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Micro Telco ... Another Long Tail Story

Telco 2.0 is born!

I spent a few days in Morocco recently and had the opportunity to meet a number of fascinating people. Our host was Abdesslam Sijelmassi, together with his lovely wife Houda were great hosts. While we were getting acquainted we talked about each others business, and I discovered another great example of "The Long Tail" in practice.

Abdesslam stems from family of entrepreneurs with a big hart for their country and it's people. One of the activities Abdesslam oversees does the following:
Using mobile technology they are building a network op private phone shops. Not to sell phones, but offering phone calls at a low price. You have to know that in Morocco many people have a mobile phone just to receive calls. Calling out is way too expensive, so they look for a cheaper alternative where they can simply pay a few Dirham (local currency) and make call. This is also a way for people there to keep their budget under control.
Now, of course there are phone shops all over big towns, but these will not cover the whole city (especially not the poorer parts), and they are definitely not present is small rural communities. And that's where "IlaïCom" comes in with project LiajliCom.

What IlaïCom does is setting up a network of micro entrepreneurs with a low cost phone unit. That unit is sold to small entrepreneurs and they help them with microcredit (much like Nobel Prize winner Muhammad Yunus). One installation costs about € 400. Along with the phone and point of sale material (mainly a sign to put outside the shop), comes a phone credit of € 200 (included in the setup cost). People starting a unit get a microcredit, which allows them to start making money from day one. The unit is connected to the phone network though mobile technology which allows them be active even in remote rural areas. Everything is extremely easy to operate, among the customers there are 70 year old women who never used a phone before. Note that many of the entrepreneurs are illiterate.

Abdesslam is constantly building and improving the model. Phone credit is prepaid and coached by IlaïCom through a call center so entrepreneurs do not fall out of credit and business keeps running. This way they succeed in moving people from a poverty situation to what they call 'precarious' and those living in a precarious situation are lifted up to an acceptable standard of living.

Today they are working on some novel ideas to further build these micro businesses. Motorised wheelchairs with a unit attached allows handicapped people pay for their wheelchairs. Another direction is to seek synergies with other sectors such as fast moving consumer goods. They have build a phone unit that is completely Coke-branded (looks like a huge can of Coke). Coke may sponsor these units, and add a small fridge to the concept with a starter-kit of drinks. Thus allowing the shops to build also a business of fresh drinks, and some advertising income from Coke to pay for the phone equipment.
An idea very relevant to Belgium builds on the tradition of emigrated Moroccans to send part of the money they make in Europe to their families. IlaïCom is now looking for ways to convince these people to invest in a phone unit for their families in Morocco, and then add phone credit on a monthly basis. Adding the credit can be done fully automatically via the Internet.

I thought this was a very interesting story, combining business with social development of a country. However it wasn't until I put some numbers together that I realized that this a perfect example of "The Long Tail". Today there about 3500 IlaïCom phones spread over Morocco, and Abdesslam estimates there is potential for at least 100 000 units. They already represent a considerable share of Meditel's public phone turnover (Meditel is the N°2 telco operator in Morocco). And this is business they would never have had if it were not for IlaïCom. Just consider the huge untapped potential of all these people who have no access to telecommunications services because nobody bothers setting up a traditional phone store. Thanks to intelligent use of new technology, IlaïCom is opening up this market.
Anther typical feature of Long Tail markets is that we see mini-tails appear within the long tail. In general there is potential for a phone for every 3 to 500 people. But in each region there are 'top selling locations' such as those places where many trucks come by. These phone shops can even afford to install a second unit.

This is truly one of the most fascinating I came across in my life. It's a Long Tail story, with a sound economic model (people are making money here, no bubble) and at the same time it Morocco and it's people move forward and saves people from poverty.