Why emerging markets need smart internet policies

The Alliance for Affordable Internet (A4AI) has released its latest study into, well, the affordability of internet access. The study shows how big the challenge is on that front in emerging markets – for over two billion people there, fixed-line broadband costs on average 40 percent of their monthly income, and mobile broadband costs on average 10 percent of their monthly income.

The United Nations’ “affordability target” for internet access is five percent of monthly income, so there’s clearly a ways to go in many developing countries. Almost 60 percent of global households are still unconnected and, unsurprisingly, those who can’t afford to get online tend to be poor, in rural communities and/or women. As my colleague Biz Carson wrote the other day, women are being left behind in the related smartphone adoption stakes too.

A4AI comprises players from [company]Google[/company] and the World Wide Web Foundation to the international development departments of the U.S. and U.K., and its report — unveiled Wednesday at Mobile World Congress in Barcelona — takes into account drivers of connectivity such as electrification and policy. As A4AI executive director Sonia Jorge pointed out quite reasonably in a statement, those who are unable to afford internet access are quite often those who most need it to improve their lot.

Still, she noted, good national “policies and principles” can make a big difference. For example, the A4AI report praised Latin American countries such as Costa Rica, Colombia and Peru for having solid infrastructure rollout plans. Costa Rica, which topped the affordability rankings of 51 emerging and developing economies, has been working to provide universal access since 2009.

According to A4AI, the policy areas that need attention include national broadband plans, competition-friendly environments (remember, many of these countries still have powerful telecoms monopolies), good spectrum allocation policy, the promotion of infrastructure-sharing, and “widespread public access through libraries, schools, and other community venues.” Strong political leadership helps, they added.

This is very much a long-term game. In the meantime, we have initiatives such as Google’s Loon, which is not quite ready yet, and [company]Facebook[/company]’s Internet.org, which is out there but somewhat divisive, both in terms of its impact on carriers and its threat to net neutrality. Both come with a still-fuzzy commercial imperative; from a societal standpoint, it is surely healthier for governments in emerging markets to foster more neutral and competitive alternatives.

White space broadband, which Google and [company]Microsoft[/company] have both been championing, could provide part of the solution (particularly in rural areas), but again it’s being held back by sluggish policy-making. Very few countries have authorized its use thus far, due to concerns over its impact on the broadcasting industry – the technology uses the spectral gaps between TV stations, though it’s now proven that it can avoid interference – and perhaps its threat to telecoms monopolies as well. Again, smarter government can make all the difference.


Opera launches App Pass zero-rating tool for carriers

Opera just released a new tool called App Pass, which gives carriers an easy way to provide people with free access to certain apps for limited periods of time.

The tool is a feature of the [company]Opera[/company] Max mobile data management app and follows the release a few years back of Web Pass, which aims to help carriers provide pay-per-use generalized web access. At launch, it can be used to provide free access for set periods of time; it will soon also allow sponsored and “paid passes” to apps.

The Norwegian company’s first customer is Norwegian carrier Telenor, which will test out App Pass in some of its Asian operations. “We’re eager to see how this service is received in our markets,” Telenor Digital chief Rolv-Erik Spilling said in a statement.

The so-called zero rating of certain apps – a practice also known as positive price discrimination – is becoming widespread, particularly in emerging markets. While it violates net neutrality by steering users towards certain services that have struck deals with the carriers, it’s also a handy way for operators to show people what mobile broadband can do, with the hope of subsequently selling them up to generalized access.

Opera, best known as a browser company, has generally been more successful in the mobile market than on the desktop, and was a pioneer of the data compression techniques that users and carriers in emerging markets – where mobile is king — can employ to save money.

Giving carriers an easy way to deploy zero-rating is yet another way for Opera to ensure that its software maintains a key position on low-cost handsets in such markets. For the carriers, it’s an opportunity to hang onto the gatekeeper role that companies such as [company]Facebook[/company] are trying to seize with their own emerging-market zero rating initiatives.

For users, it may provide the first tempting taste of the mobile internet, but zero rating could ultimately lead to a fragmented experience of what apps and the web can offer.

Facebook’s free internet.org portal opens in India

Facebook’s internet.org portal, which emerging-market carriers offer for free in order to give new customers a taste of the web, has rolled out in the Indian states of Tamil Nadu, Mahararashtra, Andhra Pradesh, Gujarat, Kerala and Telangana. Provided by Reliance Communications, the app includes free access to almost 40 services and information sources. If someone wants to click through to the open web, they need to start paying. This scenario exemplifies the mixed impact of “zero-rating” particular content in emerging markets: it gets people online for the first time, offering potentially life-changing services from job search to farming information, but it also raises net neutrality issues by promoting the idea of Facebook’s portal effectively being the internet.

What Xiaomi’s success tells us about emerging markets

Xiaomi overtook Samsung to become the largest smartphone vendor in China during the second quarter. Duplicating that success in outside its homeland will be difficult, but Xiaomi’s success provides some important lessons for any smartphone manufacturer targeting emerging markets.