<p><em>Access to telecommunication has been cited as a factor for economic development. As such it is expected that mobile phones would increase growth, alleviate poverty and overcome the perceived digital divide. Although the literature is associating mobile phone usage directly with socio economic development, there still appears to be mixed feelings on the perceived economic benefits of mobile phones especially at the bottom poor. This research challenges the prevailing ideas and investigates whether mobile phones increase or reduce income poverty in the rural areas of Southern Highlands of Tanzania.</em></p>