Mobile phones leapfrog an obstacle to development

By Mark Ashurst
Newsweek International
August 27, 2001

Strive Masiyiwa is an entrepreneur on a mission. As earnest as his own first name, Masiyiwa, 42, wants to make the mobile telephone a communications tool for Africa’s masses—as cheap and basic as the hand-cranked party line was for Americans early in the last century. “Yes, you can make a lot of money out of 10,000 very rich members of your society,” says Masiyiwa, whose company, Econet, serves mobile-phone customers in six African nations, including his native Zimbabwe. “But you can have packages that bring down the cost and put mobile phones within the reach of ordinary men and women.”

A RICH MAN’S TOY for most of the past decade, mobile phones are now transforming Africa, helping the continent to leapfrog one of the obstacles to its development. All of sub-Saharan Africa has fewer fixed telephone lines than Manhattan alone. That lack of infrastructure inhibits foreign investment and economic growth. Mobile-phone service is spreading because of fierce competition among multinational providers like Econet. And the introduction of cheap, prepaid calling plans has made mobile phones accessible to low-income Africans. Incredibly for a continent where half the people survive on less than $2 a day, African mobile-phone users now spend more time—and more money—on calls than their counterparts in Europe. In Botswana, more than one person in eight has a mobile phone. In South Africa there are more than 8 million mobiles, compared with just 5 million conventional lines. In chronically war-torn Somalia, mobile phones are popular because they don’t depend on overhead wires that are vulnerable to looters hunting for copper.

In cities across Africa, merchants, street hawkers, taxi drivers and the working poor restrict most of their calls to off-peak hours. Masiyiwa says those customers pay an average of about 25 cents a minute, compared with about 70 cents a minute in Europe. During busier times of the day, many African business callers, who pay higher rates, use mobile service in preference to less reliable, fixed-line networks. Heavy business usage pushes the average spending of an African mobile-phone customer to $36 a month, compared with $22 in Europe, where most of the usage is noncorporate.  “What you’re seeing now is a quiet revolution,” says Masiyiwa, a low-key Christian not given to hyperbole. Africa’s earliest mobile-phone systems tended to be low-tech analog networks run by local tycoons who charged exorbitant rates. “The first generation of cellular operators in Africa were really buccaneers,” says Masiyiwa. The newer systems are digital, and most of them are owned by multinational corporations based in South Africa, Egypt or Zimbabwe. Competition for customers and operating licenses has helped to drive down the cost of calling. The proliferation of mobile phones coincides with the gradual liberalization of Africa’s airwaves, as independent media companies win licenses to broadcast. Politically, mobile phones and independent broadcasters are a potent combination. Last year voters in Senegal ended 40 years of one-party rule, tossing out President Abdou Diouf. He had no chance to contest the result; ballot box by ballot box, poll watchers used mobile phones to report the vote count to Senegal’s new FM radio stations. And in Ghana earlier this year, the ruling party hung onto power in only a few remote areas that still had no commercial radio.

Masiyiwa has had less luck with politics. Econet’s application to launch a mobile network in Zimbabwe was held up by the government for five years. That gave a head start to two rivals, including a company run by a nephew of the country’s increasingly autocratic president, Robert Mugabe. Eventually, Econet won in court. Within a year it had built 40 base stations, locking up 60 percent of the market and earning a small profit. By now, Econet’s dialing code, 091, has acquired a certain subversive cachet in Zimbabwe. But Mugabe brooks no dissent; he still refuses to license independent radio stations. Masiyiwa left the country more than a year ago; though not officially in exile, he now runs his business from Johannesburg. He may have won Zimbabwe’s mobile-phone war, but apparently he still can’t go home again