A cell phone in every hut

Author: John Monczunski

The Germans call them “hanny,” in Japan they’re “kanny.” In Singapore they say “prawn.”

But the best nickname for cell phones may be “money” — particularly in Third World countries, where Notre Dame economist Barry Keating says the potential economic impact of wireless communications technology is staggering.

“This is nothing less than an economic revolution — if it is allowed to happen,” Keating argues in a recent issue of the International Journal of Social Economics.

For the first time individuals formerly excluded from the world economy can now tap into it, the Notre Dame economics professor says. Mobile phones, Keating says, “allow Bangladeshi farmers to get fair market prices for their rice and coffee, and farmers in the Cote d’Ivoire (Ivory Coast) to bypass middlemen to get full market value for their product.” Wireless communication gives instant access to the Internet as well.

Many recent studies have linked improved telecommunications with economic growth. Until the advent of wireless technology, however, developing countries were largely unable to harness this economic engine because of the prohibitive cost of building extensive land-line communications networks, Keating says. Consequently, those in poorer countries have had limited access to modern communications. The British journal The Economist reports that 40 million people in Third World countries are waiting for phone lines. For some it will take more than 10 years.

The major obstacle to wireless communication expanding into the Third World is government interference, Keating says. Historically, when governments set standards, the protocols become stagnant and set in stone, he observes. Costs go up.

The Notre Dame economist favors a relatively unfettered telecommunications industry, allowing a free and open market similar to that enjoyed by the computer industry, which, he points out, has flourished in a largely unregulated fashion. A government auction to private enterprise of the frequencies used to carry wireless calls offers the best way to govern the airwaves, Keating argues.

Notre Dame Magazine, Summer 2002