Chris Locke works for an organisation that represents the interests of nearly 800 of the world’s mobile phone operators. In this interview, he shares his thoughts on Africa’s mobile phones market, the developmental impact mobile tech is having and what he sees as the greatest barrier to bringing the internet to the rural poor.
To start us off, please tell me a little about what you do
I’m the managing director of the development fund at the GSMA. What the development fund does is work with the mobile operator community, our members, and also the development community, such as the Bill and Melinda Gates Foundation, USAID, Rockefeller etc. Looking at how the mobile industry can take development technologies to scale.
So, we concentrate very specifically on how you can take technologies to a country-wide or multi-country-wide level by showing that it is sustainable business for the mobile phone operator. So the mobile operators then play an important role in investing themselves in time and resources to take take those things to a very large number of users.
The exponential growth of mobile phone usage in Africa has been widely reported, particularly the evidence of how parts of the continent have leapfrogged into interesting and complex uses of mobile phone technology. Did GSMA predict or expect that rate of growth?
We hoped to stimulate growth that back in 2005. The very first project of the development fund was a project called Emerging Market Handset. We realised that affordability was a major barrier for people at the base of the pyramid – to get access to mobile phones and therefore benefit from the ways in which a mobile can support you, personally or in your business. What we did was get a bunch of operators to agree to buy in scale then we sent an RFP [request for proposals] to handset manufacturers to say that there will be a significant order from the mobile industry – if they could get a handset below $30. It needs to be below $30 to be affordable. Motorola won and released a handset that was the first handset that was specifically targeting users at the base of the pyramid and well over 20 million handsets went into the marketplace.
Five to six years ago, we were already stimulating the space but as you say, we’re now in a situation where many countries are leapfrogging. Kenya is always the example people use – there needs to be more case studies than just Kenya – but what you see with M-Pesa is that Kenya is one of the most sophisticated countries in the world when it comes to using mobile money. And not a small pilot scale, at a massive national scale.
So I think the exciting time we’re in now is that mobile usage has become pretty much the only ubiquitous connected technology at the pyramid and people are now innovating on that as a platform, coming up with services and products which, in many cases, are leapfrogging what we have in more developed countries.
The African Development Bank published a report in May which suggest that one-in-three Africans were now part of the ‘middle class’. Do you think they’ve been accurately labelled and how could mobile phone usage change?
We’re now seeing, especially with M-Pesa, services specifically built to support entrepreneurship and to support businesses. But even before that, one saw very creative and innovative uses. Jonathan Donner [an academic who researches the subject of mobile usage in developing countries] wrote a paper in 2004 on the way mobile phones were being used in Rwanda by small businesses in very interesting ways to help them support their business.
So, I think mobiles are being used in ways that is supporting a new class – I don’t know if I would call them middle class, or if the categorisation works in the same way it does in developed markets – but I think you are certainly seeing a new connected class and a new enabled class.
The thing that’s really going to excite me is when people start using mobile data. I’m always saying to people what I’m looking for is the first game like Angry Birds written by someone in Kampala. Suddenly people have access, with very little overhead, to app platforms that can potentially reach global distribution and have a global source of revenue – for a one or two-person operation. I think the mobile web will bring an entirely new level of innovation in developing markets beyond just outsourcing data processing to countries like India. I think we’ll see a new creativity and a new sense of energy as people get entrepreneurial in the same way as people are entrepreneurial in the [Silicon] valley but in developing markets.
Development tends to be optimistic about what new technology can achieve but so far a lot of the services respond to basic needs, for example, access to market or mobile health. Could the next Silicon Valley really be in Africa?
Absolutely. This is a market of a couple of billion people. Creating mobile data services to serve the needs of Kenyans and Ugandans and Tanzanians is in itself a huge market. I think there are fantastic sustainable businesses that will come out of those countries. I don’t think that it’s a given that the understanding of what those customer needs are will come from the existing large corporations. There is a tremendous opportunity for entrepreneurial innovation in those countries, developed to serve the needs of those communities and I can absolutely see that happening.
Can you be confident of that?
Well, we’re getting to the stage where the tools you need to be able to [reach large markets] are readily available, accessible and affordable. The ideas are also all there in people’s heads, it’s just giving them the opportunity to develop them and launch them.
What about regulation and opening up the market? There were protests in Accra last year about the lack of competitive pricing and poor services from Ghana’s mobile phone operators. Do you intervene on pricing?
We cannot intervene as we are a trade association and are legally forbidden from doing so – we’d be done for anti-trust. However, what we do do, is work with mobile operators on policy. One of the significant aspects of handset and airtime costs in Africa is taxation, so we have worked a lot with regulators and governments. There are many African countries who levy luxury taxes on the most basic mobile phone services and I think mobile has gone beyond being a luxury to a necessity. If luxury taxes were removed, it would improve the affordability of the service.
