Teleuse by the Bangladeshi migrant worker

Teleuse@BOP backgroundObjective: To understand how Bottom of the Pyramid interacts with ICTs (mostly phones) to better inform policyLarge surveys of BOP conducted in 2005, 2006, 2008Almost 20,000 face to face interviews in 6 countries since 2005Bangladesh (2008)PakistanIndiaSri LankaPhilippinesThailand

Funded by the International Development Research Center (IDRC) of Canada, the Department for International Development (DFID), UK with contributions from Telenor Research and Innovation, Malaysia*

MethodMulti-stage stratified sampling, random selection of households and individualsField research conducted by Nielsen; 12 languages; 6 countriesMigrant worker teleusers at bottom of the pyramidSEC groups C* + D + EOverseas and domestic migrants that send money home*

Samples *[1] Pakistan: Excludes tribal regions[2] Sri Lanka: Excludes North and East[3] Philippines: Survey was undertaken only among SEC E[4] Thailand: Excludes Bangkok as the SEC DE population in Bangkok is very small

Bangladesh Pakistan[1] India Sri Lanka[2] Philippines[3] Thailand[4] Total BOP teleusers2,0501,8143,1529248008009,540Margin of error @ 95% CL (%) + 3%+ 2%+ 2%+ 3%+ 4%+ 4%

Diary Sample1,0259001,6004504004004,775Migrant workers3503004002002001001,550

Sampling logicMulti-staged stratified sampling by probability proportionate to size Regions (states/provinces/districts) randomly selected in 2006; kept the same for comparison in 2008 (except BD)Stratification of cities within state, province etcGeographical ordering of cities, villagesPPS selection of cities, villagesWithin PSURandom starting points10 HH per starting point; right hand ruleKISH grid to select respondent in HH

AgendaWHO ARE THE BOP?BOP TELECOM EXPANSIONACCESSOWNERSHIPMARKET POTENTIALWHAT THOSE AT BOP DO WITH THEIR MOBILES?POTENTIAL FOR MOBILE 2.0?BENEFITS?THE UNCONNECTED

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AgendaWHO ARE THE BOP?BOP TELECOM EXPANSIONACCESSOWNERSHIPMARKET POTENTIAL WHAT THOSE AT BOP DO WITH THEIR MOBILES?POTENTIAL FOR MOBILE 2.0?BENEFITS? THE UNCONNECTED

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The study represents approx. 62 million in BangladeshTeleusers at bottom of the pyramidSEC groups D + EAged 15-60

(Rural India: R2, R3, R4)*Among BOP teleusers

Link between SEC D+E and "$2 per day" definitionActual population proportions*

Bangladesh Pakistan India Sri Lanka Philippines ThailandSEC D+E (% of population)7359694438 [SEC E]33Less than $2 per day (% of population)788586454028

Households earning ~USD71-143 per month (on average)*Among BOP teleusers

54% of Bangladeshi BOP households don't own a phone 54% BOP = 57% of BOP teleusers80% of these non-owners can reach a phone in under 5 minutesUrban: 89% can reach a phone in under 5 minsRural: 78% can reach a phone in under 5 mins Among all BOP teleusers

Main reasons for not owning are affordability and the lack of a needAmong BOP non-owner teleusers

Bangladeshi BOP can afford USD23 to get connected, but think that it will actually cost them USD38Among BOP non-owner teleusers

Once connected they can afford to spend USD1.80 per month on communication costs, while they think it will actually cost them USD2.50*Among BOP non-owner teleusers

31% of the current unconnected BOP in Bangladesh plan to get connected; 98% through a mobileAmong BOP non-owner teleusers planning to get connected

Background to migrant study component being released for first time in Dhaka today

MethodSEC groups C* + D + E, aged between 15 60Migrant worker & migrant worker families (qualitative) interviewed. domestic and overseas migrants Domestic: Living and working away from home (within the same country)Overseas: Returned (temporarily or permanently) from working in a foreign countryHad used a phone in the last three monthsHad sent money to family in the last thee monthsA small sample of SEC C users was taken in Pakistan

