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Dialing for development: How mobile phones are transforming the lives of millions

September 2010

Since the first cellular handheld telephone was invented by Martin Cooper and his Motorola team in 1973, use of mobile phones has grown at a staggering rate making them one of the most widely owned consumer assets. With over 4 billion mobile connections around the world and terrestrial GSM networks covering over 80 percent of the world’s population, mobile telephony is on track to becoming a near-universal technology, some suggest, by 2015.

The first handheld cellular phone was a rather cumbersome device weighing 2 kgs and with a battery life of just 20 minutes. Today’s affordable, lightweight and versatile third generation (3G) models offer multiple means of communicating (by voice, fax and e-mail) and accessing information and entertainment. They are, in fact, steadily developing into handheld computers. Once considered a gadget for the wealthy, the mobile phone is increasingly becoming an essential part of our daily lives. In many parts of the developing world, wireless technology is being used to open doors to a wide range of life-enhancing services that hold great promise in spurring grassroots development.

Nokia Bicycle Charger Kit - The charger
starts charging when the bicycle reaches
a speed of 6 km/h and stops charging at
50 km/h. Cyclists can check the charging
status from the screen of their mobile
phone. The charger is resistant to
humidity and dust. (Photos: Copyright
2010. All rights reserved)

In early June, Nokia launched a range of new products specifically designed for users with limited access to electricity. These include a model that accommodates two SIM cards which may be swapped and removed when the phone is switched on – a feature that serves the needs of multiple users. Another model offers a battery life of up to six weeks coupled with a bicycle-driven recharging device. News of these developments prompted WIPO Magazine to take a closer look at some of the ingenious ways in which mobile telephones are being used to connect the previously unconnected, and to improve the lives of individuals, particularly in isolated, rural areas across the developing world.

Mobile technology spawns innovative applications

Mobile phones are a substitute for fixed lines in many developing countries. They help drive economic growth, fostering business development and wider market access. They provide a more reliable alternative to roadways and postal systems for communities in remote and underserved areas. As the technology advances, mobile phones not only enable users to make voice calls, they offer easy access to a stunning array of innovative applications. In developing countries, they are creating opportunities for users to access market information, monitor health care, transfer money and promote literacy.

The Nokia C1-00 can
accommodate two SIM
cards in a single device.
It is also equipped with a
flashlight, FM radio, alarm
clock, is programmed to
speak in local languages,
and has multiple phone
books. With a stand-by time
of up to 48 days and talking
time of up to 13 hours, it
weighs just 72.9 g including
the battery.

Mobile phones are being used in a range of innovative ways. Fishermen in Senegal use them to obtain information on fish market stocks and prices before deciding in which port to unload their catch for a better return. They also use mobile phones to transmit and receive distress signals thereby improving the safety of local fishing fleets. In South Africa, farmers from the Limpopo province are avoiding the heavy losses associated with transporting perishable goods to market over long distances by using mobile phones to deal directly with their clients within a focused area – again, significantly improving revenues (from an estimated US$700 to US$4,000 per month1).

A 2005 study by Leonard Waverman of the London Business School estimated that an additional 10 mobile phones per 100 people in a given developing country boosted GDP2 growth by 0.6 percent between 1996 and 2003.

Ready access to financial services can be critical in stimulating local economic activity and in fighting poverty. Many people in remote, isolated rural areas do not have bank accounts, nor do they have access to conventional banking services. Mobile telephony is proving to be a particularly advantageous means of addressing these challenges while simultaneously reducing the operating costs of financial institutions.

“A mobile phone is a gateway, and oftentimes the only means to knowledge, entertainment and communications for people in emerging markets. They have become vital to the lives and businesses of the people that use them.”  Nokia

Banking at your fingertips

Kenya has led the way in mobile banking with the M-PESA (“m” for mobile and “pesa” for money in Swahili) money transfer system launched by Safaricom and Vodafone in 2007. In the words of Michael Joseph, Safaricom’s CEO at the launch of the service in February 2007, the “M-PESA mobile money transfer service is an example of Kenya leading the way in the advancement of mobile technology and its uses.”

