2 Jun 2011

Water service and mobile phones

Chandran Nair (Global Institute for Tomorrow) gave an interesting talk at GWI's water summit in Berlin.

He made the interesting point that fewer people lack access to mobile phones (~1.9 billion) than access to clean water and sanitation (884 million and 2.5 billion, respectively)*

He used that point (as I recall) to lament the failure to deliver water to the world's poorest, but I saw it in a different way -- as a challenge to a monopolistic, decrepit industry that's less interested in customer service than leaving the office at 3pm.

It's easy to see why mobile phone use is far outpacing access to water and sanitation, even though both technologies reply on high fixed cost/low variable cost technology to deliver a "utility" that customers say they want.
  1. Mobile services compete for customers.
  2. Customers pay for good service.
  3. Government regulation of this "inessential" service is light.
  4. International aid for such a "luxury" is non-existent.
I'll let you fill in the counter-points prevalent in the water industry.

Bottom Line: Incentives matter, and the water "business" needs more business-like incentives if it's going to serve its putative customers (instead of donors, politicians, regulators, unions, etc.)

* It's also interesting the UNICEF gives suspiciously-accurate numbers on water, but mobile phone numbers are not only approximate but listed on Wikipedia. That 884 million number also WAY under-estimates the number who have DRINKABLE water [crap. Freakonomics lost my post on this..]


AM said...

Not to mention in some places (e.g. in Kenya, Uganda, Ghana and South Africa)now customers can pay their water bills using their mobile phones.

Outsourcing? Sectoral drift? Another example of the telecom's more successful business model?

chris corbin said...

Brilliant! I believe the number of private sector examples or analogies are endless. The barriers to trade are staggering in the water market.

Jamie Workman said...

@AM Do you have any links to information, news etc. on those water bills paid via mobile phones in Africa? I'd love to learn more about that trend.
@ Zetland Somewhere in previous blogs you also note that thanks to cell phone alerts from systems set up by Google.org and waterforpeople.org the TRUE number of un- and under-served people and communities is, sadly, much higher than the official or UN figures. Governments and NGOs, seeking to show progress to donors and voters and UN, tally up all the places where pumps and wells have been installed, as if doing so is permanent and irreversible; cell phone users are now empowered and able to highlight precisely on GPS where they have broken down within years or months of the ribbon cutting ceremony.

J. David Foster said...

David, I am fully in agreement with you on this one. Tragically, some of the most outspoken critics of private sector involvement in water supply, including Robert F. Kennedy Jr., have always turned a blind eye towards the rampant corruption, inefficiency and anti-poor bias in public water systems in many developing countries.

One interesting side note to the water supply vs. cell phone situation is that there is increasing evidence that those who have cell phones are most likely to develop the habit of paying for all services in full and on time. Thus good mobile phone service can truly lead to better and more sustainable water supply.

J. David Foster said...

During a trip to Nigeria I visited a small town in Cross River State near Calabar to assess the status of their water supply. As I walked through the town I saw a large water tower in the distance and a long line of women and young girls carrying water jars as they walked up the hill. Then, to my surprise, I saw them walk past the water tower down to a stream because the old water tower had not been maintained and was no longer in operation.

Later that day I attended a meeting where the towns people were pleading for a new grant to rehabilitate their water supply system. When I asked what had happened to the old water tower and pumps and pipe network the people readily admitted that it had failed because no one paid for the water and there was never sufficient money to maintain the system. I then laughingly asked why did they expect the new system to work any better I received a response I had not anticipated: An old man stood up, pulled a cell phone out of his pocket and said that now people understood that if they did not pay their bills, they would be cut off, regardless of their position in the town or any cousins they might have working for the utility.

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