Somalia outpacing Ethiopia in mobile phone penetration

Economist reports how “once the toys of rich yuppies, mobile phones have evolved in a few short years to become tools of economic empowerment for the world’s poorest people. These phones compensate for inadequate infrastructure, such as bad roads and slow postal services, allowing information to move more freely, making markets more efficient and unleashing entrepreneurship.”

This focuses on three trends: the spread of mobile phones in developing countries and the accompanying rise in home-grown mobile operators that exceed the heretofore Western incumbent firms; the rise of China’s two leading telecoms-equipment makers from low-cost, low-quality operators to high-quality and innovative powers; and development of a raft of new phone-based services in the developing world, which go far beyond text messages and phone calls, with new data services including agricultural advice, health care and financial transfers. And whereas government-run phone monopolies do remain in places like Ethiopia, they are being dwarfed in impact and innovation by the real competition one finds in spots like war-ravaged Somalia, a poor nation with no real government where a dozen mobile operators seek market share and explain a far greater “mobile teledensity” than Ethiopia.

As telling are the many ways in which it’s now apparent that the spread of phones promotes economic development, especially money transfers or mobile banking, which derives from the custom in the developing world of using prepaid calling credit as an informal currency far more efficient than physically sending it from one place to another.

continued@EthiopianReview

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