The Impact of Mobile Telephony on Rural Entrepreneurs

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The Impact of Mobile Telephony on Rural
Entrepreneurs

• Lusapho Njenge
• Seda
• 2 July 2008
• EDC 2008
• CTICC, Cape Town

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Presentation Outline

• Evolution of Mobile Technology and Cell Phone
  Usage in South Africa
• Technology for Rural Entrepreneurship Development
  South African Scenario
• Technology related challenges facing small
  enterprises in South Africa
• Possible Solutions
• Mobile Technology in Use in Rural Areas -
  Examples
• Case Study - Port St Johns Hawker Logistics
  Problem

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Evolution of Mobile Technology and Cell Phone
Usage in South Africa

• Mobile telephony evolution
• First Generation Mobile Telephony Voice
• Second Generation Mobile Telephony Internet
  access, email, SMS and MMS
• Third Generation Mobile Telephony Simultaneous
  transmission of both voice and non-voice (text,
  video, email and web browsing)

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Evolution of Mobile Technology and Cell Phone
Usage in South Africa (Cont)

• Cellular Subscriber Growth Worldwide
• Source EMC World Cellular Database

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Evolution of Mobile Technology and Cell Phone
Usage in South Africa (Cont)

• Technological diffusion in urban and rural
• India (Source World Bank, 2008)

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Evolution of Mobile Technology and Cell Phone
Usage in South Africa (Cont)

• Key South African Statistics
• 60 of households own a cell phone, 20 own a
  landline and 17 own both (GHS 2005)
• A little of over 70 of cell phone users in 2005
  do not have a landline at home, up from 65 in
  2003 (AMPS2005RA and AMPS2003A)
• 41 of adults in South Africa use a cell phone.
  One average, people spend 3 of their income on
  cell phones (AMPS2005)
• Gauteng has the highest penetration of cell
  phones, at 48 of adults. Next is the Western
  Cape with 43, while the lowest penetration is
  the Eastern Cape at 24. (AMPS 2004)

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Technology for Rural Entrepreneurship Development
South African Scenario

• Generally Accepted Classification of
• Technology
• Process technology resulting in product quality
  improvement or increased productivity.
• Product technology resulting in new product
  development
• Transaction technology resulting in better
  co-ordination, information sharing and exchange

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Technology for Rural Entrepreneurship Development
South African Scenario (Cont)

• Governments expectations from technology
• Improving the economys productivity
• Promoting overall national development
  (socio-economic)
• Creating employment
• Fostering a technology culture within society
• Capacity development
• Keeping abreast of global competition

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Technology for Rural Entrepreneurship Development
South African Scenario (Cont)

• Numerous initiatives, 425 according to study by
  HSRC
• Focused on poverty alleviation, economic
  development a spin off
• Usually isolated from other factors such as
  market access

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Technology related challenges facing small
enterprises in South Africa

• Increased competition as a result of
  globalization
• Keeping up to date with technological advances
• General infrastructural challenges
• High costs of technology/communication

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Possible Solutions

• Better Coordination of Public Sector
  Interventions and Incentives
• Increased Research and Development
• Adapting Technology to Rural Dynamics

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Mobile Technology in Use in Rural Areas -
Examples

• Kenya Agricultural Commodity Exchange - Soko
  Hewani (Supermarket in the Air)
• Radio and sms based programme in Kenya that
• enables farmers and buyers to trade
• Commodities
• 2000 sms hits a month

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Mobile Technology in Use in Rural Areas
Examples (Cont)

• Celpay Zambia and DRC
• Platform operating on behalf of banks in the
  region. Provides clients with mobile bank account
  which is accessed through cell phones and GSM POS
  devices.
• Allows for full banking functionality
• Over 5 mil transactions a month
• Over 10 mil moved during a month

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Mobile Technology in Use in Rural Areas
Examples (Cont)
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Case Study - Port St Johns Hawker Logistics
Problem

• Background
• Hawkers have to make a round trip of three hours
  to buy fresh produce losing revenue in the
  process
• Local shops offer produce of an inferior quality,
  more expensive

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Case Study - Port St Johns Hawker Logistics
Problem (Cont)

• Interviews/Group Discussions
• Interviews held with 50 hawkers on general
  business challenges and buying patterns
• Group discussion to come up with solutions
• Integrated system involving local IT
  entrepreneur, taxi association
• First year would be run at no cost for the
  hawkers

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Case Study - Port St Johns Hawker Logistics
Problem (Cont)

• Results/Lessons Learnt
• Project abandoned at pilot stage, due to taxi
  association issues
• Willingness of rural entrepreneurs to cooperate,
  as well as utilize simple technologies
• Importance of other factors
• Multiplier effect

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• Thanks
• lnjenge_at_seda.org.za