Category Archives: connectivity

UNCTAD Information Economy Report 2010

Information Economy Report 2010: ICTs, Enterprises and Poverty Alleviation

Comments by Dr Francisco Osorio

The United Nations Conference on Trade and Development (UNCTAD) published in October 2010 a very important macro-economic study on mobile phones and development. I say mobile phones because most of the report is about this technology.

Torbjorn Fredriksson is the study’s team leader, who presented the report at The University of Manchester on October 14th, organised by the Manchester’s Centre for Development Informatics and Brooks World Poverty Institute (see news here). I was giving a printed copy but can be download it here.

The report is organised in five chapters:  (1) Exploring the link between poverty, ICTs and enterprises, (2) Trends in connectivity and affordability, (3) The ICT sector and the poor, (4) ICT use by enterprises and poverty alleviation and (5) The policy challenge.

After attending the presentation and later reading the report, I got the impression of a balanced study. It situates in the middle of two common discourses on M4D: either mobile phones are the final solution to development problems or mobile phones only perpetuates inequality in favour of the rich. The report is optimistic but it is not deterministic: there is evidence mobile phones can help socioeconomic development but also the lack of knowledge is important that cannot supports strong arguments either in favour or against. Simply said nobody knows yet.

We know one thing: mobile phones are important because is the communication technology poor people use the most after TV and radio. In other words, mobile phones are important for the poor. This simple sentence is the starting point of all research. When it is expressed in a graph, the statistical evidence shows a curve that goes up incredible fast (more phones than ever, more poor people using them).

Then the question: what does it mean? For the UNCTAD report it means an opportunity that could be used to help the poor. It does not say it will help, it might. Governments could support the mobile phone industry, because it may help to alleviate poverty. The report, although cautions, bets for an investment without strong arguments in favour. This jump into the unknown may pay well.

Even so, the most important conclusion is that we need more research. The report shows examples from many sources. Going through the references, the only anthropologist cited is Barendregt. Many references go to Donner and Heeks. The key examples come from India and Kenya but there are others from all over the world.

The report says it focuses on enterprises because they can significantly contribute to poverty reduction. The role ICTs play in enterprises, it says, is to give information access and better communications for poor people to help them build livelihood assets.

The report covers many aspects of this relationship between the poor, enterprises and mobile phones (the key ICT) and there is a very good quote that summarises one aspect of this relationship: mobile phones are more effective as a livelihood resource (communication tool) than as a source of livelihood (income generation) for the poor.

There are important distinctions to be made within enterprises. Considering its size, there are micro-enterprises, small and medium and large. Considering its purpose, they could be classified as subsistence based or growth-oriented. Considering use of ICTs, there are directs and indirect uses, either for economic and non-economic purposes. In other words, the landscape is not simple and many distinctions need to be made, instead of using concepts such as enterprises and the role of ICTs as mono-dimensional. The focus of the report is in the direct use of ICTs by poor in enterprises and direct use of ICTs by poor in ICT sector enterprises.

Other important aspect covered by the report is the problem that such a technology is facing around the world: affordability, network coverage, prices, taxes, and public policies against it, among others. Also, the open question is what would happen in the future. If TV and radio are important, well, some mobile phones integrate both into the handset (but they are too expensive to use for the poor). If the Internet is vital to access information, the mobile phone could be the way forward for the poor (still, many problems of affordability here).

As a final comment, I think this report could easily produce impact in the M4D academic community and for our project will be of great importance.

Notes on Wireless Communication and Global Development (Castells et al 2007)

Chapter 8, In Castells, Manuel, Mireia Fernandez-Ardevol, Jack Linchuan Qiu and Araba Sey (2007) Mobile Communication and Society: A Global Perspective. Cambridge, Massachusetts Institute of Technology Press.

Issues at stake

  • Leapfrogging development?
  • Efffects of mobiles on development
  • Mobile digital divide (incl. rural-urban divide within poor countries)
  • Mobility vs connectivity (in poor countries people get mobile to be connected, not because it’s mobile)
  • Design
  • Cost vs benefit (this question not clear in many cases; regulation is needed)
  • Social vs business uses (in Africa, most people use mobiles socially more than biz; empirically very hard to separate them, Donner 2004)

Alternative uses and alternative modes of access

  • Prepaid systems (key to making mobiles accessible to poor)
  • Scaled-down products and services (helps people with low education)
  • Wi-fi for internet access
  • Shared access and maintenance
  • Resource redistribution: beeps and remittances (with beeps, richer can subsidise poorer users)

Case studies in Asia, Africa and Latin America

  • Success of Little Smart (Xiaolingtong) in China: big hit since 2002; for low-income with low mobility; uniquely Chinese; huge low-income market; life in China is highly localised; this system allows ‘localised mobility’; unusual rural-to-urban tech diffusion
  • Wireless Local Loop (WLL) for India’s poor: hampered by economic barriers; unlike China no citywide scope; intense competition; slowed-down investment
  • Modified Grameen model in Uganda: two programmes – MTN VillagePhone and ‘community phone’; both highly successful according to media reports
  • Mobile payphone franchises in S. Africa: excellent performance
  • Grassroots mobile payphone initiatives in Ghana: may prove unsustainable, remains to be seen
  • Africa in general: adapted models, e.g. Grameen project in Uganda not targetting women; S. African system harder for poor entrepreneurs than in Uganda where micro-finance institutions supporting it.
  • Family life and mobiles in Chile: among poor families, mobiles are important tool of family (not so much individual) connectivity rather than mobility; they use mobile as non-mobile device as they have no landline; handset used collectively
  • Wi-Fi Internet for Development in Latin America: can deliver high bandwidth at low cost, but limited by short signal range. Peru case study: 14 interconnected telecentres, organised via existing cooperative, creating spillovers across region; but hard to replicate and much regulatory change needed in Latin America; often top-down and excluding community orgs and small entrepreneurs.


Huge connectivity gap across global South, despite magic bullet hype of mobiles. Still a lot of investment in infrastructure, adequate regulation, etc, required if people are to gain their connectivity rights. Meanwhile chapter has shown all manner of inventive ways in which people and orgs in these regions have sought to improve the situation, but a lot remains to be done.