Teleuse by the Bangladeshi migrant worker

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Teleuse by the Bangladeshi migrant worker
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Teleuse_at_BOP background

• Objective To understand how Bottom of the
  Pyramid interacts with ICTs (mostly phones) to
  better inform policy
• Large surveys of BOP conducted in 2005, 2006,
  2008
• Almost 20,000 face to face interviews in 6
  countries since 2005
• Bangladesh (2008)
• Pakistan
• India
• Sri Lanka
• Philippines
• Thailand
• 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

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Method

• Multi-stage stratified sampling, random selection
  of households and individuals
• Field research conducted by Nielsen 12
  languages 6 countries
• Migrant worker teleusers at bottom of the
  pyramid
• SEC groups C D E
• Overseas and domestic migrants that send money
  home

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Samples
  Bangladesh Pakistan1 India Sri Lanka2 Philippines3 Thailand4 Total
BOP teleusers 2,050 1,814 3,152 924 800 800 9,540
Margin of error _at_ 95 CL () 3 2 2 3 4 4  
Diary Sample 1,025 900 1,600 450 400 400 4,775
Migrant workers 350 300 400 200 200 100 1,550
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
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Sampling logic

• Multi-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
  etc
• Geographical ordering of cities, villages
• PPS selection of cities, villages
• Within PSU
• Random starting points
• 10 HH per starting point right hand rule
• KISH grid to select respondent in HH

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Agenda

• WHO ARE THE BOP?
• BOP TELECOM EXPANSION
• ACCESS
• OWNERSHIP
• MARKET POTENTIAL
• WHAT THOSE AT BOP DO WITH THEIR MOBILES?
• POTENTIAL FOR MOBILE 2.0?
• BENEFITS?
• THE UNCONNECTED

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Agenda

• WHO ARE THE BOP?
• BOP TELECOM EXPANSION
• ACCESS
• OWNERSHIP
• MARKET 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
Bangladesh

• Teleusers at bottom of the pyramid
• SEC groups D E
• Aged 15-60

(Rural India R2, R3, R4)
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Among BOP teleusers
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Link between SEC DE and "2 per day" definition
Actual population proportions
  Bangladesh Pakistan India Sri Lanka Philippines Thailand
SEC DE ( of population) 73 59 69 44 38 SEC E 33
Less than 2 per day ( of population) 78 85 86 45 40 28
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Households earning USD71-143 per month (on
average)
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Among BOP teleusers
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54 of Bangladeshi BOP households don't own a
phone 54 BOP 57 of BOP teleusers

• 80 of these non-owners can reach a phone in
  under 5 minutes
• Urban 89 can reach a phone in under 5 mins
• Rural 78 can reach a phone in under 5 mins

Among all BOP teleusers
12
Main reasons for not owning are affordability and
the lack of a need
Among BOP non-owner teleusers
13
Bangladeshi BOP can afford USD23 to get
connected, but think that it will actually cost
them USD38
Among BOP non-owner teleusers
14
Once connected they can afford to spend USD1.80
per month on communication costs, while they
think it will actually cost them USD2.50
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Among BOP non-owner teleusers
15
31 of the current unconnected BOP in Bangladesh
plan to get connected 98 through a mobile
Among BOP non-owner teleusers planning to get
connected
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Background to migrant study component being
released for first time in Dhaka today
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Method

• SEC groups C D E, aged between 15 60
• Migrant 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 country
• Had used a phone in the last three months
• Had sent money to family in the last thee months

• A small sample of SEC C users was taken in
  Pakistan

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Quantitative sample
  Bangladesh Pakistan1 India Sri Lanka2 Philippines Thailand3
Domestic migrant 170 111 116 104 150
Overseas migrant 180 199 307 106 50 100
Total 350 310 423 210 200 100
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
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Sampling

• Random purposive (non-random) sampling
  undertaken
• Random sampling
• Respondents randomly selected for T_at_BOP3 main
  household survey who fit migrant sample profile
  were interviewed
• Randomly selected regions (States / Provinces /
  Districts) sampled for 2006 T_at_BOP2 survey were
  maintained for comparability (Primary Sampling
  Unit)
• Urban and rural centers randomly selected
• Within selected centers, randomly selected
  starting points (number in proportion to
  population size) for conducting fixed number of
  interviews
• Random Selection of household and respondent via
  the Right-hand rule and Kish Grid respectively
• Purposive sampling
• Snowballing, etc, used in high migrant
  population centers for booster interviews

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Qualitative sample
With migrant workers migrant worker families
Home visits with media mapping
India Urban 0
India Peri-urban 4
India Rural 2
Bangladesh Urban 2
Bangladesh Rural 2
Pakistan Urban 2
Pakistan Rural 2
Sri Lanka Urban 2
Sri Lanka Rural 2
Philippines Urban 1
Philippines Rural 1
Thailand Urban 1
Thailand Rural 1
Total Total 22
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Outline

• gt Migrant worker sample characteristics
• gt Communicating home
• gt Sending money home
• gt Mobile remittances?

