Friday, November 04, 2005

On the ground: Africa, the forgotten continent

When we talk about cell phones, we usually think of Europe, with it's saturated market share, North America with it's booming enterprises and Asia with its developing markets. We rarely think of Africa, which we usually link to undeveloped countries, poverty and AIDS. The fact remains that more than 100 million people in Africa have a cell phone. In South Africa, about 57% of the population owns a cell phone.

There are two reasons cell phones were a huge hit in Africa. First they are cheap, especially compared with land lines which cost a fortune to set up in these countries, because of the vast distances and hard terrain. Even compared with a computer, where the barrier of entry can be very high because of the cost and also because most homes don't have stable electricity, the cell phone is an attractive technology. Then, they are easy to use and very useful. People use them to communicate, where before they needed to walk everywhere to talk. Entrepreneurs use them to do business. And it goes much farther than simple voice calls, with some people strapping them to elephants and using them with mobile Internet to track livestock.

One new application that is in the news these days in South Africa is cell phone banking. In these countries, few people have a bank account, banks charge high fees and require a lot of paperwork. A company recently started offering virtual bank accounts, where people could store their money safely and then use their cell phone to make transactions, at much reduced costs. It's a huge hit and could even bypass credit and debit cards in the same way cell phones leapfrogged wired lines.

All this is becoming big business, attracting investors worldwide. Yesterday Vodafone announced they will buy $2.4 billion stakes in South Africa's Vodacom. As cell phones conquer the world, and with smart phones becoming the next big thing, it all helps lowering the digital divide and connecting everyone, whether you live in downtown London or on top of a hill in Kenya.

1 Comments:

At 9:25 AM, Anonymous Anonymous said...

the slight focus on africa i find interesting.it's a fact that the world don't think muck of africa save for wars, famine and poverty. but it's a fact that that isn't the complete picture. millions of africans are now using cell phones with gsm technology. one is left to wonder when the big tele-communication companies in europe will cash in on this.in nigeria for instance, which has over a hundred and thirty million people, cell phones are growing fast there -not just ordinary cell phones but high end-ones with OS operating system. Globacom,in nigeria is the 3rd fastest growing metwork in the world and offers gprs, online banking transactions and instant messeging.

 

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