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Wednesday, September 7, 2005

Mobile telephony and pro-poor growth

By Rob Katz

Ethan Zuckerman of the WorldChanging blog writes eloquentlyabout the importance of mobile phones in low-income communities. He identifies three factors critical to thespread of mobile telephony: new versus replacement infrastructure,pay-as-you-go pricing, and used phones.

Zuckerman is right on. By leapfrogginglandline infrastructure, developing communities have been able to adopt moderntechnology faster and cheaper than we have in the U.S.,for example. Pay-as-you-go pricing,meanwhile, lets low-income consumers afford to make a call when they need to,rather than sign up for lengthy guaranteed contracts–as documented in thiscase study of Smart Communications in the Philippines. Used phones, operating on analog networks,are often more affordable than new GSM handsets - and the shipping containers they arrive in can even be used as shared-access, entrepreneur-run phone shops.

However, it’s only towards the end of his post where Zuckerman hits the nail onthe head: ?More fundamental than these three factors is the fact that very poorpeople are willing to pay money to communicate.? He cites Grameen Phone as an example–read thecase study here. (PDF)Mobile telephony is already profitable for the telecoms. Now the question is: how do we incorporatethis leapfrog innovation into a range of pro-poor business models? Stay tuned.

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