Cellular technology has taken off at an almost unprecedented rate in Africa -- with some 82 million people currently using mobile phones. South Africa?s operators initially estimated market saturation to be around 17 million subscribers -- at last estimates this figure was 19 million and still climbing.
For consumers cellular technology has proved a revelation on a continent where teledensity is still appallingly low. That said, mobile call costs are still, on average, R0.25 (US$0.03) per unit more expensive in SA than in comparable economies, according to a report released recently by Icasa. Competition in the sector has done nothing to alleviate this, and Icasa is in the process of investigating why prices are so high, and what can be done to reduce these.
For business users, mobile technology enables people to be constantly in touch, whether they are out of the office or out of the country. Newer technologies, like 3G and Edge, have brought with them the ability to move reasonable amounts of data wirelessly -- making things like video conferencing via cell phone feasible. Corporate users can now access everything from their e-mail to their ERP applications via cell phone and data card.
Beyond these obvious applications, however, cellular technology is proving useful to alleviate pain points around everything from providing banking services in rural areas, to enabling reps to send orders directly from a customer?s premises to data capturing, even when down a mineshaft.
Expanding channels
Mobile payment application providers like Cape-based Fundamo are providing payment solutions tailor-made for cellular technology. Says Fundamo CEO, Hannes van Rensburg: ?Some of our clients in Africa are having great success with mobile payments -- in Zambia, for example, retailers use mobile payment technology to pay for their SAB or Coca-Cola deliveries as they arrive. The supplier is immediately informed that payment has been made, as is the truck driver, who can then carry on with deliveries.?
Deon Botes, sales and marketing director for PayCell, which provides, amongst other things, a point of sale terminal able to accept payment by credit, debit, magnetic stripe cards, contactless and smart cards, or electronic purse in the SA and U.S. markets, says that businesses can no longer afford the luxury of dictating what payment method customers can use.
?In the SME space in particular, we have found that businesses need to accept payment in whichever form the customer prefers -- whether it is cash, credit card or via cell phone. From the business? point of view, companies need to increase turnover, and improve financial control. By enabling customers to pay the way they want businesses have seen 30 percent to 100 percent increase in turnover,? he adds.
Mobile technology has enabled industries like the financial services sector to provide customers with new services and solutions, like MTN Banking -- a purely mobile bank recently launched by MTN and Standard Bank, or the more established cell phone banking service provided by all of the major banks, whereby the cell phone is merely another channel through which customers can interact with the provider.
?Companies can use SMS technology to, for example, send bulk SMS? to customers informing them of new products and services, or competitions and promotions,? says Orion Telecom business development manager, Robert Casso. Orion supplies a range of SMS solutions tailored to corporate users. ?The technology can also enable companies to personalize customer service efforts -- by SMSing customers to ensure that they are happy with a product they have just purchased, for example. Companies can also run competitions to promote a new product or service, and, by charging the customer per entry, generate revenue from the competition.?
A matter of development
In the informal sector, says Sun Microsystems? sub-Saharan Africa sector manager for Public Sector and Financial Services, Jan Dry, street vendors use their cell phones as a point of contact for the world -- their handsets empower them to do business anywhere, any time. ?They no longer have to rely on face-to-face transactions,? he says.
?According to a recent Vodafone-commissioned report, more than 85 percent of small businesses run by black people, and surveyed in SA, rely solely on mobile phones for telecommunications,? Dry comments. ?In addition, 62 percent of businesses in SA, and 59 percent in Egypt, said mobile use was linked to an increase in profits -- despite higher call costs.?
Dry believes the advent of secure mobile banking will empower these business people still further. ?We believe that mobile banking could be the catalyst that converts the mass of unbanked people in SA into customers of the formal banking sector,? Dry predicts.
And, while the cell phone can be used to transact, it can also be used as a secure means of identification, as well as to transmit information and content to the masses, Dry says. He predicts that, in 10 years, the 3G-enabled cell phone handset will be a very different device to today?s model.
