Africa Says "Call Me Back"

Reporting in their “oddly enough” section recently, Reuters noted that one-third of all cell phone calls made in Africa are “missed.” While odd to Reuters, “missed” calls are a generally accepted method of communicating in Africa. The practice of “beeping,” which involves phoning someone and hanging up so the burden of the return call cost is on the receiver, was created by cost-conscious users. (In most markets outside the U.S., cell phones charges are billed only to the calling party.) Frustrated local phone operators, whose lines are tied up with non-income generating exchanges, are actively seeking methods to generate nominal revenue from this practice including offering a limited number of “call me back” text messages for free with accompanying fees for increased use.

“Beeping,” while unanticipated by wireless operators, is a smart adaptation of technology to better suit user needs and is currently under study by Microsoft Research. Cash-strapped users can continue to use their phones to communicate with friends and family as long as someone else foots the bill. This practice comes with a host of etiquette rules like not beeping a romantic interest and the one with more wealth pays. While such rules help to make “beeping” more socially acceptable, it is still considered nominally intrusive by receivers and demonstrates the degree to which users are willing to inconvenience or be inconvenienced in order to communicate with one another via cell phone.

Wireless operators have the opportunity to benefit from users' willingness to suffer minor inconveniences in return for service. With emerging advertising models, operators allow users to make a phone call for free or at subsidized rates in return for viewing (or listening to) a short ad. Operators can sell ad space to corporations interested in reaching the emerging mass markets of developing countries. Skeptics may question whether cash-strapped cell phone users are an interesting target market for advertisers. Vital Wave Consulting research demonstrates that cell phone users, even those earning less than subsistence-level income ($2 per day), have funds available for the purchase of goods and services. For instance, in Nigeria alone, individuals earning less than $2 per day represented a $40 billion market last year. Add this to other large markets and the African continent begins to represent a significant growth opportunity for consumer companies that face saturated or low-growth markets in developed countries. With advertising in exchange for free or lower-cost phone calls, former “beepers” could be the next billion pairs of eyes and ears to corporations seeking such growth opportunities in emerging markets.

Also in the news:

• India's broadband connectivity numbers are falling
• CDMA still kicking in Africa
• International remittances equal to a Fortune 500 company

Remittances to fund mobile phones and minutes - why not PCs?

Posted by Karen Coppock
___________

NPR had a story on electronic money transfer service, Mukuru, this afternoon. Mukuru allows the immigrant community to send money - in the form of gas vouchers and mobile phone minutes - to their relatives back home in Zimbabwe.

The Mukuru business model is not new. Several firms, including MamaMikes of Kenya and Thamel.com of Nepal, enable immigrants to direct their money transfers to specific purchases or purposes. This phenomena is commonly referred to as the "productive use of remittances," which is somewhat of a misnomer as the companies offer gifts such as roses, candy and televisions as options.

In all three cases - Mukuru, MamaMikes and Thamel.com - the company accepts the money transfer request online, hence taking advantage of the technically savvy immigrant population. The family member back home then receives a text message notifying them that they have a gift or voucher waiting for pick-up. Thamel.com adds an extra touch of delivering the gift and then sending the immigrant a picture, or video, of the family member with their new gift or voucher in hand.

Mobile phone minutes are gift options on all three services, which is logical given that mobile phone minutes are an alternative currency in many poor countries. Thamel.com and MamaMikes also offer many brand-name mobile handsets as gift choices. None of the three firms have brand-name PCs as gift options - perhaps a missed opportunity for computer companies interested in reaching the next billion consumers in emerging markets.