I’m in Mexico right now, investigating the use of mobile phones and other new technologies by nonprofits, NGOs, and small civil society organizations in this country. My research is only just begun, but I’ve already encountered one major barrier to small groups leveraging the expansive mobile network and innovating tools and platforms using mobile services.
Telcel is Mexico’s largest mobile phone operator, and for many in the country, the only option. Around 75% of all mobile subscriptions in the country are with Telcel– a bit like if Verizon, AT&T, and T-Mobile were one company in the U.S., but instead of Sprint as an alternative, you had three or four smaller companies. A formerly government-owned company, Telcel was sold into private hands just a few years ago, and while some users I’ve talked to report that coverage and service has gotten a little better, prices have gone way, way up.
As Samhir wrote on Thursday, part of what has driven sky-high adoption rates in many developing countries is vigorous competition between mobile operators, driving down prices. In India, a 1-minute call costs about 7 cents (adjusted for PPP), and a text message costs the same. In Indonesia, voice is expensive (as much as 32 cents/minute), but sending an SMS costs only 3 cents. In Ghana, a text costs 7 cents, and in nearby Panama, where three robust mobile operators compete aggressively, it’s only 4 cents.
In Mexico, sending a text message with Telcel costs as much as 14 cents (again, adjusted for PPP), and for pre-paid subscribers (a group that includes most poorer people) the rates can be higher. Voice, meanwhile, can cost close to 50 cents per minute. Clearly, this is a serious barrier for adoption among poorer people, and a barrier for groups that may benefit from the network’s reach.
What’s more, when Carlos Slim and his América Móvil corporation took over Telcel from the government, they did so on the agreement that they would expand the network to cover all the many rural villages around Mexico, including those here in mountainous Oaxaca. Progress has been halting at best. Despite this, it’s not uncommon to meet people who have no mobile coverage where they live, and yet own a mobile phone. They have one, they say, for when they travel into the city, or for the phone’s entertainment features. In fact, over 70% of Mexicans own a mobile phone. But the use of the platform has been limited.
While mobile has been tricky here in Mexico, internet growth has been very strong, with 19% year-on-year growth in the number of users, helping make Latin America the fastest growing region in the world for internet usage. Social networking, communication, and online entertainment are all big here, and e-commerce is beginning to make an impact. As long as Telcel’s monopoly on mobile persists, we’ll likely continue to see internet as a stronger force in society.