Mobile in an African context

With fixed-line infrastructure across much of Africa insufficiently developed or in disrepair, mobile networks are increasingly proving to be the most appropriate solution for the provision of telecommunication services―particularly in remote and rural areas. Figure 5.8 shows comparative mobile and fixed-line penetration rates in various African countries, clearly indicating the dominance of mobile even in the poorest economies, such as Côte d’Ivoire, Uganda and Zimbabwe, with Ghana being one of the few African exceptions. In fact, Uganda was the fist African country where mobile overtook fixed as the network with the most subscribers, closely followed by Côte d’Ivoire and Zimbabwe. The African market's potential for cellular mobile is evident from these examples, and from the significant progress made in mobile growth over the past few years. At year-end 1999 there were almost six million mobile subscribers in the Africa region. By year-end 2001 the figure had risen to 23 million, an estimated 80 per cent of which were prepaid subscriptions.³⁷ However, it should not be overlooked that more than eight million of the total number of subscribers in Africa are located in South Africa. The number of GSM networks in Africa also represents a relatively high proportion of all networks, with over 95 per cent of African networks now deploying GSM technology, compared to a world average of 70 per cent. In the longer term, it is expected that whereas mobile subscriber growth in developed countries will peak and start declining by 2004, growth in developing economies, including most of Africa, will go on increasing during that period.

The only operators south of the Sahara that are set to deploy general packet radio services (GPRS) during 2002 are the South African operators, MTN and Vodacom. Elsewhere in Africa, operators are concentrating on the burgeoning voice markets. The lack of computers is an obvious reason behind this trend. However, short message service (SMS) has been catching on in many African countries.

Figure 5.8: Africaa mobile continent

Mobile and fixed-line telephone penetration (per 100 inhabitants) in selected African countries, year-end 2001

0 5 10 15 20 25 30 35

Uganda Ghana Zimbabw e Côte

d'Ivoire

Egypt Morocco Botsw ana South

Africa Fixed

Mobile

Mobile subscribers and fixed-lines, per 100 inhabitants, selected African countries, 2001

Source: ITU World Telecommunication Indicators Database.

CHAPTER FIVE: CASE STUDIES 121 5.6.1 The importance of local content development

In many African countries, there has been an increase in the number of companies providing specialized Web content development and hosting in response to the rising demand for such services. For example, Ghanaweb, a Web-based Ghanaian content developer, launched a WAP service offering news and other local information to mobile subscribers.³⁸

The World Bank Information Development Unit³⁹ is also involved in numerous ICT development projects in Africa. In Ghana, it has sponsored a mobile Internet project to design, deploy and operate a Computerized Mobile Bank (CMB) for susu (informal workers private savings scheme) operators and small-to-medium enterprises over a period of 18 months. The objective of this activity is to determine the extent using new technologies to which CMB can expand the outreach of formal banking institutions and reduce the transaction costs of providing complete banking services to informal bankers. Such initiatives might, in future, be integrated into a domestic 3G network for those living in rural areas.

While initiatives of this kind are already making their mark, the lack of local content and skills shortage for content development in Africa remain an important obstacle to growth in Internet use. Location-specific content development will therefore be one of the critical success factors for the take-up of mobile data services.

5.6.2 Policy and regulatory needs

The 3G story in other countries shows that active policy measures will be necessary if African countries are to successfully develop 3G services, services which, in a largely rural population with relatively underdeveloped infrastructures, will be all the more valuable in providing access to information and communications.

Affordability of services is of paramount importance for the take-off of new mobile services, but in the less developed economies of Africa, 3G communications will be affordable and attractive only to a small elite of wealthy and technologically savvy individuals and companies. 3G handsets and services may initially be out of reach of the majority of current 2G subscribers, and may be a totally unrealistic prospect for many segments of the population. The level of market competition and the position of the incumbent operators have typically contributed to keeping costs high.

Further to this is the issue of timing: political changes, economic conditions and technological uncertainties have made 3G deployment uncertain in most African countries. It has been frequently reiterated that delays in 3G deployment will only serve to widen the digital divide.

