Al Hammond

Technology at the Edge: Other hi-tech, near-term examples

Given the right business model, high-tech devices can also find appropriate uses in developing countries.

Wireless Access

When a group of emerging market cellular operators put out a tender for low-cost basic GSM phones, nobody paid much attention until Motorola won the tender by promising to produce the phones at prices as low as $35 each. The company started shipping the first 6 million phones this past summer. Not long after, Sony-Ericsson also announced low cost phones for low-income, BOP markets. Most recently, Germany-based Infineon Technologies announced their intentions to begin selling handsets for under $20 beginning in early 2006. Since the most rapidly growing cellular markets are in Africa, Asia, and Latin America–with more than 500 million customers in China, India, and Brazil alone–this should not be surprising. Nonetheless, it marks the emergence of meaningful consumer market power in telecommunications equipment for the developing world.

Wireless data technologies?especially the WiFi and the longer-range WiMax families of equipment?are also experiencing explosive growth in emerging markets. Indeed, it seems clear that wireless solutions will dominate in bringing the Internet to the several billion people who live in rural areas of the developing world, because they can reach dispersed markets much more quickly, cheaply and efficiently than either copper wire or optical fiber. One small start-up, First Mile Solutions, has integrated WiFi with transport infrastructure, such as buses or motorbikes, to create an even lower-cost way to bring connectivity?in a store and forward mode?to rural areas.

Financial Services

Microfinance has shown to be a viable means of uplifting the poor out of poverty, but despite its successes, it has proven hard to scale; the majority of people that could benefit from such services still have no access. As a result, new technologies are being developed to help take financial services to the unbanked masses.

In 2002, HP partnered with a group of microfinance institutions (MFIs) in Uganda to explore ways in which technology could help microfinance institutions to scale. The result was a Remote Transaction System (RTS) that supports both group and individual lending, online and batch offline processing, and back office synchronization. The system makes use of sturdy handheld devices and smart cards to allow microfinance agents to collect crucial financial data in the field and subsequently to transfer the data directly into the MFIs? computerized financial management systems. The advantages of the system included automation of transactions, reduced client time and travel, more frequent payments, reduced cash management risk, and avoidance of costs for ?brick and mortar? branches. The technology is now being commercialized and licensed by Sevak Solutions.

Technology is also expanding more traditional financial services beyond the edge of current markets. In India, engineers at the IIT Madras have developed the Gramateller, an ATM designed to enable a low-cost model of delivering banking services in rural areas. The device has been designed to be used in coordination with the PC of a village Internet kiosk, and costs less than a tenth of the price of a conventional ATM. Bolivian microfinance leader PRODEM has also developed and deployed its own voice-driven Smart ATM in local languages with color-coded touch screens. The stand-alone device employs smart card and digital fingerprint recognition technology, allowing secure transactions in even the most remote areas of the country.

The demand for commercial electronic transactions continues to grow worldwide, even in regions which lack a fully developed wired telecom infrastructure. U.S.-based research firm Frost & Sullivan estimates that the market for point-of-sale (POS) terminals will grow at a hearty 16.4% compound annual rate over the next three years. To meet this demand, VISA International has partnered with WAY Systems to deploy a mobile transaction systems that integrates a smart card reader into a cellular phone. The device will allow funds to be electronically transferred anywhere in the world that a wireless network is present.