Bharti Airtel and MTN have walked away from a long-in-the-works affiliation that could have created the world's third-largest mobile operator. Bharti, India's biggest mobile operator, and South-Africa based MTN, Africa's biggest, were discussing mutual investment that would likely have led to a merger. It's not entirely clear why the deal collapsed, but it appears the companies were having trouble navigating their respective legal systems, ant MTN was facing pressure from within the government, where forces wanted the company to retain its South African identity.
This is big news for both African and Indian wireless industries, and, I have to say, probably bad news for most consumers (or prospective consumers)-- particularly in Africa. Bharti has done an extraordinary job creating a successful business model for bringing wireless access to underserved parts of India. A merger may have gone a long way to similarly connecting all Africans-- even those currently way off the grid-- to mobile networks.
A report from Gartner Research announced this week that 1 in 5 households in the world has broadband internet access. Well that's pretty good, but color me not that impressed-- the 3.5 billion people with mobile phones create a much broader network. Whether you're a corporation focused on capturing emerging markets, or a non-profit looking to improving lives around the world, the mobile audience is a lot bigger.
But if you take a look at the chart (cribbed from the Economist) at left, you'll see an interesting counterpoint to the above. While mobile phones might offer broader impact, broadband penetration packs a much more powerful punch. A 10% increase in mobile subscriptions causes a 0.8% growth in GDP in a develping country, but a comprable increase in broadband subscriptions leads to a 1.4% growth.
So should we be more interested in expanding mobile networks, which have a good deal of infrastructure in place and are spreading like the chicken pox all by themselves, or in pushing broadband internet, which will promote faster growth?
I'm relieved to say that I don't think we'll ever have to make that choice. While it's great to see new undersea broadband cables beginning to tie Nigeria, Ghana and Kenya into the global network, it's hard to imagine a fibre backbone running securely through Central Africa-- and it won't ever be necessary. If you take a look at the second pilfered graph, projections suggest that sometime in 2011, more people will get their broadband over their mobile device than through a cable running into their house. Already, more than half the phones imported to Africa have data capabilties.
This is part of a broader trend of the gradual merging of mobile and internet services. 4G networks will be up and running in less than two years' time, and at that point, a netbook with web access over mobile networks will be nearly as good as a laptop plugged into the wall. Before you know it, every device will connect to the web wirelessly over mobile broadband networks, and bringing broadband into the developing world won't require costly, risky cables.
If you're looking for impact in the near-term, simple mobile capacity is the way to go. But if you're looking long-term, internet services will be the cheaper, deeper, faster option before you can say mobile broadband.
The NY Times reported yesterday on Question Box, an innovative joint effort of Rose Shuman's Open Mind, and the Grameen Foundation, active in both India and Uganda. The service allows individuals to dial into a call center-- either through an actual phone box, or via a mobile-equipped Question Box employee-- to ask questions and get information on agriculture, commodity prices, or any number of other things.
On the user end, the program is basically a variant on Grameen Phone's "phone lady" concept-- using a communal phone to provide access for those without their own. As handset prices drop, and more and more people have their own phones, this model is less and less relevant.
The other half of Question Box-- the call center-- is more unique. In India, callers talk to people sitting in front of computers, who can answer their questions on the web. In Uganda, because of shoddy internet connectivity, callers are connected to people with access to a database of relevant local information and previously asked questions.
The Western analog of this program might be KGB, a company you may know from their TV ads encouraging you to text in whatever asinine question pops into your head, and receive an answer moments later. Yet more evidence that, while this technology is making life a bit more convenient in the parts of the world with ubiquitous internet access, it's making life massively more comfortable, more profitable, and more survivable for people in the developing world.
Sure, this program is small-bore. There's no scalable business model to support it, and the database of answerable questions is obviously limited. The rapid spread of mobile phones is making it less relevant, and as 3G networks allow the internet to penetrate deeper into India and (eventually) Africa, the call centers will also become obsolete.
Still, this kind of innovation is what's needed now-- with such a new technology, we'll only get anywhere by trying everything, and seeing what really works for the end users.
