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INTRODUCTION

There is no question as to how mobile telephony i.e., the use of mobile phone technology, has changed the lives of millions of Filipinos.

Before the advent of mobile phones in the country in the early 90s and the deregulation of the telecommunications industry, there were only 1.37 million landlines serving about 62 million Filipinos nationwide. The waiting time for a phone line to be installed was two to six months and the ruling Philippine Long Distance Telephone Company had a backlog of almost 800,000 lines.[1]

The emergence of wireless technology in the country has since changed the way Filipinos communicate. It has also a posed a significant impact on our politics and economy.

For this particular study, the researcher focused on the effects of mobile telephony on the agricultural sector, particularly fish trading in the country.

The study was done using case studies of fish traders in Navotas fish port, where most fish and seafood vendors in Metro Manila markets get their goods.

Finally, the objective of this paper is to provide options for development, to improve the fish trading system by taking advantage of the mobile phone technology through what is called m-Government or mobile government.

TECHNOLOGY AS A TOOL

This paper uses the framework of Wanda Orlikowski and Suzanne Iacono who studied the different conceptualizations of information and communications technology (ICT).

This study focuses on ICT as a tool, “a relatively straightforward, unchanging, and discrete technical entity with the focus being on the impacts/effects of this independent variable on such outcomes as information processing, productivity, social relations, and labor substitution.”[2]

According to Orlikowski and Iacono, tool conceptualization is the “common, received wisdom about what technology is and means.”[3] Within this general approach, four distinct categories were identified: technology as a substitute for labor, technology as a tool to enhance productivity, technology as a way to alter or enhance information processing and technology as a tool to alter or enhance social relations.

Related literature on telecommunications and development asserts the role of telecommunications technology as a tool for productivity and labor substitution. For example, it replaces travel thus, making communications more efficient.

Jeffrey James in his study “Information technology, transaction costs and patterns of globalization in developing countries” suggests that mobile phones, like other ICTs, help the economy of developing countries by reducing transaction costs. Other studies, which will be discussed later, saw the increased productivity in small and medium scale industries in some African countries.

Mobile phones are also seen as tools for information processing. These devices “transform the information networks of their users, enabling new contacts rather than improving contact with existing ones.”[4]

An example of this function of mobile phones is when farmers or fishermen check the prices of goods in other markets and look for suppliers through their cellular phones.

Other studies suggest that the mobile phone’s portability, simplicity and affordability make it ideal for education initiatives in places where Internet connection is scarce.

Mobile telephony is also said to alter social relations. Other studies note the rising power of communities with mobile phones to share information with each other.

The next part of the paper focuses on the concept of digital divide and the real digital divide, looking at the impacts of mobile telephony in developing countries, particularly in African countries.

THE REAL DIGITAL DIVIDE

The concept of digital divide stems from the birth of the Internet, which has created a new culture and language. Some say that the Internet gave way to the “new illiterate,” i.e. those who have not learned how to use the information and communication technologies either because they are not readily available to them or because they lack education.

Digital divide may be described simply as “the gap between those who have access to the new information and communications technology and those [without].”[5] The book Breaking the Digital Divide suggests:

“Above all, the Internet can become a crucial channel for the diffusion of essential information in those places where poverty implies not only lack of economic means but also lack of accurate information.”[6]

Political scientist Pippa Norris studied the concept of digital divide as a multi-dimensional phenomenon encompassing three different aspects.

