We have reached a big milestone – The planet has now passed Seven Billion People alive at the same time. Many will no doubt write about the various effects this has to urbanization, poverty, hunger etc. Here, we’re revisiting analysis I’ve done before about the Digital Divide and examine now with updated numbers on how does the planet split its technology, telecoms and media.
THE WEALTH DIVIDE
The very first divide is splitting the world into two by wealth. There are those of us like myself, lucky enough to be born into the ‘Industrialized World’. We only number in about 1.2 Billion people, or 17%, who were fortunate to be born into families living in Europe, USA, Canada, Australia, New Zealand, or the Industrialized part of Asia often called Japan and the ‘Tiger Nations’ like Singapore, Hong Kong, Taiwan, South Korea etc. This part of the world is also often called the ‘West’ even as major parts of it – Japan, Australia etc – are in fact in the very far East.
So 5.8 Billion people – 83% of the planet – was born into countries of the ‘Emerging World’, including Africa, Latin America and much of Asia including most of its most populous nations like China, India and Indonesia. This is the part of the world that was once called the ‘Third World’ and the ‘Underdeveloped World’ (terms that tend to be strongly resented and rejected) and more recently the ‘Developing World’ but the term that is most preferred when using this divide is ‘Emerging World’.
There are about 1.8 Billion households for the Seven Billion people. When we average the whole world, it means 3.8 people living per household. The wealth divide splits that so, that there are about 480 million households in the Industrialized World, where the population has about 2.5 people living per household. In the Emerging World they cram 4.3 people per household. Bear in mind, that the people in the wealthy parts of the planet also tend to have far larger homes, with more rooms, so typically most families have more rooms than people per household; in the Emerging World that is the opposite, in many poor parts there are many people living in a small hut or home where they share the room.
The story gets more interesting with a few concrete stats. 1.6 Billion people live without electricity – that’s 23%, almost a quarter of the world’s population. And remember, even those who nominally have their home connected to the electrical grid, may experience regular, daily interruptions in the supply of electricity. But yes. Electricity? For the Industrialized World, the proportion of families living outside of the coverage of electricity is a tiny fraction of one percent.
But in the Emerging World, 28% of homes do not have electricity. Yes, if you were born into the Emerging World, there is more than a one in four chance that you are growing up without electric lights to help you read and do your homework.
Another way to look at it, is access to running water. Homes in the Industrialized World have running water. But 17% of people born into the Emerging World live in homes that have no running water.
Thats 970 million people roughly speaking and 14% of the total planet’s population who will have to walk just to fetch water.
This part will open the Digital part of the Divide, starting with the classic telephone. The first telephone was installed 135 years ago in 1876. The world has passed one billion phones in use and today while the numbers are in gradual decline, we are at about 1.1 Billion total landline phones, or one for every six people alive (16% penetration rate per capita, worldwide).
How are the phones divided today? In the Industrialized World we are at the point where traditional telephone lines are actually shrinking in size. Roughly 305 million households or 64% of all homes have a landline phone today. Of those homes, the physical telephone line density is greater than the number of accounts, so of the homes that have a phone, about 30% will have two phone lines giving us a total count of about 395 million fixed landline phone subscriptions in the Industrialized World. These phones will give a reach of 64% of the population in the affluent part of the globe.
Then lets switch to the Emerging World where there are 690 million households with a landline phone, or about 51% of the homes. Only 4% of homes with a phone will have two landline phones. The overall reach of the landline telephone system will get to 51% of the population in the less-affluent parts of the globe.
If we go chronologically in the order of the technology, the next technology to cover is Radio. Marconi first sent a radio transmission over the ocean in 1901 and soon after that, broadcast radio would start to appear. Today there are about 4.1 Billion radio receivers (mostly FM radio) in use worldwide. That would be a very impressive 60% of the planet. Except that they are not evenly dispersed.
In the Industrialized World we have far more than half of all radio receivers, with a total of 2.6 Billion radios for 1.2 Billion people – 2.2 radio receivers per capita in fact. In the Emerging World the total is only 1.5 Billion radio receivers or a density of 30% per capita. Or each radio would need to be shared by 3.9 people on average.
