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FINANCIAL TIMES
Tuesday 25 September 2018
Investing in Refugees
Prime opportunity for businesses to change lives while gaining customers
‘They grab their kids, their clothes and their phone’ Nic Fildes reports on projects to create lucrative markets in connecting people forced to flee home
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yarugusu on the border of Tanzania and Burundi, one of the largest refugee camps in the world, is an unlikely pioneer in how the telecoms industry views refugees. Established in 1996, its population of 150,000 makes the camp about the same size as the large British town of Blackburn. Mobile companies have long been called upon to provide critical connectivity in crisis situations by building temporary networks offering free texts and calls to displaced people. Now the humanitarian sector has started to work with telecoms businesses to build permanent networks by convincing companies of the vast economic opportunities this offers. Vodacom, Vodafone’s African arm, installed a 3G tower within Nyarugusu in 2016, which it now shares with commercial rivals Tigo and Airtel. The tower is running at full capacity according to the GSMA, the mobile industry trade body, but more striking is the average revenue per user of $4.40. That is slightly higher than the average revenue per user for the rest of Tanzania. Refugees are spending around a third of their disposable income on connectivity. Chris Earney, head of innovation
at the United Nations refugee agency UNHCR, says that Vodacom had initially built one tower to test the demand and this quickly proved the business case. He says that some telecoms companies are starting to realise that refugee communities represent “large untapped markets”. In northern Uganda, where there are 1m displaced South Sudanese, Airtel experimented with temporary masts before making a formal investment in infrastructure. Money from the UN Capital Development Fund helped to reduce the investment risk. The high population density, combined with the greater demand for connectivity from refugees, has fuelled pressure on telecoms companies to change their thinking about building connections for those communities. Kyla Reid, head of the GSMA’s mobile for humanitarian innovation & digital identity programme, says that in the past two years companies including Turkish mobile operator Turkcell have come to see refugees as a large and significant customer segment. Yet progress has been slow, according to the UNHCR’s Mr Earney. “We didn’t see the speed and agility that we expected from the private sector,” he says. “The lack of information led to hesitancy but we think it is a competitive space.” A change in attitude towards the telecoms sector also matters, says Ms Reid, who argues that the onus has been on the humanitarian agencies to evolve from a view of the “nefarious private sector with questionable motives” to
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Filippo Grandi
Mobilising: a South Sudanese refugee seeks a signal in Uganda — UNHCR/Frederic Noy one based on partnership if the funding and business model can be agreed. Data has also opened up the refugee business opportunity beyond simple calls and texts. The prospect of connectivity within a camp opens up those communities to a world of digital payments, education and healthcare according to Blair Levin, a former technology adviser to Barack Obama and executive director of the National Broadband Plan in the US. Improved connectivity creates the foundation for other services, such as tailor-made mobile payment systems. These allow UN agencies to deliver funds direct to refugees that they can spend in recognised local shops. “Local food markets on the edge of refugee camps can now be a viable option for refugees to use and the refugees become potential customers for the traders,” says Rodrigo Carneiro, Vodafone’s account manager for relations with the UN. “This is a safer, more secure and more efficient way of making a real change to refugee lives, creating a sense of dignity for the refugees and again building new opportunities in the wider economy.” A lack of digital literacy, the cost of handsets and a need for formal identification (see Page 3) to buy a SIM card,
still prevent many refugees from going online. Yet many displaced people will bring knowledge and equipment with them. “They grab their kids, their clothes and third thing is the phone. It is the connection that they have,” says Mr Levin who co-authored the paper, A Global Broadband Plan for Refugees. Telecoms companies also need to think beyond situations like those in Nyarugusu. “When we think of refugees, we think of camps,” says Mr Levin. “That is a problem: 60 per cent of refugees are now in urban areas where infrastructure isn’t a problem.” In those areas, networks need to tailor packages for people with very little income that do not cannibalise their revenue from established customers. The private sector may be taking more chances in connecting displaced people. Yet there are still going to be situations where even the UN concedes it is not economically viable to build anything but temporary infrastructure. In that type of scenario, says Mr Earney, many communities are trying to make their own cheap base stations, often using solar power, to bridge the gap: “Refugees are a snapshot of our society. They want to start businesses and feel the full benefits of connectivity.”
