Sponsored Data: The Way Forward for Digital Inclusion in Ghana?

It is an accepted fact that the internet has brought a huge revolution which has affected every sphere of our lives. We are no longer limited by physical boundaries, today almost everyone and everything is just a digital handshake away. What role has sponsored data to play in this?

There are a lot of opportunities individuals, businesses and society can amass by being connected on the information superhighway.  The benefits of the Internet are however not globally and evenly distributed.  There is a huge gap between those who have ready access to the Internet, and those who do not. Experts call this gap the digital divide. This disparity between those who have opportunity and skills enabling them to benefit from digital resources, especially the Internet, and those who do not have these opportunities exist between developed and developing countries and  those who are well-off and those who are not.

Lack of access to the Internet has deprived many Africans of the opportunity to take full advantage of information available online, including but not limited to e-learning, financial data and health services. As at 2016, records show Iceland has an Internet penetration rate of 100% whilst Ghana lags behind with an Internet penetration rate of 28.4%.  According to these statistics, Ghana is not even close to getting half of its populace “connected”.

In 2013, the Ghana Investment Fund for Electronic Communication (GIFEC) conducted a study of the digital divide in Ghana, 92.4% of the group studied indicated that they would use the internet when access is provided. About 1.9% related non-use of the internet to cost constraints, they believed getting internet access would cost them an average of GHc209.5 monthly, but they would be willing to spend an average of GHc64.6 monthly for Internet access. Click here to see document.

In present times, Socio-economic growth is somewhat tied to Internet access, thus the importance of digital inclusion.  Digital inclusion involves the ability of individuals and groups to access and use information and communication technologies. Digital inclusion brings together high-speed internet access, information technologies, and digital literacy in ways that promote success for communities and individuals trying to navigate and participate in the digital realm.

This week’s article examines Sponsored Data as one of the ways to bridge this divide and empower citizenry to utilize the internet as content providers and job creators!

WHAT IS SPONSORED DATA?

The notion of toll-free telephone calls and Pay-4-me calls by some mobile operators in Ghana are a well-known concept: customers can contact businesses free of charge, while the company receiving the call covers the communication costs. Ghanaian consumers like other mobile customers everywhere in today’s highly mobile, data-driven world place a high value on the time-saving and money-saving facilities mobile data technologies allow. This is especially true in our part of the world, where a mobile phone is often the only “connected” device we own.

Sponsored Data, also known as “1-800 Data,” enables mobile device users—even those on prepaid phones with no credit or those who cannot afford a mobile data plan—to use mobile services provided by businesses and governments free of charge. It is the mobile data equivalent of the toll-free telephone service, where a third party pays the mobile operator for the customer’s access to its mobile services. In other words, you can browse specific websites, stream selected video and enjoy certain apps on your mobile device without impacting your personal data plan.

FORMS OF SPONSORED DATA

Sponsored data comes in two forms:

 Zero-rating – where users can engage with content free from data charges. Zero-rating offers exempt particular data from counting against a user’s data bundle, or from accruing any excess usage charges. Wikipedia began what is now known as Wikipedia Zero which offered access to resources on Wikipedia via SMS in Kenya and is now available on MTN Ghana free of data charges.   Facebook Zero, a similar sort of effort by the world’s largest social network has been particularly notable in countries across Africa including Ghana.

Data rewards – is a very strong incentive for users, they can receive mobile data from 3rd party sponsors as a reward for engagement and use it to consume mobile content of their choice.

WHY IS IT GOOD FOR GHANA?

So why is Sponsored Data an excellent step towards digital inclusion?

1. The cost of Internet is very high in developing countries

The cost of basic Internet access remains high in developing countries like Ghana. Internet consumers end up paying up to 30 times more for Internet access than their peers in developed countries. A service which gives a relief from the hyped data prices is a great idea for the growth and development of the nation.

2. The rate of Internet penetration in Africa is high

Internet penetration in Africa is growing very fast. Statistics on www. internetlivestats.com show a growth of 14% in Internet penetration in Ghana between 2015 and 2016. Internet penetration on the continent is about 20% and rising. The availability of Sponsored Data packages will boost Internet adoption rates on the continent and bridge the digital divide.

