Business Daily (Nairobi)

20 July 2009

Africa: Cellphones Tipped to Drive Growth in Poor Nations

The global ICT sector has witnessed an unprecedented expansion in the past decade driven by growth in the use of mobile phones, a World Bank report says.

"By the end of 2008, there were an estimated 4 billion mobile phones globally. No technology has ever spread faster around the world. Mobile phones now represent the world's largest distribution platform", it states.

The report titled Information and Communications for Development (IC4D) 2009: Extending Reach and Increasing Impact, takes a close look at mobile and broadband connectivity.

It analyses the development impact of high-speed Internet access in third world countries and provides policy options for rolling out broadband networks and addressing the opportunities and challenges of convergence between telecommunications, media, and computing.

Important market

According to the report, the mobile phone market is especially important for developing countries, where it is growing most rapidly and where it is seen as a "leapfrogging" tool.

"New phone connections in low and middle - income states have outnumbered those in high-income states since 1998. Virtually all new mobile customers in the coming years will be in developing countries", the report adds.

It notes that mobile communications have a particularly important impact in rural areas, which are home to nearly 50 per cent of the world's population and 75 per cent of the world's poor.

The mobility, ease of use, flexible deployment, and relatively low and declining roll-out costs of wireless technologies enable them to reach rural populations with low levels of income and literacy.

The report says the next billion mobile subscribers will consist mainly of the rural poor.

An important use of mobile phones in rural areas is to access market information.

TradeNet, a Ghana-based trading platform, allows users to sign up for SMS alerts about commodities and markets while receiving instant alerts for offers to buy or sell when anyone else on the network has submitted an offer.

Low prices

Globally, service providers are embracing convergence by investing in broadband networks.

They are entering new markets and improving business prospects by consolidating content and services and by adopting new business models. An evolving set of providers offers innovative services with high quality and maximum choice at low prices.

However, the global financial crisis is likely to reduce investments in the ICT sector for the first two to three quarters of 2009, but is expected to pick up in 2010; and "greater focus on cost and operational efficiencies in the recessionary environment is expected to enhance global sourcing".

One area that is receiving increasing attention in all countries, but that remains weak in most, is impact evaluation.

This is essential to ensure that ICT strategies are relevant and to be able to hold governments accountable for their implementation.

The report concludes that more research is needed on the socioeconomic impact of ICT on development and the economic justification of public sector intervention.

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