- Deconstructing Mobiles for Development - The good people at Mobile Active have initiated a new series of essays to honestly and critically assess the promise and failings of mobiles in the developing world. The first installment, from Ethan Zuckerman, analyzes some of the challenges posed by working over a centrally controlled mobile network, as opposed to a peripherally-controlled network like the internet. It's a good read, and the whole series will be well-worth watching. (via @mobileactive)
- New Operating Systems for Africa - IBM is launching a new software package to run on Canonical's Ubuntu linux operating system. Designed to work on low-cost netbooks that have become a favorite of many African businesses, the software will use cloud computing, and offers a full suite of applications. And at OLPCNews, a rave review of the Xtra Ordinary operating system for the One Laptop Per Child XO machine.
- Splash in Sierra Leone - Sierra Leone, a country known mostly for its blood diamonds and child soldiers, is about to become the latest country with a mobile payment system. "Splash," as it will be called, will allow mobile-to-mobile payments in the style of M-PESA in Kenya.
Hey, welcome to Global Mobile, a new blog at NDN. I've been doing this for about a month now, and enjoying it thoroughly, so thanks for reading, and visiting, and helping me convince my boss that this is a worthwhile endeavor (I jest... this was all his idea, really).
If you're new to NDN, we're a think tank based in Washington, DC. We are dedicated to making this country and this world a better, more just, and more sustainable place to live, and we focus our work on cutting edge issues that are sometimes a little ahead of the curve. Which is to say, everything you read here-- you'll be reading it in the Washington Post a few years from now. Or so we like to think.
Though this blog is new, we're not particularly new to the power of mobiles. Our affiliate the New Politics Institute was writing about cell phones in politics long before Barack Obama told you he picked Joe Biden via text message. Simon and Alec Ross co-authored a paper in 2007 about the importance of the global communications network, suggesting that we better prepare our children for this new world. And last year, Tom Kalil, now Deputy Director of the White House Office of Science and Technology Policy, wrote for our affiliate the New Policy Institute about the "Mobile Revolution." So, this blog is building on a pretty deep track record dealing with this stuff.
From now on (or at least for the next few weeks), I'll be digging old video out of our archives every Friday, to show you some of our history in this space. Below is an interview with Simon from earlier this summer, after our event with the UN Foundation and Vodaphone Foundation releasing a new report on mHealth for Development. He talks about our belief in the power of the mobile network to enable better healthcare around the world.
Thanks for stopping by, and hope to see you back here soon. -Sam
The latest Economist covers the powers and wonders of mBanking-- it's good to see the subject getting attention from the foremost weekly newspaper of the former British Empire. M-PESA, the success story from Kenyan mobile operator Safaricom, gets some attention in the article, which then extrapolates outward:
Extending mobile money to other poor countries, particularly in Africa and Asia, would have a huge impact. It is a faster, cheaper and safer way to transfer money than the alternatives, such as slow, costly transfers via banks and post offices, or handing an envelope of cash to a bus driver. Rather than spend a day travelling by bus to the nearest bank, recipients in rural areas can spend their time doing more productive things. The incomes of Kenyan households using M-PESA have increased by 5-30% since they started mobile banking, according to a recent study.
Why haven't we seen more of this? Well, it's a combination of banks nervous about losing market share, government regulators nervous about fraud, and existing laws that prevent corner-shop retailers from behaving like banks. But there are ways around (or through) these obstacles, says the Economist's usual omniscient-sounding editorial voice:
Instead of lobbying against mobile money, banks should see it as an exciting chance to exploit telecoms firms’ vast retail networks and powerful brands to reach new customers. Tie-ups between banks and operators will help reassure regulators. But they, too, need to be prepared to be more flexible. People who want to sign up for mobile-money services should not, for example, have to jump through all the hoops required to open a bank account. Concerns about money-laundering can be dealt with by imposing limits (typically $100) on the size of mobile-money transactions, and on the maximum balance. And inflexible rules governing the types of establishments where cash can be paid in and taken out ought to be relaxed.
