Page 261 - The Digital Financial Services (DFS) Ecosystem

ITU-T Focus Group Digital Financial Services
Ecosystem

Figure 10 – Internet affordability

3.2 Feature phone and smartphone challenges

While some social networks can be accessed via feature phones, the experience is not optimal. For example,
unless the user is currently running the social network’s Java app or visiting the mobile web site, they will not
receive real-time phone calls or messages. Since low-cost messaging and VoIP calls are very practical BoP use
cases, feature phones severely limit social network appeal.

Smartphones address the push notification problem and offer a better overall user experience, but they create
other problems:

• Battery life: Smartphones require frequent recharging, perhaps daily rather than one to three times per
week for feature phones. This higher energy consumption creates a significant barrier for the 1.1 billion
people without electrical grid access and the 1 billion with unreliable grid access. These underserved
individuals must use a battery-charging vendor and therefore incur travel costs, travel time, and recharge
costs. Recharge costs can be $8 per month for a smartphone.
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• Device cost: Smartphones are more expensive than feature phones. A low-cost Android smartphone
can be below $50, but that still reflects a sizable investment equal to one month of BoP income. In July
2016, India-based Ringing Bells released a subsidized $4 smartphone branded "Freedom 251" but has
been struggling to meet delivery promises and faces scepticism about their business model/economics.

• Data cost: Smartphones tend to use more data, driven by phone characteristics (larger screens, processing
power) and user behaviour (such as downloading large applications and visiting graphics-rich websites).

3.3 Low financial inclusion

Unless the BoP link payment and social network accounts together, they are limited to the informational and
communication features of social networks. Information can be quite powerful: pricing information, discovery
of new suppliers, agro-information, and so on. But, the BoP won’t experience the full value of social networks
without the payment component, nor will it boost penetration and usage of eMoney schemes.

4 State of Connectivity 2015: A Report on Global Internet Access. Facebook’s Internet.org.

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