Vodafone
Focus on a Member - January 2008
Every month, CSR Europe introduces one of its members' key CSR focus areas and activities through a brief interview. In focus this month: Vodafone. Ramon Arratia, Corporate Responsibility Manager and Joaquim Croca, Corporate Responsibility Executive, share some of their company's initiatives aimed at providing communications services to the developing world.
How would you describe Vodafone's approach towards access to communications in emerging markets?
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| Ramon Arratia |
Extending access to communications in emerging markets offers a great opportunity for Vodafone to make a strong contribution to society. It supports the socio-economic development of the communities where we operate and is closely linked with our strategic business goal to achieve strong growth in emerging markets.
Our approach to access to communications consists of various elements:
- Commissioning high quality, scientific research on the socio-economic impacts of our technology to better identify and understand societal needs;
- Developing business models, such as low cost handsets, smaller recharge fees or sharing network to increase affordability;
- Launching services that target specific unmet needs in emerging markets that can be fulfilled through our technology, for example money transfer services to boost economic development in rural areas with scarce banking services.
You have conducted various research studies on the socio-economic impacts of mobile. Could you tell us more about their key outcomes?
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| Joaquim Croca |
To explore business opportunities effectively in emerging markets, we need to understand the specific needs of customers in those markets. Our socio-economic impact (SIM) research project was set out in 2004 to provide a systematic analysis of the impact of mobiles, going beyond the rich but scattered array of anecdotal evidence.
The first set of studies explored the impact of mobile in Africa, where rapidly growing mobile use has been one of the very few areas in which the continent has been catching up with the rest of the world rather than falling further behind. The work, published in 2005, documented the boost to growth from greater mobile penetration, and found that even in remote rural communities there were fewer barriers to use of mobiles than might have been expected. Mobile technology can play a vital role in bridging the digital divide, particularly in rural areas where there is limited access to other forms of communication - roads, postal systems or fixed line phones.
In 2006, we looked at the evolving role of mobile in micro-payments, the transmission of relatively small sums of money and provision of some basic banking services in countries where few people have any access to the security and convenience of a bank. We found that lack of access to banking services is currently forcing people to rely on a cash-based economy with little security, a more casual informal labour market and a lower tax base for governments. Mobile phones can leapfrog that gap.
Could you describe one of your access to communication services in Africa in more detail?
M-PESA enables customers to move money within Kenya by sending instructions via SMS text message to a central server. Customers can deposit and withdraw cash at local M-PESA agents, including retail outlets such as airtime dealers, petrol stations, and supermarkets. They can transfer money to other mobile users via SMS and also buy prepaid airtime credit.
The service is aimed at mobile customers who do not have a bank account, often because they do not have sufficient income to justify the high cost of banking in Kenya or because they live in areas where access to financial services is limited. Of the 80% of Kenyan adults without bank accounts, many are self-employed business people who need the ability to transfer money.
People with bank accounts can also use the service to send money to their families living elsewhere in the country who do not have bank accounts, avoiding more expensive and insecure local money transfer services. Over half million customers have registered for the service in Kenya since its launch. Vodafone has now setup a Mobile payments business unit to scale this service up to others countries in Africa and Asia where we operate directly or via our partners.
Vodafone has decided to participate in the ‘Base of the Pyramid' Laboratory facilitated by CSR Europe. Why is this Laboratory of interest to your company?
At Vodafone we truly believe our impact in society can be maximised by working collaboratively with other businesses and public entities.
M-PESA has been developed and deployed because there was a common interest from different stakeholders to address existing societal needs, grab the opportunity and really make an impact while doing business. The UK government via DfID, the Kenyan Government, Vodafone, our local affiliate Safaricom, local microfinance institutions and local banks, all came together, allocated resources and created the framework that allowed the service to be trialled and finally deployed.
With our network we allow others to reach our clients but we also attract more clients by delivering more services. This methodology can be replicated extended beyond banking services to other basic needs like water, food, health, education, information, etc
Participating in the "Base of the Pyramid" Lab gives us an opportunity to discuss and hopefully identify new areas of joint collaboration and demonstrate, once more, that this is a viable model.
About Vodafone
Vodafone is the world's leading international mobile communications group with over 232 million proportionate customers as at 30 June 2007. Vodafone currently has equity interests in 25 countries across five continents and a further 40 partner networks worldwide. For more information, please visit www.vodafone.com.
Visit Vodafone's CR web pages at: www.vodafone.com/start/responsibility.
More information
For more information about the CSR Europe activities in which Vodafone engages, please contact Carien Duisterwinkel on cd@csreurope.org.
