Corvinus Executive MBA

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Mobile Africa

2015. február 15. - Kevin Jackson

The impact of the mobile phone on Africa has been nothing sort of extraordinary. Over the past 15 years, the number of mobile connections has grown by 44% per year and today there are more subscribers in Africa than in Europe and the U.S. combined. Now contrast this picture with the one described by South African journalist, Tony Shapshak: “There was a statistic bandied about in the 1990s that Manhattan had more phone lines than the 55 countries in Africa.” While Africa has come a long way since the 1990s, it has only really just begun to tap into its true potential.

One of the best examples of African innovation is M-Pesa, a SMS based mobile payment system. Users can charge up their account with real money at stores or with M-Pesa agents and then use this credit to pay for almost anything by sending a simple SMS. The cost to use this service is just one SMS. This service has filled a huge gap where, according to McKinsey and Company, 80% of Africa’s adult population does not use formal or semi-informal financial services. Today, more than 50% of Kenya’s GDP moves through M-Pesa used by more than 68% of Kenya’s adult population. This is textbook industry disruption.

The lack of Internet access in rural areas has also spurred some interesting innovations that are beginning to close the gap. BRCK is a Kenyan based company that sells portable units that can supply 3G and 4G Wifi connections for whole rural communities. These units sell for just $250 and have a battery life of about 8 hours. And let’s not forget the battle that is shaping up between Google’s Loon and Facebook’s Titan for the delivery of Internet access to the most remote parts of Africa. The Google Loon project involves the use of weather balloons that float around and transmit Internet access to receivers on the ground. The Facebook Titan is a huge, solar powered drone that performs a similar function. In any case, Internet access for all Africans will soon become a reality and will add even more fuel to the mobile revolution.

Rapidly growing mobile subscriptions, rising Internet access, and adoption of mobile payments are all transforming Africa and having a direct impact on its future GDP growth. Today, Africa’s iGDP (Internet impacted GDP) is only 1.1%, but McKinsey estimates that by 2025 this number can easily jump to at least 5%-6% (similar to Sweden and the U.K.). The mobile revolution in Africa is now empowering people to innovate, create, and become entrepreneurs. This is the best news of all as Africans themselves become optimistic about their own future.

For more information on how Africa is turning mobile, please refer to the following articles:

Lions go digital: The Internet’s transformative potential in Africa, byJames Manyika, Armando Cabral, Lohini Moodley, Suraj Moraje, Safroadu Yeboah-Amankwah, Michael Chui, and Jerry Anthonyrajah, November 2013  (http://tinyurl.com/q5uatjv)  

AFRICA BUSINESS-Browse, click, pay: African retail finds growing outlet online, By Elias Biryabarema and Matthew Mpoke Bigg, February 13th, 2015 (http://www.reuters.com/article/2015/02/13/africa-retail-internet-idUSL4N0VD02520150213)

Africa in 2030: A future of smartphones, drones and digital witchdoctors, By CHRISTINE MUNGAI, January 19th, 2015

(http://mgafrica.com/article/2015-01-19-africas-tech-future-smartphones-drones-and-your-local-e-sangoma)

Mobile First: Why Mobile Phones Are Transforming Lives In Africa, By Adrian Leighton, October 29th, 2014 (http://www.oafrica.com/mobile/mobile-first-why-mobile-phones-are-transforming-lives-in-africa/)  

 

For more information about the Corvinus Global Business blogger, go to https://www.linkedin.com/in/kevinmjackson1.

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