services, like targeted customer profiling and web-based capabilities, will allow for premium pricing and increased profits. This also creates opportunity for other companies that either create or enable new mServices. Tools, components and turn-key solutions for mServices can all find customer demand and partnership opportunities, especially in emerging markets where service alternatives are few and operator pressures are mounting.