Mobile brings utility services to 2 million underserved

Mobile technology is proving its value in bringing energy and other utility services to underserved communities.
Published: Fri 05 Aug 2016

Mobile telephony is frequently quoted as an example of how a new technology can leapfrog traditional technologies (in this case, landline) to bring the state of the art and its associated benefits to countries in Africa and Asia and others with development needs.

Now some figures have been put to this, in a new report from the GSMA Mobile for Development (M4D) Utilities programme. The report reviews progress in using mobile technology to deliver energy, water and sanitation services to underserved communities across the world.

The M4D Utilities programme was launched by the GSMA in 2013 with support from the UK Department for International Development (DFID). Since its inception the programme has awarded grants to 34 organisations offering mobile-enabled utility services in 24 countries – the majority in Africa – that have directly benefited almost 2 million people, the report states.

“Billions of people in emerging markets still lack access to essential utility services such as energy, clean drinking water and basic sanitation,” comments Mats Granryd, GSMA Director General. “A new wave of innovative mobile technology can improve and increase access to these basic utility services, while at the same time stimulating markets, empowering small businesses and even saving lives.”

New mobile business models

The aim of the M4D Utilities programme is to foster the development of mobile-based business models for utility service delivery to underserved communities.

The report finds that mobile-enabled services are most advanced in the energy sector and that water and sanitation services have grown more slowly, with the latter still nascent. This is due in large part to water and sanitation services historically being viewed as ‘public goods’ and consumers being less accustomed to paying for these services. Water and sanitation business models also need to take account of the role of governments in resource delivery.

However, there are signs that information about service delivery and new payment mechanisms are driving new business models and government partnerships. Additional impetus is that access to water and sanitation for all by 2030 is one of the 17 Sustainable Development Goals (SDG6) [Engerati-Sustainable energy for all – how are we doing?]

Mobile utility service trends

The report identifies several key trends for underserved populations. Arguably the most significant is the rapid growth of prepay/pay-as-you-go (PAYG) utility services via mobile.

For example, approximately 650,000 mobile-connected PAYG solar home systems have been delivered worldwide, with over 30 companies operating in at least 32 countries. Data from the largest five PAYG providers indicates an estimated 1,200 sales per day.

According to Bloomberg New Energy Finance (BNEF) and Lighting Global, PAYG solar unit sales currently account for less than 2% of the off-grid solar market. However, they are growing rapidly and are forecast to reach 13% of the off-grid solar unit market in 2020, representing 7 million units.

Interest is also growing in PAYG microgrids. For example, in Bangladesh small DC microgrids are being created by connecting households to an energy trading network in which energy can be bought and sold. With micro- and mini-grids offering the potential to deliver almost half of universal access to electricity by 2030, PAYG models will be crucial to realising these. [Engerati-Mobile Phones Will See Microgrids Grow]

PAYG provides benefits to both consumers and service providers. On the customer side, it is affordable and convenient for those with irregular incomes. Service providers benefit from improved revenue collection.

A second trend is the transformation of utility models which is being brought about by the Internet of Things. M2M connectivity is increasingly being used for monitoring utility infrastructure remotely and, in combination with an actuator, enables the PAYG model.

Low cost smart energy meters have been deployed in the thousands and sensors are finding application for monitoring of for example, battery charge levels, water flow and sanitation pressure and loads. Recent pilots and deployments in the water space have begun to demonstrate the impact of connected water infrastructure, such as handpumps, on system functionality, for which data visibility is key.

With the costs of both hardware and software dropping, M2M technology will become increasingly accessible. The convergence of new technologies, such as Low Power Wide Area (LPWA) networks, blockchain and big data are also expected to create growth opportunities in emerging utility models.

Mobile utility service challenges

Many service providers have partnered with mobile network operators in order to leverage assets such as mobile payment platforms or sales outlets to enhance their efficiency, extend their reach and offer new services. The partnerships are often symbiotic, in that the mobile operator benefits from increasing uptake of mobile services and improved brand perception. Indeed, in some cases, for example, in Sri Lanka and Pakistan, the operators themselves, Dialog Axiata and Telenor Pakistan, are leading efforts to improve energy access in their respective countries.

However, these partnerships require a deep level of engagement and leveraging the distribution networks of the mobile operators can prove challenging. For example, the difficult and complex logistics involved with selling hardware such as solar home systems, coupled with mobile operator agent networks not being well adapted to sell such products, has resulted in few utility service providers leveraging such assets.

The other key challenge identified is in powering telecom towers as an anchor business for community power. [Engerati-Middle East Telecommunication Tower Operators Turn to Microgrids for Reliable Power] Off-grid energy companies, particularly microgrid providers, may envisage telecom towers as a viable way to power surrounding businesses and communities. Community power from mobile (CPM) models are seeing traction in some markets, but aligning the incentives of all parties remains a challenge.

Further reading

GSMA: Unlocking access to utility services: The transformational value of mobile

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