Sunday, October 29, 2006

Mobile Capitalism

In 1998 the World Bank sponsored an email conference on technology and globalization, that I was involved in. At that time, eight years ago, Africa suffered a lack of infrastructure for basic phones services, let alone available service for computers. In fact most of the developing world lacked phone access.

Many email discussions on Labour Net for instance were conducted by someone with a computer forwarding email to faxes and getting faxed responses back.

Today globalization of technology has proved that infrastructure such as telephone does not have to be land based, poles, wires, interchanges, but can now be accessed by satillite and cell phones. Computers which are still unaffordable are being replaced by cell phones.

Africa's 'Lord of the Ringtones'

Computer science students at the University of Nairobi are learning how to design their own "value-added services" in a nine-week course entitled "Mobile Phone Programming for Entrepreneurs."

The class is taught by Nathan Eagle, a research scientist at the Massachusetts Institute of Technology, who says the traditional focus on computer programming has become increasingly misplaced.

He said: "A lot of people here don't have access to computers. Mobile phones are the way they're getting connected."

The irony is that Africa is the source for a rare metal used in cellphones which comes from the Congo and is found in the areas where endangered Gorilla's live.

The phenomena is sweeping the developing world.
Allowing people in distant villages who never communicated with each other to do so. And of course it has increased the spread of capitalism replacing the barter based economies of the localized free markets. Which means the market becomes dominated by capitalist monopolies.
Cellphones Catapult Rural Africa to 21st Century - New York Times

Phoney finance

Mobile banking is just one example of a wider phenomenon in South Africa. With its odd mix of advanced capitalism and developing-world economics, the country is successfully luring people who hitherto dealt only in cash or barter to the world of formal finance. A simplified kind of account called Mzansi was launched in 2004 to reach the unbanked, and portable banks and ATMs have been rolled out in townships and in the countryside. To this fast-changing scene, mobile-phone banking looks to be a promising addition. Millions of South Africans send money to their relatives in other parts of the country. And most of these sums, which add up to about 12 billion rand ($1.5 billion) each year, still move informally.

No cheap call for cellular network acquisitions

RAMPANT acquisitions in the cellular network industry have seen four players grow to dominate Africa by serving 40% of all subscribers.

Yet there are still 115 operators on the continent, providing plenty of fuel for the acquisition frenzy. The largest operators are MTN, Vodacom and the Middle East’s MTC and Orascom.

But the price tag for acquisitions is reaching a point where even the richest Africans may have to bow out and let the oil rich Arabs muscle in instead.

Recent takeovers have cost more than $1000 for each subscriber — an anomaly when Africans are among the poorest, lowest-spending users in the world. Africa has 165-million users and an average penetration of 18%. That means the potential for growth is still there, analysts agreed at the GSM Africa forum in Cape Town last week.

Of 472-million new users expected to join networks around the world this year, 48-million would be in Africa, said Devine Kofiloto, a principal analyst for Informa Telecoms. Yet the growth potential cannot be gauged purely by Africa’s population, as the majority are too poor to afford cellphone services and penetration would stabilise at about 32%, he said. The payback for acquisitions is also taking longer, as the average revenue per user is plunging as cellphones reach the poorer echelons of society.


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