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Mobile at the Base of the Pyramid: Ghana


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Mobile at the Base of the Pyramid: Ghana

Growing Innovation

©2014 infoDev / The World Bank | 1818 H Street, NW | Washington DC, 20433 Email: info@infoDev.org | Tel + 1 202 458 8831 | Twitter: @infoDev



Mobile at the Base of the Pyramid: Ghana

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© 2014 International Bank for Reconstruction and Development / The World Bank Mailing Address: MSN I9-900 1818 H St. NW, Washington D.C., 20433 USA

Telephone: (+1) 202-458-4070 Website: www.infoDev.org Email: info@infodev.org Twitter: @infoDev Facebook: /infoDevWBG Some rights reserved.

This work is a product of the staff of infoDev / World Bank. Note that the World Bank does not necessarily own each component of the content included in the work. The World Bank therefore does not warrant that the use of the content contained in the work will not infringe on the rights of third parties. The risk of claims resulting from such infringement rests solely with you. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of the donors of infoDev, The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Nothing herein shall constitute or be considered to be a limitation upon or waiver of the privileges and immunities of The World Bank, all of which are specifically reserved.

All photographs courtesy of The World Bank.

Rights and Permissions

This work is available under the Creative Commons Attribution 3.0 Unported license (CC BY 3.0) http://

creativecommons.org/licenses/by/3.0. Under the Creative Commons Attribution license, you are free to copy, distribute, transmit, and adapt this work, including for commercial purposes, under the following conditions:

Attribution—Please cite the work as follows: infoDev. 2014. Mobile at the Base of the Pyramid: Ghana.

Washington, DC: World Bank. License: Creative Commons Attribution CC BY 3.0

Translations—If you create a translation of this work, please add the following disclaimer along with the attribution: This translation was not created by The World Bank and should not be considered an official World Bank translation. The World Bank shall not be liable for any content or error in this translation.

All queries on rights and licenses should be addressed to infoDev, The World Bank, MSN: I9-900, 1818 H Street NW, Washington, DC 20433, USA; email: info@infodev.org




This study, “Mobile at the Base of the Pyramid,” was commissioned by infoDev, a global technology and innovation program at the World Bank. The study was carried out under the supervision of Maja Andjelkovic of infoDev and prepared by Research ICT Africa’s lead researchers, Steve Esselaar and Christoph Stork.

This report was made possible by the support of the Swedish International Development Cooperation Agency.

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Table of Contents

List of Acronyms. . . vi

Introduction . . . 2

BoP in Ghana . . . 4

Evolution of App Adoption . . . 6

Smart and Feature Phone User Survey . . . 8

Business Models . . . 7

Basic Business Models . . . 10

Freemium Business Models . . . 12

Multisided Platform Business Models . . . 13

Conclusions. . . 15

Revenue Sources—Paths to Monetization. . . 16

USSD/SMS-Based Content or Services . . . 17

App Purchases, App Upgrades, and In-App Purchases . . . 17

In-App Advertisements . . . 17

Freemium . . . 18

Subscriptions . . . 18

Other Revenue Sources . . . 18

Conclusions. . . 18

Payment Options . . . 20

Premium SMS . . . 21

Airtime . . . 22

Direct Carrier Billing . . . 22

Mobile Money . . . 23

Vouchers and Scratch Cards . . . 24

Conclusions. . . 25



Distribution Channels . . . 26

Operator App Stores . . . 26

OS App Stores . . . 26

Third-Party App Stores and Websites . . . 27

Conclusions. . . 27

Conclusions and Recommendations . . . 30

References . . . 32

Annex A. Mobile Applications . . . 34

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List of Acronyms

API application programming interface

app mobile application

BoP Base of the Pyramid

CPC cost per click

CPM cost per thousand impressions

DCB direct carrier billing

ICT information and communication technology

IFC International Finance Corporation

IP Internet protocol

MEST Meltwater Entrepreneurial School of Technology

MNO mobile network operator

OS operating system

RIA Research ICT Africa

RoP rest of the pyramid

SMS Short Message Service

USSD Unstructured Supplementary Service Data

VAS value added services

VAT value added tax

All dollar amounts are U.S. dollars unless otherwise indicated.


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Apps may be used as stand-alone applications or to support or complement products or services.

A third usage is content delivery of some sort.

Products and services offered via mobile phones can further be differentiated as mobile services, mobile applications, and the mobile web.

Mobile services include premium Short Message Service (SMS), USSD,1 and voice services, which can be offered to any mobile user, including basic phone users. These services fall under the scope of the study, as they cater for 80 percent of base of the pyramid

1 USSD stands for Unstructured Supplementary Service Data. USSD is a protocol used by GSM cellular networks to communicate with the mobile network operator servers. The most common usage of USSD is for mobile money services. Unlike SMSes, USSD messages create a real-time connection to the server during a session that remains open, allowing a two-way exchange of a sequence of data.