We also calculated the age pyramid the potential listening audience. If we want to calculate the reach including babies and infants, in the Industrialized World radio reaches the full 1.2 Billion people. I estimate the actual maximum listening audience size at 1.06 Billion people, which is still 88% of the total population.
In the Emerging World the reach of radios would be 4.2 Billion people when we measure the total number of radios in households and the total number of people living in those homes, but again counting out the very young – remembering the growth of the planet is mostly in the Emerging World like in Africa and India etc – the actual listening audience maximum size is 3.2 Billion people for radio. When we add them together, the global audience maximum size for radio is 4.3 Billion radio listeners or 61% of the planet.
TV was trialed before the Second World War but didn’t launch in meaningful numbers until after the war. Today the planet has about 1.7 Billion TV sets, which would be 24% per-capita penetration rate if evenly dispersed.
Again the spread of TV sets is far more in the affluent Industrialized World countries, where we have 660 million TV sets in about 470 million households – where 98% of our households have at least one TV set, and 40% of our homes has two TVs.
In the Emerging World the TV set is spreading rapidly and of the households that have electricity, already 95% have a TV set. The number of TV households is 920 million or 68% of homes in that part of the world do have at least one TV set. 13% of the homes have two TV sets.
When we calculate the maximum addressable audience, out of the total 5.1 Billion people who live in homes with a TV set, the actual addressable audience is 4.2 Billion, which is divided so, that in the Industrialized World 1.05 Billion people – 88% of the total population can be reached by TV (and the remaining part is obviously not a viable part of the economy – mostly being too young or in some cases too old, infirm, sick etc). In the Emerging World television actual maximum addressable audience is 3.2 Billion people in size or 55% of that population. Globally, 61% of the planet’s population can theoretically be reached if you use TV as your mass medium.
There are some other interesting metrics too relating to TV. There are about 930 million pay-TV, cable-TV, digital-TV and satellite-TV accounts i.e. multi-channel systems beyond broadcast TV. In the Industrialized World these cable-TV type of households account for 67% of all homes and reach an audience of about 700 million. In the Emerging World there are about 610 households with cable-TV type of accounts which are 59% of all homes with a TV or 45% of all homes.
When looking at the audience of cable, the total cable-TV type of service reach as an audience of those 930 million accounts globally is about 2.7 Billion people, or about 64% of all who watch TV, have access (to at least one box per home) to multi-channel TV services. The split is 700 million people in the Industrialized World (59% of the total population) and 2 Billion in the Emerging World (35% of the total population).
We also have numbers on DVD players and gaming consoles. My consultancy calculates that 89% of households in the Industrialized World have a DVD player today, and 43% have a gaming console. In the Emerging World the rates are 61% for a DVD player and 18% for gaming console. If we calculate the penetration rates by homes that have at least one TV set, it gets more interesting – 90% of homes in the wealthy parts of the world and 90% of homes in the less-affluent world – that have a TV set, also have a DVD player. But where it comes to gaming consoles, of the TV households in the Industrialized World, 44% have a gaming console, but in the Emerging World only 27% of the homes with a TV set, will also have a gaming console. The overall figure for game consoles stands at about 695-700 million, with 199.79 million contemporary, 7th generation consoles (PlayStation 3, Xbox 360 and Wii).
The modern electronic computer was invented during the second world war, but home PCs came along in the mid-to-late 1970s. Remember first, that about a third of all PCs in use are at the office, used at work. I am only measuring now the home penetration rates of PCs. But this measurement includes all desktops, laptops and tablet PCs like the iPad. I am not counting smartphones in this category.
Worldwide estimations call for about 900 million PCs that are in use in the homes. That is only 13% of a penetration rate per capita, but remember, the real number is bigger when we add the PCs we can use at work. But yes, homes. 49% of all homes worldwide have a PC if divided evenly. Of course that isn’t really the case, we have 425 million PC households in the Industrialized World, or 89% of homes have a PC. Meanwhile in the Emerging World, there are only 475 million PCs or a PC in 35% of the homes. Bear in mind that total number per annum is 450-500 million new PCs sold.
