PARIS A year ago at the 3GSM World Congress, the plan to extend mobile telephony into "emerging markets" was downright heartwarming. It was about telco operators hauling basestations into darkest Africa and deepest Asia, running those basestations on generators and hauling gas through the jungle in pickup trucks to fuel the generators. It was about entrepreneurs riding donkeys from village to village sharing a single mobile phone among hundreds of people in need of medicine, food, education and mosquito nets.
Those good old days lasted a year.
At 3GSM 2007 in Barcelona, the big "emerging markets" initiative, announced by GSM Association CEO Rob Conway, was a joint GSMA/MasterCard program, in collaboration with banks all over the world, to help "unbanked and underbanked" workers remit small amounts of cash to their families back home in Mexico, the Philippines and other Third World nations. Conway noted that the annual volume of such transfers exceeds $200 billion, but fees for sending money through current systems can devour as much as 40 percent of the remittance.
For example, Conway said a U.K. worker sending 50 pounds to his family in India must pay 12 pounds (24 percent) in transfer feeswith no assurance that the money would reach its destination. Conway said GSMA and MasterCard, working together, would reduce such fees, speed the transfers and make them more secure and transparent.
Laudable goals, indeed. But few details emerged, and neither Conway of the GSMA, norin a later presentationW. Roy Dunbar, president of global technology and operations for MasterCard International, explained why banks now raking in a 40-percent fee would be happy to split a smaller take three ways with MasterCard and a mobile-phone operator.
And why MasterCard? I tried twice, unsuccessfully, to get MasterCard to explain the transfer system. In his speech, Conway suggestedellipticallythat remittances would probably require a MasterCard at each end, one for the wage-earner and one for the recipient.
Still, MasterCard? This is the same company that collaborating with banksmails millions of unsolicited cards willy-nilly, in hopes of hooking people on revolving credit. Credit card companies are especially fond of offering "no-strings" credit to the terminally guillibleteenage girls, college students, unemployed actors, agoraphobic catalog junkies and compulsive gamblers, plus the occasional dead person.
Until now, credit card companies had little access to the world's poorest, because most of them lack mailboxes and many cannot read. Now, aided by mobile-phone operators and a new cash transfer system, the door to the last credit-free people on Earth swings open.
You can't help but wonder: Will new MasterCards foisted upon the poor include all the features typical of those that land at the doorsteps of every trailer park in America? Will the migrant poor, encouraged to use their brand new plastic, find themselves unexpectedly dunned for annual fees, late fees, finance charges and 20 percent interest on the unpaid balance? Will they discover the wonderful experience of hearing from collection agencies? And will the governments of Indonesia, Tunisia and Senegal, like the U.S. Congress, cave to pressure from MasterCard, Visa and Amex, to tighten bankruptcy laws to prevent "emerging market" cardholders from escaping the oppression of massive credit card debt?
Will the poor now find themselves hounded from manger to grave not just by poverty, disease, ignorance and terrorism, but also by Citicorp and Capital One?
Perhaps most indicative of the shift in emphasis on "emerging markets" at 3GSM was a presentation by Dinesh Wadhawan, CEO of India Times, who merrily enumerated the myriad value-added services that can be hawked to the Third World masses once handsets are placed into their callused hands: ringtones, music downloads, video games, pornography!
The latest version of "emerging market" strategy among phone companies appears capable of delivering to the world's poor many things they desperately need. But it is more likely that the phone companies, credit card companies and banks will also succeed in extracting from these unwitting paupers most of the pennies they would otherwise use for rice.
David Benjamin, a freelance writer based in New York and Paris, writes often for EE Times on technology issues, usually from the Luddite point of view.