Internet & Mobile Stats: Africa Grows Fastest in the World (2009)

Each year the International Telecommunications Union puts out statistics on the state of mobile and internet data around the world. What I’m interested in is their “Information Society Statistical Profiles 2009 – Africa” report, put out just this week. Here are some key takeaways, but you should really go download the full report for yourself.

A decade of ICT penetration in Africa

“By the end of 2008, Africa had 246 million mobile subscriptions and mobile penetration has risen from just five per cent in 2003 to well over 30 per cent today. The high ratio of mobile cellular subscriptions to fixed telephone lines and the high mobile cellular growth rate suggest that Africa has taken the lead in the shift from fixed to mobile telephony, a trend that can be observed worldwide. The number of Internet users has also grown faster than in other regions.”

ICT penetration rates in Africa over the last 10 years

Despite this growth rate, penetration is far below the rest of the world. As the report states, “Less than 5% of Africans use the Internet, and fixed and mobile broadband penetration levels are negligible.” The global average is 23% internet penetration. This is due mainly to cost, but also to coverage over a very large continent that lacks population density outside of major cities.

Not all of Africa is created equal

If you’re a company trying to make money off of providing services or products to mobile phone users in Africa, you have to think strategically. You can see from the chart below that the countries you should focus on first are Nigeria, South Africa, Kenya, Ghana, Tanzania and Côte d’Ivoire.

Mobile subscriptions by country in Africa

This holds true for the internet as well. You’ll note that many of the top countries for mobile penetration are also countries with a strong internet growth rate.

Internet growth rate by country in Africa

“According to a recent household survey conducted by Research ICT Africa, the main location of Internet use in such countries as Benin, Burkina Faso, Cameroon, Côte d’Ivoire, Ethiopia, Ghana, Kenya, Nigeria, Rwanda, Senegal, Tanzania and Zambia is the cyber/Internet café.”

Leapfrogging… with a catch

Many reports you read will sing the praises of the mobile networks and how the leapfrogging of landlines has helped Africa. That’s true, and I’m one of those people. However, it comes with a catch, and that catch is that the lack of landlines in Africa means that it’s a lot harder to get fixed-line broadband penetration, whether ADSL or otherwise. This keeps prices high and primarily availability is only in urban areas.

This gives the mobile operators a significant advantage in Africa, and it’s the reason why 3G (mobile broadband) technology is leading the way and why most of the growth will be through the mobile networks.

Fixed Broadband Growth in Africa

To put it in real numbers. By the end of 2008 there were only 635,000 fixed-line broadband subscribers in all of Africa, representing 0.1% of the population, whereas the world average is 6%. Mobile broadband sees 7 million subscribers with a penetration representing 0.9% of the population, again 6% being the global average.

In Summary

This report is an absolute gold mine of valuable data on internet and mobile phone usage, penetration and growth rates in Africa. I could go on with more graphs and thoughts on each section, but you should do yourself a favor and download the free copy and read it.

Finally, some last charts showing mobile cellular subscriptions, mobile broadband and internet subscriptions by country in Africa:

Internet users by country in Africa

Mobile subscribers and mobile broadband by country in Africa

African Mobile Market, Q2 2009 Numbers

Africa has 415,010,625 mobile phone subscribers, with an average growth rate across the continent of 5.4% between Q1 and Q2 2009.

Africa and Middle East Mobile Telecoms Market in Figures: Q2 2009Blycroft does an excellent job of aggregating data on African mobile phone markets each quarter. They’ve compiled their report for Q2 2009 which includes subscriber numbers and other useful data, titled “The Africa and Middle East Mobile Telecoms Market in Figures 2Q 2009“. The mobile data includes GSM and CDMA networks, but excludes fixed and CDMA-wireless networks, which are classed as an extension of the fixed network. Make sure you get over to their site and pickup the full report, available for £399.

Mobile subscriber growth numbers by African region:

African mobile phone subscriber numbers - graph by region

comparing Q1 to Q2 2009

Statistics for the North Africa region for 2Q 2009 cover 6 states and 131,109,223 subscribers, up from 123,903,195 in 1Q 2009, and representing a net gain of 7,206,028 ( 5.8 percent)

Statistics for East Africa cover 12 states and 61,983,813 subscribers, up from 58,257,266 in the previous quarter – an increase of 6 percent. Year- on-year growth saw some additional 18,382,201 mobile subscribers in the region; a growth of 42 percent.

