Reinventing mobile identity for the Next Billion: Movirtu’s Cloud Phone

Reinventing mobile identity for the Next Billion: Movirtu’s Cloud Phone

Madagascar
Organization type: 
for profit
Budget: 
$1 million - $5 million
Project Summary
Elevator Pitch

Concise Summary: Help us pitch this solution! Provide an explanation within 3-4 short sentences.

Access to mobile communications is a proven way of improving lives and expanding the earning potential of 1 billion people living on $1-2 a day. We prove to mobile operators this group is a profitable and sustainable opportunity and give the means of serving them well. By installing our software and providing our Cloud Phone service, operators provide BoP users a way of using mobile that adapts to their economic circumstances and direct user needs. Users no longer need to buy a mobile or a SIM to have a secure mobile identity. No software or knowledge is required by the end user. Further, through applications such as MXPay and MXInfo, we provide base of the pyramid users with critical payment and information capabilities. We aim to close the gap in access to mobile services for rural poor.

About Project

Problem: What problem is this project trying to address?

The community we engage is vast, across many different countries. The 1 billion people who represent our target community have certain things in common. They tend to be employed in agriculture or small business concerns, with an average income of $1-2/day. They are most often rural dwellers, whose homes are often heated with wood, lack electricity. They are disproportionately female (70%), young (60% are between 15 and 24 years old). Depending on the educational standards of their country, they may or may not be literate. All are currently using mobile phones and spending a great deal of disposable income on this because the alternatives are even more expensive (money transfer) or because communication is essential. Our community consists of resourceful, proactive people. They are hardworking and often very aspirational for a better life, but face significant swings in fortune and income. They often travel more than an hour to reach the nearest phone, since the alternative is a journey or entrusting funds to someone to deliver. They welcome greater exposure to employment opportunities, education, and useful information, and are very interested in mobile banking and payments even if they have not yet used the services. We have spent months in the field in various countries, working alone or in partnership with our mobile operator clients and design specialists such as Frog Design to understand our community of interest, so that we can better represent their needs and advocate to the mobile operators to serve them well. This community is of interest to many parties: NGOs, governments, and businesses. They are exposed to a vast and fragmented range of initiatives and pilots. We are committed to this group’s needs for the long term, with solutions that are easy for them to understand and to use, and to afford.

Solution: What is the proposed solution? Please be specific!

Movirtu is focused on our customers and users situation and context, and removing barriers to mobile services. We work to improve the business model and business case understanding for mobile operators, and partner with them for mutual gain. Movirtu’s Cloud Phone solution is innovative in three main ways: 1.Flexibility. Movirtu’s solutions do not require the user to own a SIM card or a handset. Cloud Phone is accessible from any GSM capable phone and does not require any software downloads. 2.Security. Our solution benefits from the security and reliability of the core of the mobile network. 3.Business model. Our business model addresses significant current issues. Lenders are concerned to lend phones, for fear of exposure of information or damage. With Cloud Phone, there is no exposure of the lender’s information, and the lender is given a credit. Users are reluctant to ask to borrow a phone, and often feel obliged to buy more airtime than they use: with Cloud Phone, they are using their own airtime at best available rates. The innovation came from the idea of decoupling mobile identity from the device in the same way as Webmail does to email. This insight led to the development of Movirtu’s Cloud Phone. Our way of working is innovative when compared to other software vendors. We invest in pilots, providing significant support in marketing, user insight, and business case building. When projects move to roll-out, Movirtu’s revenue share model allows us to profit as the operator does, while limiting the up front investment in a new business model
Impact: How does it Work

Example: Walk us through a specific example(s) of how this solution makes a difference; include its primary activities.

Movirtu aims to close the gap in access to mobile telecommunications technology for those at the base of the pyramid, disproportionately rural, poor women who cannot afford a phone or SIM card. These users currently share phones. They have no mobile identity, which limits their access to employment opportunities, critical information, and banking. Movirtu designs technology that provides mobile identity from the cloud, so there is no need for the user to own a SIM card or mobile phone. The user simply logs in and out of any GSM phone. The phone lender's information is safe and the lender also receives a credit. For operators, this is a cost effective way of servicing this critical market. We work with leading mobile operators install our software at the core of the operator’s network. In addition to Cloud Phone, which provides all regular features of a phone (make and receive phone calls, text messages, voicemail and call forwarding) we also provide interfaces to the mobile operator’s mobile banking service to allow payments and remittances to be sent and received securely, information and content services (often in partnership with local NGOs, for health, education, agricultural and other projects). We provide our software to the operator with a valuable wrap-around of support, business case building, advocacy, social impact measurement, market research and communications support and advice. When rolled out we receive a revenue share as incentive for the service to be successful. We have announced our first public national rollout with Airtel in Madagascar in February 2011 and have a strong pipeline of pilots in place in our key markets.
About You
Organization:
Movirtu limited
About You
First Name

Nigel

Last Name

Waller

About Your Organization
Organization Name

Movirtu limited

Organization Country

, LND

Country where this project is creating social impact

, AN

How long has your organization been operating?

