M-PESA, the extremely popular mobile-banking product offered by mobile carrier Safaricom in Kenya, is being audited by the Central Bank of Kenya.  In December, a cartel of local banks attacked M-PESA as a “Ponzi” scheme and asked the government to investigate.  See the story in allAfrica.com.

M-PESA, launched by Safaricom in 2007 in conjunction with Vodafone, has gotten the attention of bankers because of its quick growth. M-PESA now has 5 million users and 5,000 outlets–compared to 3 million with bank accounts at 750 banks.

Because M-PESA is primarily aimed at the “unbanked” population, the limit on a single transfer is under $500.

Safaricom overall counts 12 million users.

Amid reports that Yunus may sue Telenor, along with the global financial meltdown, the proposed IPO of GrameenPhone in Bangladesh appears to be on the ropes. To raise cash, GP has offered 14% bonds that appear to be “unsecured.” Well, they aren’t the only company in trouble these days. Did I tell you the CEO quit right in the middle of the IPO dance?

What’s microtelecom? A network that relies on smaller, solar-driven base stations, so that it can reach into remote rural areas far off the electrical grid. To date, such networks in parts of South Asia and Africa rely on diesel generators, which is expensive and polluting. Like microfinance, microtelecom is based on the belief that “bottom of the pyramid” consumers can be profitably served, with the appropriate business model.

VNL, a Swedish-based company operating in India, has been perfecting low-cost WorldGSM technology for several years, and will begin pilots and rollouts in 2009, in both India and Africa (Malawi). The idea is to implement low-cost equipment that makes it profitable for telecoms to serve low ARPU (“average revenue per user”) users in difficult-to-serve regions.

WorldGSM is GSM compliant, but is low-power and low-cost, self-deploying (no need for skilled technicians, or air conditioning), and low maintenance. WorldGSM is a re-engineering of GSM technology for the next billion rural, unserved low-income users.

The founder and CEO of VNL is Anil Raj, founder of Hutchinson India, now the country’s number two operator. He also served as Chief Strategic Officer at Sony Ericcsion.

Like GrameenPhone in Bangladesh, which has created a huge interlocking chain of entrepreneurs who sell and maintain service, VNL relies on village enterpreneurs to deploy base stations along roadway or atop village houses. One key part of the kit: a compass to make sure the towers face South to collect the sun.

GrameenPhone, the primary case study in You Can Hear Me Now, is preparing to sell $300 million worth of shares on the Dhaka and Chittagong stock exchanges in Bangladesh. The company, a subsidiary of Norway’s Telenor, is valued at $3.2 billion. Get more details from The Daily Star, Dhaka’s premier English-language daily.

The IPO, although very small by Western standards, is a significant step forward for Bangladesh’s capital markets, which have been strengthening over the part five years. “It will be a breakthrough for the country’s capital market history,” said Abu Ahmed, professor of the Department of Economics of Dhaka University. The IPO is planned for the end of September.

The fact that GrameenPhone, which is owned by Telenor, a publicly traded company in Norway, is offering shares in Bangladesh is significant because it gives Bangladeshis a chance to buy into one of the country’s strongest corporate performers. This has long been a bone of contention between Muhammad Yunus, the Nobel laureate and founder of Grameen Bank, which owns 38% of GrameenPhone, and Telenor, which owns 62%. At his Nobel acceptance in Oslo, Yunus made several “in your face” comments about Telenor. Yunus now asserts that the owners of Grameen Bank are entitled to buy 20% of the shares being offered and that they have the capital to do so.

This silly jousting aside, the IPO may well propel other telecoms to list in Bangladesh, including Egypt’s hyper-successful Orascom, which operates Banglalink.

An AP story for a new project I’m involved with to get cell phones into the hands of people who need them, an innovative new program from Tracfone Wireless:

By LUCAS L. JOHNSON Associated Press Writer (August 18, 2008)

A cell phone company is offering free wireless phones and 68 minutes of free air time to more than 800,000 low-income Tennessee residents in a program aimed at ensuring they can make a call in an emergency.

Prepaid cell phone provider TracFone Wireless Inc. announced Friday that it’s launching its SafeLink Wireless program in Tennessee, which officials said would become the first state to have widespread, free emergency wireless service for poor people.

SafeLink provides eligible low-income households with a cell phone, access to 911 emergency services and 68 minutes of free air time for up to a year before customers If customers run through their 68 minutes, they can still call 911 (which is a free call) and they can purchase additional minutes for other calls at a discounted rate, said Jose Fuentes, director of government relations for Tracfone Wireless. The cell phone’s standard features include voicemail, text capability, call waiting, international calling to over 60 destination and caller ID.

John Taylor, a spokesman for Sprint Nextel Corp., one of the nation’s top three carriers, disputed Fuentes’ claim of sparse advertisement. He said Sprint participates in the Lifeline program by offering a discount on services and advertises on its Web site and through print, such as mailings. According to the FCC, 21 million households across the country qualify for Lifeline. “I’m elated that this program is providing needy families with access to basic cell phone service,” said Democratic House Speaker Pro Tem Lois DeBerry of Memphis, which has the state’s highest low-income population.