“The global divide refers to the divergence of Internet access between industrialized and developing societies. The social divide concerns the gap between information rich and poor in each nation. And lastly within the online community, the democratic divide signifies the difference between those who do, and do not, use the panoply of digital resources to engage, mobilize and participate in public life.”[7]

Some scholars propose, on the other hand, that this digital divide is not the real problem but only a symptom of other divides like income, development and literacy. According to The Economist, fewer people in poor countries own computers and have access to the Internet rather than people in developed countries because they are too poor, illiterate or have more pressing concerns such as food, health care, security and other basic needs.[8]

The UNESCO reports that most of the world’s population lacks basic access to a telephone line, let alone a computer, producing societies increasingly marginalized at the periphery of communication networks[9]

Scholars suggest that rather than trying to bridge the digital divide by bringing in more computers to developing countries, the more sensible thing to do is to determine how to use technology to promote bottom-up development, by promoting the use of mobile phones. The real digital divide that matters then is between those who have access to mobile network and those without.[10]

Statistics from the International Telecommunications Union show a considerable difference between the use of computers and mobile phones in the Philippines. In 2004, there were 3.6 million personal computers in the country or 4.6 computers per 100 individuals. Mobile phone subscribers on the other hand, numbered 33.09 million or 39.85 cellular phones per 100 individuals. Only 5 million Filipinos or six out of every 100 have access to the Internet while only half of the 6.7 million available landlines are subscribed. [11] Current projections say that more and more countries will continue to add mobile phone lines than landlines.

Why mobile phones? Mobile phones are seen as more convenient to have since there is no need to have a permanent supply of electricity and it can be easily used even by people who cannot read or write. Mobile phones are convenient, relatively affordable and therefore easier to acquire. Its economic benefits are also evident in developing countries, reducing the transaction costs and the need to travel as well as broadening trade networks.

“The greatest impact of mobile communications on access to communication services—in other words, increasing the number of people who are in reach of a telephone connection of any kind—can be seen in developing countries.” [Furthermore] “In countries where mobile communications constitute the primary form of access, increased exchange of information on trade or health services is contributing to development goals; in countries where people commonly use both fixed-line and mobile communications, the personalized trait of the mobile phone are changing social interaction.”[12]

In Kenya, farmers were always at the disadvantage because they used to lack information on the shifting prices in the agricultural market. They were exploited by middlemen because they could not make informed decisions on the best times and the right prices to sell their crops. To empower the farmers, ACDI/VOCA’s Kenya Maize Development Program, a project funded by the United States Agency for International Development (USAID) partnered with the Kenya Agricultural Commodity Exchange to devise a system to deliver up-to-date market information.

Today, Kenyan farmers are able to access market information through text messages on their cellular phones or through an interactive voice response system on landlines. From here, they can get the latest information on agricultural commodities in several major market centers. The gathering of market information also allows farmers and traders to establish an average market price for their commodities, thus doing away with middlemen who take advantage of them. Average prices, offers to sell, bids to buy and extension messages are uploaded to the messaging service as often as thrice a day.[13]

The same text messaging system is used by Ugandan farmers to know the real price of their crops so as to avoid being cheated by dishonest middlemen. Ugandan farmers often complain that middlemen cheat them by offering just a small amount of the actual market price for their produce. Through a mobile messaging system, farmers are able to know within seconds the current price of maize at markets throughout the country.

This information is available through Foodnet, an organization which advocates “greater market efficiency and value added processing in the agricultural sector.” Foodnet employs people in Ugandan towns to find out the prices for their produce in the local market. They send this information once a week via fax to Foodnet’s office in Kampala and it is then uploaded onto the mobile phone network. Those who are interested can accesss this information through their mobile phones via Short Message Service (SMS). For example, you type the keyword ‘rice’ and send it to a phone number. A few seconds later, the information is sent back to your phone. Foodnet also makes available the price of coffee as traded in London and New York. [14]

Through this system, the farmers are at a better and stronger bargaining position and can even trasport the goods to the markets themselves instead of being at the mercy of the visiting buyer.[15]

Cellular phones in Uganda are also used for rural income generation. Grameen Foundation partnered with Mobile Telephone Network (MTN) Uganda and nine microfinance institutions to create MTN villagePhone. MTN villagePhone sells mobile phones to female entrepreneurs in local villages, who in turn sell time on the phone to others in their communities.[16]

Customers use the phones for varying purposes including communicating with family members, conducting business trasanctions, checking the prices of agricultural products throughout the country and even participating in call in radio programs to voice their opinions.[17] This ‘phone lady system’ not only provides income for the women but more importantly, offers affordable telecommunications access to rural areas since the locals cannot afford to buy their own mobile phones. A similar sytem is also being done in Bangladeshi villages.