Statistics for South Africa cover 10 states and 62,175,521 subscribers, up from 60,093,764 in the previous quarter – an increase of about 3.5%

Statistics for West Africa cover 16 states and 125,616,329 subscribers, up from 118,644,669 in 4Q 2008 – an increase of approximately 6%.

Statistics for Central Africa covers 11 states, and 34,125,739 subscribers. (Note: I’m missing the Q1 2009 numbers for Central Africa, if you have them, please pass them on so I can update the chart)

Top 20 African States by Mobile Penetration

There’s not much available in the non-pay version to see, in fact, they’ve removed almost every meaningful number and graph. However, there is one graphic covering the top 20 African states by mobile penetration.

Top 20 African States by Mobile Penetration

As usual, South Africa and Egypt show large subscriber numbers, both at around 50 million users. Interestingly, penetration in South Africa is over 100%, but is still only at 60% in Egypt, meaning there will be much more growth there than South Africa in the future.

When discussing penetration rates, we always see a higher proportion of small and island countries due to the fact that it takes a lot less mobile users to have a significant percentage covered. Unfortunately, that’s somewhat meaningless in a chart like this, because they’re mixing small with large countries. More useful would be two charts that are separated on population levels.

Lessons from the mLearning Summit in Zambia

There’s an excellent post up on MobileActive about the recent mLearning Summit held in Zambia, titled “Go Mobile: Using Mobile Learning to Teach 21st Century Skills”. Steve Vosloo is a South African who has spent a lot of time researching how mobile phones can be used in education, here’s a video put together by him from this event.

“Steve Vosloo noted that m-learning summits have two main goals: To introduce and popularize the mobile phone as a tool for engaging students, and secondly, to identify local content needs. Examples of this may include applications that support grade submissions and attendance in remote locations or projects that explore how texting can be used in literacy.”

Africa’s Poor: Premium SMS in the Crossfire

If you provide services to poor people, should you make a profit?

That’s essentially the question raised by Katrin Verclas on MobileActive, and it’s an excellent one. Specifically, Katrin calls out the new Google Trader service offered by Google in Uganda, in conjunction with the release yesterday of their SMS products with Grameen and MTN Uganda, one of the local mobile phone operators. Basically, they charge 220 Ugandan Shillings per use, instead of the median 110 UGS charge across most networks. This is called a premium SMS rate.

Google Trader price in Uganda

Premium SMS rates are charged so that third-party service providers can make money off of services that they provide over the mobile phone network. The operator makes their (ridiculously high) profit as normal, and the overage is for the third-party. You’ll find a lot of dating, event and sports services offered in this way all over the world, not least across Africa.

Back to the question

The question posed is if people who are claiming to help the poor should charge, and if so, should they make a profit?

I think we’ve seen from the Grameen model in Bangladesh (ex: Grameen Bank and Grameen Phone’s Village Phone program) that you can (and possibly should). By doing so you help both parties; first, by providing a service that consumers value and are willing to pay for, and second by making the business of running an operation self-sustaining. Many good business, or project, ideas die due to lack of sustainable cash flow.

For instance, if a 220 shilling SMS can save you the 1500 shilling visit to the doctor or veterinarian, or give you a 10% higher return for your crops, is it worth it?

Is there a problem in the question?

There ends up being a paternalist nuance to that original question. After all, is it up to us to decide what services to offer the poor and at what price? Aren’t poor people able to make the value-based decision on whether a trip to the doctor is more useful to them than a call or an SMS to one? If services are being offered, the person making the decision to call, SMS or go physically to solve their problem, or not, is ultimately the arbiter of whether or not a service has merit and should be offered. It’s a classic market-led approach – if the price is too high for the service, equilibrium will not be reached and one will give, usually price.

This is particularly true when talking about for-profit companies offering services – like Google is with Google Trader. They don’t operate under the same development/grant funded subsidization that a lot of others do in Africa. Even if their goal was not to make a profit on this service, they still need to cover internal costs, as does every organization that isn’t provided with free money.

