Lessons Learned from CPM

Michel Mansard May 2013

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GSMA Mobile for Development Overview

The Rapid Growth of Mobile is Enabling the Mobile for Development Revolution

6 billion mobile connections this year 91% of connections made using GSM technology

Studies have shown The largest underserved markets are in remote, that a rural geographies

4 out of 5 new connections are made in the developing world

Most people in developing countries will visit the internet for the first time using a mobile phone Africa is the fastest growing mobile market in the world, and is now the in mobile penetration second largest market based on number increase of connections

10%

leads to a 1.2% increase in GDP.

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The opportunity exists to "skip a technological generation when it comes to energy, in much the way that mobile phone technology reached many populations before they had access to conventional phone technology.

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Energy is the backbone of the Mobile Industry

Over 3M mobile towers globally Operators spend on energy is increasing: price/kWh + increased traffic Energy is up to 40% of technical OPEX spend in emerging markets 640,000 off-grid towers in 2012:energy & diesel theft major challenges 548M off-grid mobile connections Off-Grid subscribers spend up to $2 -$3 on phone charging All VAS for rural areas have energy requirements

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Leverages mobile technology & infrastructure to provide access to rural energy services while improving the business case for network and tower operators

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Increasing GSM coverage is now reaching distant population where energy (and water) access can remain scarce
We estimates that the total number of people who could benefit from enhanced utilities to be 411 million people for energy and 165 million for water
90% 80%
CSM Addressable Markets

70% 60% 50% 40% 30% 20% 10% 0%

Water

Energy

Electricity Access Clean Water Access %

2001

2010

2000

2002

2003

2004

2005

2006

2007

2008

2009

2011

2012

2013

2014

2015

Sanitation Access %

GSM Population Coverage

Source GSMA, World Bank, IEA

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Mobile can provide energy access through three channels

Potential impact on ARPU for off-grid customers is 14%+
2. CPM from retail distribution network Leveraging extensive rural sales dealer/ retail network for distribution or sale of charging/ lighting devices through commercial partnerships

1. CPM from BTS infrastructure (i) Outsource power solution to ESCo who sells community energy services or (ii) Sell power from over-capacity of BTS power equipment (DG)

3. CPM from payment technology Opportunity for micro e-payments: High volumes of small payments for off-grid domestic & small business energy

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Challenges CPM faces

Regulatory framework that supports CPM
Understanding community level energy needs & ability to pay Accounting for diversity across geographies Whos role is it to prove the business model? Who should take the risk? We need more than just CSR pilots: Access to R&D capital for large scale trials (3rd party support) Room to innovate & trial several business models before choosing a winner

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Channel 1: Leveraging presence of mobile infrastructure to support Community Power

Mobile infrastructure can support energy access initiatives: Inside the fence: Leveraging existing power equipment to provide services to the community Outside the fence: 3rd party energy service companies can use the mobile tower as an anchor customer and provide services to the community Example: OMC Power in India and Bharti Infratel
24/7 Power to tower Leases product to customers Home delivery

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Channel 2: Leveraging distribution channels to support Community Power

Sales and distribution channels can support energy access initiatives: Providing customers phone charging services at retail outlets providing revenue opportunities for retail entrepreneur Partnering with product companies for co-promotion and distribution Example: Fenix International and MTN Uganda

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Channel 3: Leveraging mobile money and e-payments to support Community Power

Micropayments can support energy access initiatives: Allows for flexibility of payments and remote transaction Providing consumer financing to customers Other services can leverage business model (i.e. water) Example: M-Kopa and Safaricom

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Thank you Michel Mansard

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