(BoP) users, who are mainly basic phone users.

They may be integrated with mobile apps and mobile web services.

Mobile web services are services provided through mini browsers, such as Opera Mini.

Mobile applications are software packages that run on a feature and/or smartphone with an associated operating system (OS), such as Android, iOS, and so forth.

All three services belong to the same ecosystem and may be combined in a set of products. An app may use premium SMS as input from customers to deliver analytics to a business via a mobile application or mobile web. Mobile web per se would be out of the scope of this study, but it is included where used in the context of mobile apps or services. Most websites have a mobile web view, but including mobile web in the mobile app study would mean including most e-commerce sites.


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BoP in Ghana

This section draws on a nationally representative household and individual ICT (information and communication technology) access and usage survey conducted by Research ICT Africa in 2012 in Ghana.2 For the purposes of this report, the BoP

2 Research ICT Africa, “Household and Small Business Survey” (2012), http://www.researchictafrica.net.

refers to the infoDev definition of $2.5 per person per day.3 Individuals (adults of 15 years or more) were classified in terms of average household income, that is, household income divided by household size.

Less than a quarter (22 percent) of the BoP has access to a bank account and about half own a mobile phone. Of those who own a mobile phone, more than 97 percent are prepaid. Of those with

3 infoDev. “Mobiles at the Base of the Pyramid,” infoDev Project Concept Note, August 2011, http://www.infodev.


TABLE 1: National Representative Survey Results for 2012

Ghana BoP

% Number % Number

Do you have a bank account (bank or post office)? 29.4% 4,365,279 21.8% 1,952,149

Do you own a mobile phone? 59.5% 8,824,392 51.2% 4,592,415

Among 15+ mobile phone users

Prepaid 97.4% 8,593,187 97.1% 4,457,532

Is your mobile phone capable of browsing the

Internet? 28.5% 2,511,999 22.7% 1,041,302

Facebook,Twitter, Mxit, or other social

networking 11.3% 999,684 8.7% 397,443

Browsing the Internet 13.4% 1,181,060 10.9% 501,390

Do you ever use the Internet? (Gmail, Google, Facebook, Mxit,

email) 12.7% 1,878,455 10.3% 923,210

Among 15+

Internet users

First used the Internet on a mobile phone 29.5% 1,324,196 30.5% 641,233 First used the Internet on a computer or laptop 70.5% 554,259 69.5% 281,977

Used the Internet on a mobile 61.2% 1,148,900 60.3% 556,355

Used the Internet at work 34.6% 500,228 23% 156,656

Used the Internet at a place of education 50.9% 735,917 62.1% 422,844 Used the Internet at Internet café 84.7% 1,225,160 93.8% 638,288 Signed up for any online social network

(Facebook, etc.)? 80.6% 1,166,011 72% 489,954

Source: Research ICT Africa.



a mobile phone, only 11 percent use it to browse the Internet. Internet use among the BoP is 10 percent, which includes non-mobile Internet use. The majority of Internet users started using it at an Internet café or a place of education.

What can be concluded from this for mobile application development?

Twenty-three percent of BoP mobile users had a handset in 2012 that was capable of browsing the Internet and about 10 percent of BoP mobile phone owners used their mobile to actually browse the Internet. These figures may have increased since the survey was conducted at the beginning of 2012, because smartphone

and feature phone prices have dropped considerably. An entry-level smartphone is currently available for as little as $70.4

Mobile money was at the early stages of adoption at the time of the 2012 survey—usage was approximately 1 percent. It is clear that about 78 percent of people at the BoP do not own a bank account and that SMS or airtime- based payments are the only feasible way for them to pay for apps or services at this stage.

4 Margaux Pelen, “What a $70 Smartphone Means for Mobile in Africa,” Medium (October 28, 2013), https://


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Evolution of App Adoption

FIGURE 1: Evolution of Mobile Adoption in Ghana

Revenue sources:

Mobile operators

Airtime Share of premium SMS Share of mobile money fees Airtime

Share of premium SMS Share of mobile money fees

Stage 2: Mobile voice & data

Distribution channel


Mobile operators

Basic mobile

Mobile operators Web App stores Smart phone Stage 1: Mobile voice & SMS Stage 3: Mobile computing

Airtime Share of premium SMS Share of mobile money fees

Mobile operators Web

Feature phone

approx. 20% of the BOP

approx. 77% of the BOP approx. 0–5% of the BOP


Revenue sources:

Developer Share of premium SMS

Share of app sales Mobile money revenue

Web Share of premium SMS Web

Share of premium SMS Mobile money

Revenue sources:

Third Party

Share of premium SMS Share of mobile money fees

Share of app sales Share of premium SMS Share of mobile money fees Share of premium SMS

Share of mobile money fees


Mobile application (app) adoption can be graded in three stages for people living at the BoP.

