Mobile opportunities Peru

Mobile Opportunities Preliminary results from Peru Roxana Barrantes IEP Instituto de Estudios Peruanos 1 Table of contents 1. D and E SEC Groups: our sample and ENAHO. 2. Characteristics of selected locations 3. Users and Non - users 4. Users 5. Non users 6. Concluding remarks IEP Instituto de Estudios Peruanos 2 1. D and E SEC Groups: our sample and ENAHO 3 1. D and E SEC: Peru vs Sample Number of family members 18.0 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0 17 13 ENAHO 5.4 SAMPLE 4.2 5.0 4 40.0 60.0 46.8 42.0 45 40 120.0 100.0 80.0 98 Age 70 1 Mean Median 1 20.0 14 18 Min Max 0.0 Mean Median Min Max Sex (1=Male) Literacy (1=Literate) 1.20 1.00 0.80 0.60 0.40 0.20 0.00 Mean Median 0 0 Max 0.780.83 1 1.0 1 1 1.20 1.00 0.80 0.60 0.40 0.20 Min 0.96 0.62 0.49 1 1 1 0 0 Mean Median Min Max IEP 0.00 Instituto de Estudios Peruanos 4 Sample • D and S socioeconomic groups, according to SISFOH. • Urban poor • Three cities: – Trujillo – Puno-Juliaca – Metropolitan Lima • 1200 surveys • Randomly selected households • Randomly selected individuals within the household. 5 1. D and E SEC: Peru vs Sample Education: ENAHO and sample superior universitaria completa 2 2 4 4 7 superior universitaria incompleta superior no universitaria completa 4 2 4 superior no universitaria incompleta Level secundaria completa 22 20 19 12 13 5 0 5 31 secundaria incompleta primaria completa 20 22 primaria incompleta sin nivel 7 10 15 20 25 30 35 IEP Instituto de Estudios Peruanos % of total 6 1. D and E SEC: Peru vs Sample Sewage 60 50 40 30 20 10 0 50 36 15 40 16 16 % Conected to public network Cesspit Doesn’t have sewage IEP Instituto de Estudios Peruanos 7 2. Characteristics of selected locations 8 Population in selected locations   Trujillo – La Libertad   Pop. 765 171 Pop. 441 382 6 954 583 Puno – Juliaca  Lima  IEP Instituto de Estudios Peruanos 9 Peru and selected locations IEP Instituto de Estudios Peruanos 10 Urban poor in Peru % of Urban Poor 25% 20% 15% 10% 5% 0% 20% 2% 3% 1% 5% 4% 4% 5% 4% 4% 2% 3% 3% 3% 8% 4% 1% 3% 4% 4% 4% 3% 4% 2% Ayacucho Madre de Arequipa Huancavelica Moquegua Amazonas Apurímac Ancash Huanuco La libertad Lambayeque Cajamarca San martin 100% = total of urban poor households of Peru IEP Instituto de Estudios Peruanos 11 Tumbes Ucayali Ica Piura Junin Puno Loreto Cusco Pasco Tacna Lima % Am 10 2 5 6 18 2 20 30 40 50 60 70 0 Source: OSIPTEL 7 10 42 2 11 11 18 2 4 12 2 9 8 35 5 19 8 27 27 7 17 57 4 9 3 22 7 44 2 5 2 3 9 8 5 5 11 19 16 49 33 17 az on An a s c Ap as h ur im Ar ac eq Ay ui p ac a u Ca ch ja o m ar c Hu Cu a an s c a co ve Hu lic a án uc o Fixed and mobile density 2006 Description of telecom indicators 12 Ic a La J un ín L La i be r m b a tad Li m yeq a ue y Ca lla M Lo o ad re ret de o M Dio oq ue s gu Pa a sc o Pi ur a Sa Pun n o M ar tí Ta n cn Tu a m b Uc es ay al i To ta l 9 32 3. Users and Non - users 13 During the past three months have you used a mobile phone to make or receive calls? Yes No Total N % N % N % 102 49,0% 106 51,0% 208 100% 90 43,7% 116 56,3% 206 100% 192 46,4% 222 53,6% 414 100% 99 47,6% 109 52,4% 208 100% 109 54,5% 91 45,5% 200 100% 208 51,0% 200 49,0% 408 100% 177 83,1% 36 16,9% 213 100% 178 83,2% 36 16,8% 214 100% 355 83,1% 72 16,9% 427 100% 14 Cities Lima Sectors D E Total Trujillo D E Total Puno-Juliaca D E Total IEP Instituto de Estudios Peruanos Gender Men Users No users Total 370 200 489 User's Gender Women 385 294 760 Total 755 494 1249 Men 51% 49% Women IEP Instituto de Estudios Peruanos 15 Age Users .06 AGE T test Group Density .04 Obs Mean 36.36 31.28 33.29 5.07 .02 0 20 40 edad_us 60 80 Non-users .03 .04 Non users 494 Users 755 combined 1249 diff Ho: diff = 0 Ha: diff != 0 Pr(|T| > |t|) = 0.0000 Density .01 0 .02 0 IEP 0 20 Instituto de Estudios Peruanos 40 edad_nous 60 80 16 Users, non-users and education sup. universitaria co sup. universitaria in sup. no universitaria sup. no universitaria 5to de media 4to de media 3ro de media 6% 6% 9% 7% 9% 4% 3% 3% 15% 8% 3% 2% 3% 2% 3% 1% 1% 1% 1% 0% 5% 7% 10% 15% 3% 5% 1% 6% 2% 6% 1% 3% 6% 