Home Asia-Pacific II 2005 Bringing ICTs to the Asia-Pacific’s remotest regions

Bringing ICTs to the Asia-Pacific’s remotest regions

by david.nunes
Ron WiseIssue:Asia-Pacific II 2005
Article no.:9
Topic:Bringing ICTs to the Asia-Pacific’s remotest regions
Author:Ron Wise
Organisation:Cape Range Wireless
PDF size:92KB

About author

Dr Ron Wise is the Chairman of Cape Range Wireless Ltd. For the past five years at Cape Range Wireless Ltd, he has pursued the telecommunications industry, prior to which Dr Wise directed the company’s activities commercialising a novel power cycle, the Kalina Cycle, that is now privately owned and the technology is licensed to Siemens and others. Ron has a PhD in Biochemistry, with Post-Doctoral Research at Stanford University. He lectured at the University of Western Australia before becoming an entrepreneur in the field of technology.

Article abstract

Telecommunications have helped widen the economic gap and the digital divide between Asia’s rural and urban populations. Rural communities have been destabilised by the migration of their population to urban areas in search of jobs, education and a better life. Formerly, the cost of building telecommunications networks confined service to urban areas. New fixed-wireless technologies can lower the cost of building and operating communications services in rural areas, stimulate rural economic growth and help reverse the migration to urban areas.

