NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Wednesday, May 18, 2005

Popularity linked to expansion of private capital
The rapid growth in mobile phone use throughout the developing world, especially in sub-Saharan Africa, is helping to transform national economies, producing a thriving entrepreneurial class and marked growth in private capital, according to Leonard Waverman, an economist with the London Business School.
Speaking at the American Enterprise Institute (AEI) in Washington May 5 on a panel of fellow economists and representatives of one of Europe’s largest wireless telephone providers, Vodafone UK, Waverman pointed to the extensive use of mobile phone accounts in the developing countries as a new source of economic development in Africa.
Although mobile phone penetration is only about 9 percent in Africa generally, mobile phones account for approximately 75 percent of all telephone connections in 19 of the poorest African countries, Waverman said, adding, “If you look at it globally, the growth in the number of mobile telephone subscribers in developing countries is twice that in the developed world”
In most instances, he explained, mobile phone infrastructure is easier to set up and cheaper to maintain than the standard fixed-line telecommunications systems that were technological holdovers from the colonial past and often controlled by the government. The new systems sidestep the control issue, have fewer technical problems and are having a noticeable effect on the future of telecommunications in Africa, as antiquated analog networks are being replaced with newer digital ones.
Story found here.