Digital Divide: Wireless Solution?
By Joachim Bamrud, Thu Sep 06 00:00:00 GMT 2001

Can the mobile Internet help reduce the gap between the digital haves and have-nots?

The wireless Internet will play a key role in shrinking the divide, but there will still be a digital divide within the wireless Internet community.

Enter an Internet cafe in downtown Madrid, Spain and its equivalent in Panama City, Panama these days and you'll undoubtedly experience some similarities. Yes, Spanish will be the language spoken by the clerk. And yes, there will probably be several tourists. But you will also find something else: Locals. That's right. Locals who basically cannot afford a desktop PC. They will, though, more often than not, be carrying a mobile phone.

And that, my friends, is a key clue to why I believe the digital divide will necessarily be reduced, (although not all together abolished).

All over the world, low-income consumers that have lost out on the PC Revolution, have joined the Mobile Revolution, thanks to the fact that mobile phones can cost little or nothing compared with even the least-expensive PCs.

Whereas the PC is still, for better or worse, a luxury item in most parts of the world, the mobile phone is not.

In Southern Europe, especially Spain and Italy, operators have had a phenomenal success in recruiting new subscribers with the prepaid phone services that often are as simple as buying the phone with a pre-paid SIM card and no registration or subscription.

In Japan, i-mode has gained more than 26 million subscribers in a little over two years, largely due to the fact that its entertainment and information services otherwise would have been out of reach for most consumers who can't afford PCs.

(To be sure, not all low-income areas are success stories for mobile phones. In the United States, the device is still somewhat of a luxury due to a combination of reasons, including the guaranteed minimum high costs of usage (or non-usage). While penetration has been growing strongly, the rate is still only 30+ percent, compared to 70 percent in several European markets.)

So, while UN and G-8 committees meet and discuss ways to reduce the digital divide, the divide is already being reduced by the growth of the wireless Internet. To be sure, the digital haves are also benefiting from the mobile Net. So, in theory, if more "digitally privileged" consumers will join the mobile net market, the divide will continue.

Not an easy question

Yes and no. "Yes" - in the sense that the digirati clearly are among the most avid users of the mobile Net. But "No" - in the sense that the wireless Internet is being accessed (and has the potential to be accessed) by exactly those groups that have been deemed victims of the digital divide.

And the potential is even stronger. Here is a way billions of people can afford to get key information and data and services without the more costly infrastructure of electricity and fixed lines and PCs in their homes.

Bill Gates has rightly pointed out that the value of PC's isn't that great in poor, rural areas without even basic utilities and health services.

But wireless devices are in a different category, all together. Their costs aren't "competing" with electricity and water access.

The key, of course, is installing enough base stations in the relevant areas and providing enough low-cost handsets.

And that's not a given for many operators, of course, especially in the poorest areas of the world. And especially these days when the telecommunications sector is under immense pressure for short-term revenues to offset growing losses.

However, public funds can and should help bridge the gap. After all, using only a fraction of the allocated budgets for bringing PCs and fixed Internet to the Third World and less-developed segments in the First World will make a huge difference.

However, already now many consumers in the developing world are complaining that it's mainly urban, heavily populated areas that are benefiting from mobile telephony. And the 2.5G and 3G technologies will likely be concentrated in those areas, further causing a "digital divide" within developing countries.

Then, there are the handsets. Even though basic wireless web phones will be available throughout the Third World, there will be a gap between the lowest-cost models that will dominate and the higher-end ones that will be purchased by those who can afford them. The higher-end ones will likely also be popular throughout areas like Northern Europe (especially the UK and Scandinavia).

And thus, even with the wireless web we will see a digital divide. Which means Michael Powell does have a point. The chairman of the US Federal Communications Commission recently caused a stir when he declared that there wasn't so much a digital divide, as a "Mercedes divide." A lot of people, including him, wanted a Mercedes, but couldn't afford one. What he meant was that we have to differentiate between luxury and basic products. Technology, Powell feels, is still the former.

I don't agree that technology should be a luxury, but it is. But, the fact is also that Europe and Japan have shown that mobile phones can also be a non-luxury, mass-market product. So, while there are tons of technology products (including many mobile phone models) that can be deemed luxurious and out of reach for the poor worldwide, there are also plenty of mobile phone models that can be had for free or as little as $10 or $20 (with subsidies from operators).

Couple that with the wealth of data that can be accessed from wireless web phones, and you've got a powerful tool for the poor. Especially health information, as Alex "Sandy" Pentland, Academic Head, MIT Media Laboratory, Joachim Bamrud is an award-winning journalist with 17 years experience as a writer and editor in the United States, Europe and Latin America. Bamrud has worked for various print, broadcast and online media, including Latin Trade, Reuters and UPI.