Quantitative sample*[1] Pakistan: Excludes tribal regions; includes SEC C[2] Sri Lanka: Excludes North and East[3] Thailand: Excludes Bangkok as the SEC DE population in Bangkok is very small

BangladeshPakistan[1]IndiaSri Lanka[2]Philippines Thailand[3]Domestic migrant170111116104150 Overseas migrant18019930710650100Total350310423210200100

SamplingRandom & purposive (non-random) sampling undertakenRandom samplingRespondents randomly selected for T@BOP3 main household survey who fit migrant sample profile were interviewed:Randomly selected regions (States / Provinces / Districts) sampled for 2006 T@BOP2 survey were maintained for comparability (Primary Sampling Unit)Urban and rural centers randomly selectedWithin selected centers, randomly selected starting points (number in proportion to population size) for conducting fixed number of interviewsRandom Selection of household and respondent via the Right-hand rule and Kish Grid respectively Purposive samplingSnowballing, etc, used in high migrant population centers for booster interviews

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Qualitative sampleWith migrant workers & migrant worker families

Home visits with media mappingIndiaUrban0Peri-urban4Rural2BangladeshUrban2Rural2PakistanUrban2Rural2Sri LankaUrban2Rural2PhilippinesUrban1Rural1ThailandUrban1Rural1Total22

Outline> Migrant worker sample characteristics> Communicating home> Sending money home> Mobile remittances?*

Migrant worker characteristics

Mostly SEC D and E, some C in PKMigrant workers (domestic or overseas) from bottom of the pyramid who remit money to family SEC groups D + E mainly, some C in PKAged 15-60

Mostly males in BD, PK & IN; males + females in LK, PH and THMore educated migrants from PK* and PH* includes SEC C migrants

Migrants earning USD 417 (overseas) & USD 124 (domestic) per month on averageOwnership of bank account or credit card (% of BOP migrants surveyed)* Many refused to answerMonthly personal income (USD)

BangladeshPakistan *IndiaSri LankaPhilippinesThailandOverseasMode432261556138435Mean (sd)485(516)346 (195)413(168)294(214)475(325)DomesticMode8610567138174232Mean (sd)84(44)136 (142)100(56)125(56)164(110)259(143)

BangladeshPakistanIndiaSri LankaPhilippinesThailand Bank account32%29%48%84%53%80% Credit card11%5%4%15%11%16%

Majority of overseas migrants work in Middle East; Southeast Asia also popular among SeA migrants

Bangladesh destination countries

Communicating home

28% Bangladeshi overseas migrants make Internet calls; 8% Internet chat (everyone, except a few Filipinos, uses the phone!)Overseas migrantsDomestic migrants

Own phones (mostly mobile) used most as primary phone, followed by public phones; primary use to keep in touch with loved ones at home, and for work (depending on job)

Domestic migrantsOverseas migrants

Simi | Farmer / housewife / mother of domestic migrantJae Hom, Thailand (rural) Migration almost always results in mobile adoption, either the migrant purchases the handset and gives it to her family, or she passes down her handset and buys a new one for herself. Simis son is a domestic migrant. She has a mobile primarily to keep in touch her son who works outside of the city. After he migrated, the need to be in constant touch with her son arose. Before owning a mobile, communicating with her son involved lots of time, effort and constant mediation by others. To call she had to travel (a considerable distance) by bike with her husband to a public phone, where she would often have to spend time waiting in line. To receive a call from him, she would have to go by bike with her cousin to the cousins house where she could receive the call. After two years her son bought her a mobile phone.

Bangladeshi and Pakistani overseas migrants call home most frequently: 87% in BD call home at least once a week; 34% dailyBased on respondent recallOverseas migrants The primary need for communication was to keep in touch with loved ones at home. Depending on the type of job (e.g., client-driven, delivery-based, etc.) some need to communicate with local contacts.