Cheaper prices will of course result from the increasing demand for high bandwidth for data services, as more systems are networked around the country, driving improved and cheaper connectivity. In this way, private sector initiative will eventually prompt governments to take relevant policy measures, but examples of countries in other world regions have also shown that the more proactive a government is, the better the results in terms of mobile and Internet growth, the more affordable the services are to users, and the greater access populations have to information and communications.

5.6.3 Education and literacy

One of the difficulties is the identification of a “killer application” for mobile data services in Africa. As illustrated by the case of the Philippines, SMS, which sprung from first and second-generation technologies, has a great deal to offer in developing environments. However, any moves towards Internet-based services will be contingent upon further development of locally relevant content, and on education and literacy levels.

While the overall literacy rate many African countries ranges widely, actual breakdown of figures usually show a strong gender divide in access to Internet content and text-based communications. In Ghana for example, overall literacy stands at some 64 per cent, representing 70 per cent for men, against just 51 per cent for women. In the African context, raising access to education will be important to cover this social divide, and to maximize the market for SMS and future data services.

5.6.4 Ghana

Ghana has one of the poorest economies in the world, with a per capita income of US$ 390 in 2001. It has a fixed-line telephone penetration of 1.16 lines per 100 inhabitants, and a mobile penetration of 0.93 subscribers per 100 inhabitants (see Figure 5.8 for a comparative cross-section of African economies). Ghana has four mobile operators. Millicom Ghana, a subsidiary of Millicom International, UK/Luxembourg, which started its operations in 1991 and was the first cellular network operator, using the brand name Mobitel. The second operator, ScanCom, started operating in October 1996 using GSM 900 technology. ONEtouch is the cellular arm of the incumbent operator, Ghana Telecom, also uses GSM technology, and offers prepaid and post-paid services, including SMS. It also plans to introduce CDMA systems into the network and to change its remaining analogue exchanges to digital. Finally, CelTel, owned by Kludjeson International, started its operations in Ghana in 1993 using AMPS technology. Ghana has had full fixed-line Internet connectivity since 1993.

5.6.5 Mobile data services in Ghana SMS messaging

Although SMS initially took time to catch on in Ghana, its use has become a very popular means of communication in recent years, proving particularly popular with prepaid customers. Mobitel offers free e-mail services on its network. Spacefon, on the other hand, introduced the use of SMS into the mobile industry. According to estimates, SMS messages sent in Ghana have grown from 22’000 to over 130’000 in 2000.⁴⁰ The rise of SMS in Ghana has been fuelled by many factors. These include the growth of prepaid services, the development of WAP, SMS roaming, interconnection between operators and the different services available to users.

Third-generation in Ghana

The Ghanaian telecommunications regulator, the National Communication Authority, recently announced its intention to award Ghana Telecom, the former State-run monopoly operator, a 3G licence, and a frequency has already been reserved for the company’s 3G operations. The decision to reserve a licence for Ghana Telecom has raised some doubts as to the transparency and design of the decision-making process, and as to whether industry stakeholders were properly consulted. The tentative approach towards opening up the market may be based on the need to allow timing of market readiness and network development.

The choice of winner of the contract to manage Ghana Telecom will have a decisive influence on the deployment of a future 3G network in Ghana. Until now, government policy and politics have strongly determined the growth and direction of the telecoms market. But difficulties are bound to arise in the deployment of 3G unless the capacities of the national regulator are strengthened as an independent overseer of the industry. Notwithstanding this, the private sector and operators have been initiating and sponsoring new projects which could have a positive effect on the sector’s transition to a future 3G environment.

Beyond the governmental policy issues with regard to licensing, one of the biggest factors discouraging operators from introducing 3G in Ghana is the low level of economic activity and the low-level domestic economy. Despite being the eighth biggest cellular market in Africa, Ghana may have some way to go before introducing 3G onto the local mobile market—particularly given that only few individuals and corporate entities may be able to subscribe to 3G. However, the progress made in other African countries in encouraging the substitution of fixed-line communications—for which the necessary infrastructure is so often lacking—through mobile, could serve as inspiration in Ghana.

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