Internet for All: Telenor on the essentials

By Gabey Goh September 18, 2014

Access, affordability and services key to bringing the Net to Asia's mass market
Internet governance issues also on the agenda in discussions with regulators

Internet for All: Telenor on the essentials

IMAGINE a 60-year-old woman in Thailand experiencing the mobile Internet for the first time. Imagine her excitement as she realises she can now do more than just talk to her daughter over the phone. She can now see where her daughter works and how she lives, all via her mobile device – despite not being able to read or write.

That was the picture painted in a video aired during a presentation by Sigve Brekke, Telenor Group executive vice president and head of Asia Operations, on the first day of KL Converge at the Kuala Lumpur Convention Centre.

KL Converge is a three-day event organised by the Ministry of Communication and Multimedia and the Malaysian Communications and Multimedia Commission (MCMC) as a platform for users, developers, producers, writers, directors and animators to come together to meet and share ideas.

The video formed part of the bigger vision of Telenor’s Internet For All initiative and sought to underscore just how critical a role Asia is about to play as the epicentre of global growth.

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Brekke said that the Internet drive used to be powered by Silicon Valley and the United States, but not anymore. It is now all about Asia.

He pointed out that eight out of the 10 dominant device makers are Asia-owned or Asian-based, with 60% of the top messaging apps also based in Asia: LINE, WeChat and KakaoTalk.

Norway's Telenor Group recently said it expects to increase its mobile Internet subscriber base in Asia to 45 million users by year’s end, an increase of approximately 64% year over year and the company’s fastest uptake of mobile Internet users to date.

When these numbers are reached, roughly one-third of Telenor Group’s 158 million user base in Asia will be Internet-enabled.

Currently, less than 20% of Telenor’s markets in Asia are active mobile data users, so this would be a marked jump and an encouraging step toward widespread Internet access, the company said.

Its Internet for All strategy aims to capture this significant revenue and growth potential in a region with low fixed-line penetration and declining device prices.

“Less than 15% of Asia is online and of that population, 50% are under 25 years of age. In fact, over the next 10 years, 500 million children in the region will be accessing the Internet for the first time, many of them via mobile," said Brekke.

“It has only just started in Asia. Fifteen years ago, mobile penetration was very low but today it’s more than 100% in markets like Malaysia and Thailand,” he added.

With much of Asia yet to get connected, Brekke said there was a need for operators to rethink the way they offer products and services, especially with the increasing dominance of data over voice, coupled with the need to increase affordability for the mass and rural segments.

He outlined three elements that need to be sorted out in order to make access to the Internet an inclusive process, with the first being enablement.

Internet for All: Telenor on the essentials This is where Brekke (pic) brought up the topic of spectrum allocation, pointing to the Malaysian Government’s spectrum refarming exercise that is expected to happen in 2015.

Telenor and its Malaysian subsidiary DiGi Telecommunications are advocating that they be allocated spectrum from lower bands such as the 900MHz and 700MHz in addition to the Long-Term Evolution (LTE) 2.6GHz spectrum allocation.

“It’s not about getting a hold of a specific band or block, that’s an approach for the voice world. In today’s data-driven market, you need a little bit of everything in order to be efficient in your deployment and be better able to coordinate coverage.

“It is important that governments across Asia understand that there is a need to balance this resource in a good way. It’s not just about maximising the payment you get from operators but how the spectrum can be used wisely,” he argued.

In addition to better deployment of spectrum and the expansion of networks, the price of mobile devices also needs to come down.

“Currently it’s about US$45 for a phone now, and we need to get it down to US$25 for the mass market in Asia,” Brekke said.

It is also important that operators' new business models be sustainable. When it comes to the mass market, not everyone can afford to pay a monthly fee or sign up for an unlimited package, he noted.

“But they can afford to pay by the day or hour or just for access to Facebook. It is important for us to try to understand the real Asian mass market better and how they can afford these services,” he added.

The final piece of the puzzle, after access and affordability, is content and services – in short, giving new users a reason to use the Internet.

In order to stimulate usage and meet customers’ needs, Telenor is partnering with social media and entertainment players such as Facebook, Wikipedia and WhatsApp and is focusing on other digital offers.

“If you really want to bring the Internet to all, international content is not enough," said Brekke. "You need local content as well and you need to part of that ecosystem. I think Malaysia has a long way to go but we want to be a part of that.”

Some of the services Telenor is expanding into include financial services, knowledge access, as well as affordable and accessible health services.

Citing market research, Brekke noted that four million people in Malaysia are expected to get access to formal insurance via mobile by 2020.

Telenor is leveraging on the experience gained launching financial services in Pakistan, where the company’s service Easypaisa, and its six million active users, is the top three more recognised services on mobile, he claimed.

In Malaysia, DiGi currently offers a new international remittance service, DiGi SendMoney, in partnership with Maybank.

Also, in partnership with insurance corporations, DiGi Insurance currently offers customers the ability to purchase personal accident insurance and travel insurance packages directly via their mobile phones.

“We use our resources to help in distributing these services, for example via working with existing banks, or establishing it on our own.

“We don’t want to compete with the established banking systems or services sector, but rather, serve the 20% that those guys currently don’t,” Brekke said.

While access, affordability and services are critical components of a successful mobile Internet ecosystem, the issue of governance which overlays it all also plays an important role.

Asked for Telenor’s stance on issues of Internet governance, Brekke said that the company feels a strong sense of responsibility, especially given the role it plays as a provider.

“Knowing that there are millions of children accessing the Internet for the first time via our networks ... is why we have programmes on safe Internet practices like the CyberSAFE programme and have filters against pornography.

“That’s why we also are discussing internally at Telenor about freedom of speech, about how to balance the principle issues around that with local regulations.

“We also have these discussions with regulators as well, as you know the Internet is not regulated but we are. It is now on the agenda with all our discussions with regulators to help foster more awareness of these issues and how to handle them,” he said.