Final thoughts

This space in Africa, of offering services to the poor (in lieu of the governments actually doing their jobs), has been primarily “owned” by large development and aid organizations. This has created a false floor for the economy, as projects and initiatives are propped up by outside money and services rarely have to survive on their own. This is changing, as low cost and high value options come into the market, be they mobile phone operators providing new communication opportunities, or cheap chinese batteries and LED lights for local energy/lighting needs.

I’m sensing a flux in the space, like two bull buffaloes before they fight, the heavyweights in the aid industry and in business are circling each other before they knock heads. The marketing is over who is helping the poor and marginalized in Africa best. In the end the market will decide, and regardless of the messages spouted by both sides, the “poor African” will choose the winner.

If there’s a problem with collusion and price fixing in an industry (like there sometimes seems to be with SMS services in a country), that’s something beyond the scope of individuals and needs to be tackled separately by regulation. However, that’s not the case here, we have expensive SMS services in East Africa, but the new entrants into the space always offer low rates, and the costs of switching providers is relatively low.

No, this is market-based competitive services and both non-profits and for-profits have the right to offer them at whatever price they like. Equally, individuals have the right to use it or not, be they premium SMS rates or not.

I’d like to hear some other African’s thoughts on this.

Do you want big multinationals like Google and MTN coming in and providing their services to you? Should we be asking questions for the poor, or is that condescending in itself? What is the sticking point here, and is there a side that I’m missing?

**UPDATE**
Thanks to Katrin’s email to Rachel Payne, Google’s lead in Uganda, we have the following response from her on this topic, and it does clarify quite a few unknowns:

Hi Katrin.

Yes, I saw your blog post where you speak in detail about the pricing. However, what is written is not quite accurate. You see, Google, Grameen and MTN launched three types of mobile services yesterday: Google SMS Tips (targeting low-income, rural users primarily), Google SMS Search (urban, mainstream) and Google Trader (all users).

The second service is somewhat similar to other “premium SMS” content services currently available (except that it is built on Google search technology) and therefore, is the same price as other content services. To accommodate the first group, we have priced Google SMS Tips at half the price of a content service; this is available for the cost of a person-to-person SMS, which many rural individuals are willing and able to afford currently.

The third service drives income and livelihood benefits, so we decided to begin charging at the normal content service rate and monitor whether this excludes rural communities or not (we did extensive testing during the pilot, which included pricing discussions and most of the users found that Google Trader provided far greater, direct value than the 110 shilling price difference). For all services, we are offering them for free for the first few months, just to ensure that all users have an equal opportunity to try them out, risk-free and allow them to access critical content during this period so that they can assess whether or not they would like to continue to use the service.

I hope this helps provide a bit more information that clarifies the questions raised.

Quick Hits Around African Tech

I’m thoroughly enjoying Dambisa Moyo’s “Dead Aid” book. Buy it, has great food for thought, and numbers to back it up.

The New York Times article on big web content companies lack of profitability in places like Africa.

We’re seeing a new trend of microblogging platforms emerge across Africa. Most recently in the Congo with Akouaba, but also in Nigeria with Naijapulse and South Africa’s Gatorpeeps.

Matt Berg writes about the “Off-grid solar calculator” in North Africa.

Mobility Nigeria points out that Nigeria displaces Germany in the Opera Mini top 10 list.

Bankelele breaks down some of mobile payment tool M-Pesa’s strengths and weaknesses in Kenya.

We’ve announced Ushahidi’s Beta stage, and another round of funding.

APC talks about the broadband rollout issues and a movement to change policy in South Africa.

Sembuse: East Africa’s First Mobile Social Network

For 15% of the cost of a normal 160 character SMS message in Kenya you can now send one with 1000 characters in it.

sembuse160_logoSembuse is a mobile social network. It’s a way for East Africans to connect with each other via short messaging, cheaper than normal SMS messages (much like it’s counterpart Mxit in South Africa). It’s a new release by Symbiotic, a Kenyan firm that specializes in making mobile phone related applications. To get the application on your phone, point your device to to m.sembuse.com (or s.zunguka.com). It’s a free download for anyone with a GPRS or 3G enabled phone, and you can try it out immediately.

Making Money

Mbugua Njihia is an entrepreneur, I’ve known him for a little while, and he’s focused on running profitable enterprises. There are two revenue streams at Sembuse.

