Wireless Technologies and Development in Africa

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Wireless Technologies and Development in Africa

• Brief Introduction
• Methods of Mobile Phone Deployment in Africa
• Applications of Mobile Phones for Development
• A few concluding remarks

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Introduction

• Most documented form of wireless use in Africa is
  the mobile phone
• About 104 mobile networks serving 52 million
  people in Africa.

• For most new subscribers, mobile phone is first
  and only telephone.
• Most of Africa demand for mobiles exceeded that
  of fixed lines here is an illustration from Kenya

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Fixed and Mobile Networks Growth in Kenya
    
http//www.cck.go.ke
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Methods of Mobile Phone Deployment in Africa

• Prepaid System
• Village/Community Payphone systems
• Bicycle Phones
• Resale of Minutes

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• Prepaid System most popular includes
  pay-as-you-go, no need for credit checks, no need
  to track customers and resolution of the unpaid
  bills

Kenya growth in the mobile telephony attributed
to introduction of prepaid and flexibility in
pricing through per second billing.
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• Nigeria most operators charged per
  minute, potential of competition from Glo-mobile
  finally made other providers listen to the users
  and do the same.
• But one factor hindering uptake in Africa is the
  logistics involved in selling airtime to
  end-users.
• Traditional vouchers have many challenges like
  high commissions to physical merchants e.g. in
  Nigeria.

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• Operators blame high cost of doing business in
  Nigeria for the high prices. Contributing factors
  include

• GSM license fees of US285m compared to US10m in
  South Africa
• Higher cost of setting up a base station, and the
  cost of electricity 104m vs. 12m in South
  Africa
• Problems of interconnection between the networks
  and also with the fixed line operator.

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• Answer may be in feasibility study on how to
  provide profitable low-cost telephony in rural
  regions of Africa Tanzania pilot case.
  (EngvallHesselmark, 2004)

Main argument in study low tariffs and low cost
of entry essential for provision of rural
telephony..
Argue mobile phone operations in developing
countries highly profitable, because tend to
focus on short-term investments in urban markets.
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Claim that telephony can be provided in Africa at
up to one-sixth of prevailing mobile rates. How?

• Develop model that produces lower revenues but
  higher usage level.

Hypothesize that despite initial lower revenues,
the network effects of increased user numbers
will lead to increased traffic.
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• My question Will the mobile operators buy into
  this?

Their Findings show that country trends tend to
move either to high or to low price categories.
Unlikely that low cost operators would enter a
market where prices already high.
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Community Payphones

• Village Payphones In Uganda, 1st year 1300
  operators. 100 new businesses added per month,
  usage levels exceed initial projections by 25
  percent.
• Preliminary results show system developing
  differently from financier. Many micro finance
  organizations Grameen offer loan terms from
  6-24 months unlike Bangladesh where standard 2
  year loan.

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Community Payphones

• MTN launched similar concept in Rwanda known as
  Tuvugane with 600 payphones but now 19000.
• Kenya has Simu ya Jamii. K-Rep bank give loans
  up to 24 months similar to Uganda case. By the
  end of 2004, had 5000 community payphones.
• Other examples of deployment include the use of
  bicycle phones, resale of minutes and phone
  rental.

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User-Driven Practices

• Mobile use in Africa can be high e.g.
• Nigerians use 200 minutes per week
• 154 minutes in France,
• 149 minutes in Japan,
• 120 minutes in Britain and
• 88 minutes in Germany.

• Users found ways to cope with the high prices
• Sharing Phones
• Sharing Sim Cards
• Sharing Airtime
• Flashing
• Cell Phone Towers

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Sharing Phones and Sim Cards

• Sharing Phones Urban and Rural Areas. Urban
  mostly when battery low, rural have sim card no
  phone.
• Operation of network effects different where
  mobile phones are shared like in a communal
  facility.

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Concept of Sharing

• Vodafone study model of shared use, two-way
  communication is more difficult. Non-owning user
  can make calls out, but cant receive spontaneous
  inbound calls.

• Concept of sharing attributed to cultural
  factors one simply gives a neighbors number
  even without informing them.

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• Some attributes of sharing have an impact of
  usage e.g. Sambaza in Kenya.
• Negative Stories of misuse. Plans to enhance
  security features through introduction of an
  optional PIN based security feature.

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• Income issues access now possible to all income
  levels.
• Respondents in lowest income group found clever
  ways to minimize costs like beeping or
  flashing e.g. public phone operator in Kenya
  charges 2 cents to flash

• Kenya Safaricom introduced a service called
  Flashback 130, Please call me back, thank you
• Access at all costs Ghanaians cell phone
  towers and Congos high tree houses.

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• Business vs Personal use some empirical research
  on this e.g. Vodafone study in Egypt, Tanzania
  and South Africa but more needs to be done.

• In Tanzania 34 percent, 85 percent in the Egypt
  and 89 percent in South Africa used mobiles for
  business.

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• Emphasis Very little empirical information on
  impacts of mobile phone use in rural communities
  but hypothetically if small businesses in rural
  areas have one phone, it would be a mobile phone
  e.g. Tanzanian and Congolese women illustrations.

