Facebook for Every Phone and its impact on the developing world

Image representing Facebook as depicted in Cru...

Image via CrunchBase

The mobile revolution in Africa is well documented, however mobile statistics are specifically impressive in the BRIC Nations — Brazil, Russia, India and China – as well as the likes of Indonesia, Mexico and the Philippines. Many emerging markets have skipped the ‘desktop generation’ and are already mobile-first economies where mobile devices are more ubiquitous than either land-line telephones, PCs, or fixed Internet connections. Although research suggests that global smartphone shipments have overtaken those of feature phones recently, it is still the basic feature phone that dominates in emerging markets. Facebook has been quietly working on a project over the last 2 years to expand its user base of 1.1 billion and enable Facebook access on simple, feature phones.

The scheme is called ‘Facebook for Every Phone‘ and has reached 100m users. The stripped-down, minimum capacity version of Facebook is accessed through over 3,000 types of feature phone, some costing less than 20 dollars. Working with mobile operators, Facebook has encouraged them to allow users free or cheap access to this basic version of their product.

Why is Facebook doing this?

Although markets such as India, Indonesia, Brazil, India, Mexico and Vietnam are not currently lucrative advertising markets for the internet giant, they are some of the fastest growing markets for internet access and social networking, and Facebook is clearly eyeing up its next generation of customers and the potential ad revenue these markets will bring.

As Facebook subscription in the likes of the US reaches saturation point, many people see the next generation of customers from the developing world as Facebook’s greatest opportunity to increase its global market share. Although Facebook’s success in the mobile advertising market has been well documented, it is still like many struggling with the seismic shift in internet access from the PC to mobile devices. As the economies of emerging markets grow and its consumer class demands access to the same products and services as the developing world, they represent a lucrative market for the likes of Facebook. Indeed, research suggests that users who access the product through a feature phone are the most engaged users, representing another opportunity for advertisers. As the middle class in the developing world grows, so do their purse strings and Facebook is fully aware of this.

Snaptu

Facebook purchased an Israeli company called Snaptu, that had begun to produce basic versions of applications to allow users to access them on feature phones. Facebook, having originally discounted mobile Facebook access as simply a way to update a status as opposed to the full service, saw a massive opportunity here. The Snaptu team began to re-engineer Facebook’s software to reduce its capacity and allow it to run off minimal data requirements. Facebook for Every Phone includes all the phones most popular features, including News Feed, Messenger and Photos, and is optimized to use less data than other Java apps and mobile sites.

Despite the obvious benefits access to Facebook brings many people in the developing world, there is a danger that users see Facebook as the entire internet, instead of just a small part of it. As powerful internet giants such as Facebook, Microsoft and Google continue to see emerging markets as a priority, there should be a limit to their influence allowing home-grown developers and mobile applications to launch and thrive in the developing world.

New Orange Money Service allows in Store Mobile Payments in Botswana

Mobile money has seen an exponential rise in the developing world and much of its success has centred around Kenya and Safaricom’s M-PESA service. Recent research from the GSMA highlighted the fact that 74 per cent of the adult population in Kenya use mobile money, and 31 per cent of Kenyan GDP is transacted through mobile money services.

Mobile money however is not all about Vodafone’s M-PESA, as Orange demonstrated with its recent launch of the Orange Money International Transfer service which will operate between Mali, Senegal and Ivory Coast – the first such service in the region. Every year, about 200 million Euros are transferred between the three countries. According to Orange, there is an urgent need for a more convenient and secure transfer service in the area. The service will allow Orange Money customers to transfer money between friends and family within the 3 countries using a mobile device and simply dialling #144# from the mobile phone and entering the recipient’s telephone number and the amount to be sent. Orange is desperately trying to compete in the ever-growing mobile money market in Africa. Their goal is to expand this first-of-a-kind service in Africa to other  countries in which the Group is present. Orange Money is already a significant player in the region and this transfer service is likely to expand its influence. Available in 13 countries in  Africa and the Middle East, Orange Money has more than 7 million  customers today.

The Orange Money International Transfer service announcement has been swiftly followed by an Orange partnership with Visa. Currently, Orange Money allows customers to use their mobile phones to transfer funds to any mobile phone subscriber in or outside the country, buy airtime, and pay bills. From August this year, registered Orange Money subscribers in Botswana will be able to use their Orange Money account to make Visa enabled payments and pay invoices at stores, international online merchants and at over 300 Visa ATMs across the country. To access these services, Orange Money subscribers will need to apply for a Orange Money prepaid Visa card, which will be instantly linked to their existing Orange Money account. The card, secured with a PIN code, will then allow them to use funds to make point-of-sale payments at retailers and withdraw cash at ATMs. This is a significant move forward in the African mobile money movement and could pave the way for the mobile device to become a real means of payment on top of a means of money transfer in Botswana and beyond. It could well be Africa leading the way in mobile payments with the likes of the UK learning from its efforts.

The Orange Money Visa card will be available to all sectors of society, including the unbanked, helping to reach those most in need of financial services. Botswana is the first country in the world where this new innovative program for enhanced mobile payments will be launched, following the announcement of a group-wide collaboration between Orange and Visa in 2012. Other countries in Africa and the Middle East, where Orange Money is already available, will progressively offer the Orange Money prepaid Visa card.

