The spectacular mobile phone revolution in Africa

Cell phone users in Africa

Mobile phone service is gaining by leaps and bounds in Africa. Indeed, so many Africans have subscribed to wireless service that the  continent is now the second-largest market in the world – having supplanted Latin America – and behind only Asia, the top market.

The expansion of mobile phones is likely to revolutionize Africa, a land plagued by poverty, disease, wars, and political corruption.

International Business Times spoke with one of Africa's top mobile phone executives about the future of wireless service on the continent. South African-based Pieter de Villiers is the chief executive of Africa's largest mobile messaging provider, Clickatell.

IB TIMES:

Mobile phone service is booming on the African continent with over 600 million subscribers. But how can this development translate into improving the economy when so much of Africa is beset with civil wars, political corruption, poor infrastructure, and poor health care?

DE VILLIERS:

Africa's natural resources, growing stability, and increasing the middle class present a significant opportunity for both commercial and societal advancements. The key area of development is indeed commerce and finding sustainable ways for communities to interact and transact with each other inefficient, trusted ways.

Africa's mobile operators and banks have been quick to realize that while 60 percent of Africa's population has no access to banking facilities, over 50 percent of the adult population in Africa has access to a mobile phone, which makes the move to mobile-banking a natural transition. Broad-based accessibility and availability of banking services at a reasonable cost could have a liberating impact on the majority of the African population, including those sections that do not have access to traditional banking channels.

For the African public itself, the benefits of mobile banking relieve significant 'pain points' associated with traditional banking. Customers no longer have to travel vast distances of several hours to reach traditional bank branches that are especially congested at the beginning and middle of the month when most paychecks are delivered.

Financial institutions will benefit by affording themselves the opportunity to address their ever-rising costs by using mobile banking as a relatively cost-effective self-service channel. In addition, Clickatell expects that when the adoption of mobile banking services reaches its prime in Africa, it will transform lives and livelihoods, not just by connecting Africa's impoverished masses to the infrastructure of the digital economy, but also by enabling Africans to become digital producers and innovators.

Moreover, pre-paid mobile top-up services like the one offered by Clickatell, offers customers in the emerging markets a real-time, direct, pre-paid airtime solution. This differs from the traditional 'indirect' pre-paid top-up methods in that no pre-paid PINs [personal identification number] or vouchers are required. A pre-paid top-up solution like this stimulates local entrepreneurial opportunities as purchases are supported through various local service channels and customers are empowered, having direct control over their airtime.

IBTIMES:

What are some other ways mobile service can help the lives of ordinary Africans?

DE VILLIERS:

Other ways in which the mobile phone plays a vital role in enhancing the economic and social well-being of mobile users and their families in the emerging markets are directly related to SMS [short message service] messaging. For example, farmers can use their phones to receive weather reports, harvest prices, information about fertilizers all by SMS. With this valuable information at hand, they can plan better and increase their crop yields.

Mobile phones and SMS also play a vital role in improving peoples' lives in the emerging markets, by giving patients access to valuable medical information. For example, mPedigree in Ghana offers an SMS authentication service to verify prescribed medications (e.g., malaria treatments) and fight the plague of counterfeit drugs. It reaches up to 50 percent of current usage with significant economic and social impact.

IB TIMES:

How developed is social media in sub-Saharan Africa? Given that social media played a role in toppling the dictatorships of North Africa, wouldn't repressive regimes like Robert Mugabe's Zimbabwe and others seek to prohibit such services?

DE VILLIERS:

The growth in Africa's Facebook numbers shows that it has touched a chord with users at a near mass level. Social media played a part in the 'Arab Spring' and everyone has been arguing about what part ever since.

Africans are leading what may be the next global trend: a major shift to mobile Internet use, with social media as its main drivers. According to Mary Meeker, an influential Internet analyst, mobile Internet and social media are the fastest-growing areas of mobile usage worldwide, and she predicts that mobile Internet use will soon overtake fixed Internet use.

Studies suggest that when Africans go online (predominantly with their mobile phones) they spend much of their time on social media platforms (Facebook, Twitter, YouTube, and so on). Sending and reading e-mails, reading news, and posting research queries have become less important activities for Africans. In recent months Facebook – the major social media platform worldwide and currently the most visited website in most of Africa – has seen massive growth on the continent.

IB TIMES:

How has mobile phone service become affordable to the average African?

DE VILLIERS:

This growth has been fueled in large part by the liberalization effort resulting in the formation of independent regulatory bodies and increased competition in the market. Combine this with numerous grassroots efforts to empower the poor (by providing access to knowledge through technology) and you have yourself the beginning of a true economic revolution.

IB TIMES:

Are mobile phones in Africa primarily in the hands of urban city-dwellers? Are such things beyond the scope of people in rural villages?

DE VILLIERS:

Currently, Africa is the world's fastest-growing mobile phone market. Today there are more people using mobile phones across the continent than traditional, fixed lines. However, like fixed-lines concentrations, most of the cellular phones are used in urban areas by the minority elite. The poor African majority still cannot afford cellular phones despite their great desire for them.

The poor in Africa tend to use public access facilities and to share phones, so low teledensity figures can mask the extent to which the poor access telecommunications services. Research shows that in 'typical' rural districts of Africa, up to 80 percent of households make regular use of phones.

IB TIMES:

What is the significance of the fact that 96 percent of mobile subscriptions in Africa are pre-paid? (The figure in the US is much lower).

DE VILLIERS:

One of the key features driving growth in mobiles in Africa is that they are mobile, and inherently suited to remote areas with poor infrastructure. In addition, the pre-paid system of low-denomination scratch cards is perfectly matched to the economic situation of many Africans, and it is recognized that mobiles offer potentially cheap means of communicating, especially through the use of SMS.

IB TIMES:

Who are the leading mobile carrier companies in Africa?

DE VILLIERS:

In Nigeria: MTN; Glo Mobile; Airtel-Zain; Starcomms; and Mtel. In South Africa: Vodacom; MTN; Cell C; Telkom; and Virgin Mobile.

IB TIMES:

China has put its fingers all over Africa - are they also helping African nations to develop broadband and mobile phone services?

DE VILLIERS:

China Mobile, the world's largest mobile-phone carrier, is looking for acquisitions in Africa but does not have any known targets at this time.

IB TIMES:

The highest broadband penetration anywhere in Africa is South Africa at 6 percent. That still seems very low. I would imagine that the potential for future broadband development in Africa is far greater than anything else.

DE VILLIERS:

The African telecoms market has been transformed by the launch of new submarine cables, according to a new report by Investment Research firm AfricaNext Research. The impact of the SEACOM, EASSY, and Main One cables has been far-reaching, according to the firm. The growth in international bandwidth has been a catalyst for, and an outgrowth of strong Internet usage growth, according to the report. Internet user numbers are set to rise, with more than 120 million users projected for sub-Saharan Africa by 2015, along with more than 100 million active mobile packet data customers, creating a 'demand stimulus' for bandwidth. But increased bandwidth supply will make little difference to prices in countries with concentrated international gateway markets.

IB TIMES:

Do you expect South Africa to lead the way in mobile phone service in Africa? Or will Nigeria, Kenya, or some other country also make great strides?

DE VILLIERS:

A recent report released by the GMSA states that Nigeria has the highest number of mobile phone subscriptions in Africa, with more than 93 million mobile phone users. South Africa, which has a more developed infrastructure, topped the continent in terms of mobile broadband penetration. The group singled out Kenya as the leader of mobile money transfers and what's termed "m-banking." It said 8.5 million users in Kenya use mobile devices to help manage their finances.

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