Windfred MFUH

Centre for Management Under Regulation

Warwick Business School

Mobile Telephony in Africa: Impact on the development of Small Businesses in Cameroon, Uganda & Nigeria

Growth in Mobile Telephony Services

• Explosive: – There are twice as many mobile owners in developing

countries as in industrialised countries. www.id21.org

• 92% of small business owners surveyed in coverage areas of Cameroon, Uganda and Nigeria Owned mobile phones and use them daily.

• 57% of Sub-Saharan Africans live within a mobile signal, simply improving efficiency of existing markets can provide access to a further 40% of the population.

• Only just about 3% of population will require government subsidies of around US$ 2.1 billion to have access (ITU, 2007).

Why explosive growth?• Failure of Landlines• Favourable investment

climate• Lack of basic

communication infrastructures, such as roads

• Exponential drop in handset costs

• Pre-paid (98%)

Business Impact• Incremental benefits:

– Productivity gains– Makes markets work better– Orders can be taken

anytime anywhere.

Business Impact -• Transformational

Benefits:

Offers new ways to access services: Banking, Money transfer, Knowledge Transfer

• Grameen phone Bangladesh

Social Impact• Mobiles have improved social communication,

household logistics, provided families with a sense of security, provided friends and loved ones with a continual sense of being in contact.

• Many conservative tribal leaders fear mobile phones have led to rise in extra marital affairs. This has increased tensions within families.

• Owning and using a mobile phone elevates your social class especially in rural areas (increased mobile penetration is diluting this effect)

• The item most targeted by thieves, after cash, is the mobile phone

Innovative consumer behaviour

• Beeping - Cameroon or flashing-Nigeria or bleeping-Uganda is a popular way of saving on call cost. Sophisticated codes are being developed

• Unfulfilled demand for mobile services is significant

Results• 73% of micro-entrepreneurs save as many as 3 hrs of

business time in a single day thanks to mobiles.• 72% of the 108 micro-entrepreneurs we surveyed in

Cameroon, Uganda & Nigeria reported that the mobile had increased the profitability of the business (still quantifying the precise impact)

• 86% think it will be very difficult to continue doing business without mobile phones.

• Main reasons for 8% of surveyed small traders not to own phones: poor or no coverage, Can’t afford, not necessary, unable to use (illiteracy)

• Many small businesses (99% rural, 85 % urban) rely solely on mobile telephony to achieve their information needs.

The future• Increase access & QoS

– Taxation– Increased competition– Spectrum

• Mobile phones as principal access platform to Internet in developing countries?

• Convergence with radio-based broadband services?

Source: GSMA

Conclusion• The real impact of access to mobile communications is

far more complex especially in developing economies where financial data are rare, patchy and in many cases non-existent. Also, mobile services contribute to multiple social, economic, and livelihood dimensions that are interrelated in complicated ways (Hillier, 2000).

• Mobile telephony is an important enabler of small businesses and a catalyst to economic growth.

• More research is needed to establish the concrete impact of mobiles

• Government must partner with industry to increase access in order to reap the benefits of mobile network externalities

• Mobiles have done the most to reduce costs, increase income and reduce uncertainty and risk

The End

Thank you