This week’s Economist features another report on the innovation spurred by mobile phones in developing countries, a theme readers of my blog will know is close to my heart.
The ingenuity never ceases to amaze me. Take mPedigree, a mobile service launched last year enabling consumers to text serial numbers of medications to a central database in order to corroborate their authenticity.
Astonishingly, mobile phone penetration in developing countries has reached 70%, and has even exceeded 25% in the world’s least developed countries, including many in sub-saharan Africa.
Mobile network operators, sensing the large opportunity, are of course supportive in the adoption of new innovative mobile applications like mPedigree. Though operators sometimes try to hinder services whose direct benefit to themselves is unclear. For example, the technique of “beeping”, in which individuals ring a mobile number just once and immediately hang up, has become widespread in Africa as a way to request a callback without expending any credit on the network. I’ve witnessed ingenuous street merchants in Banjul that have even developed an elaborate method of assigning unique ringtones to each customer for order delivery as a way to circumvent any fee-based messaging system. The mobile operators, whose network bears the transmission of such acts while not receiving any compensation in return, are understandably skeptical.
But I would argue that there is a bigger picture here for the operators to consider. First, as the populations of developing countries increasingly integrate mobile phone use into their daily lives, primary market demand grows. The “beepers” of today will become paying callers tomorrow, and premium content downloaders after that.
Secondly, while it is true that the mobile operators do not receive payment for these unconnected calls, they can still collect data on them. Carriers in developed countries possess rich databases on their subscribers, and only today are beginning to unlock the monetization potential of this information. There is no reason that the intelligence operators collect on usage patterns, location, caller behavior, etc. in developing countries cannot be harvested to their benefit in the future.