That means two-thirds, or 4 billion people are still to be connected. And even if they tend to be poorer and less literate or living under repressive regimes that don't want them connecting with anyone not previously approved, they still represent both a frustrating obstacle to growth - and a huge opportunity.
Many of the big tech companies like Facebook, Google and Apple are dreaming up creative ways of providing inexpensive access: giant balloons, satellites, drones, lasers - let your science-fiction-fueled imagination run wild, because they certainly are. There's a lot of money to be made by making it up on the huge volume of small transactions. Global health threats like ebola could be identified earlier. And, for those who care, people's lives might just be improved in the bargain. JL
Evelyn Rusli reports in the Wall Street Journal:
Two-thirds of the global population (is) still without Internet access. The possibility of connecting those four billion people to the rest of the world has led to a big scramble by tech firms and helped fuel sky-high valuations for investors’ favorite apps and gadgets.
When Sumarni, a 39-year-old woman in a rural village in Indonesia, first cradled a smartphone in her hand about two years ago, her reaction was “bingung,” the word for “confused” in Indonesian.
As she looked at the Android phone’s sleek, black surface, she asked herself: “Where are the buttons?” She was wary of holding it, since the smartphone was worth far more than her monthly income of roughly $60 from selling crackers and potato chips at a room in her house.
Now, though, Ms. Sumarni is an enthusiastic participant in the world-wide digital economy. She proficiently uses her smartphone’s Web browser, mobile messaging service WhatsApp and Facebook Inc. ’s social-networking site, where she has 40 friends and launched an online shop with women’s clothing and accessories.
That makes her a dream come true for technology companies as they try to reach the roughly two-thirds of the global population still without Internet access.
The possibility of connecting those four billion people to the rest of the world has led to a big scramble by tech firms and helped fuel sky-high valuations for investors’ favorite apps and gadgets.
Device makers in China and India are pumping out low-price handsets, while Google Inc. and Facebook have captured attention with their work on Internet-beaming, mechanized drones and high-altitude balloons.
In Ms. Sumarni’s small village about two hours west of Jakarta by car and rural areas all across the world, the reality is less sanguine. Social barriers beyond the control of companies are keeping people offline. The race to bring the next billion online could take longer than many executives think.
“It’s glamorous to say: ‘I’m going to the far reaches of the earth to connect people.’ But there are so many people who could technically access the Web but are not,” says Ann Mei Chang, a former senior director of emerging markets at Google and now executive director of the U.S. Global Development Lab, part of the U.S. Agency for International Development.
Just 16% of Indonesia’s 250 million people access the Internet regularly, according to the World Bank. The hurdles include low wages, lack of digital literacy and a dearth of compelling content that feels relevant.Advertisement
Many reluctant users can afford the Internet but wonder why they should bother.
Ms. Sumarni’s journey to the Internet took three years of hand-holding and financial support from Ruma, a Jakarta-based startup company that tries to pull people out of poverty through the use of mobile devices.
Ruma showed Ms. Sumarni, who like many Indonesians uses one name, how to run a business from her basic phone by reselling airtime. Ruma also lent her money to upgrade to her first smartphone and provided lessons on how to use it.
Before then, she never aspired to be connected. She didn’t see the point.
In 2013, Google Executive Chairman Eric Schmidt predicted that the entire world would be online by the end of the decade. Yet the Internet’s reach among new users is actually slowing.
According to consulting firm McKinsey & Co., growth of world-wide Internet users slowed to a compound annual growth rate of 10.4% from 2009 to 2013, down from 15.1% between 2005 and 2008.
As many as 900 million people are expected to join the world’s online population by 2017, which would increase the total to 3.6 billion. That would leave roughly four billion people offline.
Kara Sprague, the McKinsey principal who led the report, says she initially expected to find a large tranche of people that was too poor, uneducated or illiterate to be online.
But those forces applied to only a fraction of the people opting to stay offline. The report was done jointly with Facebook.
Those are big surprises in the developed world, where the value of the Internet is seen as a no-brainer. Facebook Chief Executive Mark Zuckerberg thought poverty was the biggest barrier when he started Internet.org two years ago. The Facebook-led partnership aims to expand global Internet access.
‘What is a data plan?’
Internet.org representatives then surveyed people in emerging markets, walking door to door in India to learn about the technology habits of families.
“We asked: ‘What data plan do you use?’ ” recalls Mr. Zuckerberg. “The answer was very simple but kind of mind-blowing,” he says. Most people replied: “What is a data plan?”
Mr. Zuckerberg now says: “I thought what was necessary to connect everyone was new technology and a change in the economic structure. Instead, it’s all about content and awareness.”
Indonesia embodies the vast opportunity and complex challenges of getting people online.
The archipelago nation is exceptionally young and social, punctuated by the capital city of Jakarta, home to a nascent but bustling tech scene.
Google and Facebook recently moved in, and China’s Xiaomi Corp. began selling its smartphones in Indonesia last year.
Yet about 100 million people live on less than $2 a day, and Indonesia has the third-largest offline population in the world, behind India and China, according to McKinsey.
Ms. Sumarni’s village, Cibeber, is part of Indonesia’s historic Banten province, a once-vibrant port for pepper that hosted colonial ships from Portugal and the Netherlands. The village now is largely agrarian and near a large steel factory. It has about 46,000 residents.
Women in conical straw hats bend over verdant green fields within walking distance of Cibeber’s narrow, dusty streets. Rows of modest homes stack together, capped with orange roofs.
Several villagers have converted the front rooms of their homes into shops, or “tokos,” and hawk popular Indonesian snacks and sundries from a window.
Men on break from work often congregate in these tokos, chatting and smoking cigarettes.
Almost everyone has a basic phone, though some young men and women have Samsung Electronics Co. smartphones or cheaper, Chinese-made devices with Google’s mobile operating systems, which they call their “Android hand phones.”
A bare-bones, Chinese-made Android smartphone can be had for as little as $50, plus fees for airtime. Falling prices have helped boost Internet adoption, according to Ruma, though it believes that more than half of the people in Cibeber still are offline.
Among them is Eti, a mother of four who sells basic staples such as rice, wheat and cooking oil from a small shop in her home. For years, she has owned a basic $20 phone, capable of texts and calls, just enough to coordinate with suppliers and customers.
While her husband works at the steel factory, she sells about $9 worth of goods a day. Her costs add up to $7, and she spends 30 cents to “top up,” or add airtime on her phone. She rarely has enough money to buy more.
Ms. Eti, 39, has heard about Facebook but never seen it herself. She says her children have told her the Internet is a “place where you can learn,” though she has never “surfed” it.
Internet foot soldiers
Ruma’s founder and chief executive, Aldi Haryopratomo, has spent the past six years trying to find people like Ms. Eti.
The company shows people with basic phones how to use them to sell airtime credit. Profits are split with Ruma, which is backed by the Omidyar Network, a foundation started by eBay founder Pierre Omidyar, and an Indonesian conglomerate.
After making a bit of money, Ruma users usually move up to smartphones, where they can use Ruma’s Android app to sell credit and accept payments for third parties, such as utility companies or motorbike lenders.
Ruma recently entered a partnership with a major retailer to help Ruma users, known as “agents,” place bulk orders and sell consumer goods. Ruma can help users borrow the money to buy a smartphone through Kiva, the nonprofit microloan website.
The hope is that Ruma’s services will help lift people out of poverty while showing them that their phones could be central to their lives.
“In a place like Cibeber, there is probably someone selling an Android phone nearby, but the people needed to teach why the Internet is valuable are missing,” says Mr. Haryopratomo, 32, who grew up on a goat farm in Indonesia and graduated from Purdue University and Harvard Business School.
Every day, Mr. Haryopratomo deploys about 200 employees across Indonesia. On motorbikes, the field operators canvass neighborhoods block by block, recruiting new people and managing the existing network of about 30,000 agents. Nearly 75% are women.
Ruma focuses on recruiting women like Ms. Eti and Ms. Sumarni, who earn just a couple dollars a day and are disconnected from the Internet.
According to a 2014 study sponsored by Google, 35% of women in Indonesia, India, Malaysia and the Philippines don’t see any reason to go online.
While women in developing countries are far less likely than men to be online, studies also show that women are often more motivated to use resources to improve their family’s quality of life.
Soon after launching Ruma in 2009, Mr. Haryopratomo realized that Internet foot soldiers and local word-of-mouth were critical to gaining trust, particularly in a country where corruption and scams were once rampant.
He says: “They want to know: ‘What is the guarantee that this guy is going to help me?’ ”
While on a motorcycle trip through Southeast Asia to do research as an employee of Kiva, Mr. Haryopratomo realized that many people struggled to understand how a website on his laptop could help them get loans.
He recalls some villagers shaking the laptop to see if money would fall out of his “magic” box.
“Changing people’s lives and changing people’s behaviors on how to access the Internet takes real hand-holding,” he says. “Nothing can quite replace face-to-face, not even Facebook.”