Maneno Ads by Sembuse1. Value added services:

“Customized news alerts, real time stock market alerts and news, rave crave – that gives users a snapshot of the nightlife in their location, the gossip channel – that allows users to submit and share gossip with their friends, the sports bar – where sports fans can keep up to date with the happenings in their favorite sports and a video section with mobisodes across a variety of channels.”

2. Advertising
There is a proprietary hyper-targeting advertising platform – SembuseConnect that allows businesses to connect with their target market directly on their handset. They can book their ManenoAds (text adverts) and choose their desired target group on the Sembuse network from the ease and comfort of their mobile phone wherever they are. The advertisements are served immediately the order is confirmed.

I asked Mbugua about the advertising, and he got back to me with the following statement:

“Going into launch we have two advertisers on board on trials – Standard Investment Bank and Royal Media Services. For the larger FMCG’s and cooperates the approach is to use their ad agencies to book and manage the medium for themselves and the rate cards have already been dispatched. This however doesn’t prevent us from having a direct engagement with clients. The biggest source we hope will be individuals and small to medium sized enterprises who can place their own adverts through their mobile phones.”

In Summary

I’m really interested in seeing where this goes. The guys behind it are ambitious, and they’re doing something that I’ve thought for a long time needed to be done. I’m particularly glad to see that they’ve taken a two-pronged revenue approach. Relying on advertising alone in this economic environment wouldn’t be that promising, but by tapping into the end-user as well, there is added potential.

Finally, I wonder if we’ll see more people moving from their older SMS-only phones, with no data capability, to GPRS enabled phones. I know we saw this happen in the case of Mxit in South Africa, so I wonder if the same will be the case in East Africa.

Screenshots

Paper: Mobile Phone Access and Usage in Africa

For the past few days I’ve been in Qatar doing a joint demonstration of Ushahidi with Ken Banks of FrontlineSMS at the ICTD conference. One of the interesting projects that I ran across was ResearchICTAfrica.net, who have been doing a study on mobile phone access and usage in Africa. They did over 22,000 surveys in 17 countries to compile this report.

ResearchICTAfrica.net

Some takeaways:

  • Lower levels of ICT access and usage in Africa can be attributed to weak telecommunications infrastructure, generally low economic activity, irregular electricity and a lack of human resources.
  • Income and education vastly enhances mobile adoption (over gender, age or social networks).
  • Mobile expenditure is inelastic, meaning higher income individuals spend a smaller proportion of their income.

Charts

There are a number of interesting charts within the paper. One of which shows the elasticity of usage depending upon income (top 25% of the population vs bottom 75%).

Mobile phone usage elasticity in Africa

Personally, I was fascinated to see a study on the average expected cost of a mobile handset.

Expected mobile handset costs in Africa

I’ve got a PDF version of the report here. Like this conference, it’s mired in academic language, but it’s an incredibly informative and useful report if you can get past that:

ResearchICTAfrica Report – ICTD 2009 [PDF]

(sidenote: the academics here at this conference could use a course in communications, it’s often difficult to decipher what they’re actually trying to say…).

Tracking Mobile and Internet Services Across Africa

I’m continually frustrated trying to find the providers and costs of mobile phone and web services in African countries. This site was inspired by, and dedicated to, the many ranting and raving conversations amongst the technorati of Africa.

One of the issues is that the providers themselves do a shoddy job of getting the information out through convoluted (if any) marketing and price gimmicks. Another issue is that once you find out what services are available, you have no idea what to expect in terms of service levels and data speeds.

I decided to put together a site, African Signals, where people could leave information on the availability, costs and service levels of mobile phone and internet connections in their country. Right now there is a basic skeleton for every country, but it needs to be updated and improved.

Your Job:

Find your country and enter whatever you know about your local costs, speeds and service levels for mobile phone operators and internet service providers (ISPs).

Take 5 minutes and jump see if you can add anything new, or if the info is correct. Then, tell your tech friends from that country too, share this. It’s a resource, something for you to give to and to take from. It is strengthened by your information, and I hope that you in turn will benefit from it too one day.

Example pages

Liberia:

African Signals page for Liberia - mobile phone services

More good example pages, and a special thanks to:

[Note: Some might notice that I am repurposing a domain that I used to have a podcast on 2 years ago, but subsequently was abandoned.]