Stage 1—Basic phone. Basic phones are used and services can only be provided via SMS or USSD. About 80 percent of BoP mobile phone users in Ghana use a basic mobile phone that cannot be used to browse the Internet.

The distribution platform for basic phones is entirely in the control of the mobile network operators (MNOs). MNOs together with third- party facilitators take 85–95 percent of the after-tax SMS fee, leaving developers a mere 4–15 percent.

Stage 2—Feature phone. The increasing prevalence of feature phones in stage 2 weakens the control of the MNOs because

it opens up the possibility of third-party app stores such as the Nokia Ovi Store, which is targeted at feature phone users and is able to negotiate better payment terms with operators by aggregating volumes via its app store.

Prices for feature phones and smartphones are declining and penetration within the BoP is increasing. Feature phones, for example, open up another potential revenue source: web- based services that are available through mini browsers, such as Opera Mini. Stage 2 has the advantage of the developer having more control over distribution and, therefore, revenue flows.

But control over revenue flows is premised on the availability of payment mechanisms other than premium SMS, such as mobile money, where developers no longer have to pay the high rates that MNOs charge for premium SMS payments. Mobile web typically charges via PayPal or credit cards. Advertisement for the mobile web is limited by small screen sizes. The various screen sizes also make it



difficult for developers to program apps for feature phones.

Stage 3—Mobile computing. Smartphones open up a third revenue stream for

developers: app sales, in-app sales, or in-app advertisement. Some MNOs operate app stores, but the most popular are operating system- based stores such as Google Play, iTunes, and BlackBerry App World. App developers can upload their apps to Google Play for free download, but they cannot directly arrange for paid downloads or in-app purchases. A way around this is to partner with developers in countries where Google Play has commercial partners, but there are none in Africa.5 Another option would be for an operator app store to collect the app price on behalf of Google in the Google store.

5 Google Play, “Supported Locations for Developer and Merchant Registration” (2013), https://support .google.com/payments/answer/1385282?hl=en&ref_


The ecosystem in stage 3 has widened to include additional players in the form of Google, Apple, BlackBerry, Facebook, and Nokia. However, app developers targeting the BoP need to consider that 80 percent of the BoP mobile phone owners are still in stage 1. This is changing rapidly, but the transition to stages 2 and 3 will take time. App stores usually take a 30 percent cut, leaving developers with 70 percent, a major improvement over premium SMS. Operator app stores that link to iTunes and Google Play may take a higher revenue share to cover the markup for their operating expenditure (OPEX) as well as the marketing of the app store. Smartphones in stage 3 allow developers the widest choice of revenue collection and control over distribution.

The smartphone penetration among mobile phone users of the BoP in Ghana is still very low— below 5 percent—but it is expected to increase because of Android-based smartphones costing under $70 coming on to the market.

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Smart and Feature Phone User Survey

This section draws on a survey conducted of 800 mobile users by the research firm Jana6 in Ghana.

The survey was done entirely online. Users could access the survey page via mobile phone, desktop, or tablet. The description of survey respondents is displayed in table 2.

6 Jana is the world’s largest mobile research and rewards platform, covering 237 mobile operators. Registered panelists log on to mCent and see a list of surveys and offers available. If they participate, they earn airtime.

Respondents can access the survey via any means:

computer, tablet, or mobile phone.

TABLE 2: Mobile User Survey among Smartphone and Feature Phone Users in Ghana

Responses 800

Share female 23.3%

Average age 24

Minimum age 15

Maximum age 61

Share rural responses 31.8%

Installed mobile app 93.8%

Previous app store use

Google Play 60.8%

Nokia Ovi 29.6%

MTN app store 20.8%

Samsung app store


Other n/a

Source: Survey commissioned by Research ICT Africa.

Note: n/a = not available.

FIGURE 2: Preferred Payment Method for App Downloads and In-App Payments by Feature Phone and Smartphone Users

Airtime deduction

Credit card






Mobile money

Premium SMS The survey is not representative because participation was based on self-selection, that is, a user among the Jana user group can decide to participate or not, and there is no random selection. Only the first 800 responses per country were used. The majority of respondents were male and the average age was 23–24. About 93 percent of the respondents had already downloaded applications for their phones, so respondents can be classified as early adopters and indicative of a future trend. Sixty percent of respondents have used Google Play to download apps in Ghana, indicating that more than half the respondents are smartphone users.