Mobile money presents a shining opportunity to start a second wave of mobile-led development across the poor world. Operators, banks and regulators should seize it.
(h/t MSB)
UPDATE: Silly me for missing this-- the above article actually comes out of a whole special report in this week's Economist devoted to telecom in the developing world. Six more articles for your consumption!:
Mobile marvels Poor countries have already benefited hugely from mobile phones. Now get ready for a second round, says Tom Standage
Eureka moments How a luxury item became a tool of global development
The mother of invention Network operators in the poor world are cutting costs and increasing access in innovative ways
- ZMQ Software systems in India is running a program that helps women access pre-natal care via mobile, by sending them reminders and advice via SMS every few days. The program, still in early stages, is designed to both raise the number of women seeking and receiving pre-natal care, while also empowering women with access to mobile phones in a country where phones tend to be the domain of the men in the family. This is similar to MoTEcH, a program run by the Grameen Foundation in Ghana. (via MobileActive)
- The Ethiopian government text messaged its entire mobile-using population to offer them free HIV/AIDS tests as part of a campaign to leading up to the new years festival earlier this month. I haven't seen anything about the success of the campaign, but the government was able to reach 2.5 million mobile users.
- Juniper Research came out with a report forecasting a hurdle to the spread of mobile networks in the developing world: rising power costs for mobile base stations. Not much has been made of this that I've heard, but as energy costs inevitably rise, network providers will have to put more emphasis on efficiency and renewables. Nokia could leverage their recent crown as the world's most sustainable tech company to become an early leader here.
- The BBC's Connected Africa has a great audio slideshow of how Rwanda is working hard to bring ICT to rural parts of the country. (On a bus!)
FCC Chair Julius Genachowski gave a pretty big speech (pdf) at Brookings yesterday, laying out two new principles to protect the openness of the internet, and throwing his weight behind net neutrality. There's all kinds of debate flying through the tubes right now-- on both sides of Genachowski-- but I'm going to stay out of all that, and instead share a few thoughts on how these principles might apply (or not) outside the U.S.
Granted, in most of the developing world, preserving the openness of the internet will take a backseat to broadening access for some time. Unfettered access to BitTorrent isn't worth much if you're confined to a feeble mobile connection and the nearest broadband access is a day away. But as high speed networks arrive in places like Ghana, Nigeria and Kenya, these countries will face the same quandaries we're confronting in Washington.
If anything, protecting open access to the web will be more important throughout Africa, Asia, and Latin America. In most countries, the population is much more rural, and anti-trust laws are much weaker-- two factors that would contribute to less competition and a surfeit of power for a very few ISPs. Already, VOIP applications like Skype, which are widely used around the world, have been targeted for throttling due to their high bandwidth requirements. For the sake of the innovation and entrepreneurship these applications enable, it would seem important to keep them open and available.
Questions of enforcement are more difficult. For a government to effectively monitor an ISP to ensure openness would require a very tech-savvy team, something many resource-poor governments would struggle to maintain. Perhaps there will be space for an international body-- an NGO, or perhaps even a for-profit company-- to protect web openness on a contract basis on behalf of governments incapable of doing so themselves.
Countries like Iran and China are, of course, a separate challenge. I'm not one to meddle in another state's sovereign affairs, but as someone with a history of being censored in China, I tend to see denial of access on par with any other violation of the freedom of the media.
Just a few opening thoughts in the hopes of provoking a conversation or a bit of disagreement.
One more thing-- Dr. Rob Shapiro, Chair of the Globalization Initiative here at NDN, just came out with an economic study (pdf) on "flexible broadband pricing"-- i.e., charging high-volume web users more for their access. I imagine the concept would offend some apostles of net neutrality, but the study makes a pretty compelling case that such progressive pricing would help close the digital divide here in the U.S. (and, surely, elsewhere).