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• From Vodafone surveys in Tanzania and South
  Africa included questions on different aspects
  of social capital such as social networks, group
  participation and social attitudes.

• Mobile phones are likely to have an effect on the
  size, number and nature of social networks in
  which people participate.

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• Mobile phones used to mediate strong links
  (family and close friends) essential for
  maintaining support networks, not to replace
  them. Face-to-face communication still important.

• Mobile phones used to manage weak links
  (businessmen and government officials) to provide
  access to information on business, social and
  education opportunities outside community. Less
  face-to-face communication.

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Complementary Services

• Banking e.g. Zambia, Kenya, Congo, South Africa
  etc.

• People with disabilities

• Charging possibilities e.g. solar, generator, car
  battery.

• Used Handsets

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• Banking CelTel launched mobile payment system
  CelPay.
• ITU say this type of application could have a
  major impact in Africa where much of the
  continent is unbanked and (where) few possess
  credit cards.
• Similar system is MoPay in South Africa,
  subscription is R200 ( 31) for registration and
  R200 monthly.

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Illustration of MoPay system
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(No Transcript)
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• Fundamo system similar from South Africa but
  have more clientele in Africa.
• In Kenya and Nigeria, users can send SMS to check
  account balances, transfer funds etc. Kenya
  charges 20 cents per transaction.
• In Morocco, some banks provide real-time SMS
  alerts to inform customers when credit transfers
  are made.
• July 2000, 1st WAP system in Africa was launched
  by CelTel in Congo, where online currency
  conversion was a hit with traders no evidence
  that this is widespread in Africa.

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• Mobile phones help overcome some physical
  challenges

• e.g. manufacturer in Cape Town who uses text
  messaging via mobile phones to communicate with
  deaf employees.

• Simu ya Jamii has given access to communication
  wheelchair users that are not well catered for
  in other public phone access points.

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Access at all costs..

• Absence of electricity has not been a major
  barrier to access and use of mobile phones.
• People use shops with electricity, car batteries,
  solar panels and generators.

• In Kenya, on average costs 40 cents to charge a
  full battery but there are no standard costs.
• Charging venues are now places to socialize and
  develop new social networks.

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• Mobile phones made more accessible because of
  sale of used handsets.

• Evidence available from 20-50 or even less but
  anecdotal evidence.

Flipside is the growing black market for these
handsets may have increased theft.
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Applications of Mobile Phones for Development

• SMS popular application of mobile phones in
  Africa except in countries like Ethiopia.

• e.g. Mobiles phones used generally to search for
  jobs and in health and agriculture sector.

• In Kenya, OKN targets those seeking casual jobs
  through the KaziSMS at 4 cents per message.

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Health

• OKN uses SMS to send messages on HIV/AIDS
  prevention and control tips to pregnant women
  on health management and nutritional advice.
  Subscribers pay 9 cents per message.

• In South Africa have TB project. On Cue, a small
  company offering a Compliance Service sends SMS
  to patients to remind them to take medication at
  pre-determined times.

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Health

• TB best treated by DOTS (Directly Observed
  Therapy System), where health workers watch
  patients take their medication each day.

• Results of pilot study showed that the Compliance
  Service is a suitable adjunct to DOTS. Only five
  failures out of 300.

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Agriculture

• In Kenya, DrumNet provides marketing and
  financial services for agricultural
  entrepreneurs.

• DrumNet (will) also compile data on credit
  worthiness of individual clients. This data will
  be in demand by financial institutions that have
  yet to tap into the market for micro-credit and
  other financial products

• Kenya Agricultural Commodity Exchange (KACE)
  launched SMS-based information service, SokoniSMS
  for farmers to receive market prices from markets
  in Kenya.

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Illustration of SokoniSMS
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Illustration of SokoniSMS
Mungai, 2005
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A few concluding remarks

• Mobile telephony is most documented use of
  wireless technologies in Africa.

• Reasons for success of mobile telephony in Africa
  esp. when contrasted with fixed lines, are amply
  demonstrated. It is worth concluding therefore
  that Africas present and likely future
  telecommunication world is wireless.

• But the problem of access in rural areas is a key
  area of concern.

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Concluding Remarks

• One feature of usage patterns is the tendency to
  share mobile phones. Many successful initiatives
  are SMS-related. This may be an avenue for future
  initiatives

• Need for a new mechanism to measure mobile phone
  access in developing countries, by distinguishing
  access from subscription.

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A possible way forward

• A lot of pilot projects. Important to ensure some
  of these are translated into major initiatives
  with demonstration effects to give the people
  more confidence.

• A lot of anecdotes, which can be documented and
  empirical research developed from some of them.

• In addition, difficult to find literature
  assessing issues from a user perspective, yet
  this area needs to be addressed.

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A possible way forward

• A lot of pilot projects. Important to ensure some
  of these are translated into major initiatives
  with demonstration effects to give the people
  more confidence.
• A lot of anecdotes, which can be documented and
  empirical research developed from some of them.
• In addition, difficult to find literature
  assessing issues from a user perspective, yet
  this area needs to be addressed.

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Thank you

• Nyaki Adeya