MobileActive.org

The use of mobile banking is an increasingly important component of national and regional economic development in Southern Africa. Mobile banking can help bring the large unbanked population into the formal financial sector, and can facilitate cross-border trade by easing the difficulty for small businesses and traders to make financial transactions.

For mobile banking to reach its full potential in Southern Africa, however, African governments must establish more efficient regulatory frameworks and implement well-designed pilot programs to gain more insight into the challenges facing a full rollout of mobile banking

Service providers periodically publish different tariff offers with the objective of both customer acquisition and customer retention. Transparency in the provision of telecommunication services and tariff offers has always been and continues to be of prime concern to the Authority. TRAI has in the past taken several steps to enhance transparency in tariff offers.

The Authority, however, is receiving several complaints and representations from consumers and their representatives seeking further effective transparency measures. In view of the increased competition as well as the spread of telecom activity to rural areas, the relevance of having a more transparent regime for tariff offerings cannot be overemphasised.  At the same time, service providers and their associations have also raised certain concerns. This consultation paper brings out various issues that have a bearing on telecom tariff offers.

We examine the growth of mobile phone technology over the past decade and consider its potential impacts upon quality of life in low-income countries, with a particular focus on sub-Saharan Africa. We first provide an overview of the patterns and determinants of mobile phone coverage in sub-Saharan Africa before describing the characteristics of primary and secondary mobile phone adopters on the continent.

We then discuss the channels through which mobile phone technology can impact development outcomes, both as a positive externality of the communication sector and as part of mobile phone-based development projects, and analyze existing evidence.

While current research suggests that mobile phone coverage and adoption have had positive impacts on agricultural and labor market efficiency and welfare in certain countries, empirical evidence is still somewhat limited. In addition, mobile phone technology cannot serve as the “silver bullet” for development in sub-Saharan Africa. Careful impact evaluations of mobile phone development projects are required to better understand their impacts upon economic and social outcomes, and mobile phone technology must work in partnership with other public good provision and investment.

The number of mobile subscribers globally is estimated to have reached four billion in 2008 (ITU, 2008), with mobile penetration reaching 61%. Around 58% of subscribers are in developing countries, and subscriber growth in Africa – more than 50% per year – is the highest in the world. Studies have shown that this rapid increase in mobile penetration has contributed significantly to economic growth. Fuss, Meschi and Waverman (2005) looked at 92 countries, both developed and developing, to estimate the impact of mobile phones on economic growth for the period 1980 to 2003. They found that a 10% difference in mobile penetration levels over the entire sample period implies a 0.6% difference in growth rates between otherwise identical developing nations. The effect of mobiles was twice as large in developing countries as in developed ones (Waverman, 2005).

Mobile phones have brought three kinds of benefits (id21, 2007). First, incremental benefits, improving what people already do – offering them faster and cheaper communication, often substituting for costly and risky journeys. Fishermen in India, for example, can earn more money and waste less fish by phoning coastal markets to see which market has a shortage of supply. Second, transformational benefits that offer something new. Innovative applications, such as m-banking and m-commerce, are bringing banking services to millions for the first time, and enabling people to use mobile phones to pay for goods and services. Third, production benefits that result from the creation of new livelihoods, not only through professional telecommunications jobs but also through activities like re-selling air-time or phone cards. Since the liberalisation of Nigeria’s telecommunications sector in 2000, the industry has become a key source of new jobs in the economy, employing about 5,500 professionals, and responsible, indirectly, for another 450,000 jobs.

Just 20 years after the launch of the world’s first commercial mobile services, there were more mobile than fixed-line users globally, and nearly as many people had a mobile as a television. Vodafone’s Socio-Economic Impact of Mobile (SIM) programme started from the beginning of 2004 to commission research which would help extend the evidence and develop a better understanding of the effects of this extraordinary phenomenon. Mobile communications are experiencing faster growth rates in low-income countries – more than twice as fast as in the high income countries in recent years. Low- and middle-income countries are therefore accounting for a rising share – now more than 20 per cent – of the world mobile market. But there is great variety between countries in mobile phone penetration and use.

Surprisingly, given its extensive poverty, Africa has been the fastest-growing mobile market in the world during the past five years. The first cellular call in Africa was made in Zaire in 1987 (the operator was Telecel). Now there are more than 52 million mobile users in the continent (compared to about 25 million fixed lines).In 19 African countries, mobiles account for at least three quarters of all telephones. Africa as a whole lags far behind richer regions of the world. Nevertheless, the rapid spread of mobile in so many of its countries is a remarkable phenomenon, especially in the context of their huge economic and social challenges.

This report describes and summarises the initial research projects commissioned by Vodafone and carried out in the second half of 2004.The results described here confirm the vital social and economic role already played by mobile telephony in Africa less than a decade after its introduction there. The research documents its impact both at the macro-economic level and at the level of particular communities and businesses. It contributes to the evidence base for the development of both regulatory policies and business strategies in Africa. This opening section sets the context with an overview of the data and of the earlier academic literature on mobile, and information and communication technologies more generally, in developing countries.