(2008-04-18) Mobile Vs Poverty

Mobile phones vs Third World Poverty.

• The family owned a cellphone, purchased several months earlier so that the father, who made the equivalent of $88 a month, could run errands more efficiently for his boss at the shoe shop... Eighty percent of the world's population now lives within range of a cellular network, which is double the level in 2000. And figures from the International Telecommunications Union show that by the end of 2006, 68 percent of the world's mobile subscriptions were in developing countries... What they're buying, he says, are cellphones and airtime, usually in the form of prepaid cards. Even more telling is the finding that as a family's income grows - from $1 per day to $4, for example - their spending on I.C.T. increases faster than spending in any other category, including health, education and housing.

• A "JustInTime" moment afforded by a cellphone looks a lot different to a mother in Uganda who needs to carry a child with malaria three hours to visit the nearest doctor but who would like to know first whether that doctor is even in town... Having a call-back number, Chipchase likes to say, is having a fixed identity point, which, inside of populations that are constantly on the move (Nomad) - displaced by war, floods, drought or faltering economies - can be immensely valuable both as a means of keeping in touch with home communities and as a business tool. (Twitter opportunity?) Text Messaging, or SMS (short message service), turns out to be a particularly cost-effective way to connect with otherwise unreachable people privately and across great distances. Public health workers in South Africa now send text messages to tuberculosis patients with reminders to take their medication.

• Some of the mobile phone's biggest boosters are those who believe that pumping international aid money into poor countries is less effective than encouraging economic growth through commerce, also called "inclusive capitalism." (International Development)... For this reason, the cellphone has become a darling of the microfinance (MicroLending) movement... Grameen Phone is now Bangladesh's largest telecom provider, with annual revenues of about $1 billion... During a 2006 field study in Uganda, Chipchase and his colleagues stumbled upon an innovative use of the shared village phone, a practice called sente. Ugandans are using prepaid airtime as a way of transferring money from place to place (Mobile Payment), something that's especially important to those who do not use banks... Already companies like Wizzit, in South Africa, and G Cash, in the Philippines, have started programs that allow customers to use their phones to store cash credits transferred from another phone or purchased through a post office, phone-kiosk operator or other licensed operator. With their phones, they can then make purchases and payments or withdraw cash as needed... "Look, microfinance is great; Yunus deserves his sainthood," Hammond says. "But after 30 years, there are only 90 million microfinance customers. I'm predicting that mobile-phone banking will add a billion banking customers to the system in five years. That's how big it is."

• Even as sales continue to grow, it is yet to be seen whether the mobile phone will play a significant, sustained role in alleviating poverty in the developing world. In Africa, it's still only a relatively small percentage of the population that owns cellphones. Network towers are not particularly cost-effective in remote areas, where power is supplied by diesel fuel... "Originally mobile-phone companies weren't interested in power because it's not their business," Banks says. "But if a few hundred million people could buy their phones once they had it, they're suddenly interested in power."

Mo Ibrahim is the Cell Phone king of Africa.

Iqbal Quadir started Grameen Phone. Quadir is now searching for other technologies to decentralize, and thereby become a tool to erase poverty. He is director of the Legatum Center for Development and Entrepreneurship at MIT, which has been funded with $50 million. He is investigating whether energy can also be dethroned from its current mode of extremely centralized generation (World Energy Grid).