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Mobile Phones as remedy for developing nations of Africa
March 09, 2005;
Vodafone publishes report that proves positive effects of mobile phones on life of people in Africa.

New research reveals economic and social benefits of mobile communications in Africa

New research released today (9 March 2005) shows that Africa has seen faster growth in mobile telephone subscriptions than any other region of the world over the last five years. The report also highlights the consequent economic and social benefits in terms of per capital GDP growth, Foreign Direct Investment and life satisfaction.

Africa: The Impact of Mobile Phones was launched at a meeting in London hosted by the Centre for Economic Policy Research, the Department for International Development and Vodafone Group. Independent research by leading economists found:

- A developing country which has an average of 10 more mobile phones per 100 population between 1996 and 2003 would have enjoyed per capita GDP growth that was 0.59 percent higher than an otherwise identical country. This is twice the size of the growth impact of mobiles in developed countries, with mobiles playing the same role in the developing world as the spread of fixed-line telephony did in countries like the US, UK and France in the 1970s and 80s

- Fixed and mobile communications networks, in addition to the openness of the economy, the level of GDP and other infrastructure, are positively linked with inward Foreign Direct Investment, and the impact of mobile phones has grown more significant in recent years

- 97 percent of people surveyed in Tanzania said they could access a mobile phone, while only 28 percent could access a landline. Income, gender, age, education and even absence of electricity do not create barriers to mobile access in rural communities, and mobiles are one of the most widely-owned consumer assets

- Mobiles save people living in rural communities the financial costs and time involved with travel. As a result, 85 percent of people in Tanzania and 79 percent in South Africa said they had greater contact and improved relationships with families and friends as a result of mobile phones

- Over 85 percent of small businesses run by black individuals in South Africa rely soley on a mobile phone for telecommunications

- 62 percent of small businesses in South Africa and 59 percent in Egypt said they had increased their profits as a result of mobile phones, in spite of increased call costs

- Mobile phones are proving important for job search in South Africa with 24 percent of people saying they had made or received a call about an employment, business or training opportunity

Launching the report, Sir Julian Horn-Smith, Deputy Chief Executive of Vodafone Group Plc, said: "Communication is core to the way in which markets function and how humans interact. In countries where infrastructure such as roads, fixed telecommunications and the postal system do not work as well as they could, mobile communications is making a substantial contribution to development.

"This report has shown that business models for mobile communications that are based on accessibility play an important role in developing economies. We believe that this information should become part of the debate on Africa's future."

Speaking at the event, chaired by Diane Coyle of Enlightenment Economics, CEPR Chief Executive Stephen Yeo said: "Mobile phones can enable developing countries to "leapfrog" old technologies and the result is explosive growth: 5000% in Africa between 1998 and 2003. They are helping increase investment into countries, and are helping businesses and people become more efficient. We endorse this research as it provides the first empirical evidence of a link between social and economic development and the establishment of mobile phone networks."

A copy of the report Africa: The Impact of Mobile Phones can be downloaded from www.vodafone.com/africa.

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