Monday, February 8, 2010

Disaster Relief & Philanthropy Enabled by New Mobile Business Models

"Information is a vital form of aid in itself […] Disaster-affected people need information as much as water, food, medicine or shelter..."

InSTEDD cites the above quote from the IFRC's World Disasters Report on its blog, which highlights Haiti and the work InSTEDD and its partners are doing in disaster relief. Everyone has heard about the millions of dollars raised via mobile phones for the Haiti crisis. Less discussed are the business models that are required to make these donations and other disaster relief efforts a success.

In developed countries such as the US, Germany and Japan, most mobile customers are on the postpaid system where they pay their bill after services are used. This enables mobile operates to charge and collect donations on traditional phone bills. Up to 90% of mobile phone subscribers in developing countries use a prepaid model, purchasing air time in advance of usage. The prepaid business model is not as conducive to mobile phone-based philanthropy. However, this is changing with the adoption of mobile phone-based money transfer services such as M-PESA, Zap and Wizzit in Africa, Globe and SMART in the Philippines and True Money in Thailand. These services enable the movement of funds and could facilitate mobile philanthropy in addition to providing much-needed financial and payments services to emerging-market consumers.

From non-profit organizations to global corporations, it is important to understand how business models differ across countries or regions and to tailor products and services that lend themselves to these distinct paradigms. Business models continually evolve and as they do, new product and service opportunities arise and others become less attractive. Mobile phones are incredibly powerful tools, but harnessing them for both social and commercial gain requires a deep understanding of their underlying business models.

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