How mobile technology is transforming Africa

English: Motorola V66 mobile phone

English: Motorola V66 mobile phone (Photo credit: Wikipedia)

Mobile phone numbers are likely to reach 1 billion in Africa by 2015. How is mobile technology transforming peoples’ lives?

Education

Despite Africa containing many of the world’s fastest growing economies and a burgeoning middle class, it still lacks behind in educational standards. As mobile uptake increases, and a flood of cheaper smartphones enter the continent offering Internet access, there is a tremendous opportunity to allow the mobile phone to facilitate educational training. In Nigeria, a country with well below average educational standards, UNESCO recently launched an SMS educational toll aimed at providing primary school teachers with regular updates on educational content. The scheme in Nigeria follows successful initiatives in other parts of the developing world that have opened up mobile learning to those in rural areas as well as women, who can be excluded from traditional forms of education.

Empowerment of women

It is potentially an unexpected benefit resulting from the exponential uptake of mobile devices in the developing world, but mobile phones have definitely helped the most marginalised in society which often include women. The move towards mobile money has opened up financial services to women, who can receive payments directly to their mobile phone, and has resulted in increased independence and a feeling of empowerment. From a healthare perspective, the mobile device can act as an excellent tool to disseminate information from malaria SMS warnings to maternal healthcare and advice. The mobile device is allowing women greater control over their lives.

Employment and payment

Mobile devices can act as tools of education and training for workers in hard to reach places without the costs of more traditional face-to-face training methods. There is no substitute for personal training but the mobile device is a step in the right direction.

Recent reports from the Democratic Republic of Congo also highlighted the fact that mobile banking has led to government workers getting paid on time as well as the amount owed to them. In a system where corruption is endemic, this is no mean feet. Workers get exactly what is owed to them, avoiding the traditional cash pay packet and superiors syphoning off ‘tips’

Transport

Mobility data is created when someone uses their phone for a call or a text. A user is then registered to the nearest cell tower and their movement is ascertained when they move form tower to tower. Use of this data is often known as crowd sourcing, and governments are now exploring the possibilities of using this data to update city’s transport systems. For example, the giant mobile operator, Orange, recently released tracking data on its phone users in Ivory Coast and researchers from IBM have started to use this data to update Ivory Coast’s transport system and cut travel times in the country’s largest city, Abidjan.

Personal finance

The African continent counts 15 of the top 20 countries in the world by mobile money usage. Mobile money is often associated with Safaricom’s hugely successful M-PESA service, which operates in several countries including Kenya, Tanzania and more recently, India. Access to a mobile phone is ubiquitous in many parts of Africa, and the mobile money service has empowered huge swathes of people by allowing them to pay bills, for goods and services, and transfer money from cities to rural areas at the touch of a mobile keypad button. In addition, the service has facilitated savings programmes protecting vulnerable families during times of hardship. Mobile money has helped governments and organisations reach the previously “unbanked”, who are often the most vulnerable in society but are able to access mobile phones.

A lack of entrenched banking services, minimal fees associated with the service, the huge geographical distances that separate city workers from rural families, and the fact that the vast majority of people own a mobile phone in Africa have all led to the huge uptake of mobile money services on the continent.

Orange opens up Mobile Money in Africa

Orange Shop

Orange Shop (Photo credit: Wikipedia)

Mobile Money has brought a great number of benefits to parts of the developing world including financial independence and improved security. Until now, Safaricom’s M-PESA has dominated this ever-growing market. However, it comes as little surprise to many that Orange is now trying to stake its claim. Orange Mobile has just rolled out its first international mobile money transfer service called “Orange Money International Transfer” which will operate between Mali, Senegal and Ivory Coast – the first such service in the region. According to Orange, 200 million euros are transferred between these three countries every year. Can Orange cut it in the ultra-competitive world of mobile money in Africa?

A customer in The Ivory Coast will now be able to send money directly to friends and family in Mali or Senegal with their Orange Money account. The sender simply needs to dial #144# from their mobile phone, and enter the Orange telephone number of the recipient and the amount to be sent. The money is immediately available in the recipient’s account to make payments, pay bills, purchases and transfers, or alternatively it can be withdrawn at a nearby location from any Orange Money distributor, also known as a Mobile Money Agent.

Mobile Money is the simple transfer of money through SMS based services. Its success in Kenya has been replicated in many parts of Africa, and more recently India. The system has flourished due to a lack of traditional banking infrastructure (consider the costs of building ATMs and bank branches in Africa’s remote, rural areas), the relative low cost of the service in comparison to bank charges, as well as the fact that the mobile phone has become ubiquitous in the developing world over the last decade. Mobile money has been particularly successful in reaching the ‘unbanked’, those most at need in society. A mobile phone is an essential device to many people in the developing world, and mobile money is simply an extension of this.

The mobile money system is dependent on a network of people who are in essence the face of the business called Agents. Agents can be anyone from people working in neighbourhood shops, petrol stations and lottery ticket stalls. These agents are the “face” of the business and determine customers’ trust and willingness to transact over the mobile platform, and allow people to cash-in and cash-out money when required. The whole mobile money system is dependent on this network. If the network of agents is too large, then there are too many agents who are not transacting meaning they have no incentive to ensure they are ‘topped up’. If the network is too small then there aren’t enough agents to enable consumers to transact meaning the network falls down and the whole system loses credibility. This loss of credibility was particularly prevalent in West Africa, which until Orange’s foray has had limited exposure and success in mobile money. It is costly to build and manage the agent network, but these costs are worth incurring in order to get to scale and they will eventually pay off – as some of the more successful mobile money experiments are showing.

The success of mobile money depends on the network of agents to build up trust, and to be readily available for people to cash-in or cash-out. Success for Orange in West Africa will depend on the quality, training and commitment of its network of Agents. The jury is still out on whether Orange will succeed in its Mobile Money roll-out in West Africa. What is evident is the necessity of an excellent network of Agents, a build-up of trust amongst the everyday user in Africa, as well as gentle persuasion that mobile money is a more cost-effective way of dealing with money that traditional everyday means.