[kictanet] Social Impact of mobile phone

Thu Sep 29 19:42:48 EAT 2011

Dear Grace,

Thanks for flagging this interesting article up. Does anyone know if the 
two reports mentioned are going to be made publically available for 
download?

Thanks
Chris

-- 
Christopher Foster
PhD Researcher, Centre for Development Informatics (CDI)
University of Manchester, UK

On 27/09/11 16:39, Grace Githaiga wrote:
>
> *Social Impact of mobile phone*
>
> By Mutwiri Mutuota
>
> NAIROBI, Kenya, September 27- In the often stated world order, 
> innovation is ‘ordained’ to flow from Western nations to their 
> Southern counterparts.
>
> However, the mobile phone industry has provided the South, 
> particularly Sub-Saharan Africa, the rare opportunity to impart on 
> their illustrious Western counterparts pioneering advancements in 
> Information and Communication Technology (ICT) that if replicated 
> worldwide, the social impact would be astronomical.
>
> On Monday night, a report released by GSMA, the umbrella body of all 
> mobile phone operators worldwide in Nairobi spelt out the staggering 
> scale of what Government initiatives aimed at promoting mobile phone 
> use can have on their populations.
>
> The GSMA conducted two studies, titled Mobile Telephony and Taxation 
> in Kenya and Mobile Taxation: Surtaxes on International Incoming 
> Traffic where the positive and inhibitive impact government policy can 
> have on the advancements of the industry were spelt out.
>
> In the first report, the decision by the Kenyan government in June 
> 2009 to exempt mobile handsets from Value Added Tax (VAT, pegged at 16 
> percent in the country) spurred unprecedented growth in the industry 
> that in turn accelerated economic growth.
>
> That pronouncement was made by the country’s Minister for Finance, 
> Uhuru Kenyatta, tucked in his long annual budget speech and its 
> importance was lost at the moment.
>
> “The social impact has been astounding. Economic growth has been 
> boosted by eight percent in Kenya as an example with services such as 
> M-Pesa and Airtel Money making such a huge difference in people’s 
> lives,” Gabriel Solomon, the Head of Public Policy at GSMA said.
>
> He was alluding to the mobile money transfer services pioneered by 
> Kenya’s leading communication service provider, Safaricom (M-Pesa) and 
> rivals Airtel (Airtel Money) who followed suit with the concept 
> catching on worldwide.
>
> “It has improved production efficiency and social cohesion 
> tremendously and such an impact can be replicated worldwide if mobile 
> phone and mobile broadband technology is adopted worldwide,” Solomon 
> added.
>
> According to the report, the economic impact of the growth in mobile 
> telephony in Kenya has seen contribution to the Gross Domestic Product 
> (GDP) shoot up by whooping 250 percent since 2006 with the industry 
> expected to churn some $3b (Ksh300 billion) or 5.6 percent of the 
> entire GDP to the nation’s breadbasket in 2011.
>
> The decision to slash VAT on mobile handsets has led to a 200 percent 
> growth in sales in the past two years. It also saw the market expand 
> to include two other Mobile Network Operators (MNOs) namely Orange and 
> Essar (YU Mobile) added to the Safaricom and Airtel duopoly.
>
> The corresponding price drop on the handset pegged at 70 percent has 
> seen mobile coverage increase to cover 96 percent of the population, 
> one of the highest penetration rates worldwide.
>
> “Kenya and sub-Saharan Africa have shown to be leaders in innovation 
> in the developed world and we are seeing a shift of innovation from 
> the South to the West and this levels the playing field if ultimately 
> replicated worldwide with the world doing business,” Solomon remarked.
>
> Subsequently, MNOs in the country have played their part in motivating 
> the growth in productivity of the country’s economy as a whole by 
> contributing such increases by providing services such as mobile 
> banking, M-Agriculture and M-Education in addition to initiating a 
> number of social projects in Kenya’s rural areas.
>
> Events such as the annual Safaricom Lewa Marathon held at the Lewa 
> Downs Wildlife Conservancy where besides promotion of the rare black 
> Rhino at the 5,000 acre lush of Savannah in Northern Kenya, the race 
> also raises money for eradication of eye disease trachoma among the 
> nomadic Samburu community.
>
> “The experience of the Kenyan government’s removal on taxation on 
> handsets indicates there could be significant benefits for consumers 
> from removal of mobile specific taxes,” the report features.
>
> On the other side of the spectrum, the second study on Surtaxes on 
> International Incoming Traffic (SIIT) illustrated the adverse effects 
> state levies on mobile telephony were having on particularly rural 
> African society that continues to be left behind by the digital boom.
>
> Gabon and Congo Brazzaville have borne the brunt of the introduction 
> of SIIT by their governments with the price of inbound mobile call 
> traffic rising by 111 and 82 percent in that order.
>
> “MNO in Senegal noted that the number of international call minutes 
> terminated on its network decreased each month the taxation is in 
> place when the prices rose by 50 percent,” the report cited.
>
> Similar reversals were witnessed in Ghana where prices rose by 58 
> percent when SIIT was introduced where in addition to the reduction of 
> incoming calls, operators in African countries are reciprocating by 
> higher termination prices.
>
> Of more worrying concerns, the findings state, “Operators have 
> reported significant cases of illegal traffic since the introduction 
> of SIIT. This takes away the revenue from operators and governments 
> since illegal SIM boxes work in a way that congests a disproportionate 
> amount of spectrum and reduces the average quality of service for 
> illegal calls.”
>
> “Governments should liberate the mobile phone industry to allow 
> private sector investment for the benefit of the consumer as Kenya 
> demonstrated by dropping the tax on mobile phone handsets,” Solomon 
> asserts.
>
> During the launch of the report where Kenya was cited as a model 
> example of government’s active involvement in advancing mobile 
> telephony, the country’s Information and Communication Minister, 
> Samuel Poghisio, noted;
>
> “The world should think of mobile technology as an agent of social 
> development and there is need to worry about cyber security and such 
> steps are for the sake of mankind.”
>
> While proclaiming the country was in the process of rolling out an 
> ambitious M-Education and M-Health programme, he added, “We should 
> think of the mobile phone as an agent of rural development.”
>
> *While the figures stated above are beyond the comprehension of the 
> commoner, Jane Mwai, who owns a small stall for mobile phone handsets 
> and accessories in Kinoo, a settlement 15km from Nairobi’s Central 
> District perhaps best sums the impact of devices whose stated average 
> weight are given between 200 to 800 grams.*
>
> **
>
> “Before I ventured into mobile phone business three years ago, I used 
> to operate a shop on this very premises that was not bringing much and 
> I had to rely more on my husband,” she narrates.
>
> “However, since I changed to phones, I’m making enough to keep me 
> going and with my savings, I’m looking forward to opening another 
> stall in Kikuyu (some 5km away). Every day, there is a new mobile 
> product in the market and customers are always there so I made the 
> right choice,” she added.
>
>
>
> -----------------------------------------------------------------------------------
> If you have the strength to survive, you have the power to succeed. 
> Life is all about choices we make depending upon the situation we are 
> in. Go forth and rule the World!
>
>
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