Sunday, July 10, 2005
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The real digital divide
A common lament among development activists is that regions like Africa are held back by the digital divide -- these places have less access to the Internet.
However, the Economist runs a good story on the information technology that would benefit poor African countries the most:
The good news is that firms like Motorola have a huge incentive to expand to this market, and are in the process of creating low-cost handsets.
The bad news is that developing countries themselves might block further expansion of cell phone usage:
One reason left unmentioned in the Economist piece why some governments might impose high barriers to cell phone usage -- cell phones increase the costs of repression. A newtork of opposition activists armed with cell phones and text messaging capability can more easily coordinate political action against a repressive government.posted by Dan on 07.10.05 at 09:47 AM
China Flexes Economic Muscle Throughout Burgeoning Africa: "Chinese companies have become a dominant force, building highways and bridges, power stations, mobile-phone networks, schools and pharmaceutical plants. More recently, they have begun exploring for oil and building at least one Ethiopian military installation." [cf.]posted by: georgio on 07.10.05 at 09:47 AM [permalink]
Mobile phones for people in the burgeoning African nations will boost GNP in measureable amounts? How does that translate to 100,000,000 in the U.S.? Every person over the age of 10 probably has one. Our nation must be on the verge of super wealth. You must be talking about mobile phones in the hands of the select people who have anything of consequence to sell or trade, especially the ones who might project their trade internationally. I suspect that the vast majority of mobile phone use will always be dedicated in inane conversation with friends by the vast majority of people who have nothing to enrich the nation with through cellular phone use. Of course, this does enrich the people involved in the business of selling units and privileged air waves for their use.posted by: Marcell on 07.10.05 at 09:47 AM [permalink]
My guess is your suggestion attributes too much rationality to governments. I'd suspect that African governments are often starved for reliable revenue. So when they have the opportunity to collect a tax through the cellular service provider the temptation is irresistible, particularly when the tax clearly falls on the more prosperous portion of their population.posted by: Bill Harshaw on 07.10.05 at 09:47 AM [permalink]
Another reason governments would want to impose taxes on mobile phones is that they represent competition for the state-owned telephone monopoly.posted by: Bob McGrew on 07.10.05 at 09:47 AM [permalink]
" a rise of ten mobile phones per 100 people boosts GDP growth by 0.6 percentage points"
The classic question of causality. Which causes which or maybe they both are caused by a third factor?
I think it would be interesting to look at income levels of mobile phone owners. do the rich get it? (that would suggest gdp increase causes increase in # of mobiles)
OR do the poor get it? That would suggest the Economist's theory is right and the economy benefits from better communication...
Also, your last argument seems a bit weak. Here's why: If government is repressive then it can monitor phone calls for keywords. Since repressive governments tend to be the ones from countries with lower income levels there are fewer mobile phone owners to monitor.
Marcell..the US doesn't provide a good comparison because just about everybody in the US already *had* a landline phone. The situation in much of Africa is like what things would be in the U.S. if there were almost no phones at all, not just no cell phones...indeed, it is probably similar to what the situation in the US would be if even the *telegraph* wasn't available.posted by: David Foster on 07.10.05 at 09:47 AM [permalink]
If the cost of handsets are the biggest obstacle to entry, why don't service providers follow the American model and subsidize the cost of handsets?
If people can pay for the monthly service, it makes sense to provide them with phones. They need not offer all the bells and whistles, but just a basic cell phone with texting capability.posted by: Kelly K on 07.10.05 at 09:47 AM [permalink]
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