Eighty-one percent of feature phone and smartphone users in Ghana preferred airtime deduction as a method of payment, pointing toward direct carrier billing (DCB). This highlights the low popularity of premium SMS, which only scored 4 percent. Because these users are early adopters of smartphones, it shows that premium SMS is most powerful when targeting basic and feature phone users. As people transition toward smartphones, new payment methods such as DCB and mobile money are vital to support innovation in the app ecosystem.


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A business is required to realize four goals: solve a problem, make a profit, obtain customers, and keep customers. Applied to app development, a developer has to choose a problem to solve and think about how to make money solving it.

Revenues need to exceed costs and the first important consideration is revenue source.

Obtaining customers is about choosing the right distribution channel and using suitable payment facilities. Keeping customers is about continuously delivering value.

Decisions on distribution channel, revenue sources, and payment facilities are intertwined.

Most developers choose several combinations, either sequentially or simultaneously.

Revenue sources include in-app advertisement, pay per download of content or apps, in-app purchases, and upgrade of a free app to a more feature-rich one in return for a fee and subscriptions.

Distribution channels include choices to sell via an app store or directly to subscribers of an operator through value added services (VAS).

Payment options include premium SMS, mobile money, airtime, credit or debit cards, and cash or checks.

The combination of these factors is reflected in various business models available for app developers. There are three categories of business models in order of complexity: basic, freemium, and multisided platforms. The basic business model includes three versions: app store, VAS provider, and content provider. The key feature of the freemium business model is that it is a blended model: free services are offered alongside paid premium services. The third business model comprises multisided platforms. The key feature of a multisided platform is that it facilitates transactions between two (or more) distinct yet interdependent customers.

Basic Business Models

The three basic business models are displayed in figure 4: app store, VAS provider, and content provider.

App store

The key feature of the app store model is that content or services are sold via an app store, such as Google Play or the Nokia Ovi Store. The developer gets a revenue share from the value of the app. For example, in the Google Play store, a developer would receive 70 percent and Google Play 30 percent. The same applies to in- app purchases.7 In this business model, the key questions that a developer should ask are the following:

How does the developer gain visibility in the app store?

What is the payment mechanism? Google Play does not allow a business in any

7 Google Play, “In-App Billing Availability and Policies”

(2013), https://support.google.com/googleplay/android- developer/answer/1153481.

Business Models

FIGURE 3: Overlap of Choices

Distribution Channel

Payment Facilities

Revenue Sources



African country to register as a merchant, so developers have to go to other countries that are willing to act as intermediaries with Google.

What is the revenue share with the app store?

The MTN App Store in Ghana has a revenue share split of 40/60, with 40 percent going to the developer. In comparison, the revenue share split for Google Play is 70/30, with 70 percent going to the developer.

Are there any particular benefits of app store choices and/or requirements regarding exclusivity? For example, local app stores may promote apps and may require exclusivity in return.

An example of the app store business model is the iWarrior game from Leti Arts. iWarrior is a game

with African iconography. The purpose of the game is to protect a village from wild animals such as elephants, lions, and cheetahs. iWarrior is sold on iTunes for $0.99. Revenue share is 70/30, with 70 percent going to the developer.

VAS provider

The key feature of the VAS provider model is that content and/or services are distributed via bulk SMS, which is paid for by businesses. In this model, the distribution channel is not an app store, but the MNO network. Key questions that a developer should ask:

Does the client provide the bulk SMS

subscribers or are they accessed from a third- party database?

FIGURE 4: Basic Business Models

Developer Customers


App Store Share

Customers Bulk SMS

VAS Provider Businesses

Monthly subscription

App purchase in-App purchase

Customers Bulk SMS

Content Provider

Premium SMS

FIGURE 5: Business Model of iWarrior

Customers OS store purchase

App store Revenue share

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How does the developer market to businesses?

Where does it find businesses that are interested in sending bulk SMSes to the developer’s customer base?

An example of the VAS provider business model is mNotify from Ghana. mNotifiy provides bulk SMS services to businesses, institutions, individuals, and clubs. Clients can send bulk SMSes through the mNotify web page. Subscription prices are linked to the quantity of SMSes; they vary from 5 cedis for 148 SMSes to 500 cedis for 17,858 SMSes (0.034 cedi to 0.028 cedi per SMS). mNotify also offers an application programming interface (API) to other app developers that allows them to include an SMS- based notification feature in their applications.

Clients pay for bulk services via formal banking facilities and mobile money. The purchase and activation of bulk SMSes is currently not automated. mNotify relies on Facebook for

exposure. On average, it generates between $1,500 and $2,500 a month.

Content provider

The key feature of the content provider model is that customers pay for content and/or services through premium SMS or interactive voice

response (IVR). Premium SMSes are distributed via the MNO network. The content provider receives a small revenue share of the premium SMS value, but the main portion of the revenue from premium SMSes go to the MNO. Key questions that a developer should ask:

What is the revenue share split between the MNO and the developer?

