Microsoft Partners to Create Affordable Internet Across the U.S., and the World

Guest post from Microsoft

At Microsoft, we recently announced that we have awarded Affordable Access Initiative grants to twelve entrepreneurial businesses to help scale their solutions and business models to increase affordable Internet access in communities around the world. Each company will receive seed grants of $70,000 to $150,000 and resources including BizSpark tools such as free software, services and technology support to help extend the reach of their hardware, applications, connectivity and power solutions. Although there are still approximately 4 billion people globally not yet online, universal and affordable high-speed Internet access is more achievable than ever with new technologies and business innovations.

Microsoft’s Affordable Access Initiative aims to democratize access to the Internet through grants, commercial partnerships, connecting new leaders and community engagement. Together with our partners, we already have many exciting projects underway. Some recent progress:

  • In the United States, Microsoft is partnering up with Mid-Atlantic Broadband Communities (MBC) to help close the homework gap in two rural Southern Virginia counties. These are counties where only about half the students have broadband Internet access at home. By wirelessly extending its existing installation of fiber-optic connectivity, MBC will be enabling thousands of school kids to have connectivity at home. MBC will be leveraging new TV white space and Wi-Fi technologies developed by Adaptrum in San Jose, California and MediaTek in Taiwan.
  • Outside the United States, we are completing phase one deployments of other affordable access projects with our partners. These include projects in Jamaica and Botswana where connectivity and cloud services are being provided to many entities. In Botswana, we are partnering with the Botswana Innovation Hub, Vista Life Sciences, the United States Agency for International Development and Botswanan ISP Global Broadband Solutions to assist in remote delivery of specialized medicine, including cervical cancer screenings, to women at rural healthcare clinics. In Nanyuki, Kenya, our network operator partner, Mawingu Networks, is rapidly extending the reach of its wireless broadband network.

Taking what we’ve learned from our TV White Spaces work, we’ve seen how, for the first time, we have real, affordable solutions that truly bring the benefits of the Internet and computing to even the most remote communities. We don’t have to wait to make an impact. The challenge is deploying them, and then empowering people with the tools and information to make the most of them. And when you’re talking about an issue that affects 4 billion people, you can’t take a one-size-fits-all approach. Last-mile connectivity is a global challenge, but it requires local solutions.

mSTAR was honored to have Namema Amendi speak on Microsoft’s Affordable Access Initiative at the launch of the report, Business Models for the Last Billion: Market Approaches for Increasing Internet Connectivity. To view Namema’s presentation, click here


Event Highlights: Business Models for Connectivity

On Tuesday, May 24th, mSTAR launched Business Models for the Last Billion: Market Approaches to Internet Connectivity at the event Business Models for Connectivity. Business Models for the Last Billion details how innovative entrepreneurs and forward-thinking investors are connecting the poorest and most remote communities in the world to the Internet. We were thrilled to have an engaging and dynamic line-up of speakers at the report launch.

Highlights include Namema Amendi from Microsoft’s Affordable Access Initiative who opened the event by announcing Microsoft was giving seed funding to two of the business models featured at the event and in the report: AirJaldi and Wi-Fi Interactive Networks (WIN). More than 200 start-ups had applied for funding from Microsoft, yet AirJaldi and WIN were among only 12 companies that received the grant. To see Namema’s presentation, click here.

The report authors, Steve Schmida and Caitlin Lovegrove from SSG Advisors, then detailed the report findings. They concluded that the technology exists for connecting the “last billion.” The next step is to bring the businesses that provide connectivity to the world’s poorest billion to scale. Click here to see their presentation.

Philip Zulueta, COO of WIN, flew in from the Philippines to describe his start-up to the investors, donors, NGOs, government agencies, and tech companies present. WIN enables base of the pyramid consumers to access wifi. WIN partners with major companies to set up hotspots at kiosks where that company’s goods are sold. If a consumer buys the sponsoring corporation’s products, the consumer also gets 30 minutes of free wifi. To learn more about WIN’s model, view Philip’s presentation here.

Paul Talley, Chairman and CEO of ViRural, then described ViRural’s model. Currently operating in Nigeria, ViRural designs, deploys, manages and maintains wholesale cellular networks for rural communities with no power and no Internet. ViRural partners with local mobile operators so that consumers can use their existing devices to connect with no extra charge to ViRural’s networks. To see Paul’s presentation, click here.

Michael Ginguld, Director of AirJaldi, arrived from India and took the audience through AirJaldi’s journey of becoming a successful start-up. AirJaldi provides high-quality broadband Internet to rural Indians. AirJaldi currently serves 70,000 Indians who previously had little to no Internet and aims to reach 25% of India. Click here to see Michael’s presentation.

