By
Robin Hicks | 27 April 2010
It is often argued that no technology in history has been as effective at fighting poverty as the mobile phone. According to the World Bank, an extra ten mobiles per 100 people in a typical poor country will add 0.8 per cent to GDP growth.
The mobile phone can provide an almost instant economic shot in the arm, which disperses in a self-sustaining bottom-up way. This eases the pressure on government to stimulate the economy on its own, which is welcome news for economies still under the clouds of slow economic growth.The humble handset has given disadvantaged people access to information with which they can build businesses or increase the productivity of their crops in geographically isolated areas, such as remotes islands in Indonesia and the Philippines, and where there are dodgy roads, unreliable public transport, and disrupted landlines.
Citizen services are now increasingly available on mobile phones, with both the public and private sector playing a role in their delivery. Tata Consultancy Services provides a platform for farmers in India to receive personalised information from a database compiled by local agricultural experts, for a small fee.
In China, the Ministry of Agriculture has teamed up with China Mobile to launch the mobile service Nong Xin Tong (which translates roughly to farmers’ communication network), which gives farmers advice on planting techniques, pest management and government policies on agriculture. The service already has 50 million users, and pumps out 13 million text messages every day.
Probably the biggest triumph of the mobile phone has been its role in moving money around. Few places in Asia have been as good at ‘mobile money’ schemes as the Philippines, the ‘texting capital of the world’. Smart Money, an initiative launched in 2000 by the local telco Smart Communications, and GCash, which rival Globe Telecom launched in 2004, are held up as examples of how government and the private sector can economically empower the poorest citizens.
The mobile’s secret weapon is accessibility. Mobiles are relatively cheap in the Philippines, a basic model with a voice and text function costing around 500 pesos (US$10) new and even less second hand. As of June this year, mobile phone penetration in the Philippines reached 77 per cent, and it is expected to surge to over 150 per cent by 2013. To encourage as many people as possible to use its service, GCash enables even non-Globe customers to open an account.
The service allows users to make deposits and withdrawals, cash purchases, peer to peer credit transfers, automatic deposits from employer payrolls, and international money transfers; US$50 million is transferred by overseas workers every month by mobile phone. GCash also enables its one million users to get small loans, and for individuals and companies to pay their taxes. To keep the service secure, all transactions are encrypted, a pin number is required, and users receive a text confirmation when a transaction is completed.
To get around the chance of fraud or money laundering, users are limited to how much money they are allowed to move. Smart Money’s limit is set at Pesos 50,000 (US$950).
Mobile 2.0
New ways of using the mobile to reduce the difference between government and citizens are rapidly emerging. The Philippine government’s rescue efforts in the wake of Typhoon Ketsana, which drew criticism from the local media for being slow and inadequate, were helped in a big way by text messages. SMSs (as well as social media such as Twitter and Friendster) were used to locate flood victims stranded on rooftops. The Taiwan government was accused of being too slow to respond to Typhoon Morakot in August. The storm, Taiwan’s worst for 50 years, caused US$910 million in damage to agriculture and infrastructure. But the government was able to raise US$30 million in donations from the public - much of it via mobile phones - to distribute to those most in need.
Disaster management is one of the more obvious uses for mobiles to help the disadvantaged. In Pakistan, mobile phones are being used to root out corruption. In the Jhang district in Punjab province, civil servants who handle land transfers must submit a list of transactions every day, giving the amount paid and the mobile number of the buyer and seller. This enables senior officials to make spot checks on transactions made with the private sector. This process could be applied in situations where poor people in rural areas need government funding. The mobile phone could be used to ensure the money entitled to them gets into their hands and no one else’s. India’s National Rural Employment Act, which was passed in 2005 to give rural populations 100 days of work, now has a mobile element to help ensure that jobs, and the money they generate, find the intended citizens.
