Mobile Communication and Developing Countries

Today's Sunday New York Times (April 13, 2008) featured a piece in the NYTimes Magazine on the role that mobile communications - cell phones in particular - play in the developing world. The story focused on the efforts of Nokia 'ethnographer' Jan Chipchase (UK citizen) who travels the world to observe and record the peculiar uses of cell phones in developing countries - from Ghana, to Uzbekistan to Tajikistan and parts of Central and South America. Reports the Times:

"Several companies, including Intel, Motorola and Microsoft, employ trained anthropologists to study potential customers, while Nokia’s researchers, including Chipchase, more often have degrees in design. Rather than sending someone like Chipchase to Vietnam or India as an emissary for the company — loaded with products and pitch lines, as a marketer might be — the idea is to reverse it, to have Chipchase, a patently good listener, act as an emissary for people like the barber or the shoe-shop owner’s wife, enlightening the company through written reports and PowerPoint presentations on how they live and what they’re likely to need from a cellphone, allowing that to inform its design."

Clearly the 3.3 billion cell phone users worldwide and growing - faster than the growth of Internet subscribers - is testimony to demand by people all across the world, including developing countries where annual incomes are as low as $300 per year. Whatever the arguments may be about the metrics of comparisons between such annual incomes in developing versus developed countries, the fact remains that even in lower income economies, cell phones and voice communications appears to have a substantial value associated with it. One such value is theorized to be a kind 'just in time' transactions economy.

This 'just in time' economy manifests in a number of ways. One is the Grameen Phone model whereby a $150 phone 'kit' sold to primarily women, were then turned into a phone service for lease by the surrounding community whereby the women would quickly recoup their microloans used to finance the operations. Michael Mace, blogger on mobile phones, calls this 'spontaneous society' and makes a case for this growth based on the more 'realtime' centric societies.

Another example of a 'just in time' practice enabled by the cell phone is the idea of micro payments using the telephone as 'wallet.' This can involve a small purchase, or the payment of a debt. But the phone plays a critical role in such 'online' banking, and the article points out that estimates are generally high for growth in this area especially since 'latent demand' in rural parts of the world - including Africa - for banking services are so high, we will likely see a further rapid expansion of mobile phone purchases as this deman gets filled by users who want more than a leased line.

It is this 'just in time' thinking that will likely transform the developed world as well. Whether it is the kind of transportation system that depends on mobile communication verification of user credentials to 'ride share' or use a particular public transportation system; or the growth of mobile-based banking; it is clear that transactions will likely play a key role in mobile communications everywhere. What is not so clear is the separation between advertising-based models and membership/subscription based business models. If the Web of today (2008) is an indicator, then advertising would appear to be the safer bet. Yet, given the transactions-oriented use of 'just in time' mobile economics, it is not entirely clear that the advertising model will dominate mobile phone communications. Rather, it may be secure, branded, 'trust based,' subscription services.