1‐5 years

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Innovation
What stage is your project in?

Operating for 1‐5 years

Share the story of the founder and what inspired the founder to start this project

My name is Nigel Waller and I am the Founder and CEO of Movirtu, a venture capital funded, for-profit social enterprise. Movirtu was founded in March 2008 to address a market failure: the cost effective and high quality provision of mobile identity to the next billion who earn between $1-$2/day, use mobile through other public or private phones but have no access to mobile identity of their own.
The story of Movirtu begins about eight years ago, during a meeting with some senior executives. My colleague turned to me and said “The base of the pyramid is a huge market: how can we address their needs and get them connected to mobile?” The introduction of a whole huge and underserved market at the base of the pyramid opened my eyes to a significant but challenging opportunity.
When I was posed that initial challenge, I set myself the task of immersing in these users’ world. I soon discovered that the way these users think of mobile is completely different from the way we look at mobile in the west. The desire for individual mobile connection exists but not the means. Further, a mobile is much more than it is to users in the West: often a user’s only means of communication with far away relatives, a way to receive and send money, a valuable source of education and employment information. Finally, the mobile is the only feasible channel to access the Internet.
Something needed to change. The innovation came from redesigning the mobile supply chain in a way that would work for users, and allow the operators to operate cost effectively to serve this enormous market.

Social Impact
Please describe how your project has been successful and how that success is measured

We have developed our technology platform, tested it in our labs, and run several pilots successfully in our key markets with major mobile operators. We have also developed a number of additional services such as mobile payment, information and content publishing, and we will continue to develop applications for Cloud Phone users that meet their emerging needs.

The first of these initial pilots has moved forward to nationwide launch in Madagascar and is now available to all 2 million of Airtel Madagascar’s customers through over 8,000 village phone operators. We have other live pilots which we expect will follow a similar path in the next 6-12 months. Over the last two years, we have also built business model test cases and had the opportunity to refine and build on these to help us in our discussion with the operators.

As a for profit social enterprise, success is measured commercially first of all, through a series of commercial milestones (customers, revenue, product development) agreed with our board of directors.

We also measure our social impact in a number of ways. With our partners the William Davidson Institute, we have run an evaluation on our project in Madagascar that helped us define the metrics we would use to measure our social impact across our markets of operation.

We are testing an approach in a second African market for social impact evaluation, which includes a short quantitative survey. The key metrics we track across pilots relate to economic opportunity: where has Cloud Phone demonstrably been able to either save money or grow a user’s income? This allows us to benchmark against our headline objective of increasing each user’s income by $5-6/month through either time saving, avoiding unnecessary transportation, and easier access to job and employment.

How many people have been impacted by your project?

More than 10,000

How many people could be impacted by your project in the next three years?

More than 10,000

How will your project evolve over the next three years?

We plan on expanding our client base to a dozen markets by the end of 2012. Operators intend to roll out our service to several of their countries when we have completed our pilots successfully. By 2014, we expect to be able to access opportunities in Latin America in addition to Africa and South Asia.
We will expand our offer and services, and continue to participate in consortia with NGOs and operators as mobile health and agricultural information becomes more widely available. Our current investors have committed further funding. We expect to have attracted new funding and more partners during the next three years. We plan to offer developed market services since our technology can be applied to developed market operator pain points.

Sustainability
What barriers might hinder the success of your project and how do you plan to overcome them?

The Cloud Phone project has been proved in the market and developed in line with proven user needs. While we are convinced of the size of the opportunity, the mobile industry can move quickly. Mobile operators, device manufacturers, or SIM card manufacturers could change their own business models to focus on base of the pyramid users. For instance, a low cost handset could enter the market at a more affordable price point, and if the purchasing power of users increases significantly users might choose to buy a phone rather than our service. However, the size of our market is so large, and the income volatility of our users so pronounced, that even if cheaper handsets are made available, they will remain out of the reach of most users.

For mobile operators, providing our service to base of the pyramid users represents a change and a new area. We have hired a very experienced sales team and have collected a great deal of evidence to advocate for the opportunity and support the mobile operators through the transition.

We have a few, large competitors who offer elements of our solution, although they do not focus on the base of the pyramid market and their solutions are at some technical disadvantages. If these competitors chose to change their focus, they have significant assets at their disposal. However, we have a track record of several years of work on the issue, and a great deal of proprietary knowledge they would be hard pressed to equal.

