Cellphones fuel growth in developing world - by Malcolm Foster
Today, mobile phones are the primary form of telecommunication in most emerging economies, fulfilling much the same role as fixed-line phone networks did in facilitating growth in the United States and Europe after World War II. Some developing nations have even jumped out in front as mobile pioneers. In the Philippines, more than 4 million people use their cellphones as virtual wallets to buy things or transfer cash — services still rare in many wealthy countries, with few exceptions like Japan.
As service charges and handset prices have plunged and coverage areas have expanded, cellphone subscriptions in the developing world have surged fivefold since 2000, to 1.4 billion at the end of 2005, according to the U.N. International Telecommunication Union. That's nearly double the 800 million in advanced economies.
Research shows that greater cellphone use can drive economic growth in emerging economies. Based on market research in China, India and the Philippines, consulting firm McKinsey & Co. found that raising wireless penetration by 10 percentage points can lead to an increase in gross domestic product of about 0.5%, or around $12 billion for an economy the size of China.
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