Responsible Finance Forum

Sustainable Energy & Water Access through M2M Connectivity

Michael Nique and Firas Arab
01 January 2013
Source:  GSMA

From urban to rural areas, mobile networks have become the predominant infrastructure in emerging markets and more people are now covered by mobile networks than have access to energy and water. Increased GSM coverage and growing mobile handset ownership in developing countries have become tools of inclusion for the underserved population often lacking access to basic yet critical infrastructure. Beyond voice and SMS, the maturity and cost decrease of Machine to Machine (M2M) solutions coupled to the development of mobile micro-payments are opening new pathways to innovative thinking where mobile connectivity can be leveraged to provide affordable energy and improved water access. At the same time, the prospect of millions of active M2M-enabled devices communicating through cellular networks could represent a compelling commercial opportunity for Mobile Network Operators and the broader mobile ecosystem.

This paper aims to shed light on the opportunities created by M2M solutions to reach and empower underserved populations in the developing world. The emergence of new business models leveraging GSM connectivity for remote operation and monitoring is already helping tens of thousands of people gain access to more affordable and sustainable basic life services. The development of “Pay As You Go” solutions combining the use of M2M technology to mobile money services, provides a microfinance element where the credit on a user’s account can be checked remotely, enabling low income consumers access what would have been normally prohibitively expensive goods/services.

Beyond pilots and nascent commercial deployments, some challenges remain for entrepreneurs providing M2M-based services to better reach the full population lacking access to energy and water. As an important element to achieve scale in resource constrained economies, a section of this report is focusing on the opportunity to design a new GSM M2M module: a simpler module design integrating lighter functionality would stimulate the integration of M2M modules in a wider range of products. Related to this point, M-KOPA, currently providing Pay As You Go solutions for energy access in Kenya, presents at the end of this report, an in-depth testimony about the challenges they envision in increasing the impact and scale of M2M services for the Bottom of the Pyramid (BoP) – see attached article “Unlocking a New Market: Ultra Low Cost M2M”.

This first white paper is part of a wider piece of GSMA research on how mobile “Enhanced Utility Solutions” in the developing world are helping the population covered by GSM networks to have access to basic community services. The term “Enhanced Utility Solutions” refers to the use of mobile technologies, either through Machine to Machine (M2M) usage, and/or mobile services, i.e. SMS/USSD and mobile payments, to improve access to energy and water for the population without a formal utility connection. A second report on the use of mobile phones and mobile applications for enhanced decentralized utility services is expected to be published by the end of the first quarter of 2013.