E-Agriculture

Hillary Miller-Wise

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Hillary Miller-Wise
Hillary Miller-WiseTechnoServeTanzania

I would like to pick up on Judy's comment about trade-offs in a multi-MNO strategy. Our worry is that MNOs, especially in countries where market share is relatively balanced, will all try to develop their own proprietary m-agri platforms with similiar content and business models, which we believe will result in a race to the bottom.

There are (at least) two solutions that I can think of to mitigate this:

1. Agriculture partners can retain ownership of the data, thereby allowing them to use it on multiple platforms but, as Judy stated, add value to each MNO by supporting them with the development of differentation strategies. For example, an ag partner can work with one MNO to transform data for use through a call center, while working with another MNO to tailor the data for use via SMS or USSD. Or perhaps work with MNOs to create differentiated bundles of services e.g. insurance/mobile payments/weather with one MNO and buy-sell/market prices with another.

To maintain a good reputation, it will be important for the ag partner to be transparent with the MNOs about their strategy in this space (while maintaining confidentiality).

2. Agriculture partners can work exclusively with an MNO but, as part of that effort, work with the telco to establish a fair and transparent pricing model to enable out-of-network users to access the information.

I look forward to comments/critiques of these approaches. 

Hillary Miller-Wise
Hillary Miller-WiseTechnoServeTanzania

I fully agree with Judy that MNOs want to know whether serving the rural poor will increase market share and net margin for the company. However, in our experience, MNOs have two distinctly different views on how serving the rural poor will increase market share. Some MNOs view mAgri services as a stand-alone business that should generate revenue for the company. Others, however, seem to view these services as loss leaders that are intended to boost revenue in the company's core business...that is, selling SIM cards and air time.

 

We would argue that the latter perspective is not sustainable. As soon as another strategy comes along to boost SIM sales, the MNOs will abandon mAgri. TechnoServe's preference is to work with MNOs that view mAgri as a potentially profitable suite of services. The chances that these MNOs will support these services properly (via marketing, sales and distribution) - and that the services will still be around in 5 years -  is much higher.

 

Hillary

Hillary Miller-Wise
Hillary Miller-WiseTechnoServeTanzania

I appreciate the challenges regarding partnering with MNOs and would like to push the envelope a little farther.

 

Telcos are not in the business of increasing incomes of smallholder farmers. They are, however, necessary distribution channels for the delivery of information that will improve productivity/quality/prices and lead to increased incomes at a large scale. However, there are obviously different philosophies on how to achieve impact by partnering with telcos.

 

What are some of the approaches to reach scale and achieve impact at the same time? I would argue that content providers need to own the data and retain usage rights over it. Information needs to be made available to as many farmers as possible, not only those farmers that are subscribers of one telco or another. However, the telcos need to differentiate themselves in highly competitive markets. If they view content as a differentiator, they will not want other MNOs to access it.

 

I would appreciate the thoughts of this group on ways to resolve this conflict.

 

 

Hillary Miller-Wise
Hillary Miller-WiseTechnoServeTanzania

To pick up on Steph's comment, I agree that data-rich content on feature phones as well as voice-based services are more promising for achieving impact than SMS. The question I have is how economically sustainable voice-based services are in this market. IVR and call centers are clearly the most costly information delivery mechanisms. We also know that farmers' willingness to pay for agronomic information tends to be low. What indications do we have that willingness-to-pay will increase to the point of equilibrium with the cost of these services? Or do we think that the costs of voice-based services needs to be covered in some other way?

Hillary
 

Hillary Miller-Wise
Hillary Miller-WiseTechnoServeTanzania

Great contributions to this discussion. Thanks for your valuable input on Day 1 of this event.

I would like to add onto bkaddom's comments and ask: how do we define success when evaluating mAgri business models that involve partnerships between telcos and "agriculture partners"? TechnoServe has done some analysis in this space and found that there are very few models to date that are profitable. In part, this is due to the fact that many initiatives are still in early phases of development. However, other initiatives are based on business models that seem not to be designed for profitability.

If models are fully or mainly subsidized, can we call that a success? We would argue that if there is not a clear strategy for full cost recovery beyond donor funds, this is not a sustainable model.

I would very much like to hear the thoughts of the group on this question.