Full Article

Information and Communication Technologies (ICT) can be broadly defined as technologies that allow the communication, transfer and processing of information. Easy access to telephony and communication services has been the mainstay of the developed world for decades and, in some countries, even generations. Over the last decade, we have seen the Internet have a profound impact on our everyday life. We now take for granted the ability to communicate, interact, share and disseminate information without geographic barriers. With the emergence of packet based voice communication (VoIP), the world of telecommunications is in the process of being reinvented, utilizing the Internet for voice communications, making it possible to make a phone call anywhere in the world for virtually no cost. It is hard for us in the developed world to imagine that there are billions of people in this world, many of these people in rural and remote areas of Asia, who have never even had the opportunity to make a conventional phone call. While Asian economies, at a national level, have experienced sustained growth, a massive economic and digital divide has developed between urban and rural communities. It is a long established fact that economic development and technology are closely linked. While it is true that export driven production fuelled by low labour rates was fundamental to the growth of Asia, the effective use of ICT allowed not only communication with their foreign markets that drove economic development, but also the ability to disseminate and convert information into applied knowledge. Such knowledge enabled sustainable economic development by allowing countries to remain competitive on a global scale. However, these same phenomena have marginalized rural and remote communities. Capital investment and infrastructure development flowed to those predominantly urban areas that fuelled economic growth. Rural communities have seen destabilisation due to migration of their populations to urban areas, drawn by the prospect of employment opportunities, education and higher standards of living. Telecommunications infrastructure, which historically has been the first layer required to facilitate effective use of ICT, was hugely capital intensive. Infrastructure required substantial forward planning and a target population that had not only a level of density, but was economically capable of providing some level of payback. None of these critical requirements were prevalent within the majority of rural areas. This, combined with the geographical dispersion of these regions, meant that in many of these communities it was not financially viable to build the underlying infrastructure that is necessary to facilitate any form of ICT. The landscape has now changed dramatically. Rapid technological advancements, particularly within the areas of wireless technologies, VoIP and open source software are causing traditional technological and economic barriers to start falling. Vendors have started to identify opportunities within these previously inaccessible rural markets and are now beginning to provide these markets with cost efficient, low maintenance and scalable communications infrastructure. Communities that currently have no infrastructure will not have to go through the historical sequence of deploying an expensive fixed line infrastructure, and then follow by deploying a varying number of increasingly obsolete data network technologies. New infrastructures can be deployed quicker, easier and at substantially lower capital outlay. The new infrastructure technologies will actually allow these communities to ‘leapfrog’ over several generations of now obsolescent technology, directly to the low cost voice and broadband data communications that many of us in the western world have only been able to take advantage of in the last few years. However, reducing the digital divide between urban and rural communities requires much more than just connecting these communities with infrastructure. For sustainable, achievable, rural development, policy makers and rural community leaders need to work together to address four key areas – economic development, education, health and community stability. Economic development ICT enable the execution of a range of commercial activities that were previously time-consuming or unachievable. Agriculture and fishery are the mainstays of rural communities, and a number of middlemen traditionally facilitate trade in their produce. As a result, only a small percentage of the final price of the produce ends up with the farmer. ICT let farmers and fishermen promote their businesses directly with the end market – the retailer or consumer – and increase the community’s income. Government initiatives to provide real time market information and support services via ICT will help increase competitiveness for these rural communities. Several studies document the improvement in prices received by farmers, because of better access to telephony, in developing countries in Asia, Africa and Latin America. The improved flow of information evidently reduces monopsony, or buyer’s monopoly, power in agricultural markets. This is especially true for markets in highly perishable products, where prices are not, or only irregularly, published. Where information flows are poor, the law of one price does not operate, so middlemen can employ discriminatory pricing practices with different suppliers or customers. The theory of information and market signals, and the available evidence on the relationship between market integration and economic development, suggests that greater access to ICT can significantly improve the living standards of rural farmers and fishers by enhancing the functioning of relevant markets. More advanced technologies, such as Internet-enabled computers, can provide even greater benefits. For some markets, a single mouse click can instantaneously, and simultaneously, reveal market prices in numerous locations, without having to contact each directly, say, by telephone. Education Valuable potential applications of ICT for education include distance access to libraries, textbooks and instruction. Distance learning can greatly expand the availability of opportunities to learn. Distance learning programs are currently available for a wide variety of subjects that cover everything from basic school education to best practices for farming. Health ICT provide the opportunity to increase the level of health care to rural communities. Access to global medical databases and best practices, and even on-line advice and supervision from top specialists at major medical centres, gives health care staff at remote locations the training and information they need to better support their community. For instance, many public health problems can be prevented through information dissemination programs, or treated and via remote diagnostics. Prevention, more often than not, cost less than treating the problem afterwards. Community stability Improving the educational, health and economic development of these communities will help stem and reverse the urban migration. This, combined with government programmes that support community stability and development, will convince many of those who have left to return to their communities of origin. It is of little surprise that ICT are widely recognized today as an important prerequisite for participation in the modern economic universe. Investment in ICT generates a growth dividend because the spread of telecommunications reduces the costs of interactions and transactions, expands market boundaries, broadens trade networks, facilitates information flows and substitutes for costly physical transport. There is a wealth of literature attempting to gauge the economic impact of telecommunications. The findings of Roeller and Waverman suggest a substantial growth dividend in OECD nations. Roeller and Waverman also demonstrated that the impact of telecoms penetration on growth depends upon the initial level of penetration. The greatest impact occurs when there are 30 or more mainline phones per 100 inhabitants, which corresponds to a telephone in nearly 70 per cent of households. An Asian Development Bank study found that the introduction of telephones in rural Thailand almost doubled farm income because it enabled farmers to regularly check prices for their produce. In Tumaco, Colombia, community telephones, beginning in 1994, led to increased trade, employment and government service delivery. In rural Ecuador, access to telecommunication services improved opportunities in the rural non-farm sector, thereby increasing incomes in the rural non-farm sector. Operating public call centres can, in itself, be a major source of rural employment and income. In the Indian state of Punjab, for example, the 10,000 telecentres there each generated an average of US$9000 in revenue in 1996. Numerous cross-country studies also found a strong link between telephone rollout and income growth. Cross-country evidence further suggests that limited access to telephone services within a country is a powerful force behind the growth of income inequalities. Those with access to telephones benefit, whilst the incomes of those without a telephone stagnate. Because of the historical concentration of access among relatively wealthy urban populations, telephone rollout has traditionally created divergence in incomes between rich and poor countries and between those with and without telephones in poor countries. The difficulty and cost of providing telephone access in the remote areas of developing countries explains why teledensity in rural areas is typically strikingly lower than in urban areas. In recent years, mobile technologies have drawn much interest and grown substantially in developing countries. Mobile networks can be quickly rolled out since they do not require the copper cable networks that are so slow and expensive to put in place, particularly in areas with difficult access. Nevertheless, mobile networks are not necessarily the best solution for rural communities in developing countries. There are now fixed wireless systems on the market that have been specifically developed to overcome the difficulties and cost issues associated with the deployment of traditional fixed line or mobile technologies in rural areas. Fixed wireless systems combine the advantages of both traditional mobile and fixed line technologies: they can be quickly rolled-out due to wireless technology but provide – both the telecommunications companies and subscribers – the cost savings and other benefits of fixed line technology. The most obvious cost savings and benefits of fixed-wireless systems in rural communities are: √ Fixed-line handsets are cheaper than mobile phones; this leads to quicker penetration of the market and rapid universalisation of service; √ Call charges for fixed-line services are lower than for mobile phone services and are more in line with the income profile, the ability to pay, of the rural end user; √ Fixed-line access enables reliable and affordable Internet connectivity, providing users with a tremendously increased information flow for education, public health and other purposes; √ Fixed-line handsets, unlike mobile phones, do not require stable power sources – often not available in rural areas – for recharging. Accordingly, there is every reason to believe that fixed wireless technologies will provide greater economic and social returns in rural areas than any other competing technology on the market. The policy implications for developing countries are clear. For economic progress, it is worth investing heavily in telecommunications to get close to universal service. Fixed wireless networks can be rolled-out over large areas more rapidly and at lower cost than traditional fixed line or mobile technologies. As a result, they can play a vital role the economic development, education, health and community stability in rural communities. Moreover, providing ICT to the remotest of communities in Asia helps to preserve the culture and identity of those communities whilst, at the same time, affording them access to the advances made in the developed world. It is not a simple task, governments cannot take it lightly, but it is necessary if the developing nations are to bridge the once insurmountable digital divide.

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