Will marketing be done by the MNO? If not, how will the developer ensure that customers are aware of their content or services?

Nandimobile is an example of the content provider business model. Infoline is the main product of Nandimobile. It is a web and mobile application that enables organizations and businesses to communicate with their customers interactively.

Companies may send information to customers via bulk SMSes. Customers then respond to a short code number in order to request information or to provide feedback. Businesses may also advertise on billboards and in newspapers, for example, specifying a short code for potential customers to request more information. Infoline can be used for competitions and voting (TV game shows, for example). A premium SMS sent to any of the Infoline short codes from any network costs 0.1 cedi, of which 100 percent goes to mobile operators and third-party aggregators.

Nandimobile received $70,000 seed funding in 2010 and has been operating on revenues since then.

Distribution is mainly through the web and payments are collected manually from business customers.

This limits its scalability to services within Accra.

Freemium Business Models

Adding a layer of complexity are freemium business models. Freemium models are often used in conjunction with other business models, such as the content provider model. The key feature of the freemium model is that it is a blended model: there are free services alongside paid premium services. Generally, there is a large user base using the free app, which is cross- subsidized by a smaller user base using the paid version. (The ratio between free and paid users is often around 10 percent.)8 The paid subscribers 8 A. Osterwalder and Y. Pigneur, Business Model

Generation (New York: John Wiley & Sons, 2010).

FIGURE 6: Business Model of mNotify


Customers Monthly


Bulk SMS Wholesale Bulk SMS

other m-apps or resellers

Bulk SMS





access both free and premium services (hence the

“freemium” name). Key questions that a developer should ask:

What is the cost of providing content or services to free users?

Do the fees charged to the paid user base cover both the free content as well as the cost of operation?

How many paid subscribers does the application need to break even?

How quickly or often do free subscribers convert to paid subscribers?

An example of the freemium business model is Esoko. Esoko is an agricultural platform that provides market information to farmers and traders. Esoko allows farmers to negotiate better prices with buyers by having real-time access to market prices in different locations and SMS alerts are automatically sent to farmers. At agricultural markets, prices are uploaded by either SMS, mobile application or website, providing farmers

with real-time data. Farmers and traders can also match transactions and be notified by SMS.

Aside from its main activity of providing market information to the agricultural sector, Esoko also offers a range of extension services through SMS.

Basic services—such as market prices and bid and offer matching—are free, but additional services require either a subscription or are charged at premium SMS rates.

Multisided Platform Business Models

More complex combinations of the three dimensions (distribution channels, payment facilities, and revenue sources) can be found in multisided platform business models. Newspapers are a simple example of a multisided platform:

newspapers can be sold below cost in order to attract more readers; in exchange, the newspaper can then charge more for advertisement space, effectively cross-subsidizing the newspaper FIGURE 7: Business Model of Nandimobile

Businesses Customers

Monthly subscription


Premium SMS

Bulk SMS

FIGURE 8: Business Model of Esoko

Buyers Farmers

Monthly subscription

Offer by free SMS


Price information SMS, web or mobile app

Premium SMS to receive info

SMS alerts

Offers by free SMS

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readers. The key features of a multisided platform business model are as follows:

Network effect. The platform’s value is dependent on the number of users on each side. The larger the number of users on the one side, the more value that users on the opposite side see in the platform.

Facilitator. A multisided platform facilitates transactions between the different customer bases.

Distinct customers. The business model can differentiate between the different customer segments because distinct prices can be charged to each segment.

Interdependent prices. Prices for the various sides are interdependent—that is, lowering the price for one side allows an increase of the price for the other side.

Prices are set independently of cost. Allowing free download of an app is below the cost of developing the app. The zero price does not reflect the cost. The revenue to cover the cost is generated from the other side.

There are two versions of the multisided platform business model. In the first version, customer segment A gets the service for free (or heavily subsidized) while customer segment B pays for the service. In the second version, customer segment A pays to advertise to customers of segment B (usually consumers), thereby allowing the platform to subsidize the content to consumers.

Key questions that a developer should ask:

How can the developer attract sufficient A and B customers?

Which side (or segment) is more price- sensitive?

What is the optimal pricing for the

interdependent markets? Free or low payment for one side and higher charges for the other, or more balanced payments?

Example 1: mPedigree

One example of the multisided business model is mPedigree, which operates in Ghana and Nigeria. mPedigree is a verification service that allows users to send a free SMS to verify that a pharmaceutical drug is genuine. The cost of the SMS and the service mPedigree provides are paid for by pharmaceutical companies who have an interest in ensuring that the drugs people use are genuine and not counterfeit. In this variation of the multisided platform business model, the service to the consumer is free.

