Mobile phones and magic bullets
The Economist continues its love affair with the mobile phone in a recent special report. Highlights:
‘In 2000 the developing countries accounted for around one-quarter of the world’s 700m or so mobile phones. By the beginning of 2009 their share had 
grown to three-quarters of a total which by then had risen to over 4 billion. [see chart]
China is the world’s largest market for mobile telephony, with over 700m subscribers. India is adding the biggest number each month: 15.6m in March alone. And Africa is the region with the fastest rate of subscriber growth.
Three trends in particular are reshaping the telecoms landscape. First, the spread of mobile phones in developing countries has been accompanied by the rise of home-grown mobile operators in China, India, Africa and the Middle East that rival or exceed the industry’s Western incumbents in size.
These operators have developed new business models and industry structures that enable them to make a profit serving low-spending customers that Western firms would not bother with. Indian operators have led the way, and some aspects of the “Indian model” are now being adopted by operators in other countries, both rich and poor.
The second trend is the emergence of China’s two leading telecoms-equipment-makers, Huawei and ZTE,….. prompting a shake-out among the incumbent Western equipment-makers.
The third trend is the development of new phone-based services, beyond voice calls and basic text messages, which are now becoming feasible because mobile phones are relatively widely available. In rich countries most such services have revolved around trivial things like music downloads and mobile gaming. In poor countries data services such as mobile-phone-based agricultural advice, health care and money transfer could provide enormous economic and developmental benefits.’
The one unconvincing bit is the claim, based on some World Bank econometrics that ‘adding an extra ten mobile phones per 100 people in a typical developing country boosts growth in GDP per person by 0.8 percentage points.’ The source for this isn’t online, but I’m trying to track down whether the Bank researcher is really claiming causality, correlation or a mixture of both. If it’s causality we can forget aid, let’s just drop crate loads of mobiles on poor countries and declare victory (yes, I realize it might be a bit more complicated than that……..)
If you are left wanting more, UNCTAD’s recent Information Economy Report 2009 should sort you out (Guardian summary of the report here). As a panacea, mobiles are right up there with microcredit, but for a rare bit of mobile phone scepticism, see my previous blog here.
The Economist has even provided a 3 minute video summarizing the report
November 4th, 2009 at 11:24 am
I’m still a bit sceptical about how much this technology is still dominated by western companies.
My wikipedia http://en.wikipedia.org/wiki/List_of_mobile_network_operators
says of the top 10 largest companies. 6 out of 10 are still western based. The trend is there but I’m still not convinced the real power has left the boardrooms of USA and Europe.
November 4th, 2009 at 11:39 pm
The article about the mobile phone boom in developing countries is quite encouraging. The three trends—growth of mobile phone users, emergence of local operators, and diverse phone-based services show that developing countries channel an effective way to boost economy by embarking on the information expressway. Moreover, for most developing countries, the mobile phone market still has great potential for business. Also, the spread use of mobile phone not only generates wealth, but makes it much easier for people to access to information. The information network will undoubtedly be helpful for supervising governance and curbing corruption and so on so forth.
November 5th, 2009 at 11:50 am
I think Ken is right. A small example from Malawi: I was talking to an agricultural advcie worker from a local NGO. At least 1 farmer in every group he works with has a mobile now. So they can ring him straight away they spot a problem and arrange a visit/meeting with him, often at short notice. He’s much more at the beck and call of his clients and he gets to the meeting properly prepared, which he welcomes – he said that’s what genuine extension work should be about. i don’t think we should underestimate the great importance of time saving, or time efficiency, for poor people. Being able to do things at their convenience saves their time and energy (which is money). It means better dialogue and better advice, and it encourages greater activism on the part of poor people to seek that advice, and greater accountability among providers.
November 5th, 2009 at 3:08 pm
I’m not sure what your position is. The link (“for a rare bit of mobile phone skepticism, see my previous blog here”) goes to an entry by James Scott and/or Richard Heeks, and your comments on that blog link to one of your links-I-liked-entries and the 11/4 entry above.
I assume you are concerned with the fact that people with no disposable income are disposing what they do have into mobiles (paraphrasing Scott/Heeks). That is disturbing.
On the other hand, “agricultural advice, health care and money transfer could provide enormous economic and developmental benefits?” (from your entry above).
The problem is these economically poor people/countries are engaged with the globalized/capitalismized economy, like it or not. Traditional routes for “development” (i.e., via Gov., NGOs, World Bank, etc.) have improved the lot of the bottom several billion to some extent (or not, depending on who you ask), but perhaps there is something else (e.g., mobiles) that can circumvent, or compliment, the traditional approaches.
You are right, mobiles are not a panacea. They do, however offer some hope. In addition to what you’ve already mentioned there are many novel/unexpected uses, such as real-time news from off-the-radar regions – see, The Economist “Twitter 1, CNN 0” on the Iran protest,
http://www.economist.com/world/middleeast-africa/displaystory.cfm?STORY_ID=13856224
There is no way to unplug poor people/countries from the global economy. Are we going to block telecoms or ICT programs because people are making poor choices about how to spend their money? Maybe. It is a difficult (moral?) question. Perhaps consumer education should be stepped up when these new products are introduced. I’m not quite sure where the cost/benefit analysis leaves us, and I’m sure it depends on the intended use and income of the individuals involved.
I’m not clear where you stand on this, but I remain cautiously optimistic.
November 6th, 2009 at 8:39 am
I think the real strength of mobile phones is how they can transform power relations. A relatively cheap way of communicating for people in remote areas removes almost at a stroke one of the biggest obstacles previously preventing people from engaging effectively in a whole range of political, social and economic activities. No longer can decision makers (either in government or business) ignore rural citizens on the basis that they’ve got no effective way of raising their voice or complaining. Politicians are uneasy, which is a pretty good indicator for me that something transformative (and positive) is going on.
November 9th, 2009 at 10:18 am
Interesting. In my limited experience mobile phones offer a very real and practical bottom-up solution to problems for the poor (they save time and effort and eventually cash). One phone call = 8 hours on a dusty road to strike a deal. Not sexy, but tends to be voice or v simple SMS. Regardless of price (the cost/benefit is usually pretty clear on that I think) it strikes me there are other concerns. For instance, the most vulnerable are often illiterate (especially women) – have you come across anything which addresses the risk that as telcos/NGOs/media companies etc. develop and promote more sophisticated knowledge/money sharing technologies via SMS or phone applications they may (unwittingly?) embed priviledge? Is it realistic to suppose that such technologies somehow become a spur to literacy? Could we be doing something roughly equivalent to rolling into a poor community, providing access to a massive new marketplace, training people how to exploit it or how to get support in bad times. But only if you’re a male who already speaks one specific language?