In May 2021, GSMA launched the GSMA Innovation Fund for Digital Urban Services with support from the UK Foreign, Commonwealth & Development Office (FCDO). The fund was open to start-ups and early-stage companies providing essential urban utility services who leverage digital innovations to make these services more accessible, reliable, sustainable and affordable. Successful organisations were awarded between £100,000 and £250,000 in grant funding and were provided with technical assistance. Pitches were received from 335 organisations in 43 countries across Africa, South Asia and Southeast Asia, and from these, a cohort of nine organisations were selected. This blog series summarises the key learnings from the grant period.
Only 52% of Nepalis have access to piped water for their homes. One of the reasons is that, according to government data, fewer than 30% of Nepal’s 44,000 water schemes are fully functional. When services fail, people often rely on water from tanker trucks, which is usually much lower quality and can cost up to 40 times more than piped water. In urban areas, price gouging in times of scarcity is well documented.
Diyalo are a delivering enterprise resource planning solutions for water utilities of all sizes in Nepal. They have over ten years’ experience in providing these and at the start of the grant period were already working with 175 water providers, catering to over two million people. Diyalo offer their solution on a SaaS basis and aim to tailor the payment plans such that it can be used by water utilities of all sizes. This is essential in the Nepalese context as Nepal’s water sector is characterised by a very large number of independent small providers, often serving just a few thousand people, even within the urban areas of the Kathmandu valley.
Purpose of the grant and key outcomes
The GSMA supported Diyalo to further develop their ERP solution – ‘Watermark’ – through adding a customer mobile application, IoT integrations, and an enterprise dashboard. The customer application allows people to register complaints, record mobile meter readings and make digital payments, amongst other features. The ultimate aim of the application is to improve lives by ensuring consistent water quality and supply, build a better relationship between utilities and their customers and save users time and money. The IoT deployments will help utilities identify and manage water that is lost in the network, helping to conserve water resources and reduce lost income in non-revenue water (NRW), and was piloted with 16 water utilities alongside the launch of the customer app.
The key grant outcomes:
- The customer app was downloaded 10,016 times in the 16 water utilities in which it was piloted. Based on a survey of end users among the 16 pilot utilities, 43% of customers were using digital payments for their water bills by the end of the grant period.
- The 16 water utilities using the IoT solution and customer application reported an average 10 percentage point reduction in non-revenue water, and five of the 16 pilot utilities were able to reduce O&M costs by over 10 percentage points. Finally, month on month revenue collection by the utility increased by an average of 14% after launching the application.
- Over the grant period Diyalo saw a large growth in their client base, expanding from working with 175 water providers at the start of the grant to over 800 at the end. This means their solution is being used by water providers serving approximately 1.2 million households, or ~5 million people, roughly 20% of Nepal’s population.
- Diyalo are currently collaborating with the Government of Nepal’s Town Development Fund to support the capacity building of water utilities on billing and accounting. Internationally, Diyalo are exploring international partnerships in Ethiopia and Kigali, and are in discussion with the Water and Sanitation Corporation of Kigali.
Key learnings from the grant
- Delivering their solution required intensive outreach and capacity building with the water providers – over the course of the grant Diyalo hugely increased the number of providers subscribing to their platform. For many, this was their first engagement with digital solutions of this kind. In the absence of other capacity building programmes Diyalo delivered capacity building and training.
- Hardware financing remains a challenge for many small providers – Initially, within the 16 IoT pilots, Diyalo encountered scepticism when presenting our solution to water utilities’ board members. This was based on high-budget deployments of supervisory control and data acquisition systems, which typically cost between 30-50 million NPR (~$225k-$375k). While Diyalo’s solution – which included flow meters, pump automation, and level sensors for the water systems – was priced at between 18-35 million NPR (~$130k-$260k) depending on the technology package selected. However, Diyalo’s unbundled approach allows providers to choose only what they need, saving significantly. Despite this, that initial capital deployment still presented a barrier for many providers.
- The customer app was generally well received, but needed water provider feedback to ensure user stickiness – in the endline survey users reported positive feedback on the efficacy of features like online payment/billing statement history and water distribution schedules offered by the mobile app. However, to enhance user engagement the water quality and complaint registration features, along with institutional notifications, necessitated more active involvement from utility providers in responding to complaints via the app and posting information on it. On the user side, device storage, keypad mobile, and lack of mobile data all presented challenges for digital inclusion.
Next steps and scaling
Diyalo continue to develop their technology offering, most notably recently by bringing the assembly of devices in-house to lower the cost to water providers. Over the grant period the sensors and other equipment were purchased from third parties, brining much of the assembly in-house has cut the costs of the hardware by roughly two thirds. Since the end of the grant Diyalo have also undertaken a further seven IoT deployments with water providers. Part of this work entails Diyalo’s commitment and work to strengthening water utilities’ operational capabilities through targeted training programs. The GSMA are also supporting Diyalo under the GSMA Innovation Fund for Accelerated Growth, to support the further scaling of their solution. Diyalo’s next initiative is the implementation of smart metering at the end-user level with piloting the solution and then scale it up based on the results. This approach aims to streamline meter reading processes, minimize errors, identify water losses to reduce non-revenue water, and ultimately automate meter connections and disconnections based on water tariff payments.
This initiative is currently funded by UK International Development from the UK Government and is supported by the GSMA and its members.
