The “end of isolation” for the world’s poor – From 2005 to 2010, cell phone use tripled in the developing world to nearly 4 billion mobile subscriptions, according to the International Telecommunications Union (ITU). Nowhere was the growth faster than in Africa, which saw mobile use grow more than 400% during that time frame, according to ITU. That means more money — a 2006 University of Michigan study found that every 10% increase in cell phone penetration grows the local economy by 0.6%.

The simple ability to make a phone call has far-reaching economic consequences, note economist Jeffrey Sachs said.

“Places where traditionally, people would walk livestock for a week or two without knowing what kind of price they’ll fetch — should they go to Khartoum, Nairobi or Port Saeed? Now they can call ahead and find out where to get the best price,” Sachs said.

The low cost of setting up mobile towers and plunging costs of handsets has allowed cell phone coverage to grow even in poor, rural locations, said Michael Joseph, former CEO of Safaricom, a Kenyan telecom provider which grew from 17,000 users when he started in 2000 to more than 18 million when he stepped down in 2010. “There’s probably more pervasive coverage in Kenya than in many areas in Europe,” Joseph said.

Business models set up for selling services to the poor — such as buying pre-paid phone service and charging by the second rather than the minute — made cell phone use affordable, but Safaricom’s development of banking services via cell phones revolutionized the telecom business in poor countries.

Full CNN story http://www.cnn.com/2011/10/09/tech/mobile/mobile-phone-poverty/

 


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