From banks to crime, mobile revolution hits Africa

DAKAR (Reuters) - From banking to education and even organized crime, mobile phones are revolutionizing the lives of ordinary Africans as foreign phone companies scramble for a share of the world’s fastest growing market.

Two men stand outside a roadside stall selling pre-paid cellphone cards in Kinshasa, in this file photo taken October 3, 2003. From banking to education and even organized crime, mobile phones are revolutionizing the lives of ordinary Africans as foreign phone companies scramble for a share of the world's fastest growing market. REUTERS/Dino Mahtani

Having shunned Africa in the 1990s, the companies are now lured by cheaper technology, stronger economic growth and the success of pioneer firms such as South Africa's MTN MTNJ.J.

In the mid-‘90s there were more phones in New York city than the whole of Africa. This year, the African continent passed the milestone of 200 million cellphone users -- just two years after reaching 100 million.

Analysts predict the figures may nearly double again in five years as Middle Eastern operators flush with cash like Celtel TELE.KW battle European heavyweights such as France's Orange FTE.PA for a share in the market.

Nigeria’s former Communications Minister David Mark -- now president of the country’s Senate -- once quipped that the telephone was not for the poor. But those days are long gone and the change for millions of Africans has been dramatic.

“A cell phone is a source of pride, a status symbol ... for people who used to be completely marginalized,” said Solange Konan, manager of a cocoa farmers’ cooperative in Ivory Coast.

African farmers once faced long journeys, braving potholed roads and bandits, to check export prices for their goods, but now they just phone the port to ensure they get a fair price. “It is the greatest invention of the century,” Konan said.

For the four-fifths of Africans working in the informal sector, mobiles allow small businessmen from electricians to carpenters to stay in touch with clients and organize work.

“The mobile has really increased productivity in Africa,” said Thecla Mbongue, researcher at Informa Telecoms and Media.


Mobiles outnumber fixed lines in Africa by more than 10 to one. But with an estimated 63 percent of the continent’s nearly 1 billion people living in rural communities -- the highest rate in the world -- mobile phone companies face major challenges.

“Our return on investment can be very, very low in rural areas,” said Beston Tshinsele, general manager of Celtel in Chad, one of Africa’s most sparsely populated nations.

Solar panels and cheap bio-fuels allow Celtel to overcome a lack of power in the bush, while more powerful transmitters mean coverage is being extended to the arid heart of Africa.

Cell phones are plugging gaps in other services. With banks scarce outside cities, Kenya’s Safaricom launched a project this year to allow clients to transfer money using an SMS -- the recipient can then collect cash from a supermarket or shop.

Many observers hope that mobiles can help achieve the United Nations’ objectives to halve poverty and achieve universal education by 2015 under its Millennium Development Goals (MDGs).

"Mobile technology can play a fundamental role in reaching the MDGs in Africa," said Vitalis Olunga, regulatory affairs head at Safaricom, partly owned by Britain's Vodaphone VOD.L.

But mobile phones also bring new opportunities for crime.

“organized crime groups are moving away from dirty crimes, like drug trafficking, into clean crimes, such as telecoms fraud,” said Giles Lucas of software specialists Basset Labs.

Scams include gangs which steal mobiles and then sell calls for cash, or which hijack lorries carrying charge cards. Mafias may also penetrate the database of phone companies and remove users from billing lists so they make free calls.

“Fraud is on the upswing because new technologies provide greater opportunities,” said Lucas.

But he added: “If we eliminated all the stolen phones in Africa, companies would be left with no clients.”