This is a significant milestone in the financial and mobile industry to drive financial inclusion and will contribute to drive the mobile money revolution in Africa.

MMU releases infographic on Kenyan mobile money journey

Flag of Kenya

Flag of Kenya (Photo credit: Wikipedia)

As Nairobi jostles with the likes of Accra, Lagos and Johannesburg to become the continent’s technical innovation hub, mobile money continues to drive the Kenyan economy and is at the forefront of reaching the unbanked. Mobile money started as a simple money transfer system driven by a lack of entrenched financial systems and operates through a vast system of mobile money agents, enabling people to “cash in” and “cash out” using their mobile device. Safaricom’s hugely successful M-PESA is synonymous with the term mobile money, and has since launched in other countries in Africa as well as India, and now allows users to pay for goods and services using their mobile device.

The Mobile Money for the Unbanked (MMU) is a department within the GSMA and works with mobile operators and the financial industry to accelerate the access to financial services across the developing world. The following link is an infographic highlighting the Kenyan journey from 2006 to today, and outlines the exponential rise of mobile money.

http://www.gsma.com/mobilefordevelopment/wp-content/uploads/2013/07/MMU-Infographic-The-Kenyan-journey-to-digital-financial-inclusion.pdf

Highlights of the report are are:

23m Mobile Money users in Kenya. 74% of the adult population

31% of Kenyan GDP transacted through mobile money services

96,319 mobile money agents in Kenya

Google and Microsoft aim to use ‘white space’ in Africa to deliver Internet access

Image representing Microsoft as depicted in Cr...

Image via CrunchBase

Microsoft will soon be piloting an Internet connectivity ‘white spaces’ project in rural South Africa, following on from similar projects in Kenya and Tanzania earlier this year. The trial will take place in Limpopo, and is similar to the pilot in Kenya as it targets very rural areas which may not even have access to the electricity grid. The Internet giant continues to eye its next generation of customers and aims to deliver broadband at reduced cost to the rural masses in Africa. ‘White spaces’ is a term for utilising unused frequencies for television broadcasters to deliver Internet services. Google also launched a project earlier this year attempting to bring fast speed Internet access to South Africa, using high altitude balloons or ‘blimps’ capable of transmitting signals across thousands of kilometres. The Google project is focusing on developing a wireless broadband network in Cape Town, using masts to transmit signals to local schools in Stellenbosch.

The Microsoft project will use the TV ‘white spaces’ and solar-based power stations to deliver low-cost broadband to 5 schools in South Africa’s Limpopo province. Microsoft isn’t simply providing Web access and says the schools will be kitted out with Windows-based tablets and projectors, while teachers will get laptops and training. Since access to power can be an issue in parts of South Africa, there will also be solar panels for charging devices where mains electricity is not available. So alongside the philanthropic leanings, Microsoft is clearly looking to engage the next wave of potential customers.

The Limpopo trial, which aims to connect local schools, is similar to Microsoft’s Kenyan pilot, in that it targets very rural areas that may not even be on the electricity grid (the Tanzanian pilot was more urban, dealing with high-density, low-income areas). The Limpopo pilot involves solar-powered base stations and – Microsoft being Microsoft – each school also gets a range of Windows tablets for pupils, laptops and training for teachers, projectors and teaching materials.

The ‘white spaces’ technology isn’t solely for emerging markets, and it could have potential right across the world. Google’s TV white space database was approved in the US just last month, while it was recently reported that both Microsoft and Google are considering launching the project in the UK in the future.

Large Internet players like Facebook, Microsoft and Google often talk about the next billion people to access the Internet, and how the majority of them will come from the developing world and will access it through mobile devices. Recent reports highlighted the fact that Facebook and Google are persuading wireless carriers to offer cheap or free internet access to customers for stripped-down access to the web giants’ sites. Considering that Facebook currently only has access to about 5% of the African continent’s population, there is a massive opportunity here for the social networking giant,

There is also likely to be an influx of cheap, sub-100 dollar smartphones into Africa over the coming years and Google wants to be at the forefront of this through the production of cheap Nexus phones and tablets. Google’s gives away its open-sourced software on Android for free so as to increase the reach of its information-gathering system, and Africa is seen as a massive opportunity. Google wishes to break into African and Asian markets by reducing the cost of smartphones and is doing this to exert is monopoly position in these, in Internet terms, virgin territories.

So, it is easy to understand why the likes of Google and Microsoft are looking into innovative ways of bring high speed broadband to the masses in Africa. The Internet giants’ continued growth depends on reaching new people in the developing world, who will be the next generation of its customers. Their intentions clearly aren’t completely philanthropic, but that doesn’t mean it isn’t enormously beneficial to developing economies whose people are accessing the Internet for the first time. In the end, for both Google and Microsoft this all comes down to wanting to spread connectivity, and therefore those companies’ addressable markets. This connectivity will also have major benefits for the economies of the countries concerned, so everyone should do well out of it.