An explosion of mobiles in the developing world

According to a recent study, adding an extra ten mobile phones per 100 people in a typical developing country boosts growth in GDP per person by 0.8 percentage points

The Economist on the explosion of mobiles in the developing world.

The reason why mobile phones are so valuable to people in the poor world is that they are providing access to telecommunications for the very first time, rather than just being portable adjuncts to existing fixed-line phones, as in the rich world. “For you it was incremental—here it’s revolutionary,” says Isaac Nsereko of MTN, Africa’s biggest operator. According to a recent study, adding an extra ten mobile phones per 100 people in a typical developing country boosts growth in GDP per person by 0.8 percentage points.

In 2000 the developing countries accounted for around one-quarter of the world’s 700m or so mobile phones. By the beginning of 2009 their share had grown to three-quarters of a total which by then had risen to over 4 billion (see chart 1). That does not mean that 4 billion people now have mobile phones, because many in both rich and poor countries own several handsets or subscriber-identity module (SIM) cards, the tiny chips that identify a subscriber to a mobile network. Carl-Henric Svanberg, the chief executive of Ericsson, the world’s largest maker of telecoms-network gear, reckons that the actual number of people with mobile phones is closer to 3.6 billion.

(…) And Africa is the region with the fastest rate of subscriber growth. With developed markets now saturated, the developing world’s rural poor will account for most of the growth in the coming years. The total will reach 6 billion by 2013, according to the GSMA, an industry group, with half of these new users in China and India alone.

All this is transforming the telecoms industry. Within just a few years its centre of gravity has shifted from the developed to the developing countries. The biggest changes are taking place in the poorest parts of the world, such as rural Uganda.

Much more in this Economist special report: Telecoms in developing markets.