Example 2: mPawa

mPawa is a job-matching service targeted at blue- collar workers in Africa. The majority of workers in Africa are blue collar and mPawa bridges the gap that exists in the current blue-collar recruitment space. mPawa is free for workers who register online or via SMS (mPawa therefore works on all phones); the workers then receive job notifications whenever prospective employers require their FIGURE 9: Multisided Platforms for App Development

Customers (of the app)

Customers (of the app) Free App

Multisided platform (e.g.

mPedigree) Bulk SMS

Multisided platform

Free SMS/USSD Businesses Monthly


Businesses, i.e. Advertisers


FIGURE 10: Business Model of mPedigree

Patient Vertification SMS

Free SMS with drug code Pharmaceutical





skill set. The main differentiating feature of mPawa is that, over time, a worker can build a strong résumé based on prior work and employer recommendations. The recommendation system reduces the time needed to find appropriately skilled workers. Workers are informed by SMS or they can log on to the mPawa website to see if they have been selected for a job.

mPawa charges employers, not workers.

Employers are charged a percentage of the worker’s salary. Pricing depends on the length of the contract. A short-term contract (from one day to three months) costs 10 percent of the worker’s first month’s pay; a long-term contract (three months to one year), 25 percent of the worker’s first month’s pay; a permanent post (one year and above), 50 percent of the worker’s first month’s pay.

Example 3: Saya

Saya, from Ghana, is a cross-platform chat application. Because it uses data, it is significantly cheaper than standard SMS. Saya works on both feature phones and smartphones and offers advanced functionality, such as Facebook chat for those with a Facebook account, group discussions, and the exchange of multimedia. Its most popular application is a location-based chat called street chat, where users can exchange messages based on their location. Saya was first offered only on feature phones, but it is now focusing on smartphones like Android and iOS because of their growing popularity. The value of Saya’s multisided platform is the size of its subscriber base and, therefore, its attraction to advertisers. Saya has no revenues, but it is testing an advertising model with AdsBrook, an app from the same incubator.


The best combination of these basic dimensions of payment facilities, revenue sources, and distribution channels will depend on the actual choices available in a country, the target audience, and the nature of product and services offered.

The majority of potential customers are still using basic phones. Feature phones and smartphones make up only 15–20 percent of the mobile subscriber base. Apps that are programmed for smartphones need to generate the required revenue from a smaller number of subscribers in order to sustain app development compared to an app developed for feature phones.

A multisided platform is the most promising business model for apps, particularly in countries such as Ghana, where payment facilities are limited or uneconomic. There are several examples of multisided platforms from the four countries, but most of the examples are from Nigeria and Ghana.

mPawa is an example of a multisided platform that clearly solves a problem for two sets of customers:

on one side it addresses employers, who struggle to find skilled and experienced workers; on the other side, it addresses the needs of blue-collar workers to find employment based on their previous work and skill set. The employers are relatively price-insensitive, so mPawa charges a fee based on the length of the employment contract. For workers, price sensitivity is high, so mPawa offers a free service.

FIGURE 11: Business Model of mPawa

Blue-collar worker Job offers via SMS

Posting availability Company

10–50% of first month salary

Posting of jobs

FIGURE 12: Business Model of Saya

Customers Free app

Free chat Businesses


Operator Data use

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Revenue Sources—Paths to Monetization

The decision concerning the generation of revenues is at the heart of any business model.

App developers have to make a choice about how to make money from their products and services, using fees and subscriptions to generate revenues, such as in-app advertisements, pay per downloads of content or app, in-app purchases, upgrades of a free app to a more feature-rich one, and so forth.

Globally, advertising and app purchases are the dominant mechanism for revenue generation (see figure 13). The trend for 2013 also shows a shift toward advertisements, in-app purchases, and the freemium models.9

Developers in Ghana have, in principle, the same choices available as anywhere else, but they are

9 VisionMobile, 2013.

TABLE 3: Types of Revenue Sources

In-app advertisements

Advertisers pay app developers to place adverts within the app (e.g., at the bottom of the screen).

Pay per downloads

The most common model, where subscribers pay a fee to download the app.

In-app purchases

Downloading the app is often free, but the user has to pay to use the app.

Freemium Basic services are free. Advanced services (i.e., additional features) are charged.

Subscriptions Frequent, regular payments to the app developer in order to continue using the app.

FIGURE 13: Share Revenue Sources Used among Global Mobile Developers (n = 2,167)9


2013 2012











Pay per download

In-app purchases





constrained by various market factors that limit their choices and their ability to raise revenues when products and services are targeting local (that is, Ghanaian) audiences.

Smartphone penetration is still quite low in Ghana.

MNOs own the distribution channels—via their SIM cards—to subscribers and take revenue shares of between 60 and 70 percent for content delivery.

