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Developing countries reap benefits of wireless comms

Posted: 18 Feb 2008 ?? ?Print Version ?Bookmark and Share

Keywords:mobile telecommunications? wireless technology? mobile industry?

Developing countries of the world are the "wild West" of 21st-century mobile telecommunications, according to Karim Kohja, CEO of Afghanistan telecom operator Roshan.

In a nation that now has an adult life expectancy of only 42 years but a mobile phone penetration rate of 56 percent, Kohja cited the transformative powers of mobile communications. "We are making this technology available to all the people," said Kohja.

"We have created 20,000 jobs," he continued. "We have created the middle class of Afghanistan !not the drug-related middle class but the real middle class."

Kohja was part of a Mobile World Congress panel last week discussing the trials and triumphs of extending the mobile industry into the poorest and hardest-to-reach regions of the world.

As both Kohja and Iqbal Quadir, founder of GrameenPhone of Bangladesh, pointed out, a phone company in a developing country that sets out to be merely a phone company is likely doomed to failure. Kohja said he had barely hung his shingle in Afghanistan before he had to enter!"very informally"!the banking business, by carting strongboxes full of cash into outlaw-infested hinterlands. This treacherous effort laid the foundation for Roshan to establish Afghanistan's first wireless banking system!thereby cutting the outlaws out of the loop.

Quadir's company also provides financial services, including micro-loans, in Bangladesh, as well as setting up schools and running clinics.

Roshan supports clinics as well and underwriting a pioneering telemedicine practice that allows doctors in Kabul!"who dare not venture into the countryside lest they be killed"!to treat patients remotely.

Panelist Sigve Brekke, CEO of DTAC and a hardened veteran of an outreach effort by Norwegian mobile carrier Telenor, insisted that such unusual and seemingly unprofitable sidetracks are the price of success in emerging markets. "You really need to think differently if you want to survive. It's necessary to be part of the economic and social development" in countries with unstable regimes, corrupt regulators and a deep distrust of foreign interference, said Brekke. "You have to prove that you are transferring knowledge and helping the economy to grow."

Economic growth
The outcome of such efforts, according to the panelists, were extraordinary improvements for people in countries like Afghanistan, Bangladesh and Thailand, as well as profits for the telecom companies.

Kohja's said the economic potential of "connecting the unconnected" focuses on the central Afghan town of Bamiyan, one of the world's most remote and destitute outposts. Only one road leads to Bamiyan, said Kohja, and it is only open in the summer, "unless it floods." Kohja was told he was crazy to invest the $500,000 necessary to create mobile access in Bamiyan.

"But the minute we switched it on, we had 2,000 subscribers," said Kohja.

When people in the Bamiyan Valley learned that the area was "connected" to the outside world, they moved the regional bazaar to Bamiyan. Soon, one of the world's remotest hotels, the Hotel at the Top of the World (which has no indoor toilets) was built in Bamiyan to serve "extreme tourists." A hospital followed, then a college.

"Today, Bamiyan, the poorest town in Afghanistan," said Kohja in a fatherly tone, "is one of the most thriving cities in Afghanistan."

Such experiences illustrate a thesis Quadir included in his remarks: that decentralization of services and resources, especially technology, extend economic, social and even political power beyond the handful of autocrats who often hold sway in developing nations. "That's why digital technology is good medicine," said Quadir.

He added that as technology gets cheaper, as it does inevitably, "it empowers people and disperses power." Power dispersed from a central government to the mostly poor, he said, nourishes freedom.

Hamadoun Toure, secretary-general of the International Telecommunication Union, reinforced both Kohja and Quadir, agreeing that the familiar pattern of sending aid to government leaders in developing countries has done little for development. "The business model that we have had for the last 50 years has failed," said Toure. "It has failed because it was based on aid and charity."

He went on, "Making a profit is not a crime. The business model we see now in information technology now is based on profit-making and there's nothing wrong with that."

Toure noted that telecommunications in particular has a vitalizing effect on emerging economies. "The power of communication cannot be overstated," he said.

Brekke of DTAC cited studies that associated a 1-2 percent growth in a nation's GDP for every 10 percent of mobile phone market penetration. "Never underestimate our market," said Kohja. "Never underestimate what our technology can do for people. Don't underestimate poor people. They are as proud as you are."

Indeed, Kohja, Quadir and Brekke, entrepreneurs who succeeded for their companies and themselves by "connecting the unconnected," are case studies in the economic potential of extending information technology to people who often make less than make a dollar a day.

"We don't make money from the poor," said Quadir. "We make money with the poor."

- David Benjamin
EE Times

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