Wireless Technologies and Development in Africa

1. 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

2. 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 Introduction

3. Fixed and Mobile Networks Growth in Kenya http://www.cck.go.ke

4. Methods of Mobile Phone Deployment in Africa • Prepaid System • Village/Community Payphone systems • Bicycle Phones • Resale of Minutes

5. 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.

6. 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.

7. GSM license fees of US$285m compared to US$10m 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. Operators blame high cost of doing business in Nigeria for the high prices. Contributing factors include:

8. 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.

9. 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.

10. 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 User-Driven Practices

11. 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.

12. Concept of Sharing • Vodafone study model of shared use, two-way communication is more difficult. Non-owning user can make calls out, but can’t receive spontaneous inbound calls. • Concept of sharing attributed to cultural factors; one simply gives a neighbor’s number even without informing them.

13. 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.

14. 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: Ghanaian’s ‘cell phone towers’ and Congo’s high tree houses.

15. 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.

16. 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.

17. 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.

18. 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.

19. Banking e.g. Zambia, Kenya, Congo, South Africa etc. Complementary Services • People with disabilities • Charging possibilities e.g. solar, generator, car battery. • Used Handsets

20. 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.

21. Illustration of MoPay system

23. 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.

24. 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.

25. 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. Access at all costs…..

26. 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.

27. SMS popular application of mobile phones in Africa except in countries like Ethiopia. Applications of Mobile Phones for Development • 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.

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

29. MAIZE 411 Step2: Sends it 411 on the Safaricom mobile network Step1: Farmer types message to retrieve market price Illustration of SokoniSMS

30. Step4: Farmer sends number for a given market center to the number 412 Step5: Farmer receives price details. Step3: Farmer receives menu of market centers to select. Wholesale price July 08, Dry KSh1450 1 for Nairobi 2 for Nakuru 3 for Eldoret Illustration of SokoniSMS [Mungai, 2005]

31. Mobile telephony is most documented use of wireless technologies in Africa. A few concluding remarks • Reasons for success of mobile telephony in Africa esp. when contrasted with fixed lines, are amply demonstrated. It is worth concluding therefore that Africa’s present and likely future telecommunication world is wireless. • But the problem of access in rural areas is a key area of concern.

32. 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’. Concluding Remarks

33. 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 possible way forward… • 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.

34. 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.

35. Thank you Nyaki Adeya