This innovative system enables customers to transfer money between cell phone users rather than banks. The service is aimed at mobile users who do not have bank accounts, either because they do not have ready access to a bank or because they have insufficient funds to open a bank account.

Touted as “the world’s first and most successful mobile money transfer service,” M-PESA currently boasts 9.48 million registered users, over 17,000 agent outlets and 290 pay-bill partners. In its three years of operation, the system has grown to offer a wide variety of services including salary and bill payments convenient withdrawals through the ATM network and international money transfer.

M-PESA users simply register with an authorized M-PESA agent by providing their Safaricom mobile number and identification card. The M-PESA application is installed on a SIM card and works on all makes of handset. Once registered, customers can:

  • put money into their accounts by depositing cash with a local agent;
  • send money to other mobile phone users (even non-Safaricom subscribers) via text message;
  • redeem the message for cash at a local agent outlet;
  • buy Safaricom airtime for themselves or other subscribers.

Only Safaricom subscribers can send money through M-PESA, but anyone with a phone that accepts text messages can receive money via the service. They do not need a bank account to do so.

Cash is paid into M-PESA and withdrawn at M-PESA agent outlets, typically, local Safaricom dealers, petrol stations, supermarkets or local shops.

Empowering communities

In 2008, Irish aid agency CONCERN Worldwide faced the challenge of delivering food aid to vulnerable communities in Kenya’s remote Kerio Valley. Having heard about the M-PESA service, CONCERN was quick to recognize its potential in enhancing its emergency response. It linked up with Safaricom to develop a customized service and pioneered its use for emergency cash transfers.

For CONCERN this experience clearly demonstrated that “mobile phone technology offers a unique and empowering approach to efficiently deliver assistance to the most vulnerable people living in insecure and remote rural areas.” This approach enabled it to better manage risks, significantly cut costs – M-PESA was 16 percent less costly than its conventional approach - and generate a range of additional benefits.

By providing mobile phones, SIM cards and chargers, beneficiaries were given an opportunity for communication as never before experienced, and were transformed from passive aid recipients to active participants in the process. In sum, CONCERN’s experience demonstrates that mobile phones can play a key role in delivering innovative solutions that enhance the impact of development assistance and support community empowerment.

The surging growth in the use of mobile phones in Africa is enabling governments, non-profit organizations and businesses to develop innovative solutions that address the needs of these communities and stimulate grassroots development.

Supporting disaster recovery efforts in Haiti

Mobile phones played a key role in supporting the relief efforts following the earthquake that ravaged Haiti on January 12, 2010. These and other citizen-driven technologies – such as online mapping tools, GPS and social networking – served as important extensions of traditional communications services in supporting disaster recovery by facilitating the free-flow of critical information and raising much-needed funding. According to a report by the Huffington Post, donations from individuals made via mobile phones account for an increasing share of total contributions. In the U.S. alone, over US$32 million were donated to the American Red Cross Haiti relief effort via text message. Vodafone's Red Alert mobile campaign raised more than €5.2 million (US$8 million) for Haiti earthquake relief efforts.


Toll-Free drug verification

Mobile phone technology is also proving an effective means of safeguarding consumers against the scourge of counterfeit drugs. While it is difficult to calculate exact figures, the World Health Organization (WHO) estimates that more than 10 percent of medicines on the global market are fake, and that 25 percent of those in developing countries are counterfeit or substandard. Not only do these products claim lives on a daily basis, they increase resistance to pathogens and, as a consequence, place an even heavier burden on resource-constrained public health systems.

In response to this alarming situation, and amid the growing concerns of drugs manufacturers and the general public, mPedigree, a non-profit organization based in Ghana, offers a free and rapid means for customers to verify the authenticity of the drugs they purchase at the point of sale, using a mobile phone.

The mPedigree platform is an “economically accessible, technically feasible and literacy-neutral” service of increasing interest to public authorities in Africa in combating counterfeit drugs. In June the West African Health Organization (WAHO) announced it had adopted the mPedigree technology platform as a regional standard in the fight against counterfeit drugs. Pharmaceutical manufacturers are also in discussions with mPedigree regarding deployment of the platform in their African operations.

mPedigree is proving a very useful means of raising awareness about counterfeit issues in the region. For Bright Simmons, President of the mPedigree Network, the system offers a mechanism for “bridging the public health and IP protection concerns of the public and private sectors and is a means for vendors to position themselves as quality suppliers and IP-compliant businesses.”

