Keeping it local in Africa and Asia

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“We are helping to create a middle class in Afghanistan,” says Karim Khoja, chief executive of Roshan, the country’s second mobile phone provider. “Our shareholders could have brought their own people here and sold the service themselves - they would have made more money. But we are here to create an Afghan business environment. So we hired locally and looked for small businessmen as partners,” he adds.

Roshan, launched in 2003, employs nearly 500 staff, most of whom earn salaries several times those of government employees. The carrier’s dealer network gives work to a further 600. Now everyone in Afghanistan wants a mobile phone. “We get delegations from villages begging to be covered by our network,” says Mr Khoja. “Communications is not a need based on how much money you have, it a basic human requirement,” says Johan Bergendahl, vice-president of marketing at Ericsson

Sceptics point out that carriers and suppliers face saturated markets in wealthier countries and need new places to sell their wares. Indeed much of the chatter at 3GSM, the mobile industry’s main trade show, was on how to connect the next 1bn wireless customers, mostly in the developing world. Nokia estimates that there will be 3bn cellphone users worldwide by 2010, up from the current 2bn. “Emerging markets will represent 80 per cent of this growth,” says Walid Moneimne, vice president of Nokia Networks.

But there is increasing evidence that information and communications technology (ICT) really does make people better off. “Studies show that a one point increase in the infodensity index - a measure of connectivity - increases GDP per capita by $124 to $164,” says Mr Moneimne. “There is a much stronger effect when starting from low infodensity levels. This will drive significant economic development.”

The Ethiopian government sees ICT investment as key to the nation’s economic future. “We now believe that access to information infrastructure is something comparable to liberty for Ethiopia,” says Tesfaye Biru, chief executive of the Ethiopian Telecommunications Company (ETC). “This is one means of tackling the development issue. We missed all of the previous opportunities so we cannot afford to not be on board this revolution.”

ETC is investing $600m on broadband and wireless infrastructure over the next two years. “We have shifted the focus from the urban elite to equitable access throughout the country,” says Mr Tesfaye. Today, just 1m of 73m Ethiopians have phone lines.

“Ethiopia has a bold, long term vision. They are investing now so that the country can emerge in 10 or 20 years,” says Shahab Meshki in Cisco’s Nairobi office.

The foundation of ETC’s programme is a nationwide broadband network based on advanced MPLS kit from Cisco. One of the first actions was to interconnect all of Ethiopia’s 550 high schools with broadband data networks, enabling fast internet and IP-based broadcasting of eight educational TV channels. Likewise, the nation’s 610 district-level government offices now use the network for voice over IP, video-conferencing and remote training. The next step is to link in the country’s 15,000 village government centres.

In Afghanistan, Roshan is working with the United Nations to issue public call offices (PCOs) to demobilised militiamen. In return for their weapons, the former fighters are issued GSM-based pay phones that they can operate on a commission basis. Many are now earning a healthy $150 to $200 per month from PCOs.

But Roshan measures its impact in a wider context. When the operator wanted to launch a marketing campaign, there were no local partners to support it.

But Afghan entrepreneurs set up an advertising agency which has become part of the global JW Thompson network and counts Coca-Cola and Philip Morris as clients. Another innovation has been the hiring of women: 23 per cent of Roshan’s workers are female.

In Africa, wireless application provider Manobi is using mobile data to reap economic gains for the rural poor. Working with operator Sonatel in Senegal, Manobi has developed an application that allows farmers and fisherman to check the market price of their goods instead of being at the mercy of wholesalers and middlemen.

“They were not getting anything near the market price,” says Thierry Albrand, vice-president at Alcatel. In Senegal, farmers have increased their revenues by 30 to 70 per cent, he says, as well as saving several hours a day by eliminating wasted trips to low paying markets.

The application uses pictographic icons so producers can check the current and historical prices of their crops in different markets. They can then make sell offers via SMS to wholesalers and even restaurants.

At the end of June, South Africa’s Vodacom launched a similar service with Manobi in the country’s Mekuleke region, a very poor agricultural area.

But ETC’s Mr Tesfaye warns that building infrastructure is not enough. “Investing in technology alone will not get us where we want to be. You also need to transform workforce culture and skills,” he says.

That is why the Ethiopian carrier is upgrading its 50-year-old training centre into an engineering college. The government is also seeking to entice back its highly-educated expatriate community with tax breaks and dual citizenship.

“Infrastructure will no longer be a stumbling block. Now we expect private businesses to develop content and applications,” says Mr Tesfaye.

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