Often, the communication needs of overseas migrants are limited to communication with family and friends at home, rather than contacts within their destination country. However once they return home for holidays, the need to stay in touch with supervisors/bosses/colleagues in increases, in order to ensure they have a job (or the same position) to return to.At least once a weekDaily

Domestic migrants call more frequently than overseas migrants; again highest in BDBased on respondent recallDomestic migrantsSource: LIRNEasia (2008, October). Mobile Price Benchmarks* Refers to local charges only; national per-minute tariff is 0.034 At least once a weekDaily

Per-minute peak tariffs (pre-paid)BangladeshPakistanIndia*Sri LankaPhilippinesThailandMobile (on-net)0.0250.0290.0230.0470.1340.086Mobile (off-net)0.0340.0320.0230.0710.1550.086Fixed (Local/National)0.0340.0320.0230.0710.1550.086

SMS popular among PK and PH overseas migrants, and PK, LK and PH domestic migrantsOverseas migrantsDomestic migrantsSource: LIRNEasia (2008, October), Mobile Price Benchmarks.* Refers to local charges only; national per-minute tariff is 0.034

SMS charges (prepaid; USD)BangladeshPakistanIndia*Sri LankaPhilippines ThailandSMS (on-net)0.0170.0160.0230.0120.0210.058SMS (off-net)0.0170.0250.0230.0240.0210.058

Bangladeshi overseas migrants spend most: USD48 per month on average; thrice that in IN/PH; most overseas Bdeshis spend USD 40-50/month, most others spend USD10-20BangladeshMean: USD 48Most spend USD 40-50PakistanMean: USD 36Most spend USD 10-20IndiaMean: USD 15Most spend USD10-20Overseas migrants

Mean monthly expenditure on communicating home (cont'd)Sri Lanka Mean: USD 38 Most spend USD10-20PhilippinesMean: USD 16 Most spend USD10-20Overseas migrants

Domestic migrantsBangladeshMean: USD 7.08Most spend less than USD 5PakistanMean: USD 8.52Most spend less than USD 5IndiaMean: USD 3.34Most spend less than USD 6.67Domestic migrants

Sri Lanka Mean: USD 8.60Most spend less than USD 6.67PhilippinesMean: USD 4.40Most spend USD1.25-2.50Domestic migrantsThailandMean: USD 9.68Most spend USD5-10

Large variation in communication expenditure among overseas migrants (USD50+ for some)Overseas migrantsDomestic migrantsUSDUSDAve. monthly communication expenditure (USD)Ave. monthly communication expenditure(USD)

Cost of calling home from 4* of top 5 destination countries: Off-peak* International calling rates from Kuwait not availablePer minute cost of calling home using largest mobile operator (except UAE: second largest)Calling fromToUSD1.20USD1.17USD0.58

Cost of calling home from 4* of top 5 destination countries: Peak* International calling rates from Kuwait not availablePer minute cost of calling home using largest mobile operator (except UAE: second largest)Calling fromToUSD1.34USD1.24USD0.65

Bangladeshi overseas migrants make longer calls Based on respondent recallLonger calls, more often higher costs

Sending money home

Lourdes | Grandmother57 | Metro Manila, Philippines

USD 9b overseas remittances to Bangladesh in 2008 (AFP, http://www.google.com/hostednews/afp/article/ALeqM5jyBqlJab_jioB-w9Mnn1lhf55lIQ )

Nearly 10% of GDP; significant contributor to foreign reserves May 2009 saw record of USD 890m in remittances Official estimates: 6.3m overseas migrants (unofficial: 9m)

Bangladeshi overseas migrants remit USD203 per month on average (highest in S Asia); domestic remit USD27

BangladeshPakistan IndiaSri Lanka PhilippinesThailand OverseasMean(sd)203(143)198(182)182(89)137(129)249(208)Mode14426122292217 DomesticMean27(20)93(111)51(38)60(96)91(88)54(51)Mode295244464329