Local app stores are in the development stage, but they are either not yet launched or only a few months old.

The various revenue sources are discussed in the sections below.

USSD/SMS-Based Content or Services

VAS services have been offered for many years in terms of ringtones, wallpapers, and daily horoscopes. Any developer considering providing services or content via this channel needs to be aware that the subscribers, the network, and the payment facilities are all in the hands of the Telcos. The remaining revenue share for developers is relatively small. At the same time, this is the most effective channel to reach large numbers of the BoP. Ideally, apps using this channel should ensure that premium SMS is not the only revenue source and that it is complemented by others.

App Purchases, App Upgrades, and In-App Purchases

When programming for a global audience and launching products through Google Play, Facebook, iTunes, and so forth, the mechanics are in principle the same, independent of the location of the developer, but in practice there are limitations. By far the most attractive platform for

African app developers is the Google Play store:

its revenue split is 70/30 in favor of developers and the procedures for registering an app are relatively straightforward and transparent. In contrast, the API for the MTN Ghana app store (the only local app store at present in Ghana) is only available upon request. Just getting access to the API of a local app store (for example, MTN) is an achievement aside from the conditions that are sometimes attached, such as exclusivity in the operator app store. Google Play’s API is available on the web, easily accessible, and easily understood with few conditions.

Though the Google Play store is popular, the list of countries in which developers may register as merchants does not include a single African country.10 This means that developers are either restricted to free apps on Google Play or have to work through partners registered as merchants on another continent. Another option is to sell through an operator app store such as MTN Ghana. Multinational operators may have an agreement with Google to act as a merchant for all the countries they operate in. Payment is then made from the user to the operator and from the operator to the developer. The revenue share is thus likely to be lower compared to directly selling through the Google Play store.

In addition to selling an application, revenues can be generated by selling upgrades with more features or allowing in-app purchases.

In-App Advertisements

In-app advertisements represent a promising source of revenue for app developers in Africa.

The advertising model generally requires an intermediary to match advertisers with app developers or publishers. The attractiveness

10 Google Play, “Supported Locations for Developer and Merchant Registration” (2013), https://support .google.com/googleplay/android-developer/


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of a publisher to an advertiser is correlated to the size of its subscriber base. This is the key characteristic of a multisided platform.

AdsBrook is such an intermediary, and it offers targeted advertisements within apps and online.

AdsBrook is specifically focused on providing local consumers with relevant ad content. The application allows developers to serve ads across different mobile platforms, namely Android, iOS, J2ME, and BlackBerry. Regional competitors include Twinpine Networks from Nigeria, and international competitors include Blueview .com and m-mobi. AdsBrook has chosen a cost per thousand impressions (CPM) model where an advertiser pays between $2.5 and $5 for 1,000 impressions, of which $0.95–$1.20 is paid to the app developer. The advantage of this model is that the app developer (for example, Saya) is guaranteed a relatively stable income, assuming that Saya can predict its traffic flow. The alternative model, adopted by Twinpine Networks, is cost per click (CPC), where an advertiser only pays when a user clicks on the advertisement.


The freemium model reduces risk by allowing consumers to test out the company’s product or service and establish whether they would purchase more features. The freemium model provides a basic product/service for free but charges a premium for value-added features. This is a successful model for the BoP market because it provides a risk-free trial and the low-income consumer can clearly understand the benefits of the additional services that the paid product would provide. This model has been most commonly used by agricultural information services, pioneered by apps such as Esoko.


Monthly subscriptions are an attractive revenue source because of their stable cash flow.

Companies may pay for a range of services, such as delivering bulk SMSes to their customers, allowing customers to request information, informing farmers about market prices, and so forth.

Other Revenue Sources

Revenues may be generated in a number of other ways. Apps may be commissioned by public institutions, such as schools and clinics or companies. Contract work can be used to subsidize the business in order to develop other applications (Leti Arts, for example, takes that approach). Apps may be designed to support business processes and to manage information and/or to receive and make payment. The revenue is then not generated by the app but by the supported business process.

Several apps that were interviewed for this research either required contract work to ensure their continued survival or used contract work as a mechanism to earn sufficient funds to be able to develop apps. For example, to support app development, Leti Arts does contract work, using African traditions and themes, to build employee orientation games, and a game for the United Nations explaining developmental milestones for new mothers.


Internationally, there is a shift toward

advertisements, in-app purchases, and freemium models as sources of revenue. In-app purchases FIGURE 14: Business Model of AdsBrook

Blue-collar worker 1,000 impressions

$0.95–$1.20 per Company

$2.5–$5 per 1,000 impressions



and advertising revenue are two of the most promising revenue sources in Ghana. While mobile advertising is nascent, it represents an exciting potential market as app developers build large subscriber bases.