There is much reason to think positive if we look at the digital divide as the gap between those with access to mobile phones and those without. Projectionists say that the gap is closing fast and a report from the World Bank notes that 77 percent of the world’s total population already lives within range of a mobile network.[18]

Next, we shall discuss briefly the development of mobile telephony in the Philippines and how it has affected our society, politics and economy as a whole.

MOBILE TELEPHONY IN THE PHILIPPINES

Before the liberalization of the telecommunications industry in the early 1990s, telecommunications in the country was dominated by the Philippine Long Distance Telephone Company (PLDT).

The wireless industry started with the launch of Mobiline in 1991, an analog-based cellular phone service owned by Pilipino Telephone Corporation (Piltel), a PLDT subsidiary. [19] The second company to provide cellular services was Express Telecommunications Co. (Extelcom), which was launched on the same year. Smart Communications (Smart) started operating in February 1994. These three providers offered analog services.

In 1993, Isla Communications, Inc. (Islacom) launched the first Global System for Mobile Communications (GSM) service in the country. Globe Telecoms (Globe) introduced its GSM-based service in 1994. Piltel and Smart dominated the wireless industry then but because of problems in cloning and poor billing, the dominance of the analog-based service providers did not last long. Eventually, Smart joined Islacom and Globe in the GSM camp. The market competition led to the acquisition of small players by the dominant carriers. Smart acquired Piltel while Globe and Islacom merged. In 2003, Sun Cellular entered the wireless industry. [20]

The introduction of digital technology, enabling short message system (SMS) or more popularly known in the Philippines as ‘texting’ completely changed the mobile phone industry. SMS was introduced in 1994 as a free service thus it became a big issue in 2000 when cellular service providers decided to start charging subscribers P1 for each message sent. But until today, SMS has become an important source of profits for telecommunications companies. For one, subscribers preferred text messaging since the price of one text message was much much lower than voice call rates. On a social relations level, text messaging has created a subculture within the society.

The success of the mobile phone industry in the Philippines can be credited to various factors. Cellular service providers were able to develop a marketing strategy to be able offer their services to the low-end market through the prepaid card system. There was also a significant drop in the prices of cellular handsets. In 1990, the price of a cellular phone was around P50, 000. Today, one can get a brand new cellphone for less than P2, 000. The growing used handset industry and the lower costs of SIM packs have also made cellphones more affordable and accessible to low-end users. Another factor that contributed to the success of the mobile phone industry is the low landline penetration in the provinces, thus the demand for cellphones in provinces is high.

Next we shall discuss the impact of mobile telephony to business and the agricultural sector.

MOBILE TELEPHONY, BUSINESS AND AGRICULTURE

“The network society is creating parallel communications systems: one for those with income, education and literally connections, giving plentiful information at low cost and high speed; the other for those without connections, blocked by high barriers of time cost and uncertainty and dependent upon outdated information.”[21]

- UN Development Report

There is already enough evidence that Small and Medium Enterprises (SMEs) have benefitted much from the use of mobile phones and SMS. Emmanuel Lallana, Patricia Pascual and Zorayda Andam, in their study about SMEs and eCommerce studied how SMS has become a powerful tool for the tourism business. They noted the case of a small beach resort in Mindanao with no reservations office, no website, and no landline or Internet access but was still able to accept customers through text messaging. Other weekend getaways near Manila like the Tagaytay resorts also receive inquiries and reservations from customers via SMS.[22]

Cut flower producers in La Trinidad, Benguet also use SMS to communicate with flower vendors in Manila to determine the demand and to regulate the supply. Constant communication is very important to them since flowers can easily wilt and therefore need to be sold immediately.[23]

Farmers can take advantage of this technology by knowing how much their products sell in different markets in the country, like the Kenyan farmers discussed earlier.

