Telephone service in most developing countries is horrible. Typically a single monopoly company provides all service, and often there is corruption involved with contracts and agreements for providing service. THe result is that phone service in the developing world is horribly expensive in countries where people’s income is relatively low.
In a country like Honduras, for example, only 44 out of every 1,000 people have a phone and telephone calls can cost up to $1.50 per minute in a country where the per capita income is only about $850.
The Washington Post reports, however, that some enterprising entrepreneurs in the developing world are routing around their country’s phone service by starting cafe’s that let people call long distance and internationally for as little as 5 to 10 cents per minute.
The Post describes one such cafe in Honduras called Multinet which is just “a tiny one-room air-conditioned space inside the city’s largest mall” where customers sit in front of one of a dozen computers. For about $1.25, customers can purchase 15 minutes of time to call anywhere in the world. There’s a phone attached to the computer that the customers talk through and the recipient gets the phone call on a traditional phone, but the call is carried entirely over the Internet, cutting the monopoly phone company out of the transaction altogether.
The cafes are so popular, that IDC Corp. analyst Elizabeth Farrand estimates that by 2006 as much of half of all international phone calls from Latin America will be carried over the Internet.
Of course, in some countries the phone companies have successfully pushed for laws outlawing such businesses, but those countries seem to be seeing the light. Both Brazil and India have laws banning Internet phone calls, but those laws expire this year and already there are entrepreneurs waiting to pounce on the new business opportunity.
In just a few years, entrepreneurs and the Internet have accomplished what state-approved phone companies could not do in several decades — bring cheap phone service to the masses. Ah what people in developing countries can accomplish when they can route around official government policies.
Source:
Internet Cafes’ Phone Service Fills a Void. Ariana Eunjung Cha, The Washington Post, April 18, 2002.