Can cell phones and other inexpensive wireless devices close the digital divide in the world's poorest countries?
Seventh in a series of articles assessing the future of the Internet. For more, check out internetevolution.com, with its ThinkerNet blog of more than 90 contributors, including Craigslist founder Craig Newmark, author Andrew Keen, security maven Kevin Mitnick, Novell CIO Ross Chevalier, and Broadband Directions president Will Richmond, as well as videos, Webinars, news, and the latest big report, "Can The Internet Save The Planet?"
At first glance, the idea that the Internet could have a major impact in the poorest parts of the developing world--Africa in particular--seems unlikely. Few people in those poor, rural areas have access to PCs or even electricity, for that matter. The Internet infrastructure is limited to major urban areas in most countries, and broadband services are scarce and quite expensive where they do exist.
However, the picture is changing fast. The key is to look at the rollout of mobile telephone infrastructure, which is already widespread and growing rapidly in developing countries.
"For the developing world, the Internet experience is going to be a wireless experience," says Susan Schorr, the head of the International Telecommunication Union's Regulatory and Market Environment Division. Sixty-one percent of the world's 2.7 billion mobile phone users are in developing countries, compared with 10% of the world's 1 billion Internet users, Schorr says.
Online communities and markets are emerging in Africa, which accounts for more than half of the world's poorest countries, with people using low-cost cell phones rather than PCs for connectivity. They're providing vital data and information to community-based workers, connecting farmers with trading networks for their crops and commodities, and more broadly, providing access to political and social information that's changing people's lives.
Cell phones keep Kenyans in touch
Photo by Nathan Eagle/MIT courtesy of kiwanja.net
Africa has only 3.5% of the world's Internet users, according to Internet World Stats. The picture varies across the continent, with South Africa and northern African countries having the highest percentage of their populations online, but the vast majority of Africans, especially those who live outside urban areas, have little or no access (see chart, below). Even in cities, Internet access can be quite slow; it's often dial-up, with internal country traffic as well as traffic between African countries frequently routed through Europe or other non-African countries.
The International Telecommunications Union's latest statistics pegged mobile cellular use in Africa in 2006 at 7.2% of users worldwide, but cell phone use on the continent has been growing at more than twice the rate of the rest of the world. And the statistics don't tell the full story, since in countries where accessing a phone previously meant traveling long distances to the nearest landline, cell phones provide a distinct advantage. A 2005 survey by Vodafone found that 97% of 223 Tanzanians polled had access to mobile phones, while only 28% had access to landlines.
Key to making cell phones the portal to the Internet is making them affordable. India is the leader there, with a cell-phone-subscribing population of 226 million--about 19% of its total population--and as many as 7 million people a month signing on as new subscribers, says Sridhar Pai, CEO of Tonse Telecom, an Indian telecom advisory firm. As cell phone use has grown, costs have been driven down to affordable levels for people with low incomes.
Carriers have unbundled services from equipment, letting them charge less for service because they're not subsidizing handset costs. About 85% of all Indian cell phone contacts are prepaid, making it easier for customers to pay for service and providing more cash up front to operators. In addition, as the handset market has gotten more competitive, LG, Motorola, Nokia, and other companies have begun manufacturing them in India, putting downward pressure on prices, Pai says.
In Africa, shared cell phone services are taking off. The Grameen Foundation has brought the Village Phone model, originally developed in Bangladesh, to Uganda and Rwanda. People wanting to become standalone mobile phone operators can take out microloans, letting them buy a Village Phone kit that includes a cell phone, a rooftop antenna that picks up cellular signals from 25 kilometers away, and a car battery or solar panel for recharging. They set up shop in their homes, selling phone calls to other villagers.
There are at least 13,000 of these businesses in Uganda, according to the BBC, and their proprietors earn an average of $23 per month--a good living by Ugandan standards.
Village Phone doesn't provide Internet access. Grameen and cellular service provider MTN Uganda have launched a study to assess what additional services operators might offer, including Internet access.
The Business of Going DigitalDigital business isn't about changing code; it's about changing what legacy sales, distribution, customer service, and product groups do in the new digital age. It's about bringing big data analytics, mobile, social, marketing automation, cloud computing, and the app economy together to launch new products and services. We're seeing new titles in this digital revolution, new responsibilities, new business models, and major shifts in technology spending.
In this special, sponsored radio episode we’ll look at some terms around converged infrastructures and talk about how they’ve been applied in the past. Then we’ll turn to the present to see what’s changing.