9% Education 27% 37% Level 2do de media 1ero de media 6to grado 5to grado 4to grado 3er grado 2do grado 1er grado/ transición ningún nivel/ alfabet EDUCATION T test Group Obs Mean 8.73 11.1 10.36 -2.36 Non users 494 Users 755 combined 1249 diff Ho: diff = 0 Ha: diff != 0 Pr(|T| > |t|) = 0.0000 20% % 25% 30% IEP Instituto de Estudios Peruanos 35% 40% 17 Family members Users, non-users and family members 30% 25% 20% % FAMILY MEMBERS T test Group Obs Mean 15% 10% 5% 0% 1 3 5 7 Non users 494 3.923077 Users 755 4.32053 combined 1249 4.163331 diff -0.3974529 Ho: diff = 0 Ha: diff != 0 Pr(|T| > |t|) = 0.0001 9 11 18 Number of members IEP Instituto de Estudios Peruanos Literacy Users and Literacy Non users and Literacy 99% 93% Literate Illiterate 1% 7% LITERACY T test Group Obs Mean 0.925 0.988 0.96 -0.06 Non users 494 Users 755 combined 1249 diff Ho: diff = 0 Ha: diff != 0 Pr(|T| > |t|) = 0.0001 IEP Instituto de Estudios Peruanos 19 4. Users IEP Instituto de Estudios Peruanos 20 Reasons for calling Mobile telephone use (for calling) during the last week From the total (1249), the % is: From the total of users (755), the % is: 563 45.08% 74.57% Calls To workplace or for business Friends In-country Relatives Relatives living outside of the country Emergencies N° 214 318 466 12 30 % of the ones that use the mobile phone to % of the total of % of the total of call users interviewees 38.0% 56.5% 82.8% 2.1% 5.3% 28.3% 42.1% 61.7% 1.6% 4.0% 17.1% 25.5% 37.3% 1.0% 2.4% IEP Instituto de Estudios Peruanos 21 Higher impact perceived by Independent workers Saved time at work Occupation N° Employee Laborer Independent worker Comission worker House worker Unpaid worker in family business Employer Farmer Other Total 50 32 107 5 6 9 2 1 1 213 Found better job or business opportunities Occupation N° Employee Laborer Independent worker Comission worker House worker Unpaid worker in family business Employer Farmer Other Total 38 33 106 3 6 9 2 2 1 200 22 IEP Instituto de Estudios Peruanos Higher impact perceived by Independent workers Communication with more suppliers Occupation N° Employee Laborer Independent worker Comission worker House worker Unpaid worker in family business Employer Farmer Other Total 9 10 55 1 1 2 3 0 0 81 Communication with more clients Occupation N° IEP Employee Laborer Independent worker Comission worker House worker Unpaid worker in family business Employer Farmer Other Total Instituto de Estudios Peruanos 21 14 98 3 3 4 4 0 0 147 23 Higher impact perceived by Independent workers Communication with work colleagues Occupation N° Employee Laborer Independent worker Comission worker House worker Unpaid worker in family business Employer Farmer Other Total 50 29 82 2 5 6 1 0 0 175 IEP Instituto de Estudios Peruanos 24 Pre paid dominates among mobile subscribers Type of plan 2% 1 % 1 % 96% P repaid P o stpaid P o stpaid (co ntro l) Do no t kno w IEP Instituto de Estudios Peruanos 25 Reasons to choose Pre paid Why do you have a pre-paid mobile plan instead of a Postpaid plan? It is cheaper I can control my mobile phone expenditure better It is simpler to get it this way I didn’t choose it Other Total Freq. 149 153 96 51 3 452 % 32.96 33.85 21.24 11.28 0.66 100 IEP Instituto de Estudios Peruanos 26 Recharge card value Card amount N° % 10 103 20 251 30 58 40 4 50 2 120 1 Do not know 7 Did not answer 6 Total said they had not recharged 432 20 yet 23.84 58.1 13.43 0.93 0.46 0.23 1.62 1.39 100 70% 60% 50% Card recharge amount 58% % 40% 30% 20% 10% 0% 10 20 30 40 50 120 Amount (S/.) 