Cell phones eradicating clean water

April 25, 2008

Observation from Mumbai: 

Just a few minutes ago, on my way back to our hotel, I counted 9 booths selling talk time for cell phones. Compared, I saw only 3 places selling clean drinking water.

That observation made me think of the book “The fortune at the bottom at the pyramid” by C.K. Prahalad. Prahalad believes that by looking at the poor, low-income inhabitants of third world countries as viable consumers, it is possible not only to make money, but also to unleash a horde of entrepreneurial potential amongst the worlds poorest.

Mathematically this makes sense. Taking India as an example, approx. 230 million people are living for less than 2$ a day. If you multiply these numbers, you get a buying power of whopping 460 million dollars / day.

Vodafone booth in Colaba, Mumbai

The cell phone booths in Mumbai are a good example of Prahalads theory. Talk time is relatively cheap to buy, but only if you buy it in small quantities (between 0.25$ – 5$). Around 90% of this amount is transferred directly to your phone, the rest – I presume – goes to the retailer.

Buying larger amounts (above 5$) invokes a big penalty. In these cases, less than 60% of the amount is transferred to your phone. I believe the reason for this is to maintain a high rate of employment. If it was possible to put large amount in your phone, half of the booths would probably have to close down their business.

I don’t know how many people are employed in Mumbai alone selling talk time, but it seems to be in the thousands. A whole new market is unleashed, bringing prosperity and better lives to the people involved – and making companies like Vodafone and Airtel able to tap into some of the 460 million mentioned above.

But the question whether having cell phones is betting than clean water remains unanswered.





Mick & Måns Mumbai weblog is airborne!

April 9, 2008

First of all, welcome to our blog. On these pages you´ll be able to follow the progress of Kaospilot Team 1 Øresund´s India Outpost – seen from the team leaders perspective.

We will mainly be focusing on the following issues:

  • Challenges facing Kaospilots working in India
  • Funny, interesting and obscure observations done by us
  • General thoughts and reflections 
  • Key learning aspects
  • Considerations regarding team 1´s  internal process
Happy reading! 

Hello world!

April 8, 2008

Welcome to WordPress.com. This is your first post. Edit or delete it and start blogging!