Cell Phones Vital in Developing World

"They can leapfrog the technology," says David Knapp, general director of Motorola Vietnam.

In Vietnam, where the economy is growing 8 percent a year, the communist government has spent heavily to expand coverage to all 64 provinces.

"The more people who have cell phones, the more the economy will grow, and vice versa," says Bui Quoc Viet, a spokesman for the state-run Vietnam Post & Telecommunications Corp., the country's largest telecom company.

The government has also promoted competition: Vietnam now has six mobile carriers, two with foreign partners. The development has driven down service charges, a key factor in the tripling of cell phone subscribers over the past two years to 18 million.

Mobile phones provide a good way for the younger generation to seek new business opportunities and cash in on Vietnam's move toward a market economy, says Paul Ruppert, managing director of consultancy Global Point View LLC, who has extensive experience in Asia.

"It's all micro-activity _ tailors, small repair shops, textile producers, grocery stores," Ruppert says. "Even though they're small, they're allowed to get an idea of the market via the cell phone."

Text messaging, or SMS, is another application that's particularly popular in Asian nations like Thailand, Vietnam and the Philippines. It's considered a cheap, unobtrusive way to stay in touch with friends, connect to the Internet and conduct business.

"It's a good way to save costs, but more importantly I can use SMS services as evidence for my business transactions," says Truc, the embroidery business owner.

Carriers have adapted to the needs of poorer customers by selling prepaid airtime cards, often for as little as 35 cents per card. This eliminates the need for a contract, credit history check or even an address. Once you register for a phone number and buy an airtime card, you're in business.

Handset makers, meanwhile, are offering ultra-cheap phones. Motorola Inc., under the GSM Association's emerging market handset program, has produced cell phones with a wholesale price of less than $30. Retail prices vary depending on taxes and local market conditions.

But even those phones are still too expensive for many who live on one or two dollars a day.

That's given rise to communal phone use and a cottage industry made up of people who resell phone service for a living.

Both are typified in Bangladesh's "Palli Phone," or village phone, program. A quarter million "phone ladies" buy mobile phones on credit from Grameen Bank, winner of the 2006 Nobel Peace Prize along with its founder Muhammad Yunus, providing wireless communication for the community and themselves with a livelihood.

Hasina Banu, who lives in a remote village in northern Bangladesh, bought a phone from Grameen for about $110 and each week pays back about $2.50. She now earns about $25 a month from the phone and plans to use that money to open a small grocery store.

But even in rural Bangladesh she says competition is heating up among other "Palli Phone" sellers.

"Now I get less customers," Banu says. "But I am happy that now I have some money with (which) I can expand my business."

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Associated Press Writers Tran Van Minh in Hanoi, Vietnam, and Julhas Alam in Dhaka, Bangladesh, contributed to this report.