[Vnbiz] Developing countries reach for the phone

[Phan, Tai]

Developing countries reach for the phone

Cellular technology is transforming nations as they emerge from economic troubles.

Malcolm Foster | The Associated Press 
Posted February 5, 2007 


 
HANOI, Vietnam -- Nguyen Huu Truc's trusty cell phone has revolutionized his small embroidery business -- and his life.

When he bought his first mobile phone in 1995, Vietnam had one fixed-line phone for every 100 people, and cell phones were a pricey novelty. Communication was difficult, forcing Truc to make time-consuming trips to suppliers and buyers.

But these days, Vietnam has 33 telephones per 100 people -- and two-thirds of the phones are mobile. Now Truc can make calls on his cell phone from virtually anywhere in the country for about 10 cents a minute.

"I cannot imagine what it would be like if I didn't have my mobile phone for a day," he says. "It's no longer just something that only the rich can afford. Now, it's a basic means of communication."

Truc's experience provides a glimpse into how wireless communication is helping fuel Vietnam's rapid growth -- and transforming dozens of other developing nations from the ground up.

Today, mobile phones are the primary form of telecommunication in most emerging economies, fulfilling much the same role as fixed-line phone networks did in facilitating growth in the United States and Europe after World War II.

Some developing nations have even jumped out in front as mobile pioneers. In the Philippines, more than 4 million people use their cell phones as virtual wallets to buy things or transfer cash.

As service charges and handset prices have plunged and coverage areas have expanded, cell-phone subscriptions in the developing world have surged fivefold since 2000, to 1.4 billion at the end of 2005, according to the U.N. International Telecommunication Union.

"There's enormous entrepreneurship and creativity worldwide, and through mobile phones, you're providing people with the tools -- rather than aid -- to earn a living," says Leonard Waverman, a London Business School professor.

"It's not a magic bullet, but it's a vital tool," says Waverman, whose research was partly funded by British mobile carrier Vodafone Group PLC.

By bouncing signals off base stations, relay towers and satellites instead of over copper wires strung to villages and homes, cell phones can hurdle mountains. Mobile phones are not hampered by illiteracy -- which is a barrier to computer use -- giving millions new opportunities.

In India, fishermen call ahead to ports to see where they will get the best deal on their catch. Kenyan farmers check crop prices on a service offered by local provider Safaricom.

In South Africa, cell phones serve as a virtual office for carpenters, painters and other laborers who post their numbers on handwritten signs advertising their skills.

The Philippines has become a global leader in mobile commerce. Since 2000, Smart Communications Inc., the country's largest carrier, has allowed subscribers in its Smart Money program to hold limited amounts of cash in electronic wallets linked to their mobile accounts.

"If your son or daughter is away at school and needs money, this is an easy way to send it to them," says Ramon Isberto, a Smart spokesman.

This kind of application holds promise for millions in developing countries who have no bank accounts and for whom transferring money can be difficult or risky.

But even inexpensive phone services are still too expensive for many who live on one or two dollars a day.

That has given rise to communal phone use and a cottage industry made up of people who resell phone service for a living.

Both are typified in Bangladesh's "Palli Phone," or village phone, program. A quarter million "phone ladies" buy mobile phones on credit from Grameen Bank, winner of the 2006 Nobel Peace Prize along with its founder Muhammad Yunus, providing wireless communication for the community and themselves with a livelihood.

Hasina Banu, who lives in a remote village in northern Bangladesh, bought a phone from Grameen for about $110 and each week pays back about $2.50. She now earns about $25 a month from the phone and plans to use that money to open a small grocery store.

But even in rural Bangladesh, she says, competition is heating up among other "Palli Phone" sellers.

"Now I get less customers," Banu says. "But I am happy that now I have some money with (which) I can expand my business."