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More than a mobile May 10th, 2015 by

Mobile phones are the fastest growing business in Africa. And as with any big, money-making business, companies fight for customers, and the winners buy out their competitors. When I first visited Uganda in 2005, various mobile phone companies were competing with clever advertisements. The most eye-catching and memorable one I saw was a tricycle that combined a telephone booth and taxi.

Ten years later, after many visits to Uganda, I am back again and for some reason this image of the yellow tricycle pops up in my memory. I now realise that it was much more than an advertisement: it illustrated how mobile phone companies were already thinking of expanding from a mere phone service to something bigger. And in doing so, that they were ready to go to the customers, rather than just waiting for them to show up in their office.

Driving through the country, each town along the roadside shows that the struggle for customers continues. Nearly every other house is painted in either red or yellow: the brand colours of Airtel and MTN, the two biggest surviving mobile phone service providers. In every village, mobile vendors are selling airtime scratch cards of 500 Ugandan Shillings (0.15 Euro) to 10000 Ugandan Shillings (3 Euro) to cater to all people, including those with just a small coin in their pocket. The affordability and proximity surely helped with the rapid boost of this technology.

Another key to success is the diversification of services. Many farmers use their mobile phones to listen to the radio when working in the field. After all, having their cell phones charged in a rural shop is much cheaper than having to buy new batteries for their radio every few days.

Nowadays, mobile companies are competing with rural banks, providing internet and mobile money services (see our earlier blog Cell phones for smallholders). With amazing ease, people can send small amounts of money to their relatives across the country with hardly any transaction costs.

The penetration of mobile phone companies into the financial sector is also forcing banks to become more innovative in reaching out to rural clients. Equity Bank in Kenya, for example, through its corporate social arm the Equity Group Foundation, wants to improve the lives of at least 100 million people by 2020, partly by partnering with the international NGO Access Agriculture to start providing quality training videos in local languages to their rural clients. Highly innovative delivery mechanisms are currently being tested; given the creative energy that has gone into African mobile phone systems, these new ways of sharing good farming ideas will also be worth watching.

In some of the least developed regions of Africa, mobile phones are much more accessible than some other basic services, such as electricity, sanitation and financial services. However, most of the population has the potential to access health, banking and other essential services through mobile networks.

The continued diversification of extension service providers is helped by new technologies such as mobile phone and the internet, but equally by solar power systems that have become increasingly affordable and available in rural areas. New technologies are finally starting to benefit smallholder farmers, and so is the healthy competition between large mobile and financial institutions.

Further reading:

GSMA 2014. The Mobile Economy.

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