At Connect 2007 in Boston, I had a wonderful discussion with Paula and Urs Muller of Net-Scale Technologies during the course of which I mentioned my interest in communications services for emerging markets. Later I sent them an email with some URLs summarizing various posts on the productivity benefits of investment in telecom and for my post about the adoption of cellphones by fishermen along the coast of India's Kerala state between 1997 and 2001.
Most of my information and focus has been on markets in Asia and Africa, so I was please when Paula sent back pointers to comparable studies on mobile telephony in Latin America. From Paula’s first email:
Until our discussion, we considered telecommunications and more specifically mobile communications on fifth place or even further down in terms of human priorities, after food and shelter, transportation, energy, and education. What all these studies have shown is that telecommunication has multiple impacts affecting the whole dynamics of people's lives, which is different from the other categories.
I did a quick research for South America revealing the same findings. In particular, I was impressed by the finding that the "advantages offered by mobile and its inherent mobility [would] mean that extending the mobile network is a better means of connectivity than public access solutions" (http://www.regulateonline.org/content/view/899/76/). Under this link http://www.gsmlaa.org/en/article.php?id=140 you can find 2 studies from GSM Association Latin America, about the economic and social impact of mobile telecommunications in Latin America.
I've now looked at these articles. The Frost & Sullivan study "Social Impact of Mobile Telephony in Latin America" released by the GSM Association in Latin America and AHCIET, is reminiscent of the LIRNEasia study “Telecom Use on a Shoestring” showing (not surprisingly) the impact of communications is a human phenomenon, not specific to region or culture. Among the findings in the Frost & Sullivan study:
- Mobile phones are used to maintain both strong and weak bonds, but the most significant increase in communication is between relatives and friends in the same community.
- Even poor users do not consider their mobile phone to be a luxury but rather a necessity. Nearly two-thirds of those interviewed said phone expenses would be the last (32%) or nearly last (30%) expense to be cut.
- 58% said the fundamental value was the possibility of being located at any time and any place.
- A relatively small percentage (18%) of lower income users said the main advantage of having a mobile device was in obtaining work.
When combined with the December 2005 study, “The Economic Impact of Mobile Services in Latin America” which shows the impact of mobile telephony on GDP growth, some policy implications are clear, among them:
- Leave price setting to competitive market forces
- Lift restrictions on foreign direct investment
- Maximize regulatory certainty.
- Don’t hobble the mobile industry with industry-specific taxes.
The review on the World Dialogue on Regulation for Network Economics website is interesting. As the title "Private sector perspective on closing market gaps" suggests, regulators are very suspicious of any research sponsored by industry groups. But despite the tone of the article, it does mention a World Bank / Regulatel report "New Models for Universal Access in Latin America" which highlights some of the problems with “universal access funds.”
On the other hand, the GSMA sponsored studies failed to push what may be the most significant factor in promoting mobile phone penetration — rampant competition, i.e. more licenses, more spectrum and more competition. Certainly that’s the formula that’s worked in India, Pakistan, Nigeria and other countries with more rapidly growing mobile phone penetration.
All and all, this is a ton of data from a region where I’ve had less information. Thank you Paula!
One thing remains clear. The need to communicate is human, cutting across all regions and all cultures and the policies needed to promote mobile phone adoption are remarkably similar across countries, governments and cultures.