Most BD overseas migrants send money home every 1-2 months; less frequently than in PKOverseas migrants

Overseas migrants mostly send money through banks or in cash (low cost option)Overseas migrantsSending money through banks is seen to be cheap and reliable; often migrants open bank accounts for their family in order to receive money. Drawbacks are that a visit to the bank is necessary (though some migrants befriend bank workers often countrymen who facilitate transfers without the migrant needing to visit), and banking facilities should be easily accessible to the migrants family tooThough many in the Philippines use money transfer services (e.g. Western Union), it is seen to be more expensive, therefore used as a second option, to bank transfersHundi can be costly, but is capable of doorstep delivery in rural areas; additionally, loans can also be taken from the vendor (at high interest rates); it is seen to be reliable in IN and PK, but not BD and LK

Domestic migrants mostly remit once a month (when they go home)Domestic migrants

Domestic migrants send/take money in cash; "mobile payments" used by 6 % in BD and 2 % in PH Domestic migrants Sending money with friends and relatives is free and reliable and thus popular; it is often reciprocal; includes sending money through (known) bus or ferry driversPost office money transfers, are extremely popular among domestic migrants in India due to the low cost, doorstep delivery, perceived extensive coverage of the postal network, but also the reliability, since it is operated by the governmentRemittances are also delivered through bus drivers in India and Philippines, and ferry drivers in Bangladesh; often the driver is an acquaintance, so no charge is levied and he knows who exactly to deliver the money to

Most who remit via banks are satisfied, though complaining of cost in LK and PH Transfer charges?Bank wire transfers were seen as more expensive and thus resorted to only emergency situations since transfer takes only minutes

Bank and wire transfers were among those most popularly used, and was seen as one of the cheaper and convenient options E.g., In Dubai, the worker need not have a bank account. The Etisalat Bank provides workers with a bank ID using which they can send money to any account of their choice and the nominal service fee is paid by them in cash. Service charge amounts to 2.5% of the total amount sent or AED 100 (USD 27.2) for transactions less than AED 5,000 (USD 1,360).

Mobile remittances?

Higher awareness among BD migrants compared to other S Asian migrants; overseas migrants more aware

3% BD migrants* are using "mobile remittances" * 6% of domestic migrantsOperating guidelines for mobile payments proposed (Jan 2009) Regulatory framework for mobile banking drafted (June 2008)Services offered: Smart Padala, G-CashProposed services (Venyon and Kasikornbank)Proposed services (Bharti Airtel, Western Union)Services not offered; transfers possibly via e load

Some current & proposed m-remittance/payments servicesBangladesh Proposed Grameen-Obopay Bank A Billion Initiative to provide cross-border remittances, money transfer, payments etc initially in Mumbai, India and in Bangladesh. Proposed start date was October, 2008 (Aug 2008)

India Bharti Airtel and Western Union announced proposed development and piloting of Mobile Money Transfer service in India (Nov 2007)Obopay (which currently provides mobile-to-mobile money transfers) working on service to handle remittances between US and India (Dec 2008);plans to link mobile transfers in India to electronic-payment services in India so that consumers can refill prepaid minutes or pay utility bills ( Dec 2008)

The Philippines - SMART Padala (Smart Telecom) operates in Hong Kong, Yokohama, Abu Dhabi, etc.G Cash (Globe Telecom) operates in the US, UK, Australia, and Taiwan.

