The Mobile's Virtuous Cycle - African Business Magazine
The Mobile’s Virtuous Cycle

The Mobile’s Virtuous Cycle

The main benefits of the mobile telecommunications boom in Africa are similar to those of any communications revolution. Operators promote obvious entertainment applications, such as access to photos, videos, music, television and movies, but the economic, social and health benefits are perhaps even more important. The following analysis provides a list of the most obvious applications to date but it is worth pointing out that many advantages will only become apparent as the technology matures.

Economic growth: the mobile telecoms sector is a direct contributor to national economies. Mobile operators in Kenya were required to pay more than KSh40bn ($463m) to the government coffers in 2011. In addition, mobile services stimulate economic activity in the wider economy; improve economic productivity; and provide sustainable employment to millions of people.

Internet access: with high penetration rates, the challenge for many businesses now is to increase their revenue per user, whether through mobile banking, market, or internet use. The number of Nigerians using mobile internet access exceeded those accessing the internet via land lines for the first time in the final quarter of last year. The introduction of 4G services should speed up this process. Most African subscribers have fairly low-tech handsets by the global standards of 2012 but smartphones are becoming increasingly popular and internet capable technology is likely to become increasingly affordable over the next few years.

Agriculture: The benefits to farmers in terms of access to market information have been well documented. For instance, a middle man seeking to buy produce from a small holder in the Tanzanian town of Iringa cannot claim that market prices have fallen in Dar es Salaam if the farmer can check the information with neighbours, friends in the city or online. Information on crop threats, such as locusts or diseases can be quickly disseminated.

Health: Medical advice can be provided in remote areas, while nurses and health workers can check symptoms and exchange images with specialists working in distant hospitals. In addition, a scheme in Ghana now allows customers to ascertain whether the medicine they have purchased is genuine by checking a scratch code on the medicine box online. Finally, Anti-HIV-AIDS measures and other health campaigns are increasingly being disseminated by mobile technology.

Education: The educational power of mobile internet access is in its infancy but is likely to become increasingly apparent over the next few years, particularly when 4G technology falls in price and enters the mainstream. Teaching content can be delivered cheaply to most locations, with video and pictures to back up audio. In countries where access to PCs and text books is limited, such technology could revolutionise learning.

Banking: The first mobile money transfer system, Safaricom’s M-Pesa, was launched just five years ago but mobile banking is already an established part of African socio-economic life. The company now counts 15m Kenyans among its customers. Other niche, traditional banking and mobile companies have followed M-Pesa’s lead and have launched mobile banking services. Apart from local transfers, mobile banking is used to transfer overseas remittances, avoiding high commission costs. Other services common to many mobile banks include making purchases, paying bills and buying airtime.

Insurance: Mobile banking has eased the sale of other financial services. For instance, Bharti Airtel has signed an agreement with South African financial services firm Sanlam to market insurance and health financial products in seven markets: Kenya, Ghana, Tanzania, Zambia, Uganda, Malawi and Nigeria. Airtel’s Africa head for Airtel Money, Chidi Okpala, said: “This will offer our customers in Africa access to a broad range of sophisticated products and services to support their lifestyles and aspirations, and this partnership will enable us to significantly enhance the value we offer our loyal customers.” Other companies offering similar products elsewhere in Africa include the world’s biggest international mobile telecoms company, Vodafone, suggesting that it sees scope for growth in the market.

Political campaigning and human rights: As was brought into sharp focus by the events of the Arab Spring, mobile phones and internet access can be used for political activism. A photo or even video of human rights’ abuses can quickly be distributed around the world, while demonstrations can be organised far more easily via social networks. Internet access to global and local news, market information and social networking has already revolutionised the dissemination of information but mobile internet access can reduce the cost of the hardware for less wealth people in Africa.

Greater security and safety: Access to mobile telecoms services encourages communication and so provides peace of mind. In addition, aside from offering improved tariff packages and new technology, some operators are offering simple but attractive benefits for subscribers. For instance, in August Telkom Kenya announced a scheme whereby subscribers could receive emergency call credit of up to KSh15 ($0.17) for 24 hours at no cost.

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Written by African Business Magazine

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