I calculated the reach of PCs if we use the literate age population, and found that home use of PCs has a theoretical reach of literate users in the Industrialized World of 1.06 Billion people (obviously not all will want to use the PC even where their family has one). In the Emerging World the theoretical reach is 2.05 Billion people. So combined, the theoretical maximum home user potential for PCs when sharing their home PCs is 3.1 Billion people (also remember, not all of these are internet-connected, we’ll look at the internet stats below).
I also have a very unscientific estimate of how many ‘actual’ total home users there are for the installed base of personal computers at home. We can be pretty sure that if there is a PC in the home, it will be used by one person in the home. And we can be pretty sure that in every case in every home, not every person will be wanting to use the PC. So if we take the mid-point of those two extremes, we get a total very rough estimator of the total worldwide user base of personal computers today, at about 2 Billion people. So it might be someone going online, but it might be the kids doing their homework or someone playing a computer game, etc.
Then came the internet. The ARPANET (Advanced Research Projects Agency Network) was launched in 1969 when the first four computers were connected in what became The Internet. How far has the internet come since then? Ah, now we get very many fuzzy stats as we have home users, work users, internet-cafe style users, and of course increasingly users of the internet on their mobile phones – which can be smartphones, but can also be simpler ‘featurephones’ many of which have real HTML browsers, and even simpler very rudimentary browser services on a limited set of web standards called WAP, also called the ‘mobile internet’.
Roughly speaking the world has about 2.4 Billion internet users today. Of those, about 1.5 Billion (60% of internet users) use a personal computer some of the time, or all of the time, either at home, at the office, or in a shared capacity at an internet cafe or the library, school, university etc. Most of those will also use a mobile phone to access browser-based web content at least some of the time.
And talking of mobile, of the 2.4 Billion internet users, today 1.7 Billion people (68% of internet users, 29% of all mobile phone subscribers) use their mobile phones some of the time on their personal account or their work phone, to access at least some web or email content on their phone. Many who do, will also use a PC obviously.
So we get the extremes. Today only 700 million people – 28% of internet users, will only use a PC to access the web, and 72% will use a mobile part of the time or both a mobile and a PC. Similarly, today, about 900 million people – 36% of internet users – will never use a PC and only access the web on a mobile phone. And yes, obviously, the remaining part is 900 million people – 36% of internet users – who will at times surf on their PC and at other times surf on their phone.
So just for those who are still not with the program – including some pretty clueless analysts – the point where more ‘users’ of the internet came from mobile phones than PCs happened two years ago – as reported by IBM, Nokia etc – and those analysts who are promising it will happen in a few years from now, are hopelessly out-of-date with their analysis. In most major internet countries from India, China, Russia, Brazil (BRIC), Japan etc, the majority of internet users come from mobile phones already today. Even the laggard countries like the USA are nearing the mid-point. Remember, the ‘traffic’ will be far less on mobile phones than the PC, so if you measure browsing page counts, advertisements serviced, total data loads, etc, then yes, by all those measures there is still a long way to go where most of the traffic is from mobile (and that day will come too). But the first milestone has come and passed – today more web users do come from mobile phones than PCs.
HOUSEHOLDS AND THE PC-BASED INTERNET
Look at the Digital Divide again. In many cases the ‘mobile’ internet is an expensive proposition on 3G networks, needs advanced phones, and the experience is not yet really comparable to the old-fashioned legacy internet on a PC using a broadband connection. For those who may just want to go share some pictures of the family event, or watch some YouTube videos or post updates to Facebook, if the home PC is connected to the internet, that is usually a far more friendly way to go web-surfing than attempting to do so on a smartphone, for the mass market consumer.
How are our home internet connections spread out by the Digital Divide? 410 million homes, or 83% of all households in the Industrialized World have an internet connection via a PC. That is 96% of all PC-households. But in the Emerging World there are only 440 million households that have an internet connection. That’s only one in three homes, i.e. 33% and it corresponds with 93% of the homes with a PC. In total 850 million households or 47% of homes have an internet connection worldwide.
My consultancy calculated the total addressable market for people living in homes with an internet-connected PC, and the potential reach of literate age household members in those homes would be 2.9 Billion people. But only 900 million of them – 31% use the family PC to access the internet (remember, there are more PC based users who will use a work PC, internet cafe, school or university or library PC and/or their mobile phone).