The mobile industry has a great deal invested in the current ecosystem, and we could prove a threat to some very powerful players. This might create an opportunity to partner with them, or to be acquired by them. We remain focused on meeting user needs, and we do not require non-strategic investment.

Tell us about your partnerships

Technology partnerships: we have partnered with specialists to support our development teams in Africa and India as well as mainstream best in class hardware and software companies. We work with many of the current vendors to the mobile operators and this provides a strong level of comfort to the mobile operators that our solution will fit in well with their current operations.

NGOs: Our NGO partnerships include a range of global and regional NGOs such as Praekelt, Unicef, and Technoserve. We work with our NGO partners to trial and scale valuable information and micro-credit services that at the moment tend to reach only 20-40% of the addressable market due to the lack of secure mobile identities. We are under discussion with a number of NGOs, foundations, the United Nations private sector partnership group (Business Call to Action), and other bodies to ensure that where Cloud Phone is relevant it becomes a part of leading NGO provision.

Service delivery and research/user need partners: Design is a critical element to serving the base of the pyramid well. We partner with Frog Design, who are mobile and technology user experience specialists, to understand the unique needs of the base of the pyramid and create the appropriate user interface and collateral support. We have a strategic partnership in place with TNS, one of the world’s largest market research companies, to support our field activities at consistently high quality.

Explain your selections

Movirtu was originally funded by our founders until proof of concept stage. We then received seed funding from investors Grassroots Business Fund and Gray Ghost Doen Cooperatif of $1 million which enabled us to develop the technology and launch our first commercial pilots. In November of 2010 Movirtu closed a Series A funding round of $5.5 million from existing investors and TLcom, to enable us to accelerate development and commercial roll-out. Given the pace of the technology industry, venture capital will allow us to accelerate and reach a strong position in an emerging and fast changing market.

How do you plan to strengthen your project in the next three years?

We have a three year plan with milestones and goals. Our plans include a significant expansion in technology development resources in Africa and India, in order to bring more of the core elements of our technology under our direct control and simplify our offering model.

We plan to using our technology and IP from developing markets to provide services in developed markets to mobile operators which will provide a useful balance of revenue.

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We plan to partner with some commercial and brand partners to create alternative and sustainable revenue streams.

By end of 2014 we plan to have deployments in over 20 countries and be impacting the lives of over 7 million people.

Challenges
Which barriers to employment does your innovation address?
Please select up to three in order of relevancy to your project.

PRIMARY

Lack of access to information and networks

SECONDARY

Restricted access to new markets

TERTIARY

Restrictive cultural norms

Please describe how your innovation specifically tackles the barriers listed above.

Movirtu’s services are directed at end users who are currently excluded from mobile identity, which places them at an economic and social disadvantage. For instance, prospective employers have no way of reaching them or leaving a message about opportunities. For farmers and merchants, business critical information and support from NGOs is delivered via mobile. Confidential health information currently cannot be delivered without a secure mobile identity. Women are disadvantaged in most markets. If there is a phone in the household, it will be controlled by a male head of household. Women do not have visibility or control over their own income. Our services are suited to microfinance: access to a unique mobile identity preserves privacy and confidentiality.

Are you trying to scale your organization or initiative?
If yes, please check up to three potential pathways in order of relevancy to you.

PRIMARY

Grown geographic reach: Multi-country

SECONDARY

Enhanced existing impact through addition of complementary services

TERTIARY

Leveraged technology

Please describe which of your growth activities are current or planned for the immediate future.

We have two main areas to focus on growth in the immediate future: new markets and clients, and new revenue streams from new services.

Our main area of focus for the balance of 2011 is to deliver on our pilot commitments and transition these to commercial, country-wide roll-outs. In a number of cases we expect our clients will proceed to multi-country rollouts in our core regions of Africa and South Asia. We expect to be building our partnership with the local and regional NGOs in tandem as this helps our market adoption.

We will also be extending the service portfolio for BoP users and expanding on our current financial and information solutions.

Do you collaborate with any of the following: (Check all that apply)

Technology providers, NGOs/Nonprofits, For profit companies, Academia/universities.

If yes, how have these collaborations helped your innovation to succeed?

As a technology start-up offering a new service, the expertise and connections of many of these players were essential in helping us get the proposition and offer the right service at the right place. We have benefited from much of the hard-won insight about the BoP from universities/academics, and worked with our operator clients to turn this into business cases that justify their investment. Our technology partners provide key components of our solution. NGOs have been some of our most important partners, as they have deep local connections and experience in working with the base of the pyramid users. Their support and advocacy for the idea has been extremely influential with operators and investors.