Mobile phone networks champion social change in the developing world

Money transfer, healthcare, farming and education are all areas now covered in the developing world by rapidly spreading mobile phone networks

  • The Guardian,
M-pesa money transfer service, Kenya
Money on tap: Vodaphone's M-pesa money transfer service in Kenya enables migrant workers to send cash home safely. Photograph: Vodafone

Information has always been a source of power, but when mobile phones were first invented, few could have predicted that this technology would become a workhorse to create social change in developing and rural communities where modern-day infrastructures are weak or non-existent.

Services ranging from money transfers to weather reports and from medical tips to agriculture prices are being made available in emerging countries for small micro-payments.

While some philanthropic organisations, non-government organisations (NGOs) and national governments are operating free initiatives in countries such as Kenya and China to help stamp out poverty and improve rural communities, the mobile phone players believe their services are sustainable simply because they need to succeed commercially. Their free-market strategy is to provide crucial, personalised information to millions of people – mostly those outside urban areas – and that the sheer volume of micro-payments will lead to profit and better services.

Katrin Verclas, co-founder and editor of MobileActive.org, a website that monitors mobile technology used for social change, says the most successful commercial mobile projects aimed at the developing world will be hybrids, where commercial operators partner with NGOs and governments.

"This is a growing market and, while it is perfectly acceptable for companies to have business models that provide data for small payments, the various groups need to work together," says Verclas from her base in New York. "I don't think any of the commercial players have quite figured this out yet, but they will ultimately need a holistic approach with some information provided for free."

She holds up Vodafone's M-pesa money transfer service - originally launched in Kenya in 2007 - as a good example of how an international commercial giant has used local cultural knowledge and partners to succeed. So far 11 million customers have used M-pesa (the word is derived from the Swahili for "cash").

Understanding that Kenya is a country where the principal wage earner often lives away from home for months on end, Vodafone worked with local mobile operator Safaricom, Citibank and the Commercial Bank of Africa to allow M-pesa users to send money safely and cheaply to their families without a time-consuming journey home. M-pesa also allows users to make cash withdrawals and loan repayments all using mobile phone technology.

"Before M-pesa, husbands were sending home cash in envelopes which was dangerous or transferring money via Western Union telegraphs which was expensive," says Caroline Dewing, senior strategy manager for Vodafone Group. "We priced M-pesa competitively and guaranteed that the money would get to families safely through 15,000 local agents, many in village communities." Meanwhile, Safaricom claims as many as 30,000 new jobs have been created by the service.

Success in Kenya has led Vodafone to roll out M-pesa with local partners in Tanzania, Afghanistan and, most recently, South Africa.

Another mobile player crossing borders with similar mobile services is Nokia, which launched its Ovi Life Tools information service in India last year for agriculture and education as well as entertainment services, including astrology, ringtones and even movie news. The service has since moved into Indonesia and, more recently, China and added health care information to its offering.

Up to 1.5 million people have used Ovi Life Tools in the last 12 months, with agriculture and education information being the most popular. Subscribers pay the equivalent of less than $1 a month for constant agricultural information, while other services – such as learning English language - are around 50 cents a month each.

"We have teams of experts providing information on many subjects, so we complement what NGOs and governments are doing," says Jawahar Kanjilal, Ovi Nokia Life Tools global head of emerging market services. "We provide a personalised information and it is available 24/7. The NGOs cannot be in every village every day. Also, we provide more than what they can give."

Nokia was originally a partner on the Reuters Market Light project, which concentrates on information relevant to farmers, but Nokia wanted to offer more than just agricultural information and had a roll-out plan for other countries. "Ovi Life Tools is a good example of public and private partnership," says Kanjilal. "Ministries in India and Indonesia support us because our advice follows the practices of each industry and is sustainable."

Nokia won't disclose financial details nor subscriber numbers but it is clear that Ovi Life Tools and, indeed, the similar mobile information offerings have barely scratched the surface of their potential. For example, Nokia moved its services into China only last month and believes some 732 million rural residents are possible customers, while it is likely to start up in Africa in 2011, with the potential to attract hundreds of millions more potential subscribers.

Weblinks

mobileactive.org

safaricom.co.ke/index.php?id=745

http://conversations.nokia.com/tag/farmers/

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