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Rise of Mobile Phones Ring Changes for World's Poor

By Shafiq Alam
Agence France-Presse
April 22, 2005

In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.

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A Chinese farmer examines ears of corn in a field in Huai De county in Jilin province. Bloomberg
With just four calls from a mobile phone, remote Bangladeshi farmer Mir Jahid Hussein can now ensure he gets the best price for his jute seeds - something he could once only dream of.

As it is for tens of millions of poor rural-dwellers in developing countries from Bangladesh to Botswana, mobile phone technology is revolutionizing Hussein's life for the better, enabling him to cut out cheating middlemen and deal directly with buyers from district markets.

What 10 years ago was mostly a trendy gadget for savvy urbanites in wealthier countries, is now a vital tool of trade in some of the world's most remote areas, many of which had never previously had access to landlines or other means of long distance communication.

The march of the mobile phone phenomenon is relentless, with 1.65 billion cellular connections worldwide at the end of 2004 and forecast to rise up to 10 percent annually to US$2.32 billion in 2008, according to U.S. research group Gartner Inc.

Like most people living below the poverty line, Hussein, who ekes out a meagre living from half a hectare of land, can't afford a phone of his own. Despite this he is still able to take advantage of the technological revolution. Just after dawn in western Bangladesh, Hussein knocks on the door of his village's mobile phone man and makes three calls at four taka (US$0.06) each to different markets in the district.

"The calls cost me 12 taka but I have to find out the price in each market to know if it is the best time to sell my jute seeds from last season," he says. "These jute seeds are all I have to make my living for the next three months so I want to know if I will make a profit by selling now," he explains.

A few minutes later another farmer, Munshi Habibur Rahman, arrives to make a call. He wants to know if he should pick his crop of aubergines today to sell at the market tomorrow. "For us four taka is big money," he says. "But it saves you from slides in the market."

For years, Bangladeshi farmers risked being tricked out of their slender profits by cheating middlemen. But now mobile phones have allowed them for the first time to sell their crops direct to the highest bidder. "Gone are the days when we went to the market blindfolded to sell our crops at a price dictated by the commission agents," Rahman says. "Now I have the choice of selling my crops at whichever market gives me the best price."

After becoming available in 1993, mobile phones took off slowly in Bangladesh where nearly half the 140 million population lives on less than US$1 a day. But in the past 18 months, the market has more than doubled, growing from 1.5 million subscribers in early 2004 to 4.2 million at the end of February 2005, according to leading operator GrameenPhone.

Many more have access to mobile phones through village phones rented out by the minute to callers such as Hussein and Rahman. The number of people operating village phones through the company GrameenPhone rose from a little over 2,200 in 2000 to 120,000 at the end of February, says the company's general manager Syed Yamin Bakht.

In China, too, poor farmers have benefited from the spread of mobile phones through text messages giving them information about prices, weather forecasts and pest control. Ministry of Information figures released in January showed the number of Chinese subscribers topped 334 million in 2004, up 65 million on the previous year. The rate of growth in India's mobile phone market is second only to China. The country is adding an extra 1.8 million customers every month compared to five million per month in China.

According to the Cellular Operators Association of India 49.92 million Indians now possess a mobile phone in a country where bureaucracy has traditionally made land lines difficult to secure. The number now exceeds the number of land lines, which stands at 45 million.

"It took us two years - I am dead serious - of pleading with the state telecom authorities to get four landline phones here," says Nikhil Choudhury, who runs a remote 4,000 hectare tea estate in Assam, a northeastern state afflicted by a violent insurgency. "This year I was stunned when private mobile phone providers hounded us to take their service. What a change. We snapped up the mobile offer as the land line phones invariably die on us during the monsoon when we need them most," he adds.

In South Africa, thousands of migrant workers and their families have taken advantage of their new-found access to mobiles. "The cellphone revolution has allowed users to leapfrog from archaic forms of communication straight into the digital era," says Yvonne Muthien, spokeswoman for the MTN Group, the country's second largest mobile phone company with 7.7 million subscribers.

In the past, millions of rural South Africans went to a local store to make their calls or write letters. "We used to write a letter to inform a family member working in the mine about any problem the family faced. That took weeks, but now we have cell phones," says Mantinga Mazantsana, a taxi driver.

In the past, many were denied a land line because they did not have a bank account or a fixed address to which bills could be sent. Now, more than 85 percent of black-owned small businesses rely solely on mobile phones, according to a study by the world's biggest cell phone provider Vodafone Group. "The supply of telecommunications services uplifts communities and empowers them with the ability to communicate," added Muthien.

The biggest growth in mobile telephones is now expected to come from developing countries such as Indonesia and India, analysts say, as telecoms companies switch strategies away from saturated developed markets such as Europe, the United States and Japan to largely untapped poorer nations.

"Europe is almost at 100 percent capacity, while South Africa is around seven percent," says Andrew Chetham, principal analyst for Gartner Inc. in Hong Kong. "Companies are now getting better at making money from the lower end, with cheaper handsets, especially in the Philippines," says Chetham, who says handsets are generally priced between US$200 and US$300. "Everyone is looking for the US$40 handset which can still make them money," he adds.

But not everyone will be joining the revolution anytime soon. Myanmar is one of the few countries where mobile phones have yet to permeate widely - strictly controlled by the military government, they remain the exclusive preserve of the wealthy and well-connected. There are currently fewer than 200,000 cell phones in use in a country of 42 million people.

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