A Whirl Through the Liberian Tech Community

Yesterday had good meetings, but today was amazing.

Cellcom in Liberia

I had a chance to sit down with the CEO of Cellcom today, Avishai Marziano. Cellcom is the second largest mobile phone operator in Liberia by subscription, right behind Lonestar. They have very good coverage of the country (all the main roads and towns), and they do a great job of marketing their services. We got into a nice heated debate over the value of Ushahidi, and if there is any business model to use it for carriers like him (turns out there isn’t, except that the long-term health of the country is in his best interest).

We then got into some great discussions about mobile phone payments and banking. Specifically, the pros and cons of an MPESA approach (carrier monopoly, bank agnostic) compared to a Wizzit (carrier agnostic, bank monopoly). How everyone is jumping at using these services to gain more subscribers, and not to really add another value added revenue stream into their company.

The final part was when he showed me their newest prototype of an iPhone-like touchscreen mobile phone that runs with dual SIM cards, has radio and all the other goodies you would expect. Right now, it needs a little more polish, though the form feel is good and if they drop the price point down it will find buyers. Selling a dual SIM phone is a tricky business though. It’s definitely what African users want, but it’s also a tricky thing to market, when you’re basically giving a free slot away to a competitor. (no pictures, sorry)

John Etherton

john-etherton

Lunch was at a local dive, over a bowl of rice and spicy fish gravy/soup. It had no airflow, and was really much like eating in a sauna. However, it was worth it because I think I might have found one of the only true hardcore hacker types that is in Monrovia today. John Etherton has been here for a year, working on the Truth and Reconciliation Commission from Georgia Tech. He’s done some really cool stuff with GPS-enabled PDAs in rural Liberia, and is the only guy I’ve met who could give me true rundown of all things mobile and internet in the area.

It turns out that there is decent mobile coverage of the populated areas of the country. The best any operator can do is Edge/GPRS, so no 3G anywhere, but that’s better than nothing. It also means that almost everywhere that you get network access, you can also send data. Cellcom and Lonestar have the best rural coverage, and Comium is the easiest ISP to start using, but for dedicated access most go through Cellcom or one of the smaller ISPs.

Alie and the Youth Crime Watch team

Alie is the newest Ushahidi dev, originally an ASP and .NET guy, he’s now starting to get involved with the program. You can read the full story of how I got to meet him and how this transpired on the Ushahidi blog.

Alie, a developer in Monrovia, Liberia

Quick Hits from Digital Africa

I’m on the road to Liberia for a couple weeks, so getting up a quick post on some items that I think are interesting around the technology space in Africa.

Hannes van Rensburg goes off on groups that give financing to European tech companies for work in Africa, rather than the local African companies who are better equipped and more knowledgeable to handle the situation. I agree.

“I really have difficulty in understanding how this mildly succesful UK company can make a difference in Africa. Not only is it unlikely that they will be able to re-use the UK functionality in Uganda (Java phones, ATM switches, etc.), but they are also late. Many Ugandan-based companies have already (or are in the process of) lanching their mobile banking services.”

Solar-powered phones are coming. How will they change the power equation in Africa?

How will solar powered mobile phones change Africa?

Matt Berg writes a good post on leveraging internet with radio:

“Eventually low cost smart phones that are able to access the Internet in an acceptable way (think < $100 Chinese iPhone), will represent a paradigm shift in the way Africans connect to the Internet. Until then, a community radio is probably the best way to make the information on the Internet accessible to rural communities."

Zain launches mobile payment service Zap in East Africa. This is their challenge to Africa’s mobile payments golden-child MPESA (by Safaricom). In the past, Zain hasn’t had a stellar record in marketing and simplification of their services. I hope this is different, as the market needs competitors.

Rural internet, not online but still connected

“Internet access might not be instantaneous, but a USB stick driven off in a cloud of motorcycle dust, or bumping along in an ox cart, can often shift more data than a telephone dial-up connection. And with delayed dial up the customer avoids the frustration of slow downloads: returning later to waiting data.”

Coby Leuschke builds a prototype 12 volt mini computer:

“I was most interested in the 12V DC requirement for use with solar systems. I finally got around to building one from a bare bones kit…”