24% 13% 1% 0% 0% IEP Instituto de Estudios Peruanos 27 Low affordability How cheap or expensive do you think your mobile phone service is? Very cheap Cheap Neither cheap nor expensive (affordable) Expensive Very expensive Does not apply/Free of charge Total Freq. 2 41 249 136 21 3 452 % 0.44 9.07 55.09 30.09 4.65 0.66 100 IEP Instituto de Estudios Peruanos 28 Strategies to minimize cost Use of "call notifications" Use of missed calls / beeping 3% Rent a mobile phone from the street 3% 7% 26% Yes 47% 50% No Does not know 69% 28% 67% Only use the mobile phone for SMS Only make calls when the rates are lower (during non-peak hours) 55% Use of the mobile phone just to receive calls 5% 82% 13% 41% 4% 48% 50% 2% IEP Instituto de Estudios Peruanos 29 Gross elasticities: Price Suppose the monthly cost of using your mobile phone was cut in half. Which of the following statements best describes how you would change your phone usage? I would not change my phone usage (it would stay the same) I would increase my phone usage by some amount, but not double it I would double my usage I would more than double my usage Total N° 170 212 73 10 465 % 36.6 45.6 15.7 2.2 100 Suppose the monthly cost of using your phone doubled. Which of the following statements best describes how you would change your phone usage? I would not change my phone usage I would reduce my phone usage by some amount, but not by half I would reduce my phone usage by half I would reduce my phone usage by more than half I would not use my mobile phone Total N° 96 145 107 74 43 465 % 20.6 31.2 23.0 15.9 9.2 100 IEP Instituto de Estudios Peruanos 30 Gross elasticities: Income Suppose that your monthly income doubled. Which of the following statements best describes how you would change your mobile phone usage? I would not change my phone usage (it would stay the same) I would increase my phone usage by some amount, but not double it I would double my usage I would more than double my usage Total N° 147 225 73 20 465 % 31.6% 48.4% 15.7% 4.3% 100.0% Suppose your monthly income was cut in half, which if the following statements best describes how you would change your phone usage? I would not change my phone usage I would reduce my phone usage by some amount, but not by half I would reduce my phone usage by half I would reduce my phone usage by more than half I would stop using my phone Total N° 89 124 92 90 70 465 % 19.1% 26.7% 19.8% 19.4% 15.1% 100.0% 31 IEP Instituto de Estudios Peruanos Do you have a fixed phone line at home? TF1. Do you have a fixed phone line (landline) at home? Cities Lima Sectors Yes N % N 48 23.1% 33 16.0% 81 19.6% 60 28.8% 12 6.0% 72 17.6% 24 11.3% 4 1.9% 28 6.6% No % N 160 76.9% 173 84.0% 333 80.4% 148 71.2% 188 94.0% 336 82.4% 189 88.7% 210 98.1% 399 93.4% Total % 208 100% 206 100% 414 100% 208 100% 200 100% 408 100% 213 100% 214 100% 427 100% 32 D E Total Trujillo D E Total Puno-Juliaca D E Total 5. Non users IEP Instituto de Estudios Peruanos 33 Reasons What is the main reason why you haven’t used a mobile phone service? It is too expensive I don’t think having a mobile of my own is necessary There is no coverage where I live None of my contacts has a phone I don’t need to use a telephone because my contacts live nearby I can’t because there is no electricity in my home to charge the phone battery Because I have a land line at home Other Total N° 276 139 8 8 13 3 41 6 494 % 55,9 28,1 1,6 1,6 2,6 0,6 8,3 1,2 100 IEP Instituto de Estudios Peruanos 34 Plans to adquire • 151 out of 494 non users Non users planning to adquire a mobile phone 30,6% Yes No 47,4% 91.4% of them plans to buy a prepaid mobile phone IEP Instituto de Estudios Peruanos 35 Affordability • In Peru, the monthly payment to subscribe to a post paid mobile phone currently costs about 38 soles (USD 12). Can you afford to pay this amount? 14% 86% Yes No What is the maximum amount you could pay for this service per month? Less than 19 soles Between 20 and 25 soles Between 25 and 30 soles Between 30 and 35 soles Between 35 and 60 soles Total Instituto de Estudios Peruanos N° % IEP 371 75,1% 93 18,8% 16 3,2% 10 2,0% 4 0,8% 494 100,0% 36 6. Concluding remarks 37 Final comments • Mobile phone use is higher than mobile phone subscription. – Important potential market! – Sharing is not widespread. • Mobile users are, on average, more educated, younger and share household with more members than non users. 38 Final comments • Affordability is an issue. – 20 soles seems to be “the magic number”. • Pre paid dominates – Even perceived as less expensive! More homework to be done in order to present further analysis and policy recommendations! 39