Fish traders in Mindoro also benefit much from the SMS technology. When cellphones were unheard of, fish traders had to travel long distances in rough roads to sell their fish. Upon arrival in the market, they are often at the mercy of middlemen who would haggle and offer low prices for their fish, knowing that the traders have traveled long enough and wanted to immediately dispose their goods. They would often be cheated by middlemen who would argue that the long travel has made their fish ‘bilasa’ or stale. In a desperate act to avoid profit loss, the traders are forced to sell on the middlemen’s terms.

Today, the fish traders of Mindoro receive inquiries and reservations from customers via SMS. They are also able to check the prices of their goods in various municipalities to determine where they can sell their goods with the highest profit.[24]

The next chapter will discuss the impact of mobile telephony on the fish trading system of one of the major fish ports in the country—the Navotas fish port.

A FISHY BUSINESS

The Navotas Fish Port Complex (NFPC), is said to be “the premier fish center of the the Philippines and one of the largest in Asia.” It is also the first major fishing port and fish market complex placed under the exclusive jurisdiction, control and supervision of the Philippine Fisheries Development Authority (PFDA). The Navotas fish port is the traditional docking place of commercial fishing boats operating in various fishing areas in the Philippines. It is situated on a 47.5 hectares reclaimed land at the Northeastern section of Manila Bay.[25]

Its construction spanned three years from August 1973 to August 1976 through a loan of more than Php 88 million from the Asian Development Bank (ADB).[26]

Within the complex is a thriving fishing industry which supplies fish and seafood to major markets in Metro Manila. Thousands of buyers visit the port daily where an estimated 20 commercial fishing vessels unload a total volume of about 800 tons. Overland vehicles from different provinces also bring in additional volume of 50 tons. [27]

The producers, fishing boat operators or fishfarm operators unload their catch or produce at the fish landing centre in the Navotas fish port complex. They contact their accredited brokers at the landing area who then carry out the transaction with wholesalers/degatons on a commission basis. The brokers, acting as consignee, maintain stalls at the fish port and have customary buyers to whom they entrust the catch for distribution to wholesalers/degatons who then market the fish at various strategic market locations in the nearby province and towns served by the Navotas Fishing Port Complex. Payment is made on a cash and consignment basis: partial cash payments and balances to be paid within two days or upon return of the fishing boat operator from fishing.[29]

The communication lines between each stage of the process must always be open. The producers usually contact their brokers or consignees via SMS to let them know of an incoming shipment.

Suzette Anete, a broker, recalls the time when cellular phones were unheard of:

“We used to contact the owner through handheld radio if there’s a signal in their place near the fish port but for fish owners in the provinces it’s more difficult and expensive because we had to use a landline if they had one. If not, then there’s no way for us to contact each other and we just wait for their shipment to arrive.”

The producer and the broker call or text each other to negotiate the wholesale price of the catch thus, eliminating their previous practice of haggling. The brokers also ask about the type and quality of the catch to be shipped.

Brokers or consignees also conduct business with their wholesalers or degatons through SMS or cellphone call. Wholesalers contact the brokers usually in the afternoon to ask whether there’s available fish or seafood before they travel to the fish port. It is important for the wholesaler to know whether the type of fish or seafood they are looking for is available at the fish port because they usually travel from the provinces and even rent container vans to conduct business. By knowing beforehand the information they need, they can save on gas and truck rental.

Flora Mantuguina, a wholesaler (viajero) describes their usual business:

“We contact them in the afternoon and if they say there’s no catch, then we don’t go to them and then we contact other brokers.”

Another use of the mobile phone is when doing consignments. When there is a large produce that need to be disposed immediately, brokers agree to consignments and sometimes even to loans. Anete describes,

“We contact the wholesalers and retailers we know and we agree to loans. We have to do that when there’s a large catch or else we can’t sell everything and lose the profit. When they have to pay the amount already, we also contact them through their cellphones or else they might not pay us back.”

