In Nepal, the mobile phone (MP) users have been increasing since its introduction in 1999. At that time, it was considered a symbol of indulgence. But today, its rising popularity has taken it to approximately 5 million MP users in both the urban as well as rural areas within a very short span of time. But the exact number of users is hard to come by, not least because of the continued rapid growth in the number of subscribers. In the case of Kathmandu city, people of every stratum (a wage earner, an industrialist, a diplomat, a driver, a porter, a housewife, a student, a civil servant, a teacher, a laborer, a vender, a politician and others) possess a MP. The use of MP is limited in the rural areas as compared to the urban due to various reasons. But, its use would be more valuable and productive in rural areas where adequate infrastructure development is yet to take place.
Some international institutions have investigated the economic impact of the use of MP in developing countries. A study by the World Resources Institute (WRI) found that as developing-world incomes rise, household spending on MP grows faster than spending on energy, water or indeed anything else. In the same manner, a World Bank (WB) study group has found that adding an extra ten MP per 100 people in a typical developing country like Nepal boosts growth in GDP per person by 0.8 percentage points. It further states that MPs developed in a few short years, and once the toys of rich people, they have become tools of economic empowerment for the world’s poorest people.
In Uganda, entrepreneurs and development organizations are eagerly seizing the opportunity from the fast growing MP. Farmers in rural area frequently find answers to questions about farming practices and health issues using Google text messaging and an operator service. Throughout Africa, millions of people use their MPs to transfer money, turn on water wells, learn soccer games scores and buy and sell goods.
An ICRIER study on the impact of MP on farmers across several Indian districts highlights the key role played by mobiles in lowering transaction costs and raising the income-levels of farmers by efficiently addressing their immediate agricultural-information requirements. This study found that MPs have huge potential to enable the small farmer to diversify from self-sustenance farming to higher income generating ventures like horticulture crops, animal husbandry and fish farming in paddy fields. Another study conducted by a 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% in the emerging economies such as China and India.
These findings are very much relevant to the Nepalese context because 90% of Nepalese villages lack roads, reliable postal services, and parlous landlines. It highlights the importance of MP as it provides telecommunications facilities in the absence of the development of physical infrastructure, except power. In the remote villages, the MP can substitute for travel, allow quicker and easier access to information on prices, and enable traders to reach wider markets, boost entrepreneurship and generally make it easier to do business. The economic condition of people may have gone up due to information on various economic activities. People may have developed their ability of entrepreneurship to produce goods and services by knowing the technological know-how, market condition as they can exchange information, ideas and views through MP from any corner of Nepal in a short span of time at the minimum cost.
Access to communication is a fundamental right of the people that makes them aware, knowledgeable and innovative. MP facilitates to provide the right of communication of the people even in the remote places. With a view to provide communication facility, Nepal has been expanding MP network throughout the country. In recent years, MP users are increasing. It is expected that MPs will make people more efficient and innovative in performing their economic activities as evidenced from the findings of the studies undertook in the international level. Putting these evidences in place, there is an urgent need to undertake a study to examine the economic impact of the use of MP which is not yet investigated in Nepal as MPs have the potential to play a key role in efficient logistics management and reduce costs for both private and the government sector. MP saves travel time of the people and provides them innovative ideas. Services such as mobile-phone-based agricultural advice, health care and money transfer could provide enormous economic and developmental benefits. Witnessing the widespread use of MP in the country, its contribution in overall economic performance in general and education, health, agriculture, markets, technological know-how, travel time and its use in economic activities, people’s knowledge, perception and attitude etc in particular should be evaluated to examine the economic impact of MP.
Dr. Dhungel is Associate Professor, Central Department of Economics, TU
Mobile phone potential Real GDP booster
Published: 05:21 am Oct 26, 2009