Report Studies How Mobile Phones Affect Poverty

Wednesday, November 28, 2007

DIRSI (Regional Dialogue on the Information Society) has released the final draft on its report about mobile phones and poverty in Latin America and The Caribbean. The report abstract notes that access to telephony for low-income groups is largely based on different strategies of use around mobile telephony.

The main goal of this research project was to understand the strategies employed by the poor in Latin America and the Caribbean to access and use mobile telephony services, as well as to identify the major market and regulatory barriers for increased penetration and usage. More generally it investigated how access to mobile telephony contributes to improving the livelihoods of the poor.

The results show that mobile telephony is highly valued by the poor as a tool for strengthening social ties and for increased personal security, and that it is beginning to prove useful for enhancing business and employment opportunities. Overall, the results suggest that the economic impact of mobile adoption by the poor is mediated by social capital variables such as the strengthening of trust networks and improved coordination of informal job markets.

Interestingly, the level of shared ownership found was relatively low: in most cases users own their own handset and service. The notable exceptions are Colombia and Peru, where a healthy service resale market in urban areas (with very competitive tariffs) reduces ownership incentives.

They also highlight the urgent need to rethink public policies that are premised on the mobile phone as a luxury good. For the poor, mobile telephony has long become the most cost-effective and accessible alternative.

The report is based on over 8,000 face-to-face interviews were conducted with individuals aged 13 to 70 residing in low-income households in Argentina, Brazil, Colombia, Jamaica, Mexico, Peru, and Trinidad and Tobago.

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