Mantuguina points out the convenience of cellphones:

“It’s easier because you can bring it anywhere and anytime you can conduct your business transaction. You can’t lug a landline around and we do business outside so it’s really convenient.”

Through cellphones, fish traders may also be able to compare the market prices of their produce by texting brokers and other traders in fish ports all over the country. By doing this, it is easier for them to fix a price on a certain type of fish or seafood. As stated earlier, this helps to avoid being cheated by middlemen who would offer the lowest bid for the fishermen’s produce.

In African countries, there was an effort from private institutions to help the farmers. In the Philippines there has been no significant effort yet from outside forces to use mobile telephony to help the farmers and fishermen in the country.

M-GOVERNMENT AND FISH TRADE

M-Government or mobile government is a take-off from e-Government, which uses information communication technologies in the operations of government agencies. As explained by Dr. Emmanuel Lallana in his study SMS, Business, and Government in the Philippines:

“M-Government is the use of mobile and/ or wireless technologies like cellular phones, and laptops and PDAs with wireless Internet connection to improve the operations of government and to empower the citizens. The advantage of m-Government is that it makes public information and government services available ‘anytime, anywhere’ to citizens and officials. Already, mobile devices are being used to improve communication between government and citizens, enable citizen transactions with government, and as a form of electronic voting. Mobile devices are also being used to enhance the internal operations of the bureaucracy.”[30]

In the Philippines and in other countries, m-Government is used to improve the communication between the government and its citizens. Thus we have TXTGMA where citizens can air out their concerns to the highest official of the land. We also have TXTDFA for overseas Filipino workers and their relatives who want to seek assistance from the Department of Foreign Affairs. Other agencies like the Civil Service Commission, the Department of Education and the Bureau of Internal Revenue have similar SMS-based services to give citizens an easy and inexpensive way to bring their concerns to the government.
Another strength of m-Government is that it gives another channel for citizens to secure information from the government. For instance, if someone wanted to know the market prices of selected commodities in Metro Manila, it would be helpful if s/he could access this through his or her mobile phone. Right now, this information can be downloaded from the website of the Bureau of Agricultural Statistics (http://bas.gov.ph). The information here is not yet very thorough and there is enough room for improvement. To be able to help farmers and fishermen to market their produce, similar information should be made available by the Department of Agriculture.

Scholars are quick to warn though that successful m-Government projects are those, which are supported by the highest officials of the agency. Aside from the leader’s support, Dr. Lallana notes that successful m-Government projects also rely on the staff who know how to refer concerns to the proper authorities. [31]

There is also the concern of public awareness. Although a lot of people know how to use cellphones, probably not a lot know how to get the information they need just by clicking a government agency’s SMS based service. Therefore, there should be an information campaign to promote all government SMS based services. Finally, as Lallana points out, partnership with private institutions would help in this endeavor, like in the case of the text messaging services used by the Ugandan farmers. Some people might hesitate to spend P2.50 or so for an SMS service and this is where the private sector comes in. Corporations might want to link up with the government in offering services to the public as part of their corporate social responsibility.
CONCLUSION

The Navotas fish port case is a clear example of how technology, in this case mobile telephony, can act as a tool to enhance or improve existing systems. The use of mobile phones has reduced the need for travel. Whereas in the past, fish traders had to travel from market to market to know the price of their produce. Today, the market is just one SMS away.

Mobile telephony has clearly reduced transaction costs for producers, brokers, wholesalers as well as retailers since it spares them from unnecessary travel costs and other communication costs.

The use of cellphones has also allowed the sharing of valuable information about the market prices in different parts of the country. Finally, it has enhanced trade networks, since fish producers are able to create their network of business contacts by constantly communicating with their usual brokers, wholesalers and retailers. They can establish new business contacts as well.

With a little push from the public sector, a more efficient SMS system could be done to improve the fish trading industry in the country. Bridging the real digital divide does not only mean having a considerable number of mobile phones but also being able to take advantage of the technology that is available.#

SOURCES

Jonathan Donner. 2005. “Research Approaches to Mobile Use in the Developing World: A Review of the Literature,” Hongkong: City University of Hongkong.

