INTERVIEWS

INTERVIEWS by STEPHEN IBARAKI

Chat with John Davies, Vice-President Intel World Ahead Program

This week, Stephen Ibaraki has an exclusive interview with John Davies shared his deep insights in this interview.

Interview

Q: John, Intel is doing amazing work. Can you profile how stratified information, computing or mobile access is being provided to the world's 7.24 Billion?

A:  Broadband for All

To understand which programs to focus on, we must examine the full Internet and access device affordability model.

Until recently, just 2 Billion people could afford the PC and the typical $30/month unlimited Broadband fees. This limited Broadband, mostly to the mature economies and to the higher incomes in Emerging Economies. For example in Africa and India less than 5% of the people can afford $30/month.

In 2012, the Prepaid (pay as you use) model came to Broadband. This followed exactly the same lower cost business model that had driven the cellphone voice surge in Emerging economies. Device costs continued downwards as entry PC's approached $200, entry tablets moved under $100 and entry Smartphones were even lower cost. This helped usher in the era of Prepaid (pay as you use) Broadband.

Led by Asia and quickly followed by Africa, typical availability of say 400Mbyte downloads for under $1 become commonplace from many Service providers in over 70 countries. Business offerings became more varied. For example Service providers in China and India now offer more prepaid data if used in evening /night hours, which proves Ideal for University student to use WiFi on the College Campus by day and smaller Broadband use on the 3G dongle at home in the evenings. Another example is Indonesia, where Prepaid can be segmented by targeted useage (Facebook or eMail ) and priced for that usage.

With 30 day expiration dates, and Monthly ARPU in the $1-5 range, Prepaid Broadband is allowing a surge in affordability in Emerging Economies and can drive affordability up from less than 5% of citizens in the lower income countries to perhaps 30%, truly reaching the 3rd Billion people.

As we focus on the 4th to 7Th Billion, quickly the reality that many of these citizens live off $1-3 a day is the limitation and there is no business model today that allows these citizens to buy a PC/Tablet device and pay for Broadband. This is where Private Public Partnerships with Government interventions must help. There are 2 pathways starting to address this.

First is many of the 4th and 5Th Billion own simple low cost voice phones and increasingly low cost dataphones that can access the internet. Far more can be done to use these devices to access the internet. With smaller screens, prepaid data goes farther. Emerging uses like Mobile payments for convenience or for those who are not banked, simple Healthcare information (even SMS --"the Medical truck is coming to your village on Monday" or simple data tracking to help Diabetes and Tuberculosis) are surging. UNESCO studies show many of the children who do not attend school are learning entry levels of reading and writing on their phones, which may give them inspiration to attend school to learn more. This is where the m-Powering Working groups of the IT Broadband Commission are focusing.

Second is shared access. Computer Broadband access can occur in School, Libraries, Government Centers and service centers provided by local entrepreneurs. In all cases, these centers can be used to provide internet services to those who cannot afford to own devices. Beyond providing access, these centers can be structured to provide standard services. For example, in India and Bangladesh there are tens of thousands of these Internet centers, managed by villagers. In India these act as agents of the banks (bill paying, microloan financing), agents of the Government (provide online registrations to access Government services) and provide some services like PC skills training or email. Indian Government financed the Training and setup of these centers but they soon become sustainable businesses with the ladies that operate them earning perhaps $100/month. Imagine such a center with 4 PCs, a printer and scanner serving 2000 villagers. If just 1 person per family uses this center for one hour a week, then most of the village can be served each of them with the villagers paying say $1 /month (the 5% of income threshold that can be spent on Internet) and the center being profitable.

Accelerating both of the phone usage and the Shared Access Community service centers can be facilitated by the application of the Universal Service Funds and /or innovative upfront financing. Universal Service funds can help finance the local Wi-Fi hotspots, setup of the centers, select and train those who manage the centers and help them provide a basic suite of Government services and Private (Banking, training, etc) services. The private industry has many training and service capabilities to add and cooperate with Governments in a Private Public Partnership. This can be one faster path to "Universal Access".

A complimentary approach can be the school system. In several countries (example Turkey), Universal Service Funds are being applied to ensure every school has Broadband, every teacher and student has a PC or tablet. This ensures 100% access for all students and a modernized education system.

Q: How does this align with internet.org?

A:  Several groups such as internet.org and Alliance for Affordable Internet (which Intel is part of) have programs focused on Connecting the 7 Billion.

Q: What is the current status of the World Ahead program and its outcomes for 2014?

A:  Intel World Ahead focuses on 4 pillars -- affordable devices, affordable/available connectivity, training and content. These 4 are required for all vertical areas (Education, Healthcare, Government services, reaching lower income citizens and for rural). At any point in time we are engaged in perhaps 200 Digital Divide programs globally.

Our flagship is Education where we enable (reference design) purpose built PC's and Tablets for k12 students, have ICT trained over 12 Million teachers with "Intel Teach", work with Telcos and Governments on connecting schools and work with publishers to enable electronic content, analytics and assessment.

Intel has deep programs in Healthcare, mostly in the developed Economies. We apply some of these practices in Emerging markets through partners.

We have a joint venture, non-profit Grameen-Intel Social Business, based in Bangladesh, initially focused on Agriculture. Soil analysis using PC to select fertilizer has been shown to reduce costs and improve yields, which is key for smaller farms.

Intel has taken a leadership role with ITU and WSIS.

Q: What are the measurable outcomes and how does this alignment with business enterprise interests? How does this work trickle down into the business enterprise (including in the West) and provide measurable value to different enterprises: small, medium and large?

A:  

I sit on The ITU Broadband Commission as a Commissioner and one huge breakthrough was the bringing of lower cost prepaid Broadband business model to have affordable broadband for the 3rd Billion. This is based upon the same prepaid Voice Business model that led to the Emerging market surge in cell phones.

With lower cost options, the Telcos and all suppliers reach more customers. Intel put considerable marketing effort with Telcos to make solutions available for prepaid and educate these new customers on the benefits to their businesses and lives.

A newer focus is with the mPowering Working groups of ITU that focuses on greater Internet uses (mPayments, mCommerce, mHealth, mEducation) of Billions of phones owned by lower income citizens that are not today using the internet.

A third area with ITU is shared access, Telecenters, rural service centers providing internet access to Rural and lower income citizens who cannot afford ownership.

In all of these cases, reaching more customers by providing targeted business models (lower cost options) is more business opportunity for all suppliers and service providers. Operating the rural service centers in India and Bangladesh to provide Banking services, Government services and training services can be a profitable business for the ladies that operate these centers.

Q: What are the top resources links you would recommend and why?

A:  Access to all ITU Broadband Commission resources www.broadbandcommission.org

Access to all Intel Education programs www.Intel.com/Education.

Access to Intel World Ahead programs - go to www.Intel.com then search for WorldAhead.

Q: You pick the domain or market segment. What are the top 3 challenges and the proposed solutions?

A:  In every segment the key challenges seem to align well with the 4 pillars we focus on
  1. Affordability

  2. Training
    - eg Intel teach has trained over 12 Million teachers in ICT skills to create a lesson plan and use ICT in the Classroom.
    - eg In India, they need 1 Digital Literate person per family to access the Government programs online. Intel "PC Basics" and other Digital literacy tools contribute to the training

  3. Locally relevant content -this is an opportunity to create local employment and skills