A team from Indonesia took home a $10,000 prize in the Rural Innovation segment of Microsoft's Imagine Cup this year by developing a way for people to report environmental problems with their mobile phones.

It's easy to see why the idea came from Indonesia. The nation is made up of over 17,000 islands in the South Pacific, many without electricity or good wireline communications. A fisherman from a small island village may see a problem such as a sinking oil tanker, but may not be able to report it quickly enough to stave off disaster.

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Project Butterfly aims to solve the communication problem using the mobile phone networks that have become pervasive in Indonesia and many other developing countries. The Indonesia team created a way for reports to be collected and collated from voice calls, SMS, MMS (multimedia messaging service), or mobile or Web messages.

The software then classifies the problems according to priority and location, and sends an alert to authorities able to handle the problem.

The team hopes to work with environmental groups and Indonesia's Ministry of Environment to set up the system in Indonesia and elsewhere, according to Ella Madanella, a member of the team.

In addition to the cash prize, the group won the opportunity for a 12-week Internship in Bangalore, India working with Microsoft's Technology for Emerging Markets Research Group.

Michael Rawding, a vice president at Microsoft's Unlimited Potential Group, said there were a lot of projects at the Imagine Cup this year that utilized mobile phones, highlighting their importance in the developing world.

The idea for a rural innovation award at Imagine Cup came from a greater focus on environmental issues and those affecting people in developing countries, he said.

Mobile phones have really caught on around the world. Cellular networks cover most of the world's population, according to mobile phone industry associations. In Indonesia, text-messaging is so common that the nation's president even set up a mobile phone number, 9949, so people can send messages directly to his office.