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ECONOMY-SOUTHERN AFRICA: Getting in Touch with Mobile Phones

Ernest Chiombe

MASERU, Feb 15 2007 (IPS) - Only a decade ago many southern Africans thought a mobile phone was a luxury reserved for rich chief executives of multinational companies.

The rapid expansion of mobile phone networks has changed this but some challenges remain, particularly in making the service more user-friendly.

In a region where telecommunication services have at best been erratic, mobile phone services was until recently out of reach for many people. This was partly because of the prohibitive costs of handsets.

Today people are able to buy handsets at less than 50 US dollars thanks to increased competition in the mobile phone network industry. Telecommunications service delivery has improved dramatically, creating jobs along the way.

‘‘I recall how cumbersome it was to acquire a fixed telephone line,” says Mohau Rafobane, managing director of BL Skills Development Centre and a Vodacom public phone service provider in Maseru, Lesotho.

‘‘First you had to fill in forms and then would be on the waiting list for many months or even years before getting connected. With the coming of mobile phones you are instantly connected,” Rafobane points out.

Growing mobile phone networks have also been praised for creating business opportunities for many local people. In Lusaka, Zambia, Charles Banda is one young entrepreneur who has benefited.

After obtaining a certificate in sales and marketing in 2002, the 25-year-old Banda roamed the streets for a year looking for a job without success. Tired of searching for formal employment he decided to join street traders dealing in assorted merchandise.

With many people selling food stuffs Banda decided to deal in a different commodity. He set up a makeshift table which, during IPS’s visit, displayed three handsets and a variety of prepaid mobile phone cards. His mobile handsets are not for sale but serve as public phones.

‘‘I started this business using my phone and I bought two more last year when phones became cheaper. With many people affording to buy their own phones now I am not making as much money as in the past. I therefore decided to start selling prepaid air-time cards,” says Banda.

In Lesotho’s northern town of Hlotse, 22-year-old Nteboheleng Tekane and 32-year-old Tshidiso Sheea are partners in a similar mobile telecommunication business operated from a busy taxi rank.

‘‘After writing my Cambridge Overseas School Certificate Exam four years ago, my father bought me this public phone and I joined Tshidiso here who was selling air-time. I get my money from calls made while Tshidiso makes money from air-time sales,” explains Nteboheleng who is studying to become an ambulance assistant.

‘‘The money that we make here is not enough to pay for my education but it helps to meet transport costs and to buy requirements like books,” says Tshidiso who is studying marketing. He makes a profit of 7 US dollars per day which is more than the 70 US dollars per month he would have earned if he was working full-time.

The South African company MTN started its business operations in Zambia in August 2005 after buying out Telecel. They pledged an investment of 70 million US dollars over a period of two years towards improving the country’s mobile phone network.

According to Freddie Mokoena, MTN Zambia chief sales and marketing officer, one of its first steps was to make mobile handsets affordable to more people.

Within a year MTN extended its coverage to all of the country’s ten provinces, increasing the customer base from 40,000 to 200,000 subscribers by the middle of 2006.

The number of people in direct employment at MTN increased to 141. They are equipped with the appropriate skills to handle telecommunications technology. ‘‘We train our staff as part of the effort to standardise our services. Sometimes they are sent for training to any one of the other 21 countries where we have business operations,” adds Mokoena.

The South African company Vodacom, MTN’s main competitor, pioneered mobile telecommunication services in 1996 in Lesotho. Today the company enjoys 80 percent of the mobile network market share and covers all major towns and rural settlements in Lesotho.

Vodacom’s 63 permanent employees are mostly Basothos. They also receive training.

Despite the improvements in telecommunications, some people still feel these companies are not doing enough to address concerns specific to small businesses and consumers in the southern African region. As a Vodacom service provider Rafobane says he is not earning enough ‘‘to meet all the expenses and to save some for business expansion”.

He is also dissatisfied with the disparity in charges between Vodacom Lesotho and Vodacom South Africa. In South Africa, charges are lower and more services, such as fax and internet, are available.

In Zambia, the SIM cards used in mobile phones are much more expensive than in South Africa, says Zambian Beauty Bwalya. She moves between South Africa, Swaziland and Zambia and has to pay ‘‘exorbitant roaming charges. You are forced to buy a new SIM card in each country which is later deleted from the system when it is inactive”.

Countering such complaints, MTN Zambia’s Mokoena says that people should understand that operating in different countries also means that companies incur different costs. He stresses that South African companies have been providing services across Africa for more than ten years while other companies move in and out.

MTN is looking at harmonising its services across the region. According to Mokoena, MTN has launched tariff plans for people calling MTN numbers in South Africa or Swaziland and is responding to the demands of mining companies in Zambia and their parent companies in South Africa.

Lack of technology is a barrier in this case. ‘‘The major challenge is that many countries do not have international gateways, meaning that calls from MTN in South Africa to MTN in Zambia cannot be routed directly,” says Mokoena.

With reports of Celtel scrapping the roaming charges for its East African subscribers moving between Tanzania, Uganda and Tanzania by introducing one SIM card, there is optimism that similar services would soon come to the southern African region.

‘‘The good news is that the legislative environment in Zambia is opening up which will enable us to get around the issue of an international gateway and offer more affordable services,” says Mokoena.