From the Nokia 1100 to the iPhone 3G

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Giulio Quaggiotto pointed me to this article by Ken Banks on Mobile Phones and the Digitial Divide, which takes a somewhat sobering look at the limits of mobile technology in the developing world. Here's the money quote:

In the West, when we talk of mobiles helping close the digital divide, many people make a huge assumption about the technologies available to users in developing countries. We look at the mobile through rose-tinted glasses from the top of our ivory towers, through a Western prism or the lens of a 3G iPhone.

The reality is that one of the most common phones found in the developing world is the Nokia 1100. It's sturdy and serviceable, but provides little beyond voice and SMS services. According to Banks, handset manufacturers see further opportunity at the bottom of the pyramid, but it doesn't involve anything like internet browsers or cameras. For that, a little help is needed. Citing an IFC project with Celtel in Africa, Banks proposes "diverting international development funding toward providing a subsidized, fully Internet-ready handset for developing markets." If that happens, I'm going to get totally left in the dust - all I've got is a Samsung A437!

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Ryan Hahn

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Mike
August 13, 2008

The Ken Banks article is excellent, some sanity in the sea of hype that accompanies so many discussions for ICT use in developing markets ... except for the 'proposal' at the end which you cite here. Do we really want to be subsidizing handsets? Hasn't the market done a decent job of diffusing mobiles over the past decade, in places and at scale? Why distort this market by getting donors involved? IFC's investment in Celtel is just that -- an investment. What's the business case for subsidizing handsets (unless you are going to to make up for it on subscriptions and services, as in the States)? There is no reason donor money should go into subsidizing Samsung, Nokia and Ericsson (and let's be clear, this would be one concrete result of this sort of contrivance), distorting local markets in IT-related goods and services in ways we can't predict. These companies and their competitors already know that there is money to be made at the 'bottom of the pyramid', and are targeting related markets pretty successfully already. (Besides, the GSMA already sponsors the emerging markets handsets programme.) And anyway, what use is having an 'Internet-ready' handset when there is a local monopoly provider that isn't making the Internet available at rates you can afford in the first place? Better to focus donor efforts in this area, promoting competition in connectivity and related services. Last I checked, there was pretty robust competition in the handset market.

Ryan Hahn
August 13, 2008

Hi Mike, thanks for the excellent points. I agree with you and think that there is a glaring non sequitor between the first part of Ken Banks article and his proposal at the end. He basically points out that the market has done a pretty good job at delivering very basic handsets. While the proposal at the end is provocative, Banks doesn't really provide any kind of justification for investing the money into that as opposed to, say, primary education. Perhaps he will take note and address this issue next time?