Posts Tagged ‘mobile futures’

Cross-border mobile financial services in Africa are going to be huge

africa_webAnalysis Mason has an excellent article on the next big thing in mobile money across the African continent – cross border payments. I covered the emergence of these services, through regional operators as well as partnerships based on interoperability earlier. This is what I asked for:

Mapping it all

I’d love it if someone could capture all of this into one map and infographic – not only the cross border transactional ability but also the cross border interoperability as well as in country interoperability. Like the Zambians, I think the potentials for business, trade, e-commerce and biashara are far more than anyone has even considered. Top down reportage on banking and interoperability seems to focus only on the customer’s individual needs, and overlooks their agency as entrepreneurs, traders and business people.

And this is what Analysis Mason’s article has to add:

Cross-border mobile money transfer services enable the informal sector to participate in the formal financial system and avoid opening a bank account, which typically requires more extensive documentation (for example, proof of residence) than registering with a mobile operator. Mobile money provides a safer, quicker, and often less expensive, alternative for cross-border money transfers.

Demand for cross-border remittances is also driven by regional integration, particularly in East and West Africa where regional agreements promote cross-border trade and monetary integration. Significant movement of African labour across borders, to seek higher wages and new employment opportunities (especially within regional ‘blocs’), also creates a mobile population, driving demand for mobile remittance services.

Given the dates of emergence of partnerships extending the reach of well known services such as Mpesa after the publication of this analysis, I suggest going with the data collated here first. On the other hand, they were the first to map it all so I’m surprised my earlier search didn’t turn up this article which shows an earlier publication date on the web page.

The maturing of the African mobile phone market Feb 2008 to Nov 2010

This post has been percolating through my mind for the last couple of days, its time to attempt setting it out in words for a stab in the dark at some clarity.  The trigger was the recent hue and cry over Nokia’s percieved downfall as the calculated global market share for the device manufacturer dropped to under 30% after the heydays of hitting almost 40% in the recent past. Digging through the data showed that the actual size of the market had grown significantly, the equivalent of a large size pizza instead of a medium sized one. Naturally the percentage share would drop even if the absolute numbers of devices sold increased. The growth in overall market was primarily driven by the category called “Others” and to a smaller degree, the exponential growth of Android as an OS. The data is all available here, I am not bringing the table into this post because I can already sense that my circumlocutory meanderings in this space are going elsewhere.

Before I go forward, I want to step back.

mobile-in-africa-400x194

Its a pity I deleted my old blog and can’t link to the relevant post directly, but regular readers may recall this visual that I’d used for a post on Africa as the driver for innovation in the mobile space. Googlefu finds that the wayback machine has finally done its job, so here’s the relevant snippet accompanying the above visual from a post written December 14th, 2007:

Lets face it, Brazil, Russia, India and China have emerged and we can start calling them ‘driving markets’. So what’s really emerging in the mobile innovation sphere?

Africa.

Think about it, where did the concept of airtime minutes as an alternative currency arise? Along with numerous different innovative business models centered around the use of airtime as a means for making transactions, providing credit and other banking services? What about the proliferation of small business opportunities for the entreprenuerial? From car battery charging stations to sophisticated voice and text based social networking services? Not from the BRIC for sure.

Shortly thereafter, Emerging Futures Lab stuck its head into the space directly with an African fieldtrip looking at the lower income demographic. From that foray, the following sketch emerged as our synthesis of the market forces at play in the context of the mobile phone landscape as of early 2008,

Africa Mobile price shift by Emerging Futures Lab, Torino February 2008

Africa Mobile price shift by Emerging Futures Lab, Torino February 2008

In summary, back then the situation was primarily focused on the killer app of voice and text – communication leapfrogging the vacuum that the high cost and lack of appropriate infrastructure had created as its legacy.  The market had just begun to show the crazy growth – where did we recently read that it took 25 years to reach the landmark figure of the first 20o million African mobile phone subscribers but the next 200 million have emerged in the past 3? The crown prince was the basic Nokia handset and the average price for a candybar was 50 USD so we put that in the middle of our bell curve of price vs purchasing opportunity.  Cutting a long story short, projecting weak signals a short distance forward implied a rise in numbers across the board in terms of sales and new buyers but also a concurrent flattening of the curve as the price line stretched out between the high end and low end – this was looking at the “prepaid” market or those who manage on irregular income streams. Services were the next major opportunity space, given time to market in a product development cycle.

But that was then, this is now.

Everything has changed in the three years and the market is now showing all the signs of imminent maturity rather than potential growth. Sure, numbers sold and new phone users are increasing exponentially but that is not the primary focus anymore. The African mobile market has not only matured rapidly, even while growing, but its leapfrogging the traditional “market analysis curve and behaviour” to attempt to articulate the complex situation. Its sophisticated far beyond its youthful years and this is the underestimation that is creating a cognitive dissonance amongst those seeking to address the challenges from the point of view of corporate strategy.

Look, the phone has already become established as the go to or default technodevice building block. Erik Hersman puts it well in today’s blogpost, here’s a significant yet relevant extract:

We’re already seeing stories of the way guys are doing everything from creating their own vehicle security systems, home security systems, distance-triggered food preparation and even fish catching alerts. That’s with no support at all. What happens when you provide a space to make it faster, better and possibly an avenue to manufacturers and funders?

The vacuum leading to innovation and leapfrogging of technological solutions has not been limited to simply the device and service alone as in the beginning. As soon as a critical mass of devices and service affordability was reached, experimentation, innovation and invention took over to provide a host of relevant, ingenious and sometimes mindblowing solutions.  This is no more simply a market for affordable mobile phones and uplifting solutions for the world’s overlooked and underserved. Africa has become a pioneer in technological innovation on the wireless platform – products, services, applications far ahead of anything we can imagine for this little brick in our pocket.

Our biggest error would be to continue to use the same lens by which to view the African mobile phone market as we did three years ago. The mobile phone has already changed the world.  Where do we want to go tomorrow?