Mobile phones in Africa – an interview with Chris Locke of the GSMA Development Fund
Chris Locke is the managing director of the development fund at the GSMA, an organisation that represents nearly 800 of the world’s mobile phone operators. In this interview, he shares his thoughts on Africa’s mobile phones market, the developmental benefits of mobile tech and what he sees as the greatest barrier to further growth.
The exponential growth of mobile phone usage in Africa has been widely reported, particularly the evidence of how parts of the continent have leapfrogged into interesting and complex uses of mobile phone technology. Did GSMA predict or expect that rate of growth?
We hoped to stimulate growth that back in 2005. With the very first project of the development fund, called Emerging Market Handset, we realised that affordability was a major barrier for people at the base of the pyramid [so] we sent an RFP [request for proposals] to handset manufacturers to say that there will be a significant order from the mobile industry if they could get a handset below $30. It needs to be below $30 to be affordable. Motorola won and released a handset that was the first handset that was specifically targeting users at the base of the pyramid and well over 20 million handsets went into the marketplace.
But as you say, we’re now in a situation where many countries are leapfrogging. Kenya is always the example people use – there needs to be more case studies than just Kenya – but what you see with M-Pesa is that Kenya is one of the most sophisticated countries in the world when it comes to using mobile money. And not a small pilot scale, at a massive national scale. Mobile usage has become the only ubiquitous connected technology at the base of the pyramid and people are now innovating on that as a platform, coming up with services and products which, in many cases, are leapfrogging what we have in more developed countries.
The African Development Bank published a report in May which suggests that one-in-three Africans were now part of the ‘middle class’. Do you think they’ve been accurately labelled and how could mobile phone usage change?
We’re now seeing, especially with M-Pesa, services specifically built to support entrepreneurship and to support businesses. But even before that, one saw very creative and innovative uses. Jonathan Donner [an academic who researches the subject of mobile usage in developing countries] wrote a paper in 2004 on the way mobile phones were being used in Rwanda by small businesses in very interesting ways to help them support their business.
So, I think mobiles are being used in ways that is supporting a new class – I don’t know if I would call them middle class, or if the categorisation works in the same way it does in developed markets – but I think you are certainly seeing a new connected class and a new enabled class.
The thing that’s really going to excite me is when people start using mobile data. What I’m looking for is the first game like Angry Birds, written by someone in Kampala. Suddenly people have access, with very little overhead, to app platforms that can potentially reach global distribution and have a global source of revenue – for a one or two-person operation.
I think the mobile web will bring an entirely new level of innovation in developing markets beyond just outsourcing data processing to countries like India. I think we’ll see a new creativity and a new sense of energy as people get entrepreneurial in the same way as people are entrepreneurial in the [Silicon] Valley but in developing markets.
A lot of mobile services currently respond to basic needs, such as access to market or mobile health. Could the next Silicon Valley really be in Africa?
Absolutely. This is a market of a couple of billion people. Just creating mobile data services to serve the needs of Kenyans, Ugandans and Tanzanians is in itself a huge market. I think there are fantastic sustainable businesses that will come out of those countries. I don’t think that it’s a given that the understanding of what those customer needs are will come from the existing large corporations. There is a tremendous opportunity for entrepreneurial innovation in those countries, developed to serve the needs of those communities and I can absolutely see that happening.
What about regulation and opening up the market? There were protests in Accra last year about the lack of competitive pricing and poor services from Ghana’s mobile phone operators.
We cannot intervene as we are a trade association and are legally forbidden from doing so – we’d be done for anti-trust. However, what we do do, is work with mobile operators on policy. One of the significant aspects of handset and airtime costs in Africa is taxation, so we have worked a lot with regulators and governments. There are many African countries who levy luxury taxes on the most basic mobile phone services and I think mobile has gone beyond being a luxury to a necessity. If luxury taxes were removed, it would improve the affordability of the service.
Tell me a little about the fund’s gender project mWomen. What are the gender implications of mobile phone usage?
We conducted a piece of research called ‘mobiles and women: a global opportunity‘ and what we pointed out first of all was the severe disparity in terms of ownership of mobile phones. We know access is becoming easier, a lot has been done but ownership still remains an obstacle. Owning a phone gives rural women a sense of autonomy and a sense of identity – often for the first time.
There are two reasons for why targeting women is a good idea. The first, and in purely commercial terms, is that it’s a big market. It is a $13 billion opportunity to deliver services to women. But the double bottomline we show in all of our programmes, is that there is then a massive developmental impact as well. In our research, we show that women felt more secure if they had a mobile phone, were able to start their own businesses and what we’re seeing is that by encouraging operators – who spend a fortune on marketing, let’s not forget – to recognise women in their communications, there’s also a certain amount of cultural change [in those markets].
How many operators are enabling women through their phones to alert someone of dangers to their personal safety?
The operator, Cell C, in South Africa is already do this. One of the aspects of Cell C’s tariff for women is a specific number they can call to report abuse or violence and get access to help.
Has it gotten easier to speak to your stakeholders about the developmental and not just the financial benefits of mobile phones?
What drives a lot of the thinking is the market, understandably. But we also need to explain to the development industry how the mobile industry can achieve development goals much faster.
The one thing the mobile industry has is scale: both in terms of network and people-reach. There are interesting ways you can use that scale infrastructure. One of our programmes, Community Power, recognised that a lot of off-grid base stations produced up to 50% more electricity than they used, so we are working with operators to redistribute that electricity to the local community. Suddenly, you’re distributing power as well as communication. One of the projects within that programme is looking at vaccine fridges. Vaccines are often spoiled due to a lack of refrigeration. We have 680,000 off-grid base stations around the world, many in areas where vaccines are spoiled. So, projects are looking at connecting fridges to the base stations, using the excess power – a cheap form of electricity that currently is being wasted. This will then have a massive impact on reducing spoilage of vaccines and in turn improving health outcomes.
Obviously, the technology alone doesn’t develop communities but it acts as a catalyst to give someone the ability to have a certain amount of autonomy.
Mobile phones have, in part, become the new way for organising and communicating protests, with anxious governments putting pressure on mobile phone operators to suspend services – as MTN Cameroon was temporarily forced to do in March. Do you advise your members on best-practice during times of civil unrest?
I can’t comment on that. We’re an apolitical trade association and we’re there to support the industry to launch services that we know have development impact but we don’t have a political agenda.
Finally, what’s the future of Africa’s mobile phone industry? Are there any challenges that might change the growth trajectory?
Both the opportunity and the difficulty is in mobile data. I think there is huge potential there as we’ll genuinely be giving people access to one of the best inventions of the human race, the internet. Giving those at the base of the pyramid, who have been information-poor, suddenly access to information in an affordable way will just be incredible. But you never know what might happen and that’s what makes it exciting.
But ultimately, the massive barrier to that is literacy. And what do you do about that? We’re seeing the price of handsets and smart phones dropping and we seeing the price of access to data also dropping but if we still have massive illiterate populations, they will certainly not benefit.