After the entrepreneurs presented their business models, the audience heard from the investors who helped turn Mawingu, an Internet connectivity start-up, into reality. Lauren Kickham from Vulcan Inc, Jim Forster, Chairman and Angel Investor for Mawingu and AirJaldi, and Namema Amendi from Microsoft described how they came together to invest in Mawingu, and what it takes for a start-up to succeed. To see the presentation on Mawingu, click here.

Manu Bhardwaj from the U.S. Department of State closed the event with comments on the Department of State’s Global Connect Initiative, which aims to bring 1.5 billion people online by 2020. Manu underlined the critical importance of closing the digital divide and echoed a sentiment Namema made at the beginning of the event: It is just as crucial for a student in rural Kenya to be online as it is a student in Virginia. All people benefit from Internet access. You can view Manu’s presentation here. To learn more about the Global Connect Initiative, click here.

mSTAR is grateful to the authors of the report, SSG Advisors, the speakers who shared their knowledge and insights, and the attendees, who made the event a success!

Business Models for the Last Billion

mSTAR is proud to launch Business Models for the Last Billion: Market Approaches to Increasing Internet Connectivity.

As described in the report, the Internet is an integral part of the global economy. It generates more than $4 trillion and has been shown to increase opportunities in education, gender empowerment, and transparent governance.

Yet more than half the world’s population lacks Internet access. This so-called digital divide, between the connected and unconnected, is particularly acute in rural areas in the least developed countries. Low household incomes and high infrastructure investment costs deter investment in network connectivity, leaving communities and local economies cut off and at risk of falling further behind their peers.

However, this report uncovers innovative, low-cost business models that are being put in use around the world to connect the world’s lowest income consumers. When it comes to connecting the last billion, we have found that the opportunity is there, the technology exists, the businesses are viable, and the partners are willing.

Download the report here: Business Models for the Last Billion: Market Approaches to Increasing Internet Connectivity.

Participate in the conversation online with #ConnecttheLastBillion. Share ideas and experiences around connectivity for the last billion.

mSTAR thanks the authors of the report, Steve Schmida, Caitlin Lovegrove, and Isaac Williams from SSG Advisors for their efforts on this report. mSTAR is also grateful for the people around the world who gave their insights and time to help us more clearly understand the landscapes around business models for connectivity.

How to connect the last billion to the Internet

by Hannah Skelly

The Internet is an essential part of daily life. It allows access to job applications, financial services, and pertinent government information. In fact, studies have showed that internet connectivity increases opportunities for education, gender empowerment and economic growth.

Yet four billion people lack access to the Internet.
Major corporations are brainstorming large-scale methods to connect the “next billion” of the unconnected four billion—the world’s growing middle class. Yet the world’s most disadvantaged billion, the “last billion,” is largely overlooked in these schemes. The last billion often reside in the most remote areas of the world that traditional telecoms struggle to reach. The lack of access is causing a digital chasm between the connected and the unconnected, and it is set to further disadvantage this underserved population.

mSTAR examined solutions to increasing internet connectivity in the report, Business Model’s for the Last Billion: Market Approaches to Increasing Internet Connectivity, and discovered emerging business models connecting the last billion. The report will be launched on May 24th at FHI 360.  

The report was founded upon a belief that access to the internet should be affordable and available to everyone.

The value of the social, political and economic gains offered by internet connectivity have been well-documented. Seemingly every day, the myriad of ‘digital’ dividends that can be realized through increased connectivity – individually, locally and globally – transform and grow. At the same time, connectivity offers significant near-term financial dividends for a host of commercial service providers and their investors.

With these financial dividends as motivation, the telecommunications industry has brought 3.5 billion people online. Unsurprisingly, telecoms have received substantial returns (on the order of trillions of dollars) investing in appealing and reliable markets. But they are not reaching a large percentage of populations at the base-of-the-pyramid that stand to benefit substantially from internet connectivity. While eight out of ten people in the developed world have internet access, only one out of ten have access in the least developed countries.

Yet this digital divide is not only quite stark, it is actually growing.

In many cases, donors and development actors have found one-time, on-the-ground solutions for providing connectivity to communities that telecoms have not reached, whether for disaster response, security or livelihood development. However, a long-term and sustainable solution to enabling internet access for the four billion people that remain offline requires the promise of financial dividends for traditional telecoms or new entrants operating in these markets.

