Teleuse@BOP3: A Qualitative Study - LIRNEasia

Introduction
Why Is This Study Important?
Telecom and the Bottom of the Pyramid
Rural and low income urban markets are of considerable interest to multinational telecom players today than they
have ever been in the past. It is widely evident that urban mobile penetration rates in several parts of Asia are
reaching saturation and mobile development will now take place in the rural areas. Not only the rural consumers but
also the low income consumers residing in urban areas in these countries will become the next telecom adopters.
The fact that many industry experts believe that the next billion telecom subscribers (particularly mobile) will come
from the Bottom of the Pyramid (BOP) only hints at the need to study such respondents in more details to
understand how to serve this segment better. The urban BOP consumers have substantial needs for information due
to the challenges posed by income and infrastructure. In rural BOP consumers both entertainment and information
are substantial needs since remoteness aggravates these lacks by posing challenges to business development as
well as general needs for communication. In the course of this research we observe that while the types of
information needs are similar in both urban and rural users, the volume of information that is being sought are higher
in rural areas than in urban, except for Philippines where they emerged as equal. This is due to the difficulty in
accessing information infrastructures like institutional resources which are available more easily to the urban
residents than rural ones.
The Mobile Development Report (2006) produced by CKS also highlights the role of telecom as a source of
enhanced household income. In addition, telecom adoption at the BOP also transforms their personal identity by
increasing their accessibility and hence, their credibility. Telecom adoption is also seen to impact their social and
professional network coordination by strengthening family ties and increasing business coordination overcoming
substantial challenges posed by their location and context.
Pyramidal versus Normal Distribution
The BOP has largely been understood as the last step in a society that is represented through the pyramidal
approach popularized by C.K. Prahalad and S. Hart (2002). Their classification of society with respect to income
levels and population size is perhaps the most widely used and understood schema for all involved in understanding
consumer segmentation for various reasons and interests. They indicate that according to Purchasing Power Parity
(PPP), households around the world organize themselves roughly as a pyramid. While Prahalad and Hart have
received much deserved appreciation for their contribution to global business and developmental conversations by
calling people’s attention to the ‘Bottom of the Pyramid’ (BOP), we also know from the laws governing large numbers
that large populations do not tend to cluster as pyramids, but rather as normal / Gaussian distributions represented
by a bell curve. With Socio-Economic Classes A1 and E2 constituting the tails of the bell. Prahalad and Hart’s
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