Mobile Cellular Phone Revolution in Africa

Heloise Emdon, February 2010, Ottawa

History of Acacia

• 1996 – 2001

• Demonstration projects

• Recognition of constraints

• Affordability, Education

• 2001-2006• Focus on policy• Shift towards networks

Acacia I Acacia II

Acacia III• 2006-2011

• Strong networked approach• Increased focus on policy change• Integration ICTs across all sectors

2003-7: CAD10.4m 2006-11: CAD12m

Livelihoods improved

New ICT businesses

Cell phone banking: mPesa model

Client SMS

Agent Cash

mPesaCash form

mPesa admin

Fees & Admin

Safaricom

Profits

M-health

Decisions Support Applications CommCare uses OSS JavaRosa

RIA Household Study n:20 000

ICT Density in 2007

Percentage of Income on Mobiles

10 - 17% of income spent on mobile

compared to OECD averages of around 5%

Mobile pricing

How much did you spend on your fixed line last month (charges and line rental) US$

Research ICT Africa

Mobile Phone users

share of prepaid users

16+ without mobile phone and active sim and willing to pay R58.40 (US$ 5)* or

more

16+ with duplicated sim cards

16+ with mobile phone or active sim

78.6%

17.9%

10.8%

62.1%

Average monthly WTP for mobile expenditure of non-users that would be interested in getting a

mobile phone - R 46.70 (US$ 4.40)*N-households: 20 000

Research ICT Africa

Benchmarking study influence policy

An interconnection research can be imparted to policy makers to improve the day-to-day lives of people, but also that very real regional rivalries can be a trigger for policy change in Africa.

Policy barriers and hindrances in effective telecom regulation

1. Inefficient operators

2. Information asymmetry between regulator and operators

3. Regulatory failure: Dealing with competing interests of consumers and Enterprises investors

Storke and Vetter (2009)

M-banking the Unbanked – RIA study

Research ICT Africa

Comparison of the share of individuals with bank accounts and with mobile phones

Research ICT Africa

Why do you not have a bank account?

Household receiving money from another household

Research ICT Africa

Household sending money to another household

Research ICT Africa

Airtime Transfer

Research ICT Africa

What factors would make you prefer sending or receiving airtime rather than cash or transferring money via banks

Research ICT Africa

Two Modelscash-airtime convertibility and mobile wallets

M-PESA pilot overview 28/09/067

M-PESAACCOUNT MANAGER

Basic principle of operation

Money deposited into the external bank account is mirrored in the M-PESA account

• M-PESA assigns ownership of the value to different customers

• M-PESA moves value between customers in response to sms instructions

BANK ACCOUNT

$1,000

AGENT M-PESAADMIN

SAFARICOM

FinancialInstitution

CLIENT BCLIENT A

$20 $5 $100

$200 $175 $500

YES!Cellular phones meeting needs

BUT!Africa lags behind in more costly

investments in fixed line and broadband infrastructure necessary to improve education, health and enterprise

ICT opportunity Index

The Digital Guide to Digital Opportunities (ORBICOM)

Sub-saharan Undersea Cables in 2011 - maybe (version 18)

Steve Song:

www.manypossibilities,com

http://farm3.static.flickr

.com/2462/3764474517_78d7b452a3.jp

g

Investments planned for backbone

Uganda

Kenya

Tanzania Ethiopia

Burundi Sudan

Research ICT Africa

Fixed Lines

World Growth Reportommit Conclusion

3%-4% of GDP but what was found in the high growth developing countries is that they consistently invested between 5-7% of GDP in infrastructure (amongst which is ICT infrastructure) and education (capabilities) were the countries that demonstrated sustained high growth

Questions

Heloise Emdon

Program Manager

Acacia : ICT4D Africa

IDRC

Ottawa

hemdon@idrc.ca