Global mobile telecommunications company, Vodafone, has equity interests in 27 countries across five continents. It serves a staggering 186.8 million customers and 33 partner networks. As well as mobile phone technology Vodafone provides wireless internet connections and blackberry services.
The company proactively researches and explores the potential of mobile phone technology to bring socio-economic value, particularly amongst socially excluded groups. This approach has helped the company expand its operations throughout much of the developing world, as well as Eastern Europe.
Business insight
In a series of research reports Vodafone has explored the social impact of mobile phone technology with a particular focus on the secondary market for mobile technology in eastern Europe and the social and economic impacts of mobile phone technology in the developing world.
For instance, Vodafone’s research has shown that in remote rural areas in Africa the introduction of mobile technology has reduced the need to travel great distances. Mobile phone users are able to save time and money by avoiding lengthy journeys in unreliable vehicles whilst still being able to maintain their social connections.
Similarly research has shown mobile technology is particularly powerful for sole traders in the Middle East who can order stock and conduct other administrative aspects of their business without having to close their operations, particularly important for retailers.
Most recently in a report focused specifically on the Indian market the links between economic growth and mobile technology have been more clearly defined. Indian states with high mobile penetration can be expected to grow faster than those states with lower penetration. This causal relationship has been assessed at approximately 1.2 percentage points a year on average for every 10% increase in mobile take up.
In addition, the report identified that the economic impact is magnified when the level of mobile penetration exceeds a critical mass of 25%. Whilst mobile phone technology on its own cannot bring growth, provided other conditions such as basic literacy levels and infrastructure are in place, then it can help to increase economic growth. For instance, if the roads are not adequate to allow a farmer to sell their produce in a market with higher prices then there is little importance in using technology to find out this information. However, mobile technology does serve as one of the foundation elements that can assist in increasing productivity provided that investment is made in complementary infrastructure.
In the developed world, and in the UK more specifically, the focus has been on the elderly and the disabled. These people have a need/wish for mobile technology but may not always find generic models adequate from a usability and design sense.
Transformation
This knowledge has led to a range of innovations both in the product itself but also the business model through which it is delivered.
An example is the introduction of Vodafone Simply, a handset designed to be easier to use which was created with the elderly market in mind. The product can also include a personal alarm should customers need medical or other assistance. Through products like this Vodafone hopes to reduce the level of exclusion from mobile communications by a third by 2010, currently estimated to be at least 9% of the EU adult population. This brings the social benefits of mobile ownership to a wider population whilst at the same time growing the overall market for mobile technology.
By working with community groups to focus on the needs of the elderly and the disabled Vodafone has been able to effectively develop a product offering that goes well beyond compliance. They have developed a profitable market segment that delivers financial and reputational benefits to the company and significant improvement in the lifestyles and accessibility of socially excluded groups.
In the developed world the research conducted has allowed Vodafone to have more informed discussions with policy makers and indeed provide assistance in policy development. Currently in India where the most recent research has been completed the take-up rate of mobile phones has been a rate of 10 million connections a month, making it a huge source of potential future revenue.
End game
There are obvious reputational benefits in Vodafone’s approach, particularly in developing relationships with government and regulatory bodies. However, the business case also firmly stacks up with a clear market existing for these products.
By making its research publicly available Vodafone is being transparent about its intentions and at the same time is providing a useful a template for other businesses in creating markets in segments that have traditionally been ignored by mainstream business.
Through its focus on more traditionally disadvantaged groups, whether that be because of geographic remoteness, economic conditions or physical disability, Vodafone is able to develop new markets that provide social and economic benefit and contribute in part to addressing issues of social disadvantage.
References:
- "India: The Impact of Mobile Phones", The Policy Paper Series, Number 9, January 2009.
- www.vodafone.co.uk (disability services and corporate responsibility sections)
- Vodafone Corporate Responsibility Report for the 2006 financial year
- "Impact of mobile phones in the developing world", the Corporate Responsibility team, Vodafone.
© Article 13 - June 2009
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