Data Supports Mobile Phone Benefits

Posted by: Jack Ewing on August 13

Nokia and other companies in the cell-phone industry have been saying for several years that their products had a positive effect in poor countries, and last year I observed myself the effect mobile communications are having in Africa. Now there is data to back up the anecdotal evidence. The GSM Association, the mobile phone industry group, has just issued a report that summarizes 20 of the most important studies on the topic.

Some of the key conclusions:

—Farmers and fisherman earn more from their produce when they use mobile phones to get information on where demand is highest. At the same time, consumer prices go down because less produce goes to waste for lack of buyers. Use of cell phones by grain traders probably helped ease the impact of a food crisis in Niger in 2005.

—Tradespeople and small business owners are better able to find employment and boost their incomes, because they can communicate with their customers.

—People spend less time and money on travel. They can also summon help in emergencies.

—Mobile phones help strengthen social bonds. City dwellers can stay in better touch with relatives in the home village, and also transfer money using mobile banking.

—The status of women has risen in countries such as Bangladesh where they establish village phone businesses.

—Acquiring a mobile phone is a very high priority for people in emerging markets and they find ingenious ways to do so, helping to explain the explosive growth of mobile phone usage even in very poor countries.

—Several studies found a correlation between macroeconomic growth and cell-phone penetration.

However, the studies also showed that cell phones haven’t fully lived up to their promise in areas such as mobile banking. Most of the people who use services such as Safaricom’s M-Pesa in Kenya are transferring money, but not using more sophisticated banking services such as credit. And there may be a negative social effect because workers in cities send money home via their phones rather than visiting in person.

There’s also a need for more research before we fully understand the impact of mobile communications on poor societies, the GSMA report says. Still, it’s encouraging to see a profit-driven industry having such a positive effect on the world.