The photo is a typical street transaction in Cusco, Peru where vendors rent phones by the call, though the ones I saw had their handsets chained to themselves to make theft more difficult.

Meanwhile, the Economist suggests that Iraqis may love mobile more than “freedom”. It seems that people are paying bills by texting the serial numbers of phone cards to each other, turning phone credit into a form of currency and avoiding those risky trips to the bank.

Next up, an oldie but a goodie. When mobile phones were introduced in Kerala, India,

the adoption of mobile phones by fishermen and wholesalers was associated with a dramatic reduction in price dispersion, the complete elimination of waste, and near-perfect adherence to the Law of One Price. Both consumer and producer welfare increased.

And thanks to the nice people at QJE, there is a rare ungated complete paper here.

So what would you expect in the USA? A supersized multichoice combo according to this piece from the NY Times.

But for all the complexity, cellphones American-style do have a certain supersized logic. Americans spend more money each month on their wireless bills than people in any other country. But the money we spend buys a whole lot more talk time and text messages than it does elsewhere. On average, we effectively spend about 5 cents per minute of talk time and about a penny a text message, lower than anywhere else in the developed world.

In the lead-up to the 2001 Telecommunications Act which was the first regulation of the industry since privatisation, it was decided to share the “net cost” of the obligation between all telcos. And ever since then, we’ve been fighting over the details of what “net cost” means, how other technologies (notably mobile) affect it, where these loss making customers actually live, etc etc.

The MED  discussion document canvasses several relevant issues. A particularly interesting one is how to estimate the net cost. This is referred to very obliquely by the Herald but Stuff has understood it correctly. Here is how it works.

The (stylised) red line shows the cost an efficient telco would incur to provide each fixed line connection. For many urban customers its quite low because of economies of density. Out in the sticks it starts to climb rapidly. Everyone pays the same line rental, so Telecom makes a decent profit on many customers (area A) and a loss on some customers (area B).

Up until now, the net cost has been defined as B, based on the view that the profits on cheap connections (A) would be competed away. The new proposal is that it be defined as A – B, so there would only be a loss if there was a nationwide loss, which is pretty unlikely.

11-month-old pigeon, Winston, took one hour and eight minutes to fly the 80 km from Unlimited IT’s offices near Pietermaritzburg to the coastal city of Durban with a data card was strapped to his leg.

Including downloading, the transfer took two hours, six minutes and 57 seconds — the time it took for only four percent of the data to be transferred using a Telkom line.

Sounds spectacular, but note that file transfer took almost an hour (presumably this was 2 transfers: onto and off the data card), so this was a LOT of data. Still, its a great story. (HT:  NZ Herald)