Pakistan Has drafted a Regulatory Framework for Mobile Banking (June 2008)

Sri Lanka Central Bank proposes to issue operating guidelines for mobile payments (Jan 2009)

Thailand Venyon and Kasikornbank to cooperate on providing mobile payment services (Feb 2009)

Zayed | Shopkeeper 21 years | Sonargaon, Bangladesh Once facilitated money transfer through mobile for the village maulavi who was away in Dhaka; the maulavi sent BDT1,000 in load to Zayeds mobile; once the load was received, Zayed then paid the same in cash to the maulavis family in the village Other respondents seemed to be doing the same. It is only available internally, but useful to send money to rural areas. Migrants try to maintain good relations with shopkeepers in their village who provide this service Transactions of up to BDT5,000 (USD70) can be made, however this is dependent upon the shopkeeper having cash available to give the intended recipient in one go Commissions can be as high as 20%; the shopkeeper also makes commission on reselling the load

Lack of know-how is key barrier to greater use in BD

Other barriers to the use of mobiles for financial transactionsLow levels of literacy lack of confidenceLack of English literacy (mobile content predominantly in English)Except for Philippines, respondents cited difficulty navigating mobile interface, especially older respondentsPerception that a certain set of soft skills are needed in order to use such services, none of which they haveFor the immediate future, banks, hundi, social networks, etc offer sufficient reliability. Open to the idea of new services, though concerns of credibility of service providers prevail; unwilling to invest until results are shown

PK and BD most willing to use services, if affordably priced; not so much enthusiasm in PH!

The future?Existing methods provide sufficient reliability, are convenient and are affordableBOP migrant workers unwilling to pay large service charges/commissions to transfer remittancesBOP migrant workers open to learning about new services, but place premium on trustworthinessWould prefer if banks are involvedEven when mobiles remittance services not used, mobiles used to coordinate remittancesSending transaction codes over SMS; calling to confirm receipt, etc.

Saleem Afeez | Dispensary owner Saeeda Begum I Housewife 53 years | Dhaka, Bangladesh 46 years | Dhaka, Bangladesh Saleem and Saeedas eldest son is an overseas migrant working in Singapore He sends his parents BDT 10,000-15,000 per month. He transfers the money from his bank account to his fathers. He calls on the day that the transfer is made. After four days Saleem goes to the bank and withdraws the money through a cheque They find this process the most reliable; money has never been delayed or lost. Saleem is aware of the hundi system but does not trust itHe is open to trying financial services but would need substantial proof of its reliability for him to take it up

Migrant definitionsDomestic migrant: Individuals belonging to SEC D or E*, who have left there home towns and are currently based in another town / state / province for employment purposes. They should be individuals who:Still keep in touch with family in their hometown; andSend money to their family Domestic migrants were selected from key sectors which contribute significantly to towards the countrys GDPInterviews took place in the city they were working in. Overseas migrant: Individuals belonging to SEC D or E*, who have left there home country for employment purposes and have returned (temporarily or permanently) within the three months preceding the survey. They should be individuals who:Remained in touch with their family in their home town; and Sent money to their family while overseasInterviews took place at their home in their native country

*SEC group C was included in Pakistan because of the difficulty in finding SEC E group migrants; with migration, often housing is improved, which leads to an improvement in SEC category

Policy implications: ILDTS policy is counterproductive and unfairHarms overseas workers and is shortsighted with respect to real source of moneyThose who call Bangladesh include many who are poor; they work hard to support their families and provide foreign exchange earnings for Bangladesh They spend more money than those from comparator countries on communication (USD 48 v USD 15 for Indians)They have been pushed to use less-convenient Internet modeThe government is not taking 52% of the money of IGW operators; it is taking 52% of the hard-earned money of its overseas workers

ILDTS policy harmful in other ways: Why are IN, PK & LK earning from BPOs, and BD not?AT Kearny 2009rankings

1. India (position in 2007 GSLI: 1) China (2) Malaysia (3) Thailand (4) Indonesia(6) Egypt (13) Philippines (8) Chile (7) Jordan (14) Vietnam (19) Mexico (10) Brazil (5) Bulgaria (9) United States (Tier II)* (21) Ghana (27) Sri Lanka (29) Tunisia (26) Estonia (15) Romania (33) Pakistan (30) Lithuania (28) Latvia (17) Costa Rica (34) Jamaica (32) Mauritius (25) 26.Senegal (39) Argentina (23) Canada (35) United Arab Emirates (20) Morocco (36) United Kingdom (Tier II)* (42) Czech Republic (16) Russia (37) Germany (Tier II)* (40) Singapore (11) Uruguay (22) Hungary (24) Poland (18) South Africa (31) Slovakia (12) France (Tier II)* (48) Ukraine (47) Panama (41) Turkey (49) Spain (43) New Zealand (44) Australia (45) Ireland (50) Israel (38) Portugal (46)