At this year’s general election in India, even the most farflung voters could use their mobiles to get information on the competing candidates. Downloadable profiles gave the lowdown on candidates’ education, religious beliefs, even criminal convictions. At the general elections in the Philippines this month (May), the Commission on Elections (Comelec) has plans to exploit the country’s obsessive relationship with the mobile phone. James Jimenez is Director of Comelec. He says mobiles have been used to allow Filipino voters to give feedback on the archipelago’s controversial new voting system which, if all goes to plan, will be fully automated for the first time in 2010. “Every piece of information you could want to know about a political candidate, or the field test areas where the voting machines being trialed, or the tendor that decided which vendor we would use, is available on as a mobile service,” says Jimenez, who is exploring how foreign media can get accredited using their mobiles for the 2010 presidential, legislative and local elections. “If we do not succeed in accrediting journalists at the forthcoming election, we will certainly have done by the 2013 elections,” he adds.
The beauty of the mobile phone is that services can be delivered to even the most basic handsets. And there is more value to be unlocked as the cost of phones continues to fall and penetration rises as a result. Of the four billion mobile phones thought to be in circulation, 75 per cent are in the developing world. And Asia is the biggest driver of growth. Of the top six fastest-growing mobile subscription markets, four are in Asia. India is the world’s fastest growing mobile phone market, followed by Africa, China, Indonesia, Vietnam and Brazil, according to Informa Telecoms & Media. By 2013, global subscriber numbers are expected to reach six billion, and half of new users will be in India and China.
Mobile versus the web
The way mobiles are used is shifting from a device that is held to the ear to one that is held in the hand as the technology matures and more services are made available – at lower cost – at the press of the thumb. This has implications for healthcare, too. People in remote areas no longer have to visit a clinic in person or make expensive calls to find out about their position on a waiting list or the likelihood of a disease outbreak - if they receive text alerts. And hospitals can save money and time by reducing the number of patients who do not show up for an appointment and spending more time with those that do. The mobile is a great deal cheaper than even the cheapest laptop, which the One Laptop per Child association and its technology partners have so far failed to bring below a US$150 price tag. It is easier to use, too, with a lower level of technical literacy needed than for the internet. But does that make it better at delivering government services to the poor?
Korea is one of the world’s most mature mobile phone markets where penetration has reached 90 per cent. Professor Cheol Oh, Chair of the KAPS Committee for Evaluating National Programs and Future Agendas at Korea’s Department of Public Administration, says that the mobile phone’s key triumph has been “to narrow the geographical and emotional distance between government and the citizen.” This, he says, has been achieved through the ‘Ubiquitous Korea’ initiative, which he helped launch seven years ago. “Mobile was the most important part of the project. It was the most costeffective way of ensuring we could get government into the hands of as many Koreans as possible,” says Prof Oh.
Now more than 50 per cent of electronic government services are delivered over the mobile phone in Korea. That proportion is increasing as data is redesigned so that it can be used interchangeably between the web and phone.
“It was difficult in the early stages of Ubiquitous Korea to build and maintain content for the mobile phone. But over the last four years we have spent a lot of money on building an e-government environment that works for the mobile phone,” says Prof Oh.
But what about security
More than US$1 billion has been spent on the construction of Korea’s e-government infrastructure over the past decade. But a lot more will be needed to improve the mobile environment further, says Prof Oh. Much of that money will need to go on “the forgotten piece” of mobile service delivery: information security. “Security on mobile phones is a big issue in Korea. We need a different kind of technology to protect the information stored on it. As much money that goes into R&D to build a better mobile environment should go into making that environment secure,” says Prof Oh.
A smarter future
Security is becoming a bigger issue as phones get smarter, with most growth occuring in the developing world. In China, consumers upgrading their phones is expected to form over 70 per cent of handset demand in 2010, up from 50 per cent in 2008. This trend plays into the hands of smart phone providers such as Research in Motion, maker of BlackBerry. However, the company denies that it plans to launch a cheap version to appeal to developing markets, and insists that low-cost is not the most important consideration for public service delivery.
Gregory Wade, Managing Director, Southeast Asia, Research in Motion, concludes: “The rise in demand for government services on mobile sevices will be determined primarily by how easy to use and secure the device is.”
