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Mobile phone networks: Public policy choices


The spontaneous and seamless evolution and growth of the mobile phone business in Africa over the last 26 years if understood in its proper context can provide useful signposts and decision support pillars on available critical public policy choices and options.

Opinion by Mutumwa Mawere

At a time when Africa is rising, a rational expectation is that the quality of life for the majority of the continent’s inhabitants ought to be improving, but the reality is that the drivers of the economic growth witnessed in many of the countries are external people.

The missing knowledge gaps that exist about Africa’s corporate past and legacy can best be bridged if we take advantage of the corporate experiences of our time.

During our time, the mobile phone network business has taken its own personality and now has a character that is different from what is generally expected of Africa and its people.

Each African state has its own corporate citizens that operate in the mobile phone space.

The market penetration has appeared to be effortless and yet behind the business models is real actors who have stepped up to serve at different points in the value chain.

Shareholders are generally perceived to be the owners of companies and, therefore, the primary motivation often associated with any business endeavour is profit maximisation and yet in reality the lessons from the mobile phone industry is that the primary motivation behind the establishment of the first mobile phone network was the objective reality that the technological advancement could be put to use to address a genuine market gap that the state could not fill.

The experience so far shows that private people motivated by self-interest can be relied upon to efficiently respond to human needs.

If anything, entrepreneurs in the mobile phone industry have demonstrated that they are capable of organising their own affairs without the need of a big brother.

The interest in using the experience of the mobile phone industry in Africa as a reference point in framing the kind of questions that have to be addressed in order to create an Africa that can deliver the promise of a prosperous, cohesive and inclusive society is primarily based on the demonstrated ability of the industry to create new jobs and deliver incomes.

In post-colonial Africa it is not unusual for politicians to claim that they alone are the best protectors of the poor. This assertion is based on a mistaken notion that the state’s role is that of a protector and not an enabler.

In 1986, when the first mobile network was launched, the cost of a handset was about $3 000, but today, the cheapest handset costs about $7.

The significant reduction in the cost of terminal devices has been effected by a combination of technological advances as well as competition.

The last 26 years have seen competition in the innovation front, which has seen new devices and services being introduced. The customer has been the ultimate beneficiary.

The increase in the number of connections in Africa has allowed more people to participate in the marketplace, and in so doing, promote democracy in the mobile phone economy.

The politics of Africa has not been easy to democratise, while the mobile phone industry has demonstrated that the market can produce efficiencies as well as improve affordability.

The days of spending hundreds of dollars for a handset and more money per minute of talk time as well as for data transmission seem long gone.

New technologies that have been introduced by the industry have also created new opportunities not only for the users, but also for the millions who play critical roles in the value chain.

The phone with a keyboard is increasingly replacing computers for many tasks as well as improving literacy among Africa’s citizens who would otherwise be left out of the digital revolution and the possibilities that it offers.

Africa is now part of a global family where, increasingly, every phone screen is a terminal device that has opened a new window for people to pursue myriad opportunities.

The true power of a connected Africa is yet to be fully realised, but it cannot be denied that the journey travelled so far has resulted in the reduction of barriers and in a more connected Africa.

A shadow hanging over much of the progress made by the mobile phone industry will always be a predatory state with actors who believe that they can produce smarter and more efficient outcomes through some schemes of social engineering.

The temptation exists that the state that has failed to produce the dynamism that the mobile phone industry, for instance, has been able to generate, may be tempted to nationalise the industry with predictable and disastrous results.

The fact that no political actor has been able to legitimately claim the credit for the benefits that the mobile phone industry has been able to produce exposes the fallacy of the assertion that the interests of the poor are best protected by state intervention.

It is difficult for a casual observer to fully comprehend what supports the industry in terms of infrastructural investments.

The phones that are used are supported by infrastructural investments that require capital, but the advances made so far in terms of investments clearly confirm that Africa can support commercial business models.

If all the money that has been deployed in the mobile phone industry were to be put into one basket, the numbers are actually staggering but what is refreshing is that funds have been mobilised with relative ease.

Furthermore, skills have been created in the industry and any skills gaps that generally characterise the African market have been bridged with external and internally generated skills.

The cost of building roads and power stations is no different from the kind of money required to build a wired Africa any yet the industry has been able to tap into global capital markets for required funds without any visible intermediation of the state and its actors.

The challenges that most African states face in mobilising resources of a capital nature appear to be non-existent where the private sector is involved.

The native black Africans who have ventured into the industry have not fared badly in terms of raising capital for their projects.

The post-colonial experience has produced a dependency syndrome at the state level to the extent that most of the budgets of African states necessarily have to incorporate the contribution by donors to be complete.

If the mobile phone industry has managed to defy the pessimism that is often associated with investing in Africa, why is it that the African state actors who by all standards are intellectually smart have not been able to convert their rhetoric into outcomes that improve the quality of life of the generality of the African people?

When choices are made as to what matters to the future of the African people, it often is the case that the rich experiences that Africa has produced are ignored in the interests of framing the African condition using the prism of a colonial past.

No one can claim that colonialists or even imperialists created the mobile phone industry in Africa. We saw the industry being born, we saw the players grow and we have seen the impact of the industry of peoples’ lives.

As witnesses and beneficiaries, we can competently proclaim that Africa is better for the choices made by state actors that the interests of the poor in terms of access and affordability could be best protected if the industry was left to private actors.

It has been argued that Africa’s past has a lot to do with its present but we have seen many ideas being transformed into concrete projects and outcomes to allow us to draw lessons and conclusions.

We can safely conclude that Africa’s better days are yet to come only if people who have made it a habit to think for others can pause and reflect on what the world would be like without their intervention.

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