Contributors John Aglionby Former East Africa correspondent, now assistant UK news editor Nic Fildes Telecoms correspondent Filippo Grandi UN High Commissioner for Refugees Kerin Hope Greece correspondent Andrew Jack Global education editor John Reed Southeast Asia correspondent Leyla Boulton, Maija Palmer Commissioning editors Steven Bird Design and picture-editing Rebecca Speare-Cole Research For advertising details, contact: Mark Carwadine, (44) 20 7873 4880, mark.carwadine@ft.com, or your usual FT representative.
While global headlines on refugees can be dominated by alarmist views, there’s a quieter revolution under way. This is driven by pragmatic, entrepreneurial people who see opportunities where others see threats, and who understand that refugees can lead productive lives in exile, given the right environment, and the right support for the communities in which they settle. The private sector is vital to this effort, and is central to the aims of the global compact on refugees that I will present to the UN General Assembly for adoption later this year. In 2017, the number of refugees grew by 10 per cent to 25.4m — the biggest jump UNHCR has seen in a single year. Contrary to popular misconception, 85 per cent of those refugees live in developing regions of the world. Many of these places are desperately poor, while programmes to support the refugee populations they host are perennially underfunded, barely meeting refugees’ immediate needs, let alone their aspirations to live productive, meaningful lives. It’s clear that we need a new, more sustainable approach, one that isn’t dependent on the vagaries of politics, contributions from a handful of donor countries, or wishful thinking that the conflicts forcing refugees from their homes will end quickly. The global compact offers a blueprint for a way forward. Among its aims are to ease the pressure on hosting communities and countries and to help refugees become more self-reliant. It envisages a new cross-society partnership, in which innovators, experts and contributors from all segments of the community are brought on board. The private sector has a crucial role to play — whether through providing investment and jobs in areas hosting refugees, making refugees part of their value chains or helping humanitarian agencies innovate to better deliver assistance. The mobile technology sector is one area where a number of companies have already grasped the strong business case for getting involved (see left). Mobile connectivity is as central to refugees’ lives as to yours and mine. From Lesbos to Cox’s Bazar, I have been struck over and over in recent years by the sight of refugees climbing the nearest hill and holding up their mobile phones to get a signal, or searching out the nearest WiFi connection. Charging stations are as common as aid distribution points in refugee camps. There is an ever-growing need for refugees to be connected, whether for staying in touch with loved ones, studying, or running a business. But the places where refugees live are often in under-developed areas that lack basic infrastructure. Meanwhile, refugees often struggle to afford handsets and mobile services or lack the necessary ID documents to get SIM cards.
For telecommunications companies willing to innovate and to collaborate with governments and aid agencies, refugees represent a significant opportunity. In the past two years, mobile network operators have started working with UNHCR, national regulators and development actors to bring connectivity to some of the world’s most remote refugee settlements (see left). For those refugees who do get connected, the benefits can be transformative — opening up a wealth of education and training opportunities that are crucial in restoring a refugee’s future. Here too, the private sector is helping us leverage rapid advances in technology. UNHCR has teamed up with a consortium of universities committed to opening up their programmes to refugees by combining digital education with face-to-face tuition. So far, more than 7,000 refugees in Africa, Asia and the Middle East have been given a chance to earn diplomas from universities in the US, Canada, Switzerland, Kenya and Australia. Forward-looking businesses have worked with us to overcome barriers and gain new customers. There are still challenges and we need more collaboration to address them — whether this means mitigating the risks for companies wanting to invest, or advocating enabling policies to support companies and refugees. We want to see these efforts scaled up and replicated across the globe and in different sectors, from financial services to renewable energy to education. Gaining access to these goods and services will pave the way towards refugees’ inclusion in local economies. There are commercial benefits for those willing to enter this new market. But it will take bold companies to step up and help us drive this mindset shift — from viewing refugees as aid beneficiaries, to seeing them as potential customers and contributors. Filippo Grandi is the United Nations High Commissioner for Refugees
‘It will take bold companies to help drive this mindset shift, viewing refugees as potential contributors’