Let’s not write it off quite yet

A couple of months ago a member of the Social Mobile Group on Facebook asked an interesting, and pertinent, question. Commenting on a picture of a payphone attached to a bicycle from the kiwanja Mobile Gallery (this bike is taken around the streets of Kampala for members of the public to use to make calls), they wondered what was going to happen to these kinds of entrepreneurs as more and more people began owning their own phones.

A recent article in Fast Company magazine has set out to answer just that. Looking specifically at decreasing income levels among Grameen’s Village Phone Operators, it points the finger of blame squarely at the proliferation of mobile phones (the same finger can be pointed by the fixed payphone network, another victim). On the surface, blaming mobile proliferation seems like a safe bet. After all, if you have your own phone then why pay to use someone elses?

The increase in mobile ownership has certainly had an impact, but any time you mix economics, technology and human behaviour together, some pretty surprising things can happen. And this is where my love for anthropology comes in handy.

I was fortunate to have spent four weeks in Uganda last month, working with Grameen on their Village Phone Program at the same time that Business Week researched their own article on mobiles and economic development in Africa. Nothing beats being on the ground, and I’m very lucky to regularly get the chance to spend time in developing countries where I’m able to get a really good sense of what does and doesn’t work.

Many of the blog entries circulating the web in the last week or so – citing the Fast Company magazine and touting the ‘end of the Village Phone’ – fail to appreciate some of the subtler issues at play. The assumption that people will stop using a Village Phone the minute they own their own is not the open and shut case you might think. During my month in Uganda, I would regularly see people walking up to a Village Phone Operator, mobile in hand, look up a number and read it out to the phone lady to key into her own handset. From my own observations, this seems to happen for a number of reasons.

Firstly, for many owners, mobiles double-up as glorified contact managers, clocks, alarms, torches and, finally, a device which enables them to be contacted any time of day or night for work, or to stay connected with family or friends. Few maintain enough credit to make calls. Many taxi drivers, for example, hold just enough credit to enable them to ‘flash’ a phone (ring and hang up) to indicate that they are outside and waiting.

The reason for the lack of credit leads onto the second point. Few mobile owners want to spend a dollar or more topping up their phone – the amount needed to get enough credit for about 5 minutes of calling – when all they want to do is quickly touch base with a business contact or family member. Instead, a couple of hundred shillings gets them a 40-second call with a Village Phone operator, a smaller amount of money for a small amount of time which is utilised to the full with amazing skill.

And thirdly, call rates are actually cheaper through the Village Phones. Whether the caller has a mobile or not, and whether that phone has credit or not, many people still seek out a Village Phone to make their call because it saves them money. That’s the bottom line.

Try telling these people that the Village Phone is dead.

Mobile ownership may be increasing at a phenomenal rate in the developing world, but more people still don’t own phones than do, and most people earning a dollar-a-day are still a long way off affording one. The Village Phone has been a huge success – there is little dispute about that – but, as with any business, market changes force a period of re-evaluation and adjustment, and the mobile market has moved quicker than most.

Village Phone might well be a victim of its own success, but let’s not be too hasty in condemning it to the history books quite yet…