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Asia’s Booming Mobile Economy

September 19, 2013

Mobile technologies are reshaping the world with blazing speed. In the Asia-Pacific region, which has a low penetration of landline phones in many markets, the mobile phone has become a focal point of daily life—for chatting with family and friends, shopping, transferring money, reading the news, and posting to microblogs. It has expanded people’s horizons and brought them closer together.

Mobile technologies also spur economic growth, both directly and indirectly, by improving productivity in regions without traditional infrastructure. Farmers, for example, now have access to market and weather information that previously was unavailable to them.

In the Asia-Pacific region, mobile technologies are currently contributing close to 4.9 percent of GDP, with 3 percentage points attributable to productivity improvements, according to a recent study by The Boston Consulting Group (BCG). By 2020, as mobile penetration rises, those technologies’ contribution to GDP could rise to nearly 8 percent. The study on the socioeconomic impact of mobile technologies was commissioned by the GSMA, the mobile industry’s trade association.

Eugene Goh, one of the authors of the study, talks about the story behind the numbers.

About Eugene Goh

Eugene Goh is a principal in the Dubai office of The Boston Consulting Group. He has worked on strategy and sustainability for clients in the technology, media, and telecommunications and public sectors, including a number of cases involving socioeconomic impact assessments.

Aside from overall GDP, what are some of the big numbers you uncovered?

The mobile and point-of-sale industries have created 16 million jobs in the Asia-Pacific region. By 2020, that will rise to 22 million. In addition to spectrum license fees, those industries are paying $100 billion in taxes and government fees. That number will triple by 2020. Mobile technologies are a social and public good.

What surprised you most in your research?

Consumers in mature markets tend to take mobile technologies for granted. But that is not so in emerging markets. Mobile technologies are making profound improvements in the lives of people, and we are nowhere close to the end of this journey of transformation. Education, social services, and health care are all being delivered over mobile phones to people who did not have access to these services, which many of us take for granted.

What are some of the mobile innovations that you learned about in the course of the research?

A company called Simpa Networks, based in Bangalore, India, is providing rural villages with microgrids that supply individual homes or small clusters of homes and businesses with solar-powered electricity. Consumers pay for electricity when they need it by sending a payment over their phone and receiving an unlock code by text message. The service reduces the use of expensive, dirty kerosene and saves villagers long treks to recharge their mobile phones.

What is the next new thing to expect in mobile technology in the Asia-Pacific region?

The only limit to mobile technology’s potential is a lack of imagination. Today, expectant mothers in Bangladesh are receiving text messages with prenatal advice. This mobile-assisted education can help reduce perinatal and maternal mortality by 30 percent. In India, 18 percent of fruits and vegetables spoil on their way to market. Several companies are working at mobile solutions to help reduce that rate. It is critical that policy makers not inadvertently prevent or frustrate such developments.

What could stand in the way of the rollout of such developments?

The maturation of mobile services depends on the availability of spectrum. There is a large debate occurring within the Asia-Pacific region on the reallocation of the so-called 700 megahertz band of spectrum. As broadcasters move from analog to digital transmission, this prime spectrum, which actually ranges from 694 to 806 megahertz, will be freed up. Broadcasters and mobile operators both want it. While many Asia-Pacific nations have agreed to reallocate this spectrum to mobile services, several countries are still weighing their options. If neighboring nations do not harmonize their reallocations of this spectrum, signals will interfere with one another, and the benefits of mobile technology will diminish.

Asia’s Booming Mobile Economy
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