Everybody has a mobile phone

A case study in a rural area of Puno (Peru) shows how mobile phones are used and incorporated in everyday life activities. These include both agricultural and livestock activities and participation in weekly fairs.

Everybody has a mobile phone: this is what several individuals interviewed in Puno (Peru) told us in the context of a case study we developed in 2008. However, a representative survey in the same area of study revealed some nuances: mobile ownership only represents 56% of the population. Moreover, use surpasses ownership as 76% of the surveyed population declared to be mobile phone users –that is, they had used a cell phone in the previous three months. As in many other rural areas around the world, mobile pay phones are commonly used and owned handsets are shared among family members.

This is one of the many pieces of evidence we gathered in the case study that analyzes whether mobile telephony impacts the welfare of the population living in a specific rural area of Peru. Indeed, mobile telephony diffusion is limited here as network deployment is slower in rural than in urban areas of developing countries. For instance, in 2009 while 78% of urban households in Peru had a mobile phone the ratio decreased to 37% in rural zones (data can be consulted in the OSILAC ICT Statistical Information System). As fixed lines are scarce, mobile phones constitute the first device that allows synchronous long-distance communication to a majority of the rural population. This is the context in which our study was developed.

This case study is part of a larger research project, funded by the Telefonica Foundation and is designed to expand the empirical evidence on the impact of mobile communication in Latin America. Results will soon appear in a book entitled “Comunicaciones Móviles y Desarrollo Social y Económico en América Latina” (Fernández-Ardèvol, M.; Galperin, H.; and Castells, M. dirs.). The book will be published by the Editorial Ariel, and will be released in the second half of 2011. In what follows I would like to share with readers a summary of Chapter 4, in which results are presented. Chapter 4 was co-authored with Roxana Barrantes and Aileen Agüero, and benefited from the collaboration of Mariano Aronés and Laura León.

We study the influence area of two weekly fairs located in Asillo (Azángaro province) and Taraco (Huancané) in Puno, Peru. Puno is a poor, remote region located by the Shore of Titicaca Lake in the south of the country, neighboring Bolivia. Official data from the Peruvian National Statistic Institute shows that up to 63% of households are below the poverty line –this was the second Peruvian region in terms of poverty in 2008. Despite the high degree of poverty, 44% of households in the region had a mobile phone, a figure clearly above the 3.7% penetration rate for households with fixed phone lines. Indeed, penetration rates were 57.3 mobile lines per 100 inhabitants that same year.

The municipalities of Asillo and Taraco were selected by taking into account their similarities. Three characteristics were considered: altitude –around 3900 meters above sea level; dimension, in terms of inhabitants –around 4800 households; and poverty levels –75% of households in both municipalities had at least one unmet basic need.

Fieldwork consisted of a combination of qualitative and quantitative methods that allowed for a richer understanding of the processes in operation. The studied sample is representative of the area that the two weekly fairs influence. Households are mainly poor (following the general trend in the area, 75% of them show at least one basic unmet need). Agricultural and livestock activities were performed in almost 80% of the cases. Households usually have small pieces of land (2.7 hectares on average) and 50% of households declared raising four or more different kinds of crops. This production is brought to weekly fairs; therefore it is of high interest to study the relationship that these households have with local markets. Access to information through communication tools, like the mobile phone, could be a key element that allows producers to improve their participation in these local markets. For instance, mobile phones could contribute to the reduction of information asymmetries and, therefore, transaction costs.

We gained access to a diversity of individuals, or agents, in the area: livelihood farmers, who bring products that they produce to the weekly fair and get money in return in order to buy other products that they cannot produce themselves. We also accessed market intermediaries, who are part-time traders that bring products that they do not produce to weekly fairs. In addition, we accessed veterinarians that are paid by the local administration to assist local livestock farmers on a regular basis. Finally, we had access to large producers, for example cheese producers, who manage businesses and form very entrepreneurial attitudes, which are being incorporated into the dynamics of the high economic growth of the country.

To achieve the goal of our research it is necessary to understand the processes of adoption, the way the technology is incorporated in everyday life activities, and the way these activities are related to decisions that impact the generation of welfare within rural households.

My sense is that, as long as confidence and trust are key elements for business, and attending a weekly rural fair is considered a particular business; it is not only the introduction of mobile phones that will impact success, but the way business is conducted. If a market trader, an intermediary cannot rely on the quality of perishable goods that her provider supplies, she will have to keep traveling a lot of kilometers to check the quality and conditions of goods. In this kind of situation where lack of confidence and trust are not built, mobile phones do not seem able to reduce transaction costs. However, if the intermediary can rely on the information the provider gives her through the phone, then new dynamics could arise, and the value chain of this specific business would show some transformation. Different agents would incorporate different uses of mobile telephony in their everyday practices. In turn, practices might change due to the availability of this new communication tool.

The analysis of the information we gathered brings forth a very interesting picture of the situation in the area. In what follows I highlight and briefly discuss the most relevant results. 

• Mobile phones limitations: budget and coverage

• Communication with relatives includes business issues

• Mobile use experience and household welfare

• Trust and businesses: the role of mobile phones in (re)building trust