Evening at Cape Point on the tip of South Africa

While the business world is preoccupied with the global economic recovery, a mobile revolution is quietly reshaping the marketplace in the developing world. In Africa, mobile phones are providing access to communications for millions of people who’ve never had fixed communications let alone cell phones. I’ve written before about the impact that such ‘leapfrogging’ is having on African business.  Now, we’re beginning to see exciting and substantial commercial projects taking shape, particularly in the service sector.

By the numbers

To call this a ‘revolution’ is hardly hyperbole. Consider the scale of mobile industry’s growth in Africa. According to a recent report by the International Telecommunications Union, the number of mobile subscribers skyrocketed from 5% of Africa’s population in 2003 to over 30% by the end of 2008.  Today, some 400 million Africans have mobile phones — that’s 100 million more than in North America.

Since only a third of Africa’s billion people have handsets, there’s plenty of room for more growth ahead. But, the interesting story, I think, is how the mobile phone is already remodeling African economies and creating promising, new opportunities for businesses and individuals in the region.

Mobile phones are enabling rural and low income people to join the economy while creating a stable infrastructure for businesses and emerging consumer markets.  Mobile communications are making it possible for new services to develop and thrive.

At the junction of mobile and web

Africa’s mobile subscribers are using handsets to access services that consumers in developed markets typically get from the fixed internet. The junction of mobile and web is a green field for inventive engineers and entrepreneurs.

New, innovative mobile applications are being developed in sectors ranging from banking, agriculture and fishing, medical, education, to government and non-profits.  It seems that every week, we read about a novel way that mobile technology is being used to meet the consumer needs.

M-banking, as mobile-banking is known, is arguably Africa’s most successful mobile-enabled service sector so far. Last year, m-banking initiatives were launched in almost every country across the continent. As banks and mobile operators join forces to deliver m-banking programs, Visa and MasterCard are watching the sector closely hoping to ‘leapfrog’ into markets where no viable payment infrastructure currently exists.

Kenya’s Safaricom was one of the first mobile operators anywhere to roll out an m-banking program, M-Pesa. Originally it was used solely for money transfer but Kenyans are increasingly using M-Pesa to pay their utility bills.

Taking this a step further, m-banking is enabling another layer of services — known as ‘m-commerce’ — where goods and services can be bought, sold or traded. In remote regions where the fixed-line communications are thin or non-existent, m-commerce can enable buyers and sellers of goods and services to find each other.

What’s next?

As new land-based and submarine cable deployments slated for later this year make 3G widely available in many parts of Africa, we’re likely to see m-commerce grow which should mean more investment by the business community and, ultimately, more jobs for Africans and improvements in their quality of life.

Africa’s mobile revolution is bringing as many challenges as opportunities. Governments on the continent must keep pace with dynamic mobile economy by taking courageous steps to encourage outside business investments.   African governments must develop templates for working collaboratively with businesses to enable their citizens to enjoy the benefits of the mobile revolution.

One thing is clear: there’s no stopping the growth of the mobile industry in developing markets, especially in Africa. The mobile phone is helping to put the continent on a path toward greater economic sustainability.  I find it utterly fascinating to see how innovative businesses and imaginative people are harnessing the power of connectivity in Africa.

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As always, I’d love to know your perspective.

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Want more info?  Here’s an October ’09 piece in the Guardian, “Africa Calling…” and a New York Times article from the same period.

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