The good news, and the not so good news.
There are a multitude of reasons why individuals are not online, but the barriers posed by basic access and affordability are major contributors. The development community has been proactive about this issue: they’ve renewed existing commitments and launched initiatives dedicated to addressing various aspects of these barriers to extend connectivity. When this assessment began last fall, the United Nation’s Sustainable Development Goals had just enshrined the importance of universal and affordable access for the world’s least developed countries and the key role it can play across development, including women’s empowerment. Among donors, Global Connect, Connect 2020, the Global Broadband and Innovations (GBI) Alliance, the Broadband Commission for Digital Development, and the Alliance for Affordable Internet are but a few examples of the important work already being done in this space. In recent years, a noticeable set of new champions has emerged from the private sector as well: the tech giants.

As large multi-national corporations look to expand markets for advertising and gather data on nearly all market segments, efforts to connect developing markets have moved beyond the realms of CSR budgets to the realm of engineering dream teams and newsworthy technology endeavors. The field is inundated with announcements on various ‘moonshot’ technologies that aim to overcome barriers of geography and (hopefully) drive down costs. Balloons. Drones. Cutting-edge satellite technology. Large and small, high and low. These efforts seek to provide universal connectivity in awe-inspiring places and mind-boggling arrays. Closer to earth, equally impressive initiatives like Project Link or Terragraph are a testament to the investments large firms are making in urban markets. In addition to these high-profile efforts, a multitude of other inventive methods for extending connectivity abounds: license-exempt solutions, mesh networks, local caching and dynamic spectrum switching keeps Techies buzzing. There is a seemingly endless list to work-around solutions. All of these efforts are exciting to follow, but how will they work in real-life and reach rural lower-income populations at lower price points? Can they be paired with business models that truly offer low-cost connectivity?

Telecoms have been honing their business models for the last several decades to serve the largely urban middle-to high-income segments of the world population. Mobile network operators (MNOs) in particular have been innovating through dynamic pricing and improved terrestrial technologies. However, these models remain noticeably bilateral – provider to consumer – and despite requirements to reach rural communities, the focus on high-revenue markets shows little signs of changing. While the challenge these traditional providers face in reaching low-income populations are complex, one monolith dominates: profit. Low costs and high volume are key to financial dividends at the base-of-the-pyramid. That does not bode well for a service dependent on infrastructure requiring large capital investments and high operating costs. These costs are only compounded by the need to reach wider geographic areas to attain large consumer bases.

MNOs have found ways to improve fiber backbone infrastructure technology and drive down infrastructure costs. Tower-sharing, tower management companies, solar technology, software solutions and mobile virtual network operators (MVNOs) are just a few. Yet these still remain incredibly high cost, particularly in rural areas with widely dispersed populations. The low spending power of base-of-the-pyramid consumers does not balance the other end of the equation. Layer this onto additional challenges: unfavorable business environments, licensing fees and taxes, low knowledge on services desired at base-of-the-pyramid markets and household income elasticity, and prices only go up. Universal Service Funds and Private Public Partnerships, although successful in some contexts, have to date comprised the exception rather than the norm, and industry alliances tend to focus on responding to challenges faced with their existing high-revenue markets such as data overload.

Moving the market approaches forward.
The understandable limits of prevailing telecom business models in reaching the most disadvantaged populations presents those committed to universal connectivity with a dilemma that alternates between perplexing and frustrating. Committed development actors, now joined by large corporations, are determined to close the digital divide and achieve connectivity for the base-of-the-pyramid. This assessment sought to move this conversation forward by examining existing or potential business models that can extend connectivity to the lowest income consumers in a financially sustainable way. By tackling these important questions and providing concrete recommendations for next steps, it is hoped that that for-profit companies, development actors, foundations and governments can work collaboratively to make affordable connectivity a reality for everyone.

Entrepreneurs who have spearheaded models for connectivity in the world’s most challenging environments, and investors who are backing them, will be speaking at our May 24th report launch. Register to attend and learn how these innovative models are connecting the last billion.

Register to attend mSTAR’s Business Models for Connectivity event.

Follow the conversation on Twitter at #ConnecttheLastBillion.

Hannah Skelly is a member of the mSTAR project at FHI 360. She has worked with donors across a spectrum of development fields over the last nine years, including education, health and conservation. New to the techie field, (and under the initial impression that WiMAX was a laundry detergent), she is learning the benefits, and potential pitfalls, of using ICT tools in development everyday. Hannah has an MA in Development Economics from the Fletcher School of Law and Diplomacy at Tufts University and a BA from Emory University.