Fuentes said families may qualify if their household income is not above 135 percent of the federal poverty level, and if they receive assistance through government programs such as Medicaid and Supplemental Security Income.

Nicholas P. Sullivan, a visiting scholar at Massachusetts Institute of Technology, recently released a study (“Phoning in a Major Econmic Boost”) analyzing the impact of mobile phones on low-income households. He said the troubled economy makes the phones even more of an asset.

Tennessee Safety Commissioner Dave Mitchell agrees a cell phone is a valuable safety tool, especially when someone is traveling. “This program will allow drivers to call 911 if they encounter an emergency or get stranded while on the road,” he said. “I am thrilled that Tennessee is the first state in the country to offer this program and help keep our citizens safe.”

That cellphones are full-fledged computers useful for a lot more than basic communications is well known, but actual, practical applications are just coming online. To date, most have been in the transfer of market information (CellBazaar) and money (M-PESA), with a host of trials in the medical arena. But getting doctors to use new technology isn’t always easy–unless it fits right into what they are used to doing.

ClickDiagnostics, a new company spawned at MIT (and winner of the MIT Enterprise Forum’s $100K competition in the “development” field), may have accomplished that. The idea is to use cell phones in the field, particularly remote rural areas, to take pictures of people’s eyes and skin, then transmit those images to doctors for diagnosis of cataracts and skin cancer. In an initial test last winter students travelled to Bangladesh to shoot images, then tested their quality with doctors at Massachusetts General Hospital (aka MGH, aka “man’s greatest hospital”) in Boston. The doctors said they were of high enough quality to make an initial diagnosis and prescribe a treatment regimen–or point to the need for immediate hospital-related care.

In addition to the common skin disease prevalent in all developing countries, these simple cell phone images can detect the onset of HIV, Malaria, Hepatitis C, and TB. To the extent the product can be deployed in the field, it could have a huge impact on the early recognition and treatment of these debilitating and potentially deadly diseases.

With the MIT prize and some seed funding under its belt, ClickDiagnostics has its first contract to provide service in Egpyt, starting this fall.

Last spring I completed an in-depth research report on the role cell phones in helping Americans get work and make money. Released by the independent New Millennium Research Council (NMRC) think tank, Cell Phones Provide Significant Economic Gains for Low-Income American Households concludes that providing cell phones to the 38 percent of America’s 45 million poorest households now without them — including millions of seniors, Hispanics, African-Americans and rural residents — could help them get work or make money worth $2.9 billion-$11 billion. The study is based on two surveys: a scientific poll by Opinion Research Corporation (ORC) of 1,005 Americans and a statistically large online sampling of 110,000 prepaid cellphone users (provided by Tracfone). The study is the first in the U.S. to zero in on potential economic and public safety benefits to those in the bottom two quintiles of household income (less than $35,000), who are much less likely to own cell phones. Those who do not now own a cell phone tend to be older (37 percent are retired), less educated (29 percent have a high school education or less), low income (38 percent make less than $35,000 a year) or unemployed (30 percent).

The New York Times Sunday Magazine ran a long story on a Nokia “user anthropologist” who tours the world trying to learn more about how people use phones and how they would alter the design to suit their needs. See Can the Cellphone Help End Poverty? by Sara Corbett.

Nokia said recently it had seen no evidence that the global economic downturn was affecting demand for mobile phones in emerging markets, as it outlined plans for new handsets for developing countries, as reported in the Financial Times.

Alex Lambeek, a Nokia vice-president responsible for the Finnish company’s strategy in emerging markets, said 2008 should be the first year in which the number of handsets sold in developing countries to customers replacing their existing mobiles would surpass those to first-time buyers–particularly in India, China and Indonesia.

Asked whether Nokia had seen any evidence of slowing demand in emerging markets because of the economic downturn, Mr Lambeek told the Financial Times: “The simple answer is no. We see a very strong underlying trend of mobility taking root in emerging markets, and the growth drivers for that are still very much in place.”

Mr Lambeek said Nokia was looking at how to tailor its services strategy for emerging markets, and highlighted Wednesday’s announcement that it is linking with Webmail International, a South African telecoms company, to provide email services on its mobiles in the country. He added that Nokia was interested in developing mobile banking services for emerging markets, as well as informamtion services to aid productivity in industries such as agriculture.

Nokia’s emergence as the dominant player in developing markets comes at a time when Motorola’s handset business is ailing, and has been split off from Motorola’s other operations.

In talking about the economic impact of cell phones in the developing world, I often get asked about the impact of cell phones in the U.S. Nothing’s been written on it. So I dug into the topic and with the help of pollster Opinion Research Corp., which conducted a scientific random sampling of 1005 adults, and another Web survey of 110,000 Tracfone prepaid customers, I assembled some good data.

My conclusion? That Americans with household incomes less than $35,000 attribute $4.5 billion in income to their cell phones each year. And that if the 38% of these households that do not now have cell phones were to acquire them and earn money at the same rate, it would add $2.9 to $11 billion to income for these bottom two quintiles.

You can read the press release and paper (“Cell Phones Provide Significant Income Gains for Low Income Americans”), which is posted and hosted by the New Millenium Research Council.