“The cellphone revolution”
It is a uniquely developing world phenomenon that where income is lowest and the cost of cellular telephony is highest, the mobile phone is at its most ubiquitous.
Industry analysts say that there are more than 2,4 billion cellphone users worldwide, with more than 1000 new customers added every minute. “About 59 precent of users are in developing countries, making cellphones the first telecommunications technology in history to have more users than in the developed world,” says researcher Kevin Sullivan.
A spokesman for the GSM Association, David Pringle, reports that cellphone usage in Africa is growing faster than in any other region and leapt from 63 million users in 2004 to about 152 million users today. The GSM Association is a trade group that represents most cellular companies.
To extend the analogy, cellphone use is at its most prodigious in the Democratic Republic of Congo (DRC), one of the poorest and most undeveloped countries in Africa. In a population of around 58 million people, most of them living below the poverty line, well over 3 million are cellphone customers, says Pringle, and at least 6000 sign up each day.
The cellphone’s ability to eclipse distance and bring into contact people all over that massive country will do more than anything else to mend the effects of war and revive and extend the shattered economy. Even before the war ended, the cellphone made deals possible, many of them shady with deadly consequences, by linking negotiating parties a thousand kilometres apart.
Consignments of bananas turned the economy over with a single call, as did dark deals that swapped blood diamonds for weapons of war. No marketplace stall is complete these days without a cellphone in attendance, the more canny traders keeping tabs on produce price fluctuations in neighbouring towns and villages. The telephone callbox has been replaced with communication entrepreneurs in the making who buy cellphone time in bulk and then charge their customers a premium to make calls.
In spite of, or perhaps because of, the long-running and bloody civil war in the Congo, the number of users has increased tenfold in the past five years. And that’s because African cellphone operators are increasingly braving political risk and even violent unrest as they scramble for their share in some of the world’s last untapped markets. And as such relatively mature markets as South Africa, Kenya and Nigeria start to slow, the boldest are trying their luck in formerly or currently troubled spots such as the DRC, Sudan and even Somalia.
If ever there was a market crying out for innovation before the arrival of the cellphone it was telephony in Africa. Sparse, desperately inefficient and ridiculously expensive, the landline was to the vast majority of Africans the ultimate impossible dream. Just a decade ago, more than half of the African population had never used a telephone. Today, upwards of 15 percent of the total population actually owns his or her personal means of voice communication and 70 percent have access to it, and that figure increases virtually by the minute.
“The appetite for risk in Africa is increasing,” says Paul Hamilton, telecommunications analyst at research group Global Insight. “There is so much interest in the opportunities that it’s offsetting the challenges of instability.”
Africa’s second and third-largest operators, Vodacom and Celtel, run networks in the DRC and are battling negligible infrastructure, inhospitable terrain and sporadic fighting to extend their networks across the country. So far, the two operators have erected about 700 cellphone towers.
It seems almost impossible to imagine but Somalia, a tattered patchwork of warring chiefdoms, is also regarded as rich pickings for cellphone operators. “There are challenges but the demand is there,” says Mohammed Sheikh, chief executive of Telsom Somalia. “Communication is one of the most basic needs, after water and food. People want us here.”
The same applies to other areas of simmering social and political unrest like the DRC and Sudan.
“People now see communication as a fundamental right, so as long as operators do not get involved in politics, they are warmly received,” says Hamilton.
“In Somalia the lack of any real government or regulation has ironically made for some of the cheapest tariffs on the continent,” reports researcher Rebecca Harrison. “With no licencing regime, four operators fight for market share and cover 75 percent of the country, more than in many African countries.”
And now that peace seems to be breaking out in both the DRC and Sudan, Africa’s two biggest countries, they are being touted as the continent’s next big growth markets.
Prolific as the mobile business has become in Africa, it still faces over-enthusiastic tax collectors, operators say, concerned that unreasonably heavy taxes and excessive regulation are one of the biggest impediments to faster expansion.
Taxation — a deterrent to cellphone growth
It is now undeniable that the technological gulf between the West and Africa can be bridged by a cellphone industry that allows cheaper and faster data and voice communication. Although mobile phones services are making inroads, the pace is slowed by inconsistent regulations and policy, and high taxation on operators. According to Gabriel Solomon, GSM Association director for government and regulatory affairs, countries with high taxes experience much slower expansion than those with lower tariffs.
“High taxes are a deterrent to operators,” he insists. “To encourage faster penetration governments must lower taxes. In the end this will help the consumer.”
“Liberalising international gateways removes a bottleneck choking African businesses as they seek to compete in a global market,” notes Solomon. “International calls are already 50 percent cheaper for Kenya’s six million mobile subscribers,” where the business is allowed to respond to market dynamics.
Now that the DRC’s first elections in 40 years have happened in relative calm and that country is at last back on the road to economic reconstruction, it is the cellphone that will drive much of the new business waiting to be conducted, both throughout the vast 2,5km² polyglot and with the world at large.
Telecommunications analysts maintain that the region stretching from Sudan in the north to Tanzania in the south and Cameroon in the West, would have some 55m cellphone subscribers within four years as new networks come online and competition brings prices down to more sensible levels.
“The key drivers are growth and affordability,” Ezequiel Dominguez, a business research executive at Informa Telecoms and Media research group, told a recent telecommunications conference in Nairobi.
In another cellphone innovation that could have economic ramifications continent-wide, a bank-by-phone system has been designed for poor South Africans, enabling saving and access to credit, reports researcher Nicole Itano.
A boon for many poor South Africans, the system offers a first step into a financial environment where they can save, send, and receive money. By punching a few keys, people in remote stations can send money to a relative or pay for goods without ever seeing a paper bill — a benefit in a country with a high crime rate.
And if cellphone banking works in South Africa,
the pioneering hope it will help change banking throughout Africa, much of which remains a cash economy. “We believe that this very simple but very well-designed product has the potential to revolutionise banking on the African continent,” says Herman Singh, director of technology engineering at Standard Bank, which has partnered with cellphone company MTN Group on the project. Africa will never be the same as the communication revolution in the DRC is repeated in every corner of the continent. The proliferation of handsets, service providers and networks is a worry for some development agencies and funding organisations, particularly the disproportionate spend from already meagre incomes.
The deadly component
Ironically, over 80 percent of the world’s known coltan, the vital component in cellphone capacitors that control current flow in cell phone circuit boards, is found in the Democratic Republic of the Congo. The mining of the mineral is subject to “highly organized and systematic exploitation”, says the United Nations, causing some cellphone manufacturers to insist on certification that then coltan they bought did not originated in the DRC.
As currency to buy weapons and munitions, it became as valuable a means of exchange as diamonds. The technology boom caused the price of the mineral to rocket to as high as $600/kg per kilogram at one point, compared to a previous value of $65/kg. It has now stabilised at $100/kg the moment. A coltan miner in the DRC can earn as much as $200 a month, compared to a typical salary of $10 per month for the average Congolese worker.
When refined, coltan becomes a heat resistant powder, metallic tantalum which has unique properties for storing electrical charge. The main area where coltan is mined, also contains the Kahuzi Biega National Park, home of the Mountain Gorilla. The park’s gorilla population has been nearly halved, from 258 to 130 as the ground is cleared to make mining easier.
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