Another important fact to note is the surge in Ghana’s mobile phone penetration. In March 2016, the National Communications Authority (Ghana’s telecommunications regulator) released a report which detailed a rise of 127.63% in the country’s mobile voice subscriber base.  It also reported the number of mobile data subscribers growing from about 17.73 million to 18.03 million, an access rate of 65.74%, according to the Africa Report.

3. Internet access in Africa is mainly mobile

According to an internetsociety.org report in 2015, mobile broadband access accounted for more than 90% of Internet subscriptions in Africa. At the end of August 2016, the total subscribers of mobile data subscribers in the country were 19,125,469 with a penetration rate of 68.62% in Ghana,  looking at data from the National Communication Authority.  The acquisition of Smartphones and mobile subscriptions help but do not necessarily bridge the digital divide.  Internet penetration is still comparatively low in Ghana and in most parts of the continent.  Having brands and content makers provide video and other content to users without it counting against the users’ data allowance is a great step towards digital inclusion.

As the data from the GIFEC 2013 study concludes, leveraging the mobile phone platform as a pathway into Internet usage may be highly effective as mobile phone use is the second strongest predictor of Internet use. The increasing penetration rates of mobile phone usage could be a leading indicator of Internet usage if an integrated communications strategy (to include voice, video, and Internet) is developed.

4. SOCIO-ECONOMIC DEVELOPMENT

Internet penetration has been linked to Socio-Economic development. McKinsey posited that “if Internet were a sector, it would have a greater weight in GDP than agriculture or utilities”.  For a continent which is lagging behind in development, a quicker adaptation and understanding of ICTs is very crucial for our socio-economic development. Sponsored Data may enhance our chances of leveraging the opportunities which come with the Internet.

According to Thomas Sachson (Director, Emerging Technology, Global Digital Business at Sony Music Entertainment), free data’s economic effect on fostering enhanced digital enablement lays within the fundamental ability to shift core economic bargaining power for online engagement squarely to the historically disenfranchised consumer.

This pending shift in bargaining power to the consumer will be due to the fact that when a company gives away free data to encourage online engagement via their app or branded content, other competing companies will respond promptly with even more compelling free data offers, thereby creating an upward spiral of freeness for the end-user in pursuit of that consumer’s patronage. This is a very good thing indeed and will result in a large surplus of free data accruing to users of these services. This is free market dynamics at its finest and nicely explains why average to low income consumers in Ghana, will welcome and embrace sponsored data / data rewards implementations —they just want / need the free data.

Another aspect of free data dynamic is the one where end-user consumers are rewarded with mobile data. This is a great way to empower the consumers to accumulate more free data on a continuous basis by the very entities wishing to competitively engage with them.

This in turn allows more users to get online and engage not only with specified content but also with any content that is available on mobile internet. Where the end-user consumer has an ever growing basket of free data at their disposal — constantly accruing more free data from engaging with sponsored content and earning data rewards,  then these same end-users would have the means to spend the newly “earned” surplus data on  more meaningful and fulfilling online activities such as e-learning, watching news, having a video call. A LinkedIn post shares more light on this.

TOWARDS DIGITAL INCLUSION WITH SPONSORED DATA

As we have discussed earlier, Sponsored data is a way to make the transformative effects of the Internet increasingly accessible to the Ghanaian community. Sponsored data can promote digital inclusion in these significant ways

• By providing access: by providing free public access to some content on the Internet.
• Facilitating adoption: sponsored data will allow digital literacy services that assist individuals navigate, understand, evaluate, and create digital content using a range of information and communications technologies.
• Enabling application: assist individuals navigate, understand, evaluate, and create digital content using a range of information and communications technologies around key community need areas such as health and wellness, education, employment and workforce development, and civic engagement.

WRAPPING UP

I believe sponsored data to be one of the paths to a more digital inclusive community.  With Sponsored Data, you may not need to get Wi-Fi access before you access that link!

Visit www.viotech.com.gh if you are a Business, Advertiser, Corporate, App Developer, Publisher etc and are interested in this effective way of targeting mobile subscribers with specific content based on time, location, event and demographics.

Next week we examine ‘How to Build a Business Empire with Sponsored Data.

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Have a fruitful week!