Saturday, April 12, 2008

Living on $4/day and owning a cell phone

There's an excellent article in this coming weekend's NY Times Magazine in which a reporter follows around a "human-behavior researcher" or "user anthropologist" at Nokia. Basically, he travels around the world to discover how people use their phones and what Nokia could do to make them sell better. His work mainly is focused on the Third World, it being the place with the largest untapped market for cell phones. It's full of fascinating anecdotes, and reminds you of the power of something that seems as benign as a cell phone. There's a lot that's fascinating about this article, but this is what I found the most intriguing:

One of the most remarkable findings was that even very poor families invested a significant amount of money in the I.C.T. category — information-communication technology, which, according to Al Hammond, the study’s principal author, can include money spent on computers or land-line phones, but in this segment of the population that’s almost never the case. What they’re buying, he says, are cellphones and airtime, usually in the form of prepaid cards. Even more telling is the finding that as a family’s income grows — from $1 per day to $4, for example — their spending on I.C.T. increases faster than spending in any other category, including health, education and housing. “It’s really quite striking,” Hammond says. “What people are voting for with their pocketbooks, as soon as they have more money and even before their basic needs are met, is telecommunications.”

The fact that one would be surprised at the spending habit's of another seems obvious: human desire and exchange is complex, so complex that we cannot hope to possibly be able to understand it all. This is precisely the reason that communism could never work even under the most helpful conditions: no one can possibly allocate goods as well as the market. And yet, in development, people are so often focused on introducing certain things into people's lives, be it safe drinking water of access to healthcare. And yet, when people make decisions with their own money, they spend it on cell phone minutes!

Also, this makes me feel more optimistic about Somalia, because despite its so-often derided status as a stateless wasteland, it has some of the cheapest calling rates and competitive telecom markets in Africa.

No comments: