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How mobile phones can help reduce poverty

You think mobile phone are costly and often overrated devices: that is because you do not live in a LDC (not a TV but a least developed country) and you probably also are some kind of rich urban privileged educated person. If you were poor in Nepal or Nigeria, having a mobile is actually a way of getting richer, that is to say, less poor.

Olivier Languepin

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You think mobile phone are costly and often overrated devices: that is because you do not live in a LDC (not a TV but a least developed country) and you probably also are some kind of rich urban privileged educated person. If you were poor in Nepal or Nigeria, having a mobile is actually a way of getting richer, that is to say, less poor.

Poor people often lack information that is vital for the work they do. This information can include current market prices, weather reports, and new opportunities for earning income. Lack of such up-to-date knowledge adds to their vulnerability. For example, fishermen may only have time to visit one port while their catch is fresh. If the buyers at the port they select are paying a lower price than elsewhere, they must still sell there. Mobile phones can enable them to compare prices and choose the best options while still at sea. In southern India, for example, fishermen´s profits have increased by 8 per cent thanks to better market coordination. When better access to information and better chances to communicate are available to poor people, information and communication technologies (ICTs) can help them to raise their incomes significantly.

The rapid diffusion of mobile telephony is making it possible – for the first time – for poor people to have immediate access to interactive communications. The penetration rate of mobile phones is much higher than that of other ICTs such as fixed telephone subscriptions, internet use, and broadband subscriptions (chart 1). Text messaging and the use of “missed calls” help to make mobile use more affordable for the poor.

Along with this greater availability, new applications and services that can be used with mobile phones are emerging in low-income countries. Mobile phones are used for voice communications and short messages (SMS), and increasingly for accessing the internet. In some developing countries, mobile phones now allow people without bank accounts to make person-to-person payments, money transfers, and pre-paid purchases. This allows for lower transaction costs, and easier, cheaper, and safer money transfers to remote locations.

UNCTAD´s Information Economy Report 2010: ICTs, Enterprises and Poverty Alleviation released today, shows that in more and more low-income countries, farmers, fishermen and entrepreneurs have used mobile phones and other forms of communication technology to improve their livelihoods. Over the past few years, the penetration rate of mobile phones in the world´s least developed countries (LDCs) has surged from 2 to 25 subscriptions per 100 inhabitants. The technology involved is now simple and affordable enough to be purchased and used by the poor. They become “connected”, although often in ways that are different than in developed countries.

The Information Economy Report 2010 urges governments and other policymakers to take full advantage of these new opportunities to combat poverty. It says that this requires keeping a close eye on the innovative uses that develop spontaneously among the poor for mobile phones and other information and communication devices, and then using well-designed policies to boost and widen these trends.

Bangkok Correspondent for Siam News Network. Editor at Thailand Business News

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