**Fieldwork Languages (12 in total)Bangladesh : Bengali (1)Pakistan: Urdu (1)India: Hindi, Gujarati, Bengali, Tamil, Kannada, Assamese, Tripuri (7)Sri Lanka: Sinhala, Tamil (2)Philippines: Tagalog, Cebuano, Illongo, Bisaya (4)Thailand: Thai (1)

*****Teleuser anyone who had made or received a call (from any phone) in the previous three months

SEC [socio-economic classification] determined by education and occupation of chief wage earner of the household, but also takes into account other factors (varies between countries), such as housing type, availability of household durables, etc

Urban India : SEC D + ERural India: R2 + R3 + R4

Except Philippines, where we only studied SEC E users because if we studied SEC D and E users, our target group would become close to 90% of the Filipino population

Migrant samples included SEC group C users in some countries, recognizing that some SEC D / E households may have risen up to SEC C due to income infusions from household members working away from home

Total SEC D + E for BD is 106,094,305; proportion of population aged 15-60 is about 58% of this number (2007) based on the actual population distribution for all SECs. Assumption : the distribution is normally distributed and its the same for SEC D + E.

*Source: Nielsen*Mean income:USD/day equivalents:Personal: BD - 1.21 PK - 1.23 IN - 1.28 LK - 1.80 PH - 1.48 TH - 2.62 Household:BD - 3.90 PK - 4.22 IN - 3.30 LK - 5.02 PH - 4.24 TH - 5.73

USD PPP:Personal:BD-99 PK-125 IN-112 LK-135 PH-90 TH-170 Household:BD-320 PK-429 IN-288 LK- 377 PH- 258 TH- 371

Income data collected in absolute numbers; if respondent was unable to provide an absolute number, a range was given. Mid-point of those ranges were taken as respondents income.

***FIXED:SLT - SLT Citylink Pre-paid package5750Lanka Bell - Bell prepaid4900Suntel - AB64 Biz Chat3000 (1500 load)Dialog - All (CDMA touch, CDMA com bureau)5999MOBILE:Dialog - Kit (Normal)600Dialog - Dialog bundled phone offer 2999Mobitel - New SMART Prepaid500Tigo350Hutch250 (100 load)Airtel - Prepaid250 (51 load)**Fixed

**********Bank account & credit card Domestic -- Do you currently have a credit card? bank account? Overseas -- Did you have a credit card when you were working abroad? Bank account?****GICs BG, do urban vs. rural. *my own phone: in most cases (100% in LK, PH and TH; 99% in IN and PK; 95% in BD) this is a mobile phone. Migrants often obtain a mobile just before, or as they migrate, primarily to keep contact with home. Female domestic migrants (IN & LK) sometimes are given mobiles by their parents for security purposes. Overseas migrants, esp in the middle east sometimes (esp. ~4-5 years ago) faced difficulty in getting connected and using mobiles due to restrictions from their company/employer. Some would purchase mobiles and hide them/keep them switched off during working hours. Some would have to rely on their employers benevolence for calls. Others would have to use public phones, facing long queues on fridays (when calls are cheap) or high call charges on other days; they would often miss the pre-arranged time which had been coordinated with their family, thus wasting time and money.The rules have eased in the last 3 or so years.*****Bases for India overseas and Bangladesh & Thailand domestic migrants too low for statistical analyses

************Calculated Frequencies chart. Mode, etc. *****BD 3%PH 2%*********