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Ethan Zuckerman of the WorldChanging blog writes eloquently about the importance of mobile phones in low-income communities. He identifies three factors critical to the spread of mobile telephony: new versus replacement infrastructure, pay-as-you-go pricing, and used phones.

Zuckerman is right on. By leapfrogging landline infrastructure, developing communities have been able to adopt modern technology faster and cheaper than we have in the U.S., for example. Pay-as-you-go pricing, meanwhile, lets low-income consumers afford to make a call when they need to, rather than sign up for lengthy guaranteed contracts – as documented in this case study of Smart Communications in the Philippines. Used phones, operating on analog networks, are often more affordable than new GSM handsets - and the shipping containers they arrive in can even be used as shared-access, entrepreneur-run phone shops.

However, it’s only towards the end of his post where Zuckerman hits the nail on the head: “More fundamental than these three factors is the fact that very poor people are willing to pay money to communicate.” He cites Grameen Phone as an example – read the case study here. (PDF)

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Some 250 people packed a hotel conference center here in Mexico City to hear Professors Stu Hart and CK Prahalad and a host of Mexican government officials, corporate executives, and social entrepreneurs talk about the business and social opportunities represented by the base of the pyramid. The workshop builds on the broader BOP conference held last December in San Francisco by encouraging participants to translate concepts into local contexts.

The atmosphere has been electric, with lots of side conversations and questions about how best to actually make things happen. Like the similar event in Sao Paulo, Brazil earlier in the week, where some 500 people attended, there is a real sense that business approaches to addressing poverty and other unmet needs is an idea whose time has come.

WBCSD member companies have a combined annual turnover of more than 5 trillion USD, and their products and services touch the lives of about 2.5 billion people every day. Imagine the possibilities if even a portion of this business energy is harnessed to transform the lives of the world's poorest people.

This premise forms the basis for Business for Development, a new WBCSD report that makes the business case for sustainable development by illustrating how the private sector is taking an active role in the achievement of the Millennium Development Goals.

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An April 2005 report on the financial performance of African microfinance institutions (MFIs) finds that more than half of those surveyed fail to turn a profit. Conventional wisdom (and much of the writing on this site) tends to say otherwise – that microfinance is profitable. Maybe that’s a big reason why this report, jointly published by the DC-based Consultative Group to Assist the Poor (CGAP) and the Microfinance Information Exchange, is so important.

Most African MFIs are not out just for profit – often, their primary mission is to serve poor, at-risk groups and profit if possible. That explains why cooperatives generally fail to profit, while regulated microfinance providers – which behave more like banks – average a 2.6 percent annual return on assets. The report identifies poor infrastructure, hard-to-serve rural markets with low population density, and high labor costs as barriers to MFI profitability.

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