What role will mobile play in the future of the internet?

The internet has become one of the most profound enablers of social and economic growth in our time.

Today, more than 3 billion people are connected to the internet and a significant majority of these men, women and children have made this connection using a mobile device. Mobile networks serve as the very foundation of today’s rapidly evolving digital ecosystem, enabling progress for so many and on so many levels.

Nearly ubiquitous mobile technology brings the opportunities of the internet directly to the fingertips of people everywhere, instantly connecting an entrepreneur in Delhi to an investor on Wall Street or allowing a small farmer to access the latest crop information. Mobile connections have made a huge impact on the global economy and have helped lift millions out of poverty, contributing US$3 trillion to global GDP in 2014 alone.

But the real work is just beginning.

Despite all of this incredible progress, we have yet to see the full impact of mobile connectivity and the central role it will play in enabling the social and economic progress of those yet to come online. This opportunity is enormous, particularly when we consider the 4 billion people who are not yet connected.

Connecting the Unconnected

At this year’s World Economic Forum, I’ll be joining industry leaders to discuss the key challenges facing the world today, including the future of the internet. We’ll discuss how, as a global community, we can work together to accelerate access to the internet and amplify its positive impact on individuals, industries, governments and societies. The challenge of building a stronger and more inclusive digital ecosystem is at the core of the work of mobile industry.

Not surprisingly, the majority of people yet to come online live in markets that are still developing. Many of these citizens are on low incomes and have had less access to digital literacy skills training. Women are also disproportionately affected by these challenges and, globally, they represent the most excluded segment. This has a direct impact on both the growth of these markets and the social circumstances for these women and their families.

Mobile is a key an enabler of some fundamental services that many of us take for granted, but that can be absolutely transformational for others. Consider for a moment SIM-enabled digital identity, which allows individuals to establish a legal identity for the first time, participate in the formal economy and receive government services, or mobile money, which has provided millions of people access to transfers, insurance or other financial services. These opportunities would simply not exist in a world without mobile.

Partnering for a better future

So why isn’t the whole world connected today? The answer is that mobile operators simply cannot reach all of the unconnected alone. Connectivity is a global challenge, requiring a global solution by the wider digital ecosystem, government, and non-government organisations coming together to collaborate on four key areas: network coverage, affordability, digital skills and locally relevant content. While we have made significant progress, we must work together on these key areas to accelerate connectivity.

It’s expected that by 2020, the number of people connected to the internet via mobile will increase by around 40 per cent and developing markets will be instrumental in driving this growth. This is estimated to have an impact of US $1 trillion on GDP.

Access to the mobile internet is a defining moment in a community’s economic, social and political development. The mobile ecosystem, led by network operators, will continue to work with others to break down the barriers and foster digital, social and financial inclusion. As an industry, we have already connected billions, and we won’t stop until we’ve connected the world.

The future of digital finance lies in our mobile phones

John Giusti

When Safaricom first launched its M-Pesa services in Kenya in 2007, no one could have predicted the transformative impact that mobile money services would have on the lives of people living in emerging markets. Today there are 263 mobile money services available across 93 countries, and nearly 300 million people are now registered to a mobile money account. By disrupting the “bricks and mortar” financial services that was inaccessible to so many, millions of people now have a pathway to financial inclusion.

So what led to this surge in digital financial services? The biggest single contributor has been the spread and accessibility of mobile phones. With over 3 billion people connected to mobile services today, and another 2 billion expected to be connected by 2020, more people in emerging markets can now easily connect to mobile financial services quickly and – most importantly – securely.

Mobile money services have introduced a low-margin, high-volume business model that, through a mass market approach, can expand access to financial services to the unbanked.

The consumer’s experience, transformed

Cash is still the dominant payment approach in emerging markets. This presents many challenges. In particular, distributing physical cash, such as salary payments or government disbursements is expensive and insecure. A robust mobile money ecosystem allows customers to make and receive payments more safely, conveniently, transparently and affordably.

The enabling power of the mobile phone boom has been immediate as mobile phones have put financial services within reach of everyone. A farmer in a rural community can make payments to suppliers without having to travel miles. An urban entrepreneur can better achieve scale in her business through quick and secure mobile payments. A mother can conveniently pay her children’s school fees.

To expand the range of transactions available to consumers, we are seeing mobile money providers collaborate with the broader ecosystem and embrace interoperability, allowing users to seamlessly transact with customers of other mobile money schemes. In Tanzania, one of the most successful mobile money markets, interoperability has significantly increased the potential market for mobile transactions by expanding the number of mobile money senders and receivers served. In Cote d’Ivoire, a partnership between mobile operators and the government for digitization of person-to-government (P2G) payments has led to 94% of annual registration school fees being paid via mobile money.

A robust digital financial ecosystem

Mobile will underpin many of the solutions needed to address the world’s most pressing development challenges, captured in the UN’s Sustainable Development Goals. The leaders from the government, business and technology sectors gathering at the World Economic Forum meetings in Davos should consider the reach of mobile phones when trying to identify sustainable solutions to these challenges, including expanded financial inclusion through mobile money services.

Technology has always dictated how consumers live, communicate, shop, and, of course, bank. Today, we see that advances in mobile connectivity have driven successful mobile money service deployments in many emerging markets. However, there are many more people to reach. We all have a role to play. As mobile operators continue to invest in their networks and services, governments should ensure that their policy landscape allows for financial services innovation to foster great inclusion. Continued investment from both the private sector and the philanthropic community will be required to drive the innovation and collaboration needed to expand the reach and strengthen the customer experience of the digital financial ecosystem through mobile.

Mats Granryd