Connecting the unconnected

Providing mobile technology to those without was one of the major topics discussed at the recent 3GSM conference in Barcelona. Both suppliers and operators were emphasising the link between the mobile sector growth and economic growth, pushing the need for more cost-effective infrastructure and fewer government restrictions such as taxation.

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By  Alex Ritman Published  February 21, 2006

|~|Zander200.jpg|~|Motorola CEO Ed Zander claims that every time a country has 10 or more phones per 100 people, it's GDP increases by 0.6%.|~|Barcelona last week played host to the great and good of the mobile telecoms industry, with the annual 3GSM conference attracting around 50,000 professionals to perhaps tout their products or scout for new technologies. Although far from a new topic, one of the major points of discussion throughout the event was not mobile TV or any other new revenue boosting service, but getting phones into the hands of those without, the “unconnected” of this world. Last year’s 3GSM event in Cannes, France, was all about the handsets, with Motorola among others introducing phones under the US$30 mark, the threshold set for widespread adoption of mass-market mobile services in the developing world. This time round, it was the infrastructure and legislation that was the focus, with governments urged to scrap taxation on handsets and mobile services, and suppliers forced to drive down the cost of equipment and improve its efficiency. The geographical target has also switched, moving from the now booming economies of India and China to the less developed countries across Africa. Hindered by poor fixed-line infrastructure, many believe that the mobile phone can play an important role in improving economies across the continent, raising GDP and dramatically improving lives. New technologies are giving operators the opportunity to cut back on costs, and move into more rural regions where before the returns on investment might not have been worth the initial deployment levels. Motorola, for example, spoke of using unlicensed spectrum, or licensed WiMax spectrum, for backhaul, cutting out the need for expensive satellite services previously relied on heavily. Other innovative ideas that clearly have an African focus look to reduce the dependence on fuel, with solar and wind powered mobile sites meaning that continual and costly oil supplies are unnecessary. Middle East operators have a great opportunity to be a part of this revolution, with consolidation seeing the likes of Kuwait’s MTC and Etisalat of the UAE move into the region, with further aggressive expansion plans on the cards. With the capital behind them – MTC recently announced it was looking for a US$5 billion credit - these operators can help drive the use of mobile technology in Africa, in turn boosting business and increasing welfare. A study commissioned by MTC and unveiled in Barcelona looked at the effect of mobile technology on the MENA region. In Egypt, it found that employment in the mobile sector drives job growth elsewhere, with almost eight jobs created for every one employed in this industry. If ICT investment in Egypt doubled, the study claimed that 1.3 million new jobs would be created, and also that the rate of GDP growth would rise from 4% to 8% and beyond. Speaking at 3GSM, Motorola’s CEO Ed Zander was forcing home this link between mobile technology and a country’s economy, telling his audience that every time a country has ten more phones per 100 people, its GDP increases by 0.6%. But governments that continued to impose taxes on handsets and restrictions on operators, he said, would hold back these economic benefits. Zander brought up a study that claimed there would be an additional sale of 1 billion handsets across 50 countries should handsets be exempt from all customs fees and value-added taxes. Giving Zander’s claims perhaps a more credible, less supplier-led approach, was Tarek Kamel, Egypt’s minister for commerce and IT, who had recently helped repeal his country’s taxation of imported phones. “The more we deregulate, the more we re-regulate in the right direction, the more we grow.” ||**||

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