- The BBC has a cool and (apparently) new feature-- "Connected Africa." The page is dedicated to broadband penetration in Africa and all related phenomena. Ken Banks of Kiwanja has a good op-ed-style piece up there now, about the innovation that has sprung up around mobile technology, and how it might be a preview for what the arrival of high-speed, fibre-optic broadband might look like. Also, a new broadband cable into East Africa is about to go live.
- One of the big themes from the World Bank sessions earlier this week was that little innovation is the technology is all in good shape, the real challenge is around developing the business models that will allow this technology to become available and effective in the developing world. M-PESA, Safaricom's mBanking wing, has been one of few-- perhaps the only-- really successful mVenture. An essay by Mark Pickens at CGAP looks at what has made it successful, and his conclusion is familiar-- it's all about scale.
- Wayan Vota of Inveneo responds to a question posed by Erik Hersman of White African-- whether non-profits and businesses should focus on SMS or IP capacity. Vota argues that high SMS costs, relative network openness and demand for video will push us all-- even those in the developing world-- toward high-bandwidth use. For now, it would be foolish to abandon SMS, as the majority of phones in use in the developing world are SMS-enabled but not web-enabled... but the future, to be sure, is in internet services.
- Tomorrow is Software Freedom Day, and Sugar Labs-- the developers of the free and transparent software run on most OLPC-XO machines (the current One Laptop Per Child computer)-- is having a party up in Boston. Check them out if you're in the neighborhood.
At the World Bank's panel on education yesterday, one of the more alarming revelations came from Leigh Jaschke of MobileActive. She devoted most of her brief talk to literacy in the developing world, and highlighted this alarming statistic: In West Africa, literacy rates are below 60%, and for women, they're below 50%.
If you exclude Nigeria-- the largest and best educated country in the region, the literacy rate drops to just 52%. In four of the 13 countries in the region, the female literacy rate is less than 20%. All this data is laid out in a recent report (pdf) from Oxfam and a group of other organizations.
Aside from being an abomination, these facts pose a challenge for mDevelopment in all its incarnations. As Brendan Smith of Vital Wave explained in his presentation on the mHealth panel yesterday, less than 10% of mHealth applications use voice technology, while more than a quarter are SMS-based.
Needless to say, if you can't read, texting doesn't do you much good. mLearning, despite being perhaps the newest and least developed of mobile applications, may need to take priority in places like West Africa, where illiteracy is a barrier to any successful program.
Kate Place gave her own presentation yesterday on Bridgeit, a program she works with in Tanzania. Basically, the program allows teachers to access a database of educational videos through their phone, which they can download and use as aids in the classroom. Mostly the program has focused on math and science education, rather than literacy, but they seem to have had some success. Her presentation (ppt), gives you more if you're curious.
UPDATE: I should have mentioned this earlier, but if you're interested in what went on at the WB yesterday, materials from all the sessions are available here, and Florian Sturm of ICT4D (who was watching a webcast of the sessions from an internet cafe in Accra) put together great summaries of all the sessions.
Some Rights Reserved 2008 - Present, NDN. 
Bharti Airtel and MTN have walked away from a 
This is big news for both African and Indian wireless industries, and, I have to say, probably bad news for most consumers (or prospective consumers)-- particularly in Africa. Bharti has done an 
On the user end, the program is basically a variant on Grameen Phone's "
mputing, and offers a full suite of applications. And at OLPCNews, a rave review of the 
e seen more of this? Well, it's a combination of banks nervous about losing market share, government regulators nervous about fraud, and existing laws that prevent corner-shop retailers from behaving like banks. But there are ways around (or through) these obstacles, says the Economist's usual omniscient-sounding editorial voice:
- The Ethiopian government text messaged its entire mobile-using population to offer them free 
Granted, in most of the developing world, preserving the openness of the internet will take a backseat to broadening access for some time. Unfettered access to BitTorrent isn't worth much if you're confined to a feeble mobile connection and the nearest broadband access is a day away. But as high speed networks arrive in places like 
- One of the big themes from the World Bank sessions earlier this week was that little innovation is the technology is all in good shape, the real challenge is around developing the 
At the 
