Africa can lead the way in mobile

IT IS a truth universally acknowledged that the future of Africa is mobile. And it does seem that the good news for mobile in Africa keeps on rolling in. This month a bullish MTN Group announced a 20% jump in net profit in 2014 from the previous year, with sales growth in Nigeria and other major markets such as Cameroon and Uganda. The company announced that it would invest R30bn this year to grow its infrastructure in the 23 countries where it operates.

In the same week, global payment processor giants Visa and MasterCard both launched new mobile card services in Africa, eager to get a slice of the continent’s growing mobile payment industry.

Better late than never.

Africans are already more accustomed to paying with their cellphones than many Americans. Kenya’s Equity Bank was the first in the world to offer a completely mobile bank account and the mobile money transfer service M-Pesa has been quietly providing banking services to more than 15-million Kenyans (more than a third of the population) since 2007. It currently serves as conduit for a fifth of the country’s gross domestic product.

In other areas, too, mobile has made the headlines in Africa — from helping to co-ordinate efforts in the fight to contain Ebola, to assisting in the mobilisation of millions of citizens in the Arab Spring uprising. In education, health, entertainment and politics, mobile plays a starring role.

According to some estimates, more than 40% of adults in Africa have a cellphone and the number grows every year. Millions are also converting to smartphones.

Africa’s rapid and unexpected adoption of mobile technology and the speed with which it has built telephony networks have taught the rest of the world much about the continent’s potential.

MTN CEO Sifiso Dabengwa relates that when the company first considered moving into the rest of Africa, sceptics put market penetration as low as 2-million customers. Numbers like 1-billion are being bandied about 20 years later, which is why everyone is keen to get in on the act.

But can mobile significantly transform the lived reality of Africans and allow the continent to climb out of the poverty trap?

According to recent data from Afrobarometer, based on the views and experiences of ordinary citizens, about half of all Africans are still living in poverty and experience at least occasional shortages of basic needs such as clean water, food and medical care, and 44% experience regular shortages of cash.

The stage has been set: African economies are booming — growing by as much as 7% a year according to World Bank reports — investors are lining up, and the convergence of mobile and computer technology is creating unprecedented opportunities to craft a new and better future for African citizens.

THE next wave of technology development will no longer be about building a telecommunications network or computing industry, but building on these to create whole new industries and sectors. The innovators of the future will be shaping value-adding services, which use these resources to truly transform lives and experiences. It is what GSM Association, the global body for mobile operators and related companies, calls the "dawn of a new mobile ecosystem".

Massachusetts Institute of Technology senior lecturer Otto Scharmer cites technology as one of eight "acupuncture points" for institutional innovation with the power to update the economic system so that it can operate more intelligently and for the benefit of more people.

But this can only happen, he says, if we "reinvent how we develop technologies and empower all people to be makers and creators rather than passive recipients".

Social inclusion and economic equity must be the watchwords for the next wave of technology innovation in Africa. The people and communities who benefit from these services must be top of mind.

Technology companies then, especially those looking to expand into emerging markets, need to find business models that support the mass roll-out of effective technology solutions to markets at the bottom of the pyramid. It is not about only giving consumers what companies think they might need. The failure of Intel’s Yolo trial, a cheap smartphone running Android which proposed to bring cheap devices to the "masses", is a case in point.

In developing the right products and services, local knowledge will be the key. Companies with their roots in Africa will have an advantage, and technology innovators such as Michael Akindele, are proof of this.

Nigerian-born Akindele, 30, is a director and a co-founder of Solo Phone, which is mounting a serious challenge to Apple and other smartphones in Africa by manufacturing devices priced at just $150, bundled with free music of up to 20-million songs licensed from Sony, Universal and Warner. Solo recently launched a video-on-demand app available to all Android devices in Nigeria, offering the latest Nollywood and Hollywood movies.

He epitomises the new African tech entrepreneur; young, educated, able to work in uncertainty and complexity with enough tech savvy to understand technology but business-minded enough to know how to turn this into a value-added service or product relevant to its context.

Investing in and developing this generation of entrepreneurs to create new value-adding industries in Africa is going to be the key to ensuring that the continent is positioned to take advantage of the next wave of technology growth.

Partnerships will be key. The 2014 SEED SA Symposium, a forum to foster social and green entrepreneurship in Africa, warns that one of the challenges for African entrepreneurs is securing partnerships with technical experts, research institutions in particular, to ensure cross-fertilisation.

Complex challenges demand people and organisations who can see and work across silos and boundaries. Collaboration opens up networks and shares skills, ideas and human capital for the benefit of more people.

Exciting hybrids are already emerging. Novel partnerships, such as those recently concluded between the University of Cape Town Graduate School of Business, the MTN Group, Silicone Cape and FNB are exploring new forms of business innovation and challenging traditional roles of business in society to unlock greater value for Africans.

JAMES Mwangi, of Kenya’s Equity Bank, believes there is an opportunity for Africa to lead this new era of technology innovation. In the same way that mobile penetration leapfrogged over traditional telecommunications infrastructure, Africa can leap directly to the tech frontier because the continent is not tied to a legacy system — making the cost of moving forward much cheaper.

Equity Bank launched an innovative SIM card last October that threatens M-Pesa’s monopoly. The new card operates on top of cards provided by other operators and will allow Equity Bank to effectively hijack other providers and provide customers with access to its services without them having to own two cellphones.

Kenyan regulators have licensed three new mobile virtual network operators, allowing for the Equity Bank SIM, which gives customers greater choice and brings more people into the financial system.

These are exciting times. No one knows where these developments might take us but we need to invest now in developing an African innovation ecosystem that allows innovators to take centre stage to develop products and services that the continent’s citizens both want and need.