The High Cost of Calling: Critical Issues in the Mobile Phone Industry

Abstract

In today’s globalised world of instant communication, mobile phones are a nearly ubiquitous feature of everyday life in most developed and many developing countries. Ninety percent of the population of Western Europe now has access to a mobile phone, and mobile phone penetration in large Asian countries like China and India is rising exponentially. In 2006, mobile phone sales will reach a volume of 935 million handsets, representing a value of US $136 billion. This SOMO report covers the industry’s top five manufacturers of mobile phones, Nokia, Motorola, Samsung, Sony-Ericsson and LG, comparing the companies’ corporate social responsibility (CSR) policy with the results of SOMO-commissioned field research into the actual conditions at mobile phone factories in China, India, Thailand and the Philippines. Despite the clean image often portrayed by this high-tech industry, SOMO’s research at mobile phone production facilities reveals that conditions in handset factories can be appalling, especially among sub-tier suppliers of mobile phone component parts. This report documents the current situation in an industry where labourers work up to 72 hours a week with compulsory overtime, insecure employment contracts, unsafe factories, inadequate protection when working with hazardous materials, wages below the subsistence level, suppression of union rights and degrading treatment. This situation is complicated by the increasing complexity of mobile phone supply chains. Outsourced production of small component parts for handsets can often stretch into supply chains of nearly a dozen companies; the large name-brand companies have little oversight over this part of their supply chain and generally fail to take responsibility for the poor conditions there.