Forty-four interviews from 20 different types of businesses – shopkeepers, water suppliers, metalworkers and mechanics, among others – were conducted by Karin Lindström and John Wedin, students at Uppsala University, over a two month period in Rajasthan and Orissa, two of India’s poorest states. The study took place both in urban and rural areas.

The introduction of mobile phones resulted in an increased number of customers. The main reason for this, Lindström and Wedin explain, is that businesses were able to order supplies over the phone, helping them to save time and money. More time became available to help customers.

The use of mobile phones affected the ways in which supplies and suppliers were handled – the supplier networks, their transportation and the stock-holding. The supplier networks expanded without being limited by physical distances, because deals where now made over the phone. The supplies were delivered more promptly and when they were needed. This helped the businesses to keep smaller stocks in the shops and turn them around faster. “The ways of handling supplies and stock are moving towards Just In Time (JIT),” Lindström and Wedin say.

Mobile phones have enabled businesses to respond to customer demands, as providing good service has become a competitive advantage when physical distance is no longer so important.

All changes, following the introduction of mobile phones, to the different activities in the micro businesses have helped them to save time, provide a better service, and have more customers, which ultimately have led to an increase in income for all.

Professor Leonard Waverman is a leading expert on telecoms and economics. As a special guest speaker to Ericsson employees in Stockholm, Waverman gave an outside view that confirmed Ericsson’s vision of enabling an all-communicating world. The work to bring telecommunications and connectivity to people around the world has had positive effects on countries’ social and economic development.

Monika Byléhn, senior market analyst at Ericsson, says: “This qualitative study has demonstrated from a grassroots level, Professor Waverman’s work: namely the impact that the mobile phone has on the developing world in helping close the digital divide. It increases social cohesion and releases the entrepreneurial spirit that stimulates trade and creates jobs.

“Communications are of high value to society and bring positive effects to economic growth, as the study shows. The businesses only had basic voice and SMS capability on their phones. If mobile broadband is introduced, we could see the same type of benefits as those from Ericsson’s Gramjyoti project in Tamil Nadu. This is a great opportunity for emerging markets.”