Beyond drones
Several years ago, Google ran a study in India that targeted people who hadn’t used the Internet, says Ms. Chang, the former Google executive.
The company showed one woman Google’s website and told her she could search for anything by typing it into the box. The woman responded: “I want to know what the future holds.”
Ms. Chang says the lesson was: “We need to help people where they are.”
The push to get people online is highly fragmented. At Google, Internet access initiatives are spread across different groups. Project Loon, Google’s program to send balloons around the world to deliver Internet access, is part of the Google X research lab. Other connectivity projects are run by the emerging markets team and regional offices.
Tech companies also have to work with a thicket of governments, telecommunications operators, nonprofits, private organizations, schools and other entities, which vary by location and often work inefficiently with each other.
Facebook and Google have stepped up efforts to tackle the social barriers of Internet access, particularly by creating more local content.
At first, Internet.org focused on improving the technological efficiency of Facebook’s applications and deals with telecom operators to drive down access costs.
That is now being coupled with a push to bundle Facebook with local services. Last summer, Facebook made an Internet.org app for Zambia that includes information on weather, local jobs and women’s organizations, in addition to Facebook’s social network.
In India, Facebook held a contest last fall to encourage local groups to build content and apps for underserved populations in India, including women and migrant workers. Getting more people online is complicated by the roughly 100 languages spoken in India.
Last week, Facebook officially launched Internet.org in Indonesia, using a partnership with cellular provider Indosat to offer free, local Internet service.
Google has been pounding the pavement in Indonesia since opening its office there more than a year ago. A roadshow begun last year hosted conferences for businesses in several major cities. Google met with about 2,000 businesses per event.
“We have to learn what are the kind of things that people want to know,” says Andrew McGlinchey, the Asia Pacific product manager for Google. “We are doing our best to understand the next group of Internet users.”
Internet.org estimates that its efforts have helped seven million people in the developing world use mobile data for the first time. The group often has had to rely on employees of local partners to explain the value of the services and technology offered by Internet.org and Facebook.
Mr. Zuckerberg, Facebook’s chief executive, says the next several years at Internet.org will emphasize on-the-ground education, though the efforts are likely to be overshadowed by higher-profile work on drones and satellites.
“These things are not the sexy things to talk about,” he says.
Ruma’s efforts to get more Indonesians online haven’t changed much since one of its field operators knocked on Ms. Sumarni’s door in 2010.
At the time, she earned about $2 a day by selling snacks from the window of her house and reselling cellphone credit. She bought the cellphone credit in person from a store more than an hour away, which cost her $2 to reach. She had $10 in savings and used a basic Nokia Corp. phone.
The employee convinced Ms. Sumarni to try Ruma’s service so she could buy the cellphone credit using her own phone. It took her about three years to afford a smartphone.
An awkward ‘swipe’
Ms. Sumarni was taught basics like how to insert the battery and where the “on” button is located. Such a lesson is now a standard part of the process, and Ruma also teaches users how to buy a data plan. Most users in Cibeber use a provider called XL Axiata that costs about $2 a month.
Ruma also showed her how to reach the rest of the Internet. Like many online users in Indonesia, she became adept in Facebook, WhatsApp and BlackBerry Ltd. ’s BBM service. She is a regular online visitor to Kompas, a popular local newspaper, and the Indonesian version of Wikipedia, which she used to help educate her children.
The interface of Ruma’s app is designed for smartphone neophytes. It has large, colorful buttons with plain text in Indonesian. The company created large, bright “next” buttons after realizing that many users didn’t naturally “swipe” to get to the next screen.
Using her smartphone, Ms. Sumarni now makes $10 a day from selling cellphone credit and accepting payments for bills. She has reached “dealer” status, meaning she manages a group of Ruma agents recruited from the village.
Though her house still is modest, a new motorbike stood in front during a recent visit. The living room, which doubles as her sons’ bedroom, had a new television in the corner.
The kitchen was stacked with old rice cookers, pledged as collateral from villagers who have borrowed from Ms. Sumarni to expand their own businesses.
She has used her small savings to send her children to a technical high school. One of her sons is about to graduate and has ambitions of going to the police academy to study cybercrime. He got interested in technology by playing games on her smartphone.
Ms. Sumarni is on her phone incessantly. She uses it to run her new online store on Facebook, which sells cheap handbags to other ladies in Cibeber, coordinates bake sales with her friends, and reads about politics and current events.
Asked how her phone has changed her life, she smiles and says: “I’ve become more worldly.”
“Now the information comes to me,” she adds, sitting in front of her toko, which has grown from a small window to a full room
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