The first mobile network went commercially live in 1979 in Tokyo, Japan and we’ve now had mobile telecoms for 32 years. How does this technology compare? Worldwide at the end of this year we will have 5.8 Billion total mobile phone subscriptions which would be 83% penetration rate per capita across the planet. The number of mobile phone subscriptions exceeds landlines by 5 to 1, the number of PCs (including those used at work) by 4 to 1. TV sets by 3 to 1, total internet users by more than 2 to 1, and even total radios now nearly by 1.5 to 1.
Mobile has been by far the fastest-growing technology ever. But counting active subscriptions used to be a reasonably accurate measure of real mobile phones, but that is increasingly not true anymore, as more and more of us have multiple accounts and those are not necessarily also the same as multiple phones.
The number of total mobile phone subscribers is relatively easy to calculate, as the various mobile operators/carriers report their subscriber counts. But they do not know which of their own customers also has a subscription to a rival network. I was the first analyst to report on the multiple subscription phenomenon as it was first discovered in Finland, and my consultancy has been providing the annual counts for both the unique user number and the total installed base of actively used mobile phone handsets (some who have two accounts, will have two phones – think Blackberry and iPhone – but others will only have two SIM-cards, typically pre-paid accounts to optimize costs between rival networks).
Here are my preliminary numbers for the end of 2011. The world total count of unique mobile phone users, these are actual human beings who have at least one mobile phone account and at least one actual mobile phone handset in their pocket – is 3.95 Billion people worldwide. In a very ‘real’ sense, of all people alive, not just households or not just adults, but all people from babies to great grandparents, and across divides of poverty, literacy, electricity and cellular connectivity – there is now a real active mobile phone account for 56% of the planet’s population.
And how many handsets in use? My preliminary number for end of 2011 says 4.6 Billion actual phones in use – meaning that one in six of us, who has a mobile phone account, actually walks around with two connected phones in our pockets.
And when we know the total count of subscriptions is 5.8 Billion at the end of the year, it means that there are 1.46 actual active mobile phone accounts for every person who uses a mobile phone, worldwide. In advanced markets like in Europe and some advanced parts of Asia, it is now nearing two active phone accounts per mobile phone user.
MOBILE ACROSS THE DIGITAL DIVIDE
A farmer in Ghana uses his cellphone for mobile banking services
How does this split across the Digital Divide? In the Industrial World we have 1.8 Billion mobile phone accounts for our population, i.e. an average penetration per capita of 1.52. In the Emerging World there are 4.0 Billion mobile phone accounts, for an average penetration rate per capita of 69%. When we calculate that down to unique users, in the Industrialized World we have nearly 1.1 Billion unique users, or 90% of the total population in reality has a mobile phone. In the Emerging World the number of unique users is now 2.9 Billion so this year is the point where literally there is an actual mobile phone and account for half of the total population also in the Emerging World.
Then what is the reach of mobile? Here we have one more interesting phenomenon to consider: the family-shared mobile phone. This is something only seen in quite poor regions but we do have a family shared mobile phone. My consultancy estimates that of the phones in the emerging world, about 220 million – or 7% – are shared this way.
That means that if we calculate the total reach of mobile telecoms, we get the unique users of the Industrialized World, plus the unique users of the Emerging World, and for those 220 million phones, their (reading age/talking age) family members. And here I find the total reach of mobile today to be 4.7 Billion unique users – or 67% of the planet.
MOBILE AND EMERGING WORLD
A while ago, I wrote a book calling mobile the 7th mass media channel following the first six mass media: print, recordings, cinema, radio, television and the internet. In my travels, I heard from colleagues in the Emerging World that mobile was not the seventh or often in the less affluent countries, not even the first mass medium – it is often the only mass media channel, as well as the only communication tool and now starting also to be the way to provide banking services to the unbanked.
Lets look at some of those on a quick tour of mobile in the Emerging World. A publication called ICT Works quoted two separate experts on Uganda and its infrastructure, Dara Karr and Jonathan Gossier, who both agreed that in Uganda there are more mobile phones than light bulbs. Light bulbs!
