“Mobile Marvels”: The digital revolution and the bottom billion part 2

This weeks’ reading for Emerging Media included a fantastic article from the Economist (“Mobile Marvels”, pp. 2-5, 10-13, September 26, 2009) that further solidified in my mind that the digital revolution will come to be seen as one of the most influential “revolutions” on the developing world and its efforts to overcome the poverty gap. Let me clearly state that I realize that the digital revolution is not happening TO the developing world, and is not a revolution in the broader context that we associate it (abrupt change in socio-political institutions), but instead is the shift in technology from analog formats to digital formats.

The reason why I feel so strongly about the potential that the digital revolution provides to the developing world is exemplified in the creative ways people in these countries are using digital technology to overcome health, economic and productivity challenges. Combine this with creative thinking by corporations to carve out locally relevant business opportunities, and NGO’s goodwill efforts, they collectively are beginning to address several of the poverty traps that Paul Collier wrote about in the Bottom Billion. These small efforts, compounded, could result in substantial improvements in quality of life, broader economic advancement and political stability.

The “Mobile Marvels” articles addresses three trends that are reshaping telecommunications and shifting the center of gravity from developed countries to developing countries for where substantial change is taking place.

The first trend is the steadily increasing availability of mobile telecommunications in the developing world. In part this is due to the decreasing cost of materials as a result of innovations in technology which in turn make the devices more affordable. But it is also a product of business models designed specially to address the unique challenges of the developing world. Many of these ideas are coming from local mobile operators who are forced to design solutions which allow them to be profitable while serving low income and therefore low spending customers. An example is the joint venture in Bangladesh between local operator GrameenPhone and Grameen Bank along with a Norwegian telecoms firm to help “telephone ladies” across the country purchase a mobile handset, antenna and battery through micro-loans. The telephone lady would then rent out usage of the phone to her village neighbors using a portion of the proceeds to pay back the loan. Usually within eight months the loan is paid in full and the future profits can then be applied to other needs. Although the telephone ladies make up a relatively small percentage of GremeenPhone’s total customers, they account for roughly one-third of the total calls made on Gremeen’s network.

The second trend is the quick rise to the top of two Chinese tele-coms equipment makers, Huawei and ZTE. These firms have challenged the large western hemisphere based tele-coms equipment makers partially through low cost models and innovation all attributed to their need to service emerging market economies. Now, Huawei and ZTE are replacing Ericsson, Cisco and other big players in major accounts such as Cox Communications, T-Mobile, Vodofone and others. Not only is this shift providing China an economic boost, but it’s also positioning Huawei and ZTE into leading positions to drive future innovation in the market.

The third trend is the emergence of new phone based services focused on providing health, economic and productivity benefits. In Uganda a partnership between the Grameen Foundation, local operator MTN and Google has resulted in text based services to Ugandans providing agriculture, health and market information. Through a service called Farmer’s Friend, a tomato farmer can make better informed decisions about when to plant his crop by texting for information about the upcoming monsoon season. In another scenario, a local rice farmer can seek advice on how to maximize his crop output and deal with potentially harmful insects. At the other end of the spectrum is Google Trader, which matches sellers and buys within a certain proximity, by allowing the seller to announce their product and location. Then buys can easily identify sellers near them. Now buyers and sellers no longer need to rely on chance that they will happen to be in the same location at the same time when their needs overlap.

These are just a few examples within each of the trends discuss in the article, and although I can’t address all the positive ways mobile technology is helping to change quality and way of life of those in the developing world, I hope I’ve provided a glimpse at why I feel so strongly about the impact the digital revolution will have on these countries.