Tell me a little about the fund’s gender project mWomen. What are the gender implications of mobile phone usage? How do you specifically target women with mobile phone services?
We conducted a piece of research called ‘mobiles and women: a global opportunity’ and what we pointed out first of all was the severe disparity in terms of ownership of mobile phones. We know access is becoming easier and programmes such as Village Phone by the Grameen Foundation, a lot has been done but ownership still remains an obstacle.
Owning a phone gives rural women a sense of autonomy and a sense of identity – often for the first time. There are two reasons for why we think targeting women is a good idea. The first, and in purely commercial terms, is that it’s a big market. We’ve pointed out to the industry that it is a $13 billion opportunity to deliver services to women. But the double bottomline we show in all of our programmes, is that there is then a massive developmental impact as well. In our research we show that women felt more secure if they had a mobile phone, were able to start their own businesses and what we’re seeing is that by encouraging operators – who spend a fortune on marketing, let’s not forget – to recognise women in their communications, there’s also a certain amount of cultural change.
A good example is Roshan in Afghanistan where it is very difficult for women to get a mobile phone. Roshan were very creative and put out marketing targeted at men, explaining to them why it would be beneficial for their households for the women to get a phone. It was hugely successful and increased the number of women on their network from a couple of percentage points to double digits. It is important to understand what the cultural constraints are but also what the cultural impact could be from empowering women.
Another operator we think has a very good programme and we are encouraging people to copy is in India where Uninor have a ‘hand-in-hand’ project which develops centres that are training women in ICT skills, showing women how to use mobile phones to develop businesses and supporting their businesses in other ways. One Uninor beneficiary has gone from starting a small business and through the confidence she’s built, the skills she’s developed and the exposure she’s received, is now running for a position in local government. That’s a single anecdote but it’s indicative of the kind of impact you can have when you’re giving someone a mobile phone. Obviously, the technology alone doesn’t do that but it acts as a catalyst to give someone the ability to have a certain amount of autonomy.
How many operators are enabling women through their phones to alert someone of dangers to their personal safety?
The operator, Cell C, in South Africa is already do this. One of the aspects of Cell C’s tariff for women is a specific number they can call to report abuse or violence and get access to help.
We don’t mandate to operators the services they should run. What we do is show them the case studies and best practice and they develop what they need for their own market. What Cell C has done with their tarrif is look at what the needs of women are in the local market. Our work is to give them the tools and services to meet those needs.
Has it gotten easier to speak to your stakeholders about the developmental not just the financial benefits of mobile phones?
What drives a lot of the thinking is the market, understandably. We face both ways: explaining to the development industry how the mobile industry can achieve development goals much faster.
The one thing the mobile industry has is scale: both in terms of network and people-reach. There are interesting ways you can use that scale infrastructure. One of our programmes, Community Power, [http://www.gsm.org/our-work/mobile_planet/green_power_for_mobile/4599.htm] recognised that a lot of off-grid base stations produced up to 50% more electricity than they used, so we are working with operators to redistribute that electricity to the local community. Suddenly, you’re distributing power as well as communication.
There is much to be excited about. One of the projects within that programme is looking at vaccine fridges. Vaccines are often spoiled due to a lack of refrigeration. We have 680,000 off-grid base stations around the world, many in areas where vaccines are spoiled. So projects are looking at connecting fridges to the base stations, using the excess power – a cheap form of electricity that currently is being wasted. This will then have a massive impact on reducing spoilage of vaccines and in turn improving health outcomes.
Viom Networks, in India, is going one step further and putting in along with the fridges, computers linked to local governance sites, charging stations and health centres. These centres have become a development army knife of sorts.
Switching direction somewhat, mobile phones have in part become the new way for organising and communicating protests, with anxious governments putting pressure on mobile phone operators to suspend services – as MTN Cameroon was temporarily forced to do in March. Do you advise your members on best-practice during times of civil unrest? And how does the foundation negotiate being both a development fund and a business proposition?
I can’t comment on that. We’re an apolitical trade association and we’re there to support the industry to launch services that we know have development impact but we don’t have a political agenda.
Finally, what then does the future hold? Are there any challenges that might change the growth trajectory?
Both the opportunity and the difficulty is in mobile data. I think there is huge potential there as we’ll genuinely be giving people access to one of the best inventions of the human race, the internet. Giving those at the base of the pyramid, who have been information-poor, suddenly access to information in an affordable way will just be incredible. But you never know what might happen and that’s what makes it exciting. Listening to and watching this innovation develop over the next few years is going to be a phenomenal thing.
But ultimately, the massive barrier to that is literacy. And what do you do about that? We’re seeing the price of handsets and smart phones dropping and we seeing the price of access to data also dropping but if we still have massive illiterate populations, they will certainly not benefit.