Think about your home. If a family of four lives in a three-bedroom apartment – parents in their bedroom, both of the kids have their own bedroom – and then there is a living room, kitchen, toilet – we have at least six ‘rooms’ each with at least one light fixture and perhaps the ceiling lamp in the living room light has three lightbulbs. Without any other lamps – table lamps, reading lamps, floor lamps, mood lighting etc – we already have nine light bulbs in this one relatively average sized family home in an apartment building. If it was a house, it would most likely have several more rooms or similar areas – with lights.
Yet in Uganda where so many live on wages of one dollar per day, a typical home is often a small shack with one room – and if they are lucky to have electricity – then such a small dwelling is likely to have only one light bulb hanging from the ceiling for light. It helps put this issue in context. And even in Uganda today, there are more mobile phones than lightbulbs.
We’ve heard recently many studies saying there are more people with mobile phones on the planet than who have access to running water or who use a toothbrush etc. But yes, let’s look at what mobile means in the Emerging World. In Bangladesh the BBC offers a basic course in language skills to learn rudimentary spoken English – so that low-income workers like maids and gardeners and cooks can converse with an employer who speaks English.
If someone in Bangladesh can get the same kind of job with an expat employer who is a foreigner and the employee can speak basic English, the salary is typically 20 times bigger! Imagine getting a salary increase of not 20% more or 50% more – not even doubling or tripling your salary – but a giant jump of 20x more! So like in the USA today the average income is I believe around 50,000 dollars per year. If you get a 20x improvement in your income from that level – you earn a flat 1 million dollars per year and jump into that 1% that the Occupy Wall Street gang is now protesting against…
Twenty times bigger wages! Wow. You would honestly feel like a millionaire if that happened. Like you won the lottery. And that is what awaits basic workers if they can handle basic English just enough to understand what needs to be done today, the laundry, what time is dinner, etc. So yes, the BBC is offering language courses on mobile phones, that cost less per lesson than a cup of tea in Bangladesh. The course runs 78 lessons in total, all delivered via the mobile phone. How many have signed up? 400,000! This is the power of mobile.
In Tanzania, a medical clinic wanted to bring women in for some treatments that have to be done at the one hospital suited for it in the capital, Dar Es Salaam. But Tanzania is a giant country and the one-day bus ride from the countryside to the city costs easily 60 US dollars – i.e. two months of total salary in the country where the average wage is two dollars per day. The doctors cannot send cash – it would be stolen by the husbands or other relatives. The doctors cannot send a bus ticket – which would be also stolen and sold in the black market. Most do not have bank accounts. But they have mobile phones. So the clinic sends a one-way personalized bus ticket to the phone of the lady needing the treatment. She receives her return ticket when the treatment is finished at the hospital. An excellent way to remove the crimes related to cash and bus ticket fraud not to mention ensuring that poor women can be brought to the treatment they need.
Moving to Philippines – for 20 dollars without contract you get a new phone that does the basics – it does voice calls, SMS text messages, plus has a torch/light and includes FM radio. No camera, this is the ultra-basics. But all that for twenty dollars, brand new phone on Globe’s network.
SMS is being used for all kinds of innovative digital services in the Emerging World countries doing anything from handling ice cream merchant payments on the beaches of Rio de Janeiro in Brazil, to enabling farmers in India turn on their irrigation systems. In Kenya, Standard Chartered bank, Airtel and MasterCard now offer one-time use virtual MasterCards for anyone who wants to make a MasterCard payment – the sixteen digit MasterCard number and its related security codes etc are sent… yes, via SMS of course.
While we are on the topic of money, Kenya is now at the point where 30% of the total national economy passes mobile phones – all carriers/operators there offer SMS based basic mobile payments and mobile banking services which are acceptable payment for essentially anything and everywhere within the country.
And for those who are illiterate, the Ecole Polytechnique Federale of Lausanne, Switzerland http://www.epfl.ch/ has developed an icons based SMS generator into its service called EasySMS – if you need to write text messages, you can easily create them from easy-to-understand icons and the service will compose your message for you. And if you receive a message, EasySMS will of course speak out the words of the message you received.
