Mobiles and markets – providers of telephones for Africa’s rural poor?

Bridging the ‘digital divide’ – a gap between those who can access and use information technology and those who cannot – is seen as an essential part of development. Despite the wide publicity about promoting information and communication technologies (ICTs), most rural Africans still lack telephone services. Without basic telephone systems the development benefits of the information revolution – particularly the internet based ICTs - will by-pass many of the world’s poorest people.

A report from the Panos Institute urges policy-makers to pay more attention to the challenge of providing telephones to rural people in Africa. Warning that the new competitive telephone environment is greatly improving services for urban people but neglecting rural areas, the authors ask whether:

• mobile telephones can provide the solution for rural areas or should fixed lines still be the goal?
• governments are doing enough to liberalise the market and allow competition?
• the level of rural phone use will ever be enough to provide a profitable market for private providers?
• people have a right to communicate?
• governments have a responsibility to subside phone services in the same way as they do roads, health and education?

Sub-Saharan Africa has about 10% of the world’s population but only 0.2% of the world’s one billion telephone lines. Discounting South Africa, sub-Saharan Africa has only 4.6 million fixed lines, of which a mere 75 000 are public telephones. In 15 countries over 70% of lines are located in the largest city.

The cost of renting a phone connection in Africa averages almost 20% of per capita Gross Domestic Product (the value of a country’s annual output of goods and services, per person) compared to 1% in high-income countries. A local dial-up internet account for 20 hours a month is three times more expensive than in the USA. Only 20 African countries have more than five thousand dial-up subscribers. Communication infrastructure remains focused on external rather than internal communication. It is usually easier to place a call to Europe from an African capital city than to call a nearby town or even another district in the same city.

Mobile phones are spreading dramatically and now far exceed fixed lines – Uganda has seven times more mobile phone subscribers than fixed line users. However, mobile services are not picking up the shortfall - where demand for fixed lines is unmet. User costs are too high to allow Internet access and coverage is confined to major urban areas.

Other technologies are becoming affordable. Radio transmitters can be used to make phone calls by the Voice over Internet Protocol (using the Internet as a medium for communication). Equipment for long-distance links using high frequency satellite transmitters and radio now costs only US$1,000–US$2,000. When local area networks and satellite transmitters are combined, connections can be affordably brought to any remote rural area using cheap terrestrial radio connections. Unfortunately, most African telecom regulators either prohibit such links or charge unaffordable license fees.

Most African governments are committed in principle to universal access but are not taking the steps needed to achieve it. Overcoming the challenges to providing rural services within a predominantly market-oriented telecommunications environment will require:

• questioning the assumption that providing rural connectivity is unprofitable
• changing the protected status of many former state-owned providers
• understanding how the absence of roads, electricity and postal services undermines the viability and value of rural telephony
• subsidising the rural sector and encouraging flexible and cost-effective new technologies

Rural telephone systems run the risk of slipping off the global policy agenda. The New Partnership for Africa’s Development (NEPAD) has failed to address the need for rural communications structures. It is important that rural telecommunications policy should not be made by technocrats only. It should be the subject of debate involving donors, governments, the media, civil society and the rural people and the poor themselves.

Source(s):
‘Completing the revolution: the challenge of rural telephony in Africa’ by Murali Shanmugavelan with Kitty Warnock, Panos Report No 48, Panos Institute, April 2004 Full document.

Funded by: Department for International Development, Norwegian Agency for Development, Cooperation, Swedish International Development Cooperation Agency, International Development Research Centre

id21 Research Highlight: 28 September 2004

Further Information:
Murali Shanmugavelan
The Panos Institute
9 White Lion Street
London N1 9PD
UK

Tel: +44 (0) 20 7278 1111
Fax: +44 (0) 20 7278 0345
Contact the contributor: muralis@panoslondon.org.uk;

Panos Institute, UK

Kitty Warnock
The Panos Institute
9 White Lion Street
London N1 9PD
UK

Tel: +44 (0) 20 7278 1111
Fax: +44 (0) 20 7278 0345
Contact the contributor: kittyw@panoslondon.org.uk

Other related links:
'IT: are the poor being left out in the cold?'

'Beyond the digital divide: harnessing ICTs for rural development'

'Do marginal communities make good markets for telecommunications services?'

'Integrating Modern and Traditional Information and Communication Technologies for Community Development' from UNESCO

'Map showing the amount of telephone and internet connectivity in Africa' from ELDIS

'Information and communications technology (ICT) can be used as a tool to strengthen > communities, democratic institutions, development efforts, and local economies' from BRIDGES

'United Nations Information and Communication Technologies Task Force' from UN