• Internal Code :
  • Subject Code :
  • University : Addis Ababa University
  • Country : Ethiopia

Assignment Task

 

Case Study

As cell phones, the Internet, high-speed Internet connections, and other information and communication technologies become increasingly widespread, more and more people are experiencing the benefits each technology has to offer. Many of these technologies have not yet closed the “digital divide” separating the world’s well-developed and underdeveloped nations. Some countries, like the United States, have access to most new technologies, but most residents of poorer countries still struggle with challenges like obtaining reliable electricity and abject poverty. Recent trends in cell phone design and consumer research indicate that cellular phones are crossing the digital divide and are becoming a truly ubiquitous technology (far more so than personal computers), enhancing the quality of life for millions of people while also increasing the strength of the global economy. Cell phones will be the primary means of access to the Internet in the developing world. 

For instance, mobile phone use in Africa is booming. Despite their high costs (the price of a phone in Niger is equal to five days of income), mobile phone subscriptions in Africa have risen from 16 million in 2000, to 376 million in 2008. Sixty-eight percent of the world’s mobile phone subscriptions are in developing countries, compared with 20 percent of the world’s Internet users. Because cell phones combine features of watches, alarm clocks, cameras and video cameras, stereos, televisions, and even wallets soon due to the growing popularity of mobile banking, they are growing in usefulness even as they decrease in price. Most importantly, cell phones are increasingly becoming the most convenient and affordable way to connect to the Internet and perform other tasks traditionally associated with computers. And cell phones are much less costly than personal computers. 

The possession of a cell phone greatly increases efficiency and quality of life, so the global economy would stand to benefit on a proportionally large scale. Many economists believe that widespread cell phone usage in developing countries is having a profound and revolutionary effect on their economic well-being in a way that traditional methods of foreign aid have failed to achieve. 

Cellular phone companies are sending what they call “human-behavior researchers” or “user anthropologists” to gather as much useful information as they can about consumer habits and the lives of potential cell phone buyers. They pass on that information to cell phone designers and technology architects. This process represents a new approach to designing phones known as “human-centered design”. Human-centered design is important to high-tech companies trying to build products that people find appealing and easy to use, and are thus more likely to be bought.

High-tech companies face significant challenges in marketing their phones to the poorest segment of Africa and Asia’s populations. Barriers include lack of electricity in many areas, incomes too low to afford a cell phone, and potential lack of service in non-urban areas. India currently leads the way in cell phone subscriptions, with an astounding 756 million (63 percent of its total population), but many other countries lag far behind both in cell phone usage and rates of Internet access. For example, Morocco, one of Africa’s leaders in cell phone and Internet usage, boasts 20 million Internet users, or 58 percent of its total population. By comparison, the United States has over 221 million Internet users of all ages, or 79 percent of its total population. 

The World Resources Institute published a report detailing how the poor in developing countries allocate their money. Even the poorest families dedicated significant portions of their small budgets to communication technologies such as cell phones. Having a cell phone is a tremendous advantage for members of populations that are constantly on the move due to war, drought, natural disasters, or extreme poverty, primarily because it allows people to remain reachable under practically any circumstances. Cell phones also have implications for medicine in these countries: patients can more easily reach doctors, and doctors can more easily acquire information pertaining to diseases and ailments they may need to treat. 

In addition to the benefit of being able to stay in touch with others, cell phones are also useful as a business tool. Evidence suggests that possession of a cell phone increases profits on an individual level, allowing people to more easily identify and take advantage of business opportunities. A study by the Centre for Economic Policy Research also showed that for every additional 10 cellular phones per 100 people a country acquires, that country’s gross domestic product (GDP) rises 0.5 percent. 

In Niger, millet is a household staple sold in traditional village markets across thousands of square miles. According to economists, the growth of mobile phone coverage reduced grain price differences across markets by 15 percent between 2001 and 2007, with a greater impact on markets isolated by distance and poor-quality roads. Traders could respond to surpluses and shortages in the market, making better decisions about price and delivery. As a result, trader profits rose and prices fell. 

Harvard economist Robert Jensen discovered that the introduction of mobile phones in the Indian coastal state of Kerala reduced price differences across fish markets by almost 60 percent between 1997 and 2001, providing an almost-perfect example of the “Law of One Price”: when markets work efficiently, identical goods have the same price. In addition, mobile phones almost completely eliminated waste—the catch left unsold at the end of the day—by allowing fishermen to call around to different markets while at sea, choose the market with the best price, and sell accordingly. Mobile phones resulted in financial improvements for both fishermen and consumers: fishermen’s profits increased by 8 percent, and consumer prices declined by 4 percent. 

Economists and others who believe that poor countries need to radically change their economic structure in order to develop, and who also discourage reliance on international aid given to failing economies, are enthusiastic about the positive impact that cell phones and other information technologies can have on underdeveloped countries. Access to the Internet via cell phones also promises to bring about societal and political change in developing countries in which repressive governments exert control over all forms of media. 
 

Questions

1.What strategies are cell phone companies using to ‘close the digital divide’ and market phones to the poorest segment of the world’s population? 

2.Why do economists predict that widespread cell phone usage in developing countries would have an unprecedented effect on the growth of those countries? 

3.What are some examples of how cell phones might increase the quality of life for residents of developing countries? 

4.Search the Internet and identify the top 10 Internet and cell phone user countries (by a number of users) in the World and Africa in 2020. How many Internet and cell phone users are there in Ethiopia and what is its rank in Africa and the World in 2020? Indicate your source of information (List the URL).

5.Do you believe that cell phones will proliferate widely through Africa and Asia? Why or why not? How about through Ethiopia?
 


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