Mobile phones and poverty reduction: Can this shortcut work in Latin America?

Mobile phones can be the way into the information society for lower income people and less developed regions. Some structural factors help: mobile phones do not require either electricity or special traaining and the costs of connectivity are much lower than those of landline telephones. Recent studies estimate that a mobile phone network can cost 50% less per connection than landlines, and it can be installed considerably more quickly. It can reach remote areas more easily.

The number of subscribers is also growing at a fast pace. Ownership of mobile phones has practically tripled in developing countries from 2002 to 2006, according to the Information Economy Report 2007-2008 of the of the United Nations Conference on Trade and Development. Despite this explosive growth, differences remain: in 2006, 53.5% of Latin Americans had a mobile phone, compared to 20% of Africans, while in Europe, on average, every person owned at least one mobile phone.

Most of the information produced regarding the connections between mobile phones and development focuses on Africa, where mobile phones have become central to commercial exchange as the information and communication technology most used to communicate with clients, receive bids, and alert the unemployed of job offers.

The Latin American experience

According to research done on mobile phones and digital poverty in Latin America, the distribution of mobile phones is more equitable than that of landlines. “Given the same level of poverty, the penetration of mobile phones is considerably better that that of landlines,” highlighted one of the researchers, Martín Rivero, in a conversation with APCNews. Nevertheless, the report concludes that the growth in access to mobile phones has not been accompanied by a reduction in the levels of poverty.

Cultural factors and public policies play an important role. A study done in Brazil highlights that 43% of Brazilian municipalities do not have mobile phone service, and this pattern is worst in the poorest areas (North and Northeast) because the mobile phone privatisation contracts did not include universalisation clauses. In the 1990s there were projects to increase the penetration of mobile phones in El Salvador and Venezuela, financed by the World Bank, which were premised on an assumed connection between mobile phones and development.

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