Brian Michael King. “Text Messaging Empowers Kenyan Farmers.” from http://www.interaction.org/ict/success_text_Kenya.html

Emmanuel C. Lallana, PhD. 2004. SMS Business, and Government in the Philippines. Manila: DOST.

Elena Murelli, Luna Delgrossi and Rogers Wo Okot-Uma. Breaking the Digital Divide (Commonwealth Secretariat: Sept. 1, 2002)

Pippa Norris. Digital Divide? Civic Engagement, Information Poverty and the Internet Worldwide. (New York: Cambridge University Press, 2001)

Wanda Orlikowski and Suzanne Iacono. “Research commentary: Desperately seeking “IT” in IT research- a call to theorizing the IT artifact,” Information Systems Research, 12(2), 121.

Will Ross. “Mobile markets deny middlemen,” from http://news.bbc.co.uk/1/hi/world/africa/3321167.stm

Asuncion M. Sebastian. 2005. “Mobile Phones: Bridging the Divides in Philippine Society.” Makati City, Philippines: Asian Institute of Management.

International Telecommunication Union. World Telecommunications Indicators. May 2006.

International Telecommunication Union. “Mobile overtakes fixed: Implications for policy and regulation.” from http://www.itu.int/osg/spu/ni/mobileovertakes/Resources/Mobileovertakes_Paper.pdf

“The Real Digital Divide.” The Economist (print edition). March 10, 2005.

http://pfda.da.gov.ph/navotas.html

http://www.fao.org/DOCREP/003/T0274E/T0274E09.htm

[1] Asuncion M. Sebastian, “Mobile Phones: Bridging the Divides in Philippine Society,” Asian Institute of Management paper, p.2.

[2] Wanda Orlikowski and Suzanne Iacono, “Research commentary: Desperately seeking “IT” in IT research- a call to theorizing the IT artifact,” Information Systems Research, 12(2), 121.

[3] Ibid.

[4] Jonathan Donner, “Research Approaches to Mobile Use in the Developing World: A Review of the Literature,” a paper submitted to the International Conference on Mobile Communication and Asian Modernities, p. 4.

[5] Elena Murelli, Luna Delgrossi and Rogers Wo Okot-Uma, Breaking the Digital Divide (Commonwealth Secretariat: Sept. 1, 2002) p.3.

[6] Ibid.

[7] Pippa Norris, Digital Divide? Civic Engagement, Information Poverty and the Internet Worldwide,(New York: Cambridge University Press, 2001), p.1.

[8] “The Real Digital Divide”, The Economist (print edition), March 10, 2005.

[9] Ibid.

[10] Ibid.

[11] International Telecommunication Union, World Telecommunications Indicators, May 2006.

[12] International Telecommunication Union, “Mobile overtakes fixed: Implications for policy and regulation” from http://www.itu.int/osg/spu/ni/mobileovertakes/Resources/Mobileovertakes_Paper.pdf

[13] Brian Michael King, “Text Messaging Empowers Kenyan Farmers,” from http://www.interaction.org/ict/success_text_Kenya.html

[14] Will Ross, “Mobile markets deny middlemen,” from http://news.bbc.co.uk/1/hi/world/africa/3321167.stm

[15] Ibid.

[16] Ibid.

[17] Ibid

[18] The Economist, op.cit.

[19] Sebastian, op.cit., pp. 2-3.

[20] Emmanuel C. Lallana, PhD, SMS Business, and Government in the Philippines, paper, p. 2.

[21] Norris, op. cit. quoting the UN Development Report, p.2.

[22] Lallana, op.cit., p. 11.

[23] Ibid.

[24] Ibid.

[25] http://pfda.da.gov.ph/navotas.html

[26] Ibid.

[27] Ibid.

[28] http://www.fao.org/DOCREP/003/T0274E/T0274E09.htm

[29] Ibid.

[30] Lallana, op. cit., p. 14.

[31] Ibid., p. 33.