“If your son or daughter is away at school and needs money, this is an easy way to send it to them,” says Ramon Isberto, a Smart spokesman.

This kind of application holds promise for the millions in developing countries who have no bank accounts and for whom transferring money can be difficult or risky.

Wizzit, a South African-based company targeting customers without bank accounts, has been offering cellphone-based financial services since 2005.

Vodafone, which is investing heavily in Africa, is partnering with Kenyan affiliate Safaricom and the Commercial Bank of Africa to soon launch M-Pesa, a mobile financial service that allows users to send and receive cash and perform other transactions.

“Financial institutions are realizing that the only way to reach new customers is through mobile networks,” says Nick Hughes, head of the mobile payment team at Vodafone.

Expanding mobile networks also brings other economic benefits, experts say. It lures more foreign investment, gives families better access to health and educational information and provides governments with more revenue from licenses and taxes.

Wireless technology has emerged at a fortuitous time for carriers expanding in developing countries because it is so much cheaper and easier to build than fixed-line networks.

Rugged, sprawling Afghanistan, for example, now has 2 million cellphone subscribers and only 20,000 fixed-line phones.

“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 cellphones, 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 cellphone 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 cellphone.”

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 cellphones with a wholesale price of less than US$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 run by Grameen Bank.

Hasina Banu, who lives in a remote village in northern Bangladesh, bought a phone from Grameen for about US$110 and each week pays back about US$2.50. She now earns about US$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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