Then there is news and entertainment. In China four out of ten who buy newspapers, have signed up to the premium mobile news headline services that come via MMS or SMS, giving this afternoon the headlines of what is in the newspapers tomorrow. These are branded news services by the major newspapers and are paid services.
In India, in towns that do not have television or radio coverage, there often still is cellular mobile coverage. So voice-based news and entertainment services are delivered via voice, as a kind of ‘mobile phone radio’ services – ranging from cricket scores to Bollywood music hits to all sorts of regional language specialist news and culture programming. 750,000 villages are beyond the reach of any other mass media and 20 million people just in India pay for such subscription radio on their mobile phones. Mobile phone based radio services generate as much revenues out of India as ‘real’ broadcast radio in the country of over a Billion people.
Meanwhile the innovation opportunities are also enormous. Facebook is familiar to us as a web based and obviously ‘text’ based social network. In India the local Facebook executives noticed that there was no social network serving the illiterate parts of India so they created the voice Facebook version – to allow social networking via voice. A huge hit in India. Meanwhile in Indonesia, many people don’t care for other internet services, they only want Facebook, so the local phone providers innovated in releasing Facebook phones – mobile phones that do voice and text just like any other and have a full QWERTY keyboard similar to a Blackberry, but the gimmick is, that these have a Facebook button that goes to FB, but offer no other ‘real’ internet services. They have millions of happy customers on these new phones.
Think about the future. Education is the key to long term growth for any nation. How is South Africa using mobile to help educate its children? A pilot program with 40 high schools covering 3,000 students helped them with math lessons. Did it work? It resulted in 14% better math performance in the national math exams.
We could go on and on, but that is enough of a sampling of what is mobile in the Emerging World. It is not an iPhone app (nor an app on Android or even Symbian). The services in the Emerging World need to be suitable for the phones and services they use. If you want to reach the mass market, it is voice and SMS. It can also be IVR, USSD, MMS and if you want to do browser-based services, you start with WAP and consider HTML as a premium offering. Don’t think of doing any smartphone apps for most of the Emerging World if the intent is to offer mass market services for consumers. If Coca Cola says in the USA that their priority is 70% messaging, 20% mobile web and 10% smartphone apps – we can safely shift those priorities to be more like 90%, 9% and 1% for Emerging World countries especially like Africa, India etc.
COMPARE THE REACHES
If you use a fixed landline telephone, there are about 1.1 Billion phones that can ring. They can reach 3.7 Billion people, or 53% of the human population.
Radio receivers number 4.1 Billion in the absolute count, but are disproportionately in the wealthy countries. Only 4.2 Billion people worldwide are within reach of radio – which is still a very impressive 61% of the planet.
Television sets number only 1.7 Billion but are very evenly dispersed in those homes with electricity, and reach a potential target audience of 4.2 Billion people of age to understand TV programs. That is 61% of the planet’s population. Of those TV audiences, about 74% have a DVD player, 55% have pay-TV like cable or satellite; and 26% have a gaming console.
Personal computers in the home are almost in half of homes, at 900 million in total – 49% of all households. Most are connected to the internet – but not all – 850 million PCs are, and they in turn have 900 million total internet users from the homes. Remember PC and internet users will add many hundreds of millions more from work, internet cafe’s etc.
And then we have mobile. 5.8 Billion total active mobile phone accounts currently worldwide, or one for 83% of the planet. While that measure is increasingly misleading even the real numbers are impressive – the unique user count is now at 3.95 Billion – 56% of the planet – the number of mobile phone handsets in use is 4.6 Billion – and the reach of mobile when we include shared phones – becomes 4.7 Billion real people worldwide (of talking and reading age) which is 67% of the planet.
In a very real sense, mobile is the widest reaching technology ever, compared to other communication and media technologies. It now reaches past poverty, past electricity, past literacy. And while the youngest of the major technologies discussed here, it is still growing by far the fastest and it generates by far the most revenues. Mobile is the technology of this decade, perhaps even of this century.
All the stats in this essay are source: TomiAhonen Consulting October 2011. You may freely quote from this article, and make your own charts and tables and references. Just please mention my consultancy as the original source and provide a link if relevant in any item you might post online.
And a personal plug – if you need more stats and facts on the mobile industry, please see the TomiAhonen Almanac 2011 for more.