?The network will be in place and that is the way governments will be able to develop services at a far lower cost than they envisage today. Cellular communications will be a utility. The platform will be used for two-way communication -- from government to the people, and from the people back to government. E-Government will become M-government.
?SARS, for example, has made great strides in using modern technology and introducing electronic filing of tax returns. There is no reason why this cannot this be done by the municipalities to deliver services -- indeed, there is already a pilot project that enables the delivery of pre-paid electricity ?vouchers? to users? handsets,? he notes.
Mind the fine print
As the Internet gave birth to Internet service providers (ISPs), so the widespread adoption of cellular technology has seen the creation of a new breed of businesses -- the Wireless Application Service provider (WASP).
And, as with any new industry, there were no rules, and no boundaries, and always a company or two willing to push its luck to see just how much money it could make before someone cottoned on. In the case of the WASP industry, the main bones of contention have been spam, and subscription services.
Recent cases in SA and the U.K. have seen subscription services receive a lot of media attention. To sum the problem up succinctly, providers were advertising content for download (like ring tones), charging a fee for the item downloaded, and neglecting to tell the consumer that, by downloading the item, they had automatically subscribed themselves to a service, and would be billed for such on a monthly basis whether they liked it or not.
Naturally, the providers claimed this was stated in the fine print, but that is neither here nor there. A number of consumers started complaining to their network operators, one of which (in SA) decided to take the issue to the ASA. The ASA ruled that the advert in question was misleading and should be withdrawn immediately.
Since then, most of the adverts for such content are including clearly visible terms and conditions (as opposed to 6-point type-size warnings, which flash across the screen in a nanosecond), as well as clear unsubscribe details (not previously included).
The WASPs have also formed an industry association, Wireless Application Service Providers Association (WASPA), and formalized a Code of Conduct (available on http://www.waspa.org). Says Dr Piet Streicher, MD of BulkSMS, a company that specializes in bulk SMS solutions for individual and business users, and WASPA committee member: ?The WASP industry is only two years old, and, as such, unregulated. At the beginning of the year we identified a need for an industry body, and WASPA was formed. We also decided it would benefit the industry to introduce a means for self-regulation. The WASPA Code of Conduct was completed on 30 June and went ?live? on Sept. 1.
?As such, WASPA is now taking complaints against service providers. Under the terms of the code, WASPs can be fined, given a warning, suspended or expelled from the association. Both MTN and Cell C require WASPs to be members of WASPA, and will no longer deal with any that are expelled from the association, so punishment can have serious economic consequences for infringing members,? he says. Vodacom has only recommended that WASPs be members, it is not mandatory if providers wish to do business with the company.
Looking ahead
Absa GM: digital channel services, Christo Very, says his company is definitely looking at expanding the range of services it offers to its customers via cell phone.
?Mobile technology offers itself up to a number of uses -- as an authentication device, means for corporates to be constantly connected to the network, a way to deliver ATM services in rural areas that do not have fixed-line infrastructure and so on. The technology plays different roles in different market segments -- notification of account activity, confirmation of payments, account opening (which Absa is currently investigating) and so on. If you take it further it could act as a point-of-sale device,? he adds.
The list of potential applications of mobile technology is almost endless, and, as bandwidth increases, so will the number of possible uses. ?In 10 years, the 3G-enabled cell phone handset will be a very different device to today?s model,? predicts Dry. ?The network will be in place, and that is the way that governments will be able to develop services at a far lower cost than they envisage today. Cellular communications will be a utility. The platform will be used for two-way communication -- from government to the people, and from the people back to government. E-Government will become M-government.
?SARS, for example, has made great strides in using modern technology and introducing electronic filing of tax returns. There is no reason why this cannot this be done by the municipalities to deliver services - indeed, there is already a pilot project that enables the delivery of pre-paid electricity ?vouchers? to users? handsets,? he notes.
And there is no reason the technology cannot work as a two-way communication medium between business and individuals, or business to business.