MobileActive.org

The report entitled  "Innovative ways of appropriating mobile telephony in Africa" is published by the French Ministry of Foreign and European Affairs and the International Telecommunication Union (ITU).

The democratization of mobile telephony in Africa, its availability, ease of use and, above all, the extent to which it has been appropriated by the public, have made it a major success story. Very low-income populations are not only actively demanding access to mobile telephone services but also innovating by creating the functions and applications they can use. Development is thus happening “from the bottom up” and an entire economy, both formal and informal in nature, has come into being to meet people’s needs. Many different actors – private, public, NGOs – are now mobilized.

Operators and manufacturers have successfully changed their economic model and adapted their products and applications to allow access to services at affordable prices. NGOs have in addition created a range of messaging- based services in different sectors. However, the future evolution of mobile telephony is not clear. A range of different approaches will co-exist, from SMS up to full Internet capacity, including experimental initiatives using smart phones and “netbooks”. Falling costs will lead to an increase in the number of phone devices with data receiving capacity.

Individuals and companies involved in creating services or applications for development will need to take account of their users’ demographics and incomes, as well as the pricing systems of telecommunication companies in countries where they wish to operate. In this, states and regulating authorities have grasped the crucial role which they must play in promoting an investment-friendly environment with the goal of achieving universal access and stimulating innovation – key factors in achieving a “critical mass” of users.

The advent on the African continent of high-capacity links via submarine cables will change the ground rules and force operators to seek new sources of revenue. The inventiveness that has already been evident in mobile voice telephony will be needed once again if the “mobile divide” (in terms of costs, power supply, and so on) is not to widen.

This report takes stock of developments in this sector, which is crucial to Africa’s economic development, and suggests a number of possible directions it might take.

This study analyses the cost of a low-volume basket of mobile services across a sample of Latin American countries, and contrasts these results with standard income and poverty indicators. The main goal is to establish how affordable mobile services are for the poor.

Three general findings emerge. First, the poor generally pay a cost premium for using prepaid subscriptions that allow better expenditure control, though in many cases this premium is much lower than expected.

Second, affordability is an important predictor of mobile penetration. Overall, while affordable handsets and the callingparty-pays system allow a significant number of low-income Latin Americans to become mobile subscribers, the results reveal that the current tariff structure has an inhibiting effect on service consumption by the poor.

Third, since affordability is the most significant barrier to extending the reach of mobile services, as well as the range of services used by the poor, priority should be placed on policies aimed at reducing tariffs and stimulating the introduction of commercial innovations for low-income groups.

Access to telephony for low-income groups is largely based on different strategies of mobile telephony usage. The main goal of this research project is to explore the strategies employed by the poor in Latin America and the Caribbean to access and use mobile telephony services, as well as to identify the major market and regulatory barriers for increased penetration and usage. More generally, it seeks to contribute to the discussion on how access to mobile telephony contributes to improving the livelihoods of the poor –what we call mobile opportunities.

Our results show that mobile telephony is highly valued by the poor as a tool for strengthening social ties and for increased personal security, and that it is beginning to prove useful for enhancing business and employment opportunities. Overall, the survey results suggest that the acquisition of mobile phones by the poor has an economic impact reflected mainly in improved social capital variables such as the strengthening of trust networks and better coordination of informal job markets. These findings reveal the continued need to develop innovative business models that extend the market frontier for mobile telephony. They also highlight the urgent need to rethink public policies that are premised on the mobile phone as a luxury good. Clearly, for the poor, mobile telephony has long been the most cost-effective and accessible alternative.