Transforming and troubling

Mobile phones are spreading rapidly throughout Africa, bring the blessings of commerce, and the curse of spam.
Chinwuba Iyizoba | Nov 16 2009 | comment  



Africa is the fastest-growing mobile phone market in the world. According to a recent UN report, there was a 550 per cent surge in mobile subscriptions -- from 54 million to almost 350 million between 2003 and 2008. Of course India’s growth is a world phenomenon – between January and July, it registered almost 100 million new subscriptions – but Africa is growing more rapidly off a small base.

In 2008, Gabon, Seychelles, and South Africa had nearly 100 mobile subscriptions per 100 inhabitants -– higher than the United States. One African mobile operator predicts an 80 percent penetration rate in its markets by 2012.

What accounts for this?

The Economist explains that rich countries and poor countries like mobile phones for different reasons. In rich countries with well-developed transport networks and high speed broadband, they are just one more means of communication. But here in Africa, they may be the only means.

At this stage, broadband is not a contender. Only five countries -- Algeria, Egypt, Morocco, South Africa, and Tunisia -- account for 90 per cent of all broadband subscriptions. And broadband can be incredibly expensive. Burkina Faso, the Central African Republic and Swaziland have the most expensive services in the world -- more than US$1,300 a month. So cell phones have become a necessity.

Fixed-line telephones in Africa are a joke, as they are normally government-owned and incompetent. In 2001 in Nigeria, when the mobile network opened, we had 400,000 fixed-line telephones for 130 million people. About 40 per cent of the lines were in low-density areas where politicians had their electorates, not in the cities where they were most needed.

Mobiles have changed all that. "When we started in 1998 there were 2 million cell phones on the continent. Now there are over 100 million, but a quarter is in South Africa," says Mo Ibrahim, the Sudanese businessman who established Celtel, a pan-African mobile group now owned by Zain, based in Kuwait. South Africa is the first country where mobiles have outstripped fixed-line line telephones.

"Here even warlords want their phones to work," notes Mr Ibrahim, so they leave networks alone. Celtel launched its networks in Sierra Leone and the Democratic Republic of Congo during civil wars, and both prospered.

This has unexpected benefits. Some time ago, a friend of mine spent six hours trapped in Lagos traffic. "I called my wife to let her know where I was; otherwise she might have panicked." Thanks to their mobiles, people trapped in the ghastly traffic of big African cities can carry on with business.

More than just helping people to keep in touch, the cell phone has become an essential business tool, says Professor Richard Heeks, of the University of Manchester, an author of the UN report. "In fact, for many small and medium-sized enterprises in Africa, the mobile phone has overtaken the computer as the most important information and communication technology (ICT) tool. African countries, for example, are pioneering mobile banking and electronic cash transaction services. And the industry itself is a major employer - over 100,000 people work in the mobile sector and related industries."

Mobile phones also provide employment for millions of street operators. Usually seen sitting under umbrellas of different colors on hot days, these operators provide shared mobile telephone services.

"When you get a mobile phone it is almost like having a card to get out of poverty in a couple of years," says Mohammad Yunus, 2006 Nobel peace prize winner, and the founder of the highly successful Grameen Bank that provides micro-finance to poor rural women in Asian countries. Grameen phone ladies are common now in Cameroon, Nigeria, Rwanda, Uganda, and elsewhere.

Street operators became possible with the introduction of prepaid services. The prepaid cards makes keeping tab on profits easy for street operator and reduces the risk for phone companies. "Mobile phones could not work in Africa without prepaid because it’s a cash society," says Mr Ibrahim.

Prepaid cards in denominations as small as 50 cents are routinely sold by agents in small shops and on street corners across Africa. Some street operators now make more money selling prepaid card than phone calls.

The phone companies have discovered that African mobiles are enormously profitable. The success of MTN, which declared US$3 billion profit in 2004, three years after it rolled out cheap mobile services in Nigeria, alerted investors to the financial power of the poor, who had hitherto been ignored by big business. A recent study has shown that adding an extra ten mobile phones per 100 people in a developing country boosts per capita GDP by 0.8 percentage points.

But companies are not the only ones to benefit. The mobile phone connects people in isolated village with financial networks. People living in big towns can remit funds to village relatives risk-free. Farmers can get the best prices for their products and traders can update their prices on a real-time basis. "With a cell phone, I know the price for US$2, rather than traveling to the market which costs US$20," says a grain trader in Zaire.

Mobile phones have also improved security. Back in 2000, my neighbour’s home in Enugu was often robbed. A year later, the thieves were however, surprised to death. A quick call on a mobile brought the anti-robbery police in no time. They shot the thieves dead. The police are woefully under-resourced, but now, even without two-way radios, they can respond quickly.

Mobile phones are also used for election monitoring in countries like Nigeria, Kenya and Sierra Leone, as the result are sent by text messages as they come in, giving an immediate idea of the winner.

They can even help in education by giving access to ebooks. Google will soon launch an online store which will deliver electronic books to any mobile phone with a web browser.

But as in the West, mobiles bring social problems, especially for youth. Some young people spend hours on chat sites on their phones. Unsavoury music, videos and friendships are now within easy reach. In some schools in Lagos, children share pornographic pictures and content via Bluetooth in classroom. Sending SMSs is also reducing young people’s proficiency in English composition.

Mobiles are prestigious and expense and this drives both a market in used phones and an increase in phone theft. Fraud is a growing problem. Using their expertise in email fraud, some crooks are sending SMSs announcing that the recipient has just won the lottery and asking for bank details. Unfortunately, some naïve people comply.

Few inventions have had such a dramatic impart on the lives of ordinary Africans as mobile phones. They are bringing the most advanced Western commerce into remote villages, along with the most degraded Western culture. Technology can be a mixed blessing.

Chinwuba Iyizoba is an electrical engineer in Enugu, Nigeria



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