PlusOne – Marketing Musings » Economic development in third world riding on mobile phones

The mobile phone is rapidly becoming a vital tool in developing nations, from improving heath care to allowing people to access news via WAP enabled sites such as the BBC offers.

This story from ATMA shows how economic development can be improved by the introduction of mobile phones into the population, even at a penetration rate of as low as 10%.

While consumers around the world demand sleek black and silver mobile phones, villagers in rural India buy brightly-coloured handsets in gold, reds and pinks. Mobile phones are as much a fashion statement here as in the trendy bars of Europe, reports the BBC News website.

That Indian villagers are beginning to buy mobile phones is indicative of an explosive growth in mobile services in countries where the poorest people live.

Of the one million people who become new mobile phone subscribers everyday, about 85% live in emerging markets, according to the mobile phone industry body, the GSMA.

But there is growing evidence that mobile phones are more than a fashion accessory and can transform the lives of the people who are able to access them.

The most obvious anecdotal evidence can be seen all over the developing world. From Kampala to Mombasa, handset sellers are plying their trade – some based in small kiosks, others sheltering from the blazing sunshine under large, colourful umbrellas.

An enormous number of people, including taxi drivers and tradesmen, now rely on mobile phones to run their small businesses – well over 80% in Egypt and South Africa alone, according to a report by the UN’s Conference on Trade and Development (Unctad).

The mobile phone boom has transformed ordinary people into micro-entrepreneurs.

One of the most famous examples of mobile phone entrepreneurship is the Village Phone Programme in Bangladesh.

Run by a sister firm of the 2006 Nobel Peace Prize-winning Grameen Bank, it enables local women to earn an income from renting mobile phones to fellow villagers.

The scheme, which has been broadened out to Uganda and Rwanda, could reach India this year.

Meanwhile, some farmers are able to receive better prices for their crops because they have access to information on market prices, primarily via mobile phones.

And new technology from Bharti Telesoft, is allowing the local villagers to sell mobile phone time to the poor in even smaller units – through prepay top-ups that are done through phone-to-phone links rather than using cards.

TradeNet, a Ghana-based trading platform, is one of the number of projects allowing farmers to access prices and offers from traders by mobile phone.

Accompanying the growing number of anecdotes suggesting that mobile phones can change lives are studies which confirm the link between mobile phones and growing economic prosperity.

A ground-breaking study led by an expert from the London Business School in 2005 concluded that an increase of 10 mobile phones per 100 people in African developing countries would increase GDP growth by 0.6%.