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Migrant worker characteristics
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Mostly SEC D and E, some C in PK

• Migrant workers (domestic or overseas) from
  bottom of the pyramid who remit money to family
  
• SEC groups D E mainly, some C in PK
• Aged 15-60

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Mostly males in BD, PK IN males females in
LK, PH and THMore educated migrants from PK and
PH includes SEC C migrants
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Migrants earning USD 417 (overseas) USD 124
(domestic) per month on average
Monthly personal income (USD)
Bangladesh Pakistan India Sri Lanka Philippines Thailand
Overseas Mode 432 261 556 138 435
Mean (sd) 485 (516) 346 (195) 413 (168) 294 (214) 475 (325)
Domestic Mode 86 105 67 138 174 232
Mean (sd) 84 (44) 136 (142) 100 (56) 125 (56) 164 (110) 259 (143)
Many refused to answer
Ownership of bank account or credit card ( of
BOP migrants surveyed)
Bangladesh Pakistan India Sri Lanka Philippines Thailand
Bank account 32 29 48 84 53 80
Credit card 11 5 4 15 11 16
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Majority of overseas migrants work in Middle
East Southeast Asia also popular among SeA
migrants
27
Bangladesh destination countries
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Communicating home
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28 Bangladeshi overseas migrants make Internet
calls 8 Internet chat (everyone, except a few
Filipinos, uses the phone!)
Overseas migrants
Domestic migrants
30
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)
Overseas migrants
Domestic migrants
31
Simi Farmer / housewife / mother of domestic
migrant Jae 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.

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Bangladeshi and Pakistani overseas migrants call
home most frequently 87 in BD call home at
least once a week 34 dailyBased on respondent
recall
Overseas migrants
At least once a week
Daily

• 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.

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Domestic migrants call more frequently than
overseas migrants again highest in BDBased on
respondent recall
Domestic migrants
At least once a week
Daily
Per-minute peak tariffs (pre-paid) Per-minute peak tariffs (pre-paid) Per-minute peak tariffs (pre-paid) Per-minute peak tariffs (pre-paid) Per-minute peak tariffs (pre-paid) Per-minute peak tariffs (pre-paid) Per-minute peak tariffs (pre-paid)
Bangladesh Pakistan India Sri Lanka Philippines Thailand
Mobile (on-net) 0.025 0.029 0.023 0.047 0.134 0.086
Mobile (off-net) 0.034 0.032 0.023 0.071 0.155 0.086
Fixed (Local/National) 0.034 0.032 0.023 0.071 0.155 0.086
Source LIRNEasia (2008, October). Mobile Price
Benchmarks Refers to local charges only
national per-minute tariff is 0.034
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SMS popular among PK and PH overseas migrants,
and PK, LK and PH domestic migrants
Overseas migrants
Domestic migrants
SMS charges (prepaid USD) SMS charges (prepaid USD) SMS charges (prepaid USD) SMS charges (prepaid USD) SMS charges (prepaid USD) SMS charges (prepaid USD) SMS charges (prepaid USD)
Bangladesh Pakistan India Sri Lanka Philippines Thailand
SMS (on-net) 0.017 0.016 0.023 0.012 0.021 0.058
SMS (off-net) 0.017 0.025 0.023 0.024 0.021 0.058
Source LIRNEasia (2008, October), Mobile Price
Benchmarks. Refers to local charges only
national per-minute tariff is 0.034
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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 USD10-20
Overseas migrants
Bangladesh Mean USD 48 Most spend USD 40-50
Pakistan Mean USD 36 Most spend USD 10-20
India Mean USD 15 Most spend USD10-20
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Mean monthly expenditure on communicating home
(cont'd)
Overseas migrants
Sri Lanka Mean USD 38 Most spend USD10-20
Philippines Mean USD 16 Most spend USD10-20
37
Domestic migrants
Domestic migrants
India Mean USD 3.34 Most spend less than USD 6.67
Bangladesh Mean USD 7.08 Most spend less than
USD 5
Pakistan Mean USD 8.52 Most spend less than USD 5
38
Domestic migrants
Sri Lanka Mean USD 8.60 Most spend less than
USD 6.67
Philippines Mean USD 4.40 Most spend USD1.25-2.50
Thailand Mean USD 9.68 Most spend USD5-10
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Large variation in communication expenditure
among overseas migrants (USD50 for some)
Overseas migrants
Domestic migrants
Ave. monthly communication expenditure (USD)
Ave. monthly communication expenditure (USD)
USD
USD
40
Cost of calling home from 4 of top 5 destination
countries Off-peak International calling rates
from Kuwait not available
USD1.20
To
USD1.17
USD0.58
Calling from