First piloted in Ghana in 2008, mPedigree connects GSM mobile networks to a central registry (currently managed by Hewlett-Packard) which stores information on the branded medicines of participating drug manufacturers. The platform focuses on “authenticating the supply line from one level of the supply chain to the other, all the way to the consumer.” It allows manufacturers to tag each unit pack of pharmaceuticals with a unique code that consumers can send via text message to a toll-free number for an almost instantaneous response regarding the legitimacy of the product. Only properly certified medicines can be verified in this way and the “one-time use” design of the codes prevents forgeries of legitimate medicines entering the supply chain.

Under the system, each pack of drugs is embossed with a unique alphanumeric code. Consumers scratch off a panel to reveal a code which they then send by text message to the toll-free number leased from telecom operators and directed to the mPedigree application. The cost of the SMS messages is borne by the manufacturers who benefit from discounted rates from operating telecom partners.

Where hologram technology has failed and radio-frequency identification (RFID) systems to identify and track drugs using radio waves are beyond the purse of many developing countries, mPedigree is proving an effective solution. According to Mr. Simmons, the mPedigree platform “provides all the security of RFID but comes at a tenth of the cost.”

Empowering consumers

(Photo: iStockphoto.com / Mathias Wilson)

Mr. Simmons underlined the significance of this initiative, saying, “for the first time in recorded commercial history those with the greatest stake in pharmaceutical safety – patients and consumers – are being brought directly into the heart of the anti-counterfeiting agenda, thanks to the transformative impact of mobile phones in the developing world.” In his view, the system “redresses an ancient injustice in the marketplace” and enables those who pay for a product to have a means to ensure they receive what they pay for – in this instance, life-saving drugs. It represents a “wholesale shift in thinking about … consumer rights.”

Advances in mobile telephony and the availability of affordable handsets have brought millions of people into the Information Age and opened the door to many life-enhancing opportunities.

For the original inventor, Mr. Cooper, “the future of cellular telephony is to make people’s lives better.” His view is that “the cell phone in the long range is going to be embedded under your skin behind your ear along with a powerful computer who is in fact your slave.”

As mobile operators continue to push through the frontiers of innovation to reach more subscribers, new innovative applications will emerge and continue to transform the lives of millions.

Vast market potential, broad social benefit

The rapid adoption of mobile phones by users in the developing world - an estimated 1.5 million consumers sign up for a mobile phone subscription each day - means mobile phone companies have the opportunity to expand their market share and generate profits, while at the same time delivering significant social benefit.

By 20113, the global mobile phone market is forecast to have a value of US$211.9 billion (an increase of 103.1 percent since 2006) with an estimated volume of 1,804.1 million units (up 125.5 percent on figures for 2006).

Given the huge market potential, manufacturers are recognizing the importance of developing low-cost handsets and applications that match the needs and circumstances of consumers in emerging markets. These include:

  • icons to replace names for use in communities with low literacy rates;
  • long battery life and flashlights for use in areas with no electricity or frequent power cuts;
  • rubber sides to enhance grip in highly humid areas;
  • dust-protected key mats for dusty environments;
  • radios with loudspeakers for collective entertainment;
  • multiple phone books on one device;
  • cost and call trackers to facilitate multiple users and contain costs;
  • local language support;
  • applications to support micro-entrepreneurs, e.g. calculators, alarms, calendars. 

2  GDP – Gross domestic product - a measure of a country's overall official economic output

The WIPO Magazine is intended to help broaden public understanding of intellectual property and of WIPO’s work, and is not an official document of WIPO. The designations employed and the presentation of material throughout this publication do not imply the expression of any opinion whatsoever on the part of WIPO concerning the legal status of any country, territory or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. This publication is not intended to reflect the views of the Member States or the WIPO Secretariat. The mention of specific companies or products of manufacturers does not imply that they are endorsed or recommended by WIPO in preference to others of a similar nature that are not mentioned.