The path to monetization in Ghana is extremely challenging. Several app developers have to

supplement their income through contract work in order to cross-subsidize app development. There are several revenue sources potentially available, but few are practically possible because of the lack of payment facilities. The challenge remains the ability to match revenue sources with available payment facilities.

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Payment Options

The main payment options for app developers to collect revenues can be grouped into operator based, mobile money, bank based, and others.

Operator-based payment facilities include premium SMS and airtime transfer. Mobile money has been placed in its own category because it can be operator-based or bank-based, depending on the regulatory framework. Bank-based payments are electronic transfers or payment by check or with debit and credit cards. A fourth category that

is neither bank- nor operator-based comprises scratch cards and vouchers.

The cost of collecting revenues is different for each of these payment facilities and so is their availability. For example, app developers receive between 5 percent and 15 percent of revenues using premium SMS and there is a potential target market of 8.8 million mobile subscribers (aged 15+) in Ghana. They would, however, receive 95 percent of revenue or more if they could use mobile money, but then their potential customer base would be limited to about 400,000 active users.

FIGURE 15: Payments Options for App Developers in Ghana

Payment Options

Operator Based:

Premium SMS

Airtime transfer

Bank Based:


Credit/Debit card


Vouchers/Scratch cards

Ghana Operator Based:

Developer revenue share: 5–15%

Customer base 15: 8.8 million Developer revenue share: 85–90%

Customer base 15: 8.8 million

Bank Based:

Developer revenue share:  95%

Customer base 15: 4.3 million Developer revenue share: > 95%

Customer base: unknown Other:

Developer revenue share:  95%

Customer base 15: 8.8 million Mobile Money:

Mobile money

Mobile Money:

Developer revenue share:  95%

Customer base: 400,000



The upper limit, in terms of number of potential customers, that an app developer can target is 8.8 million, which is the number of Ghanaians 15 years or older who owned a mobile phone in 2012. This figure will be higher in 2013 and continue to steadily increase. Using formal

banking facilities, apart from being less convenient compared to just sending a SMS, halves the customer base, because only 4.3 million people have some banking facilities. The number of Ghanaians with a credit card or debit card could not be reliably established, but it is significantly less than those with bank accounts. Vouchers and scratch cards potentially target the entire mobile user base, but the distribution channel would need to be built up from scratch and the actual target market would be local, unless one wants to distribute the vouchers along the airtime channels of operators, which would entail a significantly lower revenue share.

Premium SMS

Premium SMSes are ordinary SMSes, but instead of content they entail a payment instruction. The airtime of the subscriber sending a premium SMS is reduced by a specified value, usually higher than the cost of a standard SMS. Because these messages cost a premium fee, they are typically designated a special number (a “short code,”

which is usually four to eight digits in length).

In some countries, usage of premium SMS can be restricted (and is, therefore, controversial). For example, in Zambia, the regulator charges $3,000 for use of a designated short code in an attempt to control content delivery. In Mozambique, short codes are allocated largely to MNOs, making it difficult for app developers to get access.

Premium SMS is the most attractive payment facility, because the target market consists of all 8.8 million mobile users. However, the economics of premium SMS mean that it is very difficult to

make money. In Ghana, two of the major SMS aggregators are SMSGH and Rancard. In tables 4 and 5, the economics of premium SMSes are illustrated for each business model.

SMSGH takes 25 percent of the after-tax revenue from premium SMSes, with the operators taking between 60 and 70 percent, based on a premium SMS cost of 5 pesewas. On the MTN or Tigo networks, an app developer would need to sell 2.4 million premium SMSes to have revenues of 10,000 Ghanaian cedis, or $5,000 per month. The total potential market is 8.8 million subscribers and so over a quarter of the Ghanaian mobile owners would need to subscribe, a nearly impossible target. With higher nomination premium SMS, the revenue share of SMSGH is lower and the mechanics start to look more positive for the developer. However, higher premium SMS prices also mean lower participation by subscribers.

Rancard’s economic model is slightly different and generally more lucrative for the app developer.

Rancard takes 60 percent of what is left after taxes and after operators have taken their share.

Nevertheless, revenues of 10,000 cedis, or $5,000, still require 1.7 million premium SMSes sold on the MTN or Tigo networks.

The business models outlined in tables 4 and 5 for Rancard and SMSGH are negotiable. Depending on the volume of premium SMSes, more favorable conditions may be accepted. However, the mobile operators in Ghana seem unwilling to negotiate.

That may change with revenue streams shifting from premium SMS to app stores.

The premium SMS economic model explains why premium SMS generally remains the preserve of mobile operators, with few app developers using premium SMS as a payment facility. While the number of subscribers is attractive, the requirement for massive volumes severely limits the choice of potential business models and the revenue share model has a chilling effect on app innovation.

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