• Per minute cost of calling home using largest
  mobile operator (except UAE second largest)

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Cost of calling home from 4 of top 5 destination
countries Peak International calling rates
from Kuwait not available
USD1.34
USD1.24
To
USD0.65
Calling from

• Per minute cost of calling home using largest
  mobile operator (except UAE second largest)

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Bangladeshi overseas migrants make longer calls
Based on respondent recall
Longer calls, more often ? higher costs
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Sending money home
44
Lourdes Grandmother 57 Metro Manila,
Philippines
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USD 9b overseas remittances to Bangladesh in
2008 (AFP, http//www.google.com/hostednews/afp/a
rticle/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)

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Bangladeshi overseas migrants remit USD203 per
month on average (highest in S Asia) domestic
remit USD27
Bangladesh Pakistan India Sri Lanka Philippines Thailand
Overseas Mean (sd) 203 (143) 198 (182) 182 (89) 137 (129) 249 (208)
Mode 144 261 222 92 217
Domestic Mean 27 (20) 93 (111) 51 (38) 60 (96) 91 (88) 54 (51)
Mode 29 52 44 46 43 29
47
Most BD overseas migrants send money home every
1-2 months less frequently than in PK
Overseas migrants
48
Overseas migrants mostly send money through banks
or in cash (low cost option)
Sending 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 too
Overseas migrants
Though 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 transfers
Hundi 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
49
Domestic migrants mostly remit once a month (when
they go home)
Domestic migrants
50
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 drivers
Remittances 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
Post 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
government
51
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
52

• 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).

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Mobile remittances?
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Higher awareness among BD migrants compared to
other S Asian migrants overseas migrants more
aware
55
3 BD migrants are using "mobile remittances"
6 of domestic migrants
Operating guidelines for mobile payments proposed
(Jan 2009)
Regulatory framework for mobile banking drafted
(June 2008)
Proposed services (Venyon and Kasikornbank)
Proposed services (Bharti Airtel, Western Union)
Services offered Smart Padala, G-Cash
Services not offered transfers possibly via e
load
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Some current proposed m-remittance/payments
services

• Bangladesh 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)

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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

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Lack of know-how is key barrier to greater use in
BD
59
Other barriers to the use of mobiles for
financial transactions

• Low levels of literacy ? lack of confidence
• Lack of English literacy (mobile content
  predominantly in English)
• Except for Philippines, respondents cited
  difficulty navigating mobile interface,
  especially older respondents
• Perception that a certain set of soft skills
  are needed in order to use such services, none of
  which they have
• For 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

60
PK and BD most willing to use services, if
affordably priced not so much enthusiasm in PH!
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The future?

• Existing methods provide sufficient reliability,
  are convenient and are affordable
• BOP migrant workers unwilling to pay large
  service charges/commissions to transfer
  remittances
• BOP migrant workers open to learning about new
  services, but place premium on trustworthiness
• Would prefer if banks are involved
• Even when mobiles remittance services not used,
  mobiles used to coordinate remittances
• Sending transaction codes over SMS calling to
  confirm receipt, etc.

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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 it
• He is open to trying financial services but would
  need substantial proof of its reliability for him
  to take it up

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Migrant definitions

• Domestic 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 and
• Send money to their family
• Domestic migrants were selected from key sectors
  which contribute significantly to towards the
  countrys GDP
• Interviews 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 overseas
• Interviews 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

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Policy implications ILDTS policy is
counterproductive and unfair

• Harms overseas workers and is shortsighted with
  respect to real source of money
• Those 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 mode
• The government is not taking 52 of the money of
  IGW operators it is taking 52 of the
  hard-earned money of its overseas workers

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