Mobile communications are an increasingly important platform for the delivery of critical services in rural and impoverished areas. Mobile phones are used for much more than inter-personal communications. Doctors can diagnose patients, people can send and receive money, users can crowd source crisis information, and so on.
According to the International Telecommunications Union, 2-3 billion people around the world lack affordable mobile telephone services that facilitate critical communications and access to information. In Mexico alone, according to the Secretary for Communication and Transportation, there are 50,000 communities without any coverage. Due to market saturation in developed countries and economic disincentive in the developing world and especially rural areas, mobile coverage proliferation is slowing dramatically worldwide. And yet most telecom regulations forbid the provision of strictly rural service, effectively killing any chance for small providers interested and capable of serving the un-served to thrive.
Currently, only very large, politically powerful companies have access to the mobile spectrum and the concessions to provide cellular service. In Mexico, according to a recent OECD report on the Mexican telecommunications sector, “the poor development of telecommunication infrastructure in Mexico is due in large part to lack of effective competition, and the resulting high level of market concentration…This has resulted in a significant welfare loss for users in Mexico. This welfare loss is incurred by existing users who are overcharged in their use of telecommunication services, and from the welfare loss resulting from unrealised subscriptions to telecommunication services. Consumer welfare loss in the Mexican telecommunication sector over the period 2005-09 is estimated at USD 129.2 billion, or an average of USD PPP 25.8 billion per year. The latter amount is equivalent to 1.8% of Mexican GDP per year.”
As evidenced, both the business model and the technology that traditional providers employ and the regulation and policy regimes in place, have proven unable to solve the problem of connecting much of Mexico. We aim to challenge this situation and create opportunities that allow municipal governments and community-based enterprises to become service providers as well, thereby increasing access and spurring economic growth in places sorely in need of both.
There is another aspect to this issue which is important to consider, relating to the affordability of mobile communications. One of the communities where we are proposing to work, Tlahuitoltepec Mixe, after years of being left out, was finally connected by the country’s largest provider and now has cell phone service. However, the company is charging exorbitant rates to the residents (30-40 US cents per minute) and assigned a non-local area code to the town. Although the town is in Oaxaca, the company has set up the network there as if it were in Veracruz, which is many kilometers away. And since there is still a higher tarriff for roaming or out of area calls in Mexico, those in the town are paying even more than they should over and above the already excessive costs.
We did a very basic analysis of how much money was being spent on basic cell phone service in the town. Tlahuitoltepec has around 9 thousand residents, and we assumed that around half use a cell phone. And, on average (conservatively), each spends 150 pesos per month. If you do the math, the sum you get is $54,000 US Dollars per month being spent. This money is changing hands from the residents of the town to the cell phone company at a rate of nearly $650,000 USD per year.
Trying to keep this money circulating locally is one of our major objectives and relates directly to the ability of a community to operate their own communications infrastructure. This is usually where the powers that be begin to have a problem. It is one thing to operate your own radio, etc. but it is another to create economic benefit locally by running ads for the general store in town. In other words, the authorities are at times willing to tolerate communities running their own infrastructure, but it must always be “not-for-profit”. This is fine in some cases, but eventually destabilizes local communication projects and keeps them from attaining long-term sustainability. Challenging this structural (political, economic) imposition must be a priority.