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Navigating and Internet Mobile in Africa

Completed on the: 2015 - 07 - 02Author: Wilfried BeugréPrincipal references: eMarketer’s The Global Media Intelligence Report Middle East and Africa 2014 TNS’ In Focus: Navigating Growth In Africa report InMobi Insights: State Of App Downloads Q3 2014 Africa Economist.com Interviews with african people (principally from Côte d’Ivoire, Gabon, Cameroun), from 12 to 60 years old.

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Econonical context Middle East and Africa (MEA)

Economic growth across the Middle East and North Africa was about just 2.2% in 2013, according to the International Monetary Fund (IMF), thanks to:- higher public spending offset by lower oil production, - meager private investment growth - continuing political and social instability in many countries (Arab Spring).

The IMF has predicted better financial results in 2014 and 2015, due to:- rising demand in the US, Europe and other markets,- more public and private investment.

Those trends should lift regional growth in real GDP to 3.2% in 2014 and 4.5% in 2015.

But the same source noted some risks:- complex political transitions- weak confidence, high unemployment,- low competitiveness- large public deficits, in many cases.

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Econonical context Africa

According to the World Bank’s “Africa’s Pulse” analysis, economic output in sub-Saharan Africa increased 4.7% in 2013 and would have climbed a further 5.2% in 2014 due to “rising investment in natural resources and infrastructure, and strong household spending.”

The World Bank also called out a 16% gain in net foreigndirect investment to sub-Saharan Africa last year, due to the discovery of new oil and gas reserves in severalcountries. Moreover inflation went down and several nations welcomed more tourists, too (5.2% more in 2013 according to the UN World).

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Econonical context Africa

The World Bank report did highlight areas of concern:- the pronounced sub-Saharan “infrastructure deficit” (expensive and unreliable electricity, roads’poor condition...),- lower prices for exported commodities such as copper and iron (lower demand from China and increasing supply from other parts of the world, such as Latin America),- natural disaters (in 2013, a drought caused up to 50% of local crops to die, driving up food prices),- upcoming national elections in several countries may slow the pace of much-needed structural reforms,” the World Bank suggested.

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Although communications infrastructure is less sophisticated in most of Africa than in the wealthier states of the Middle East, the sheer size of the African countries’ populations means comparatively larger online populations.

eMarketer estimates that 336.5 million people in the Middle East and Africa (MEA) will access the internet at least once per month in 2014.

Within four years, the region will register almost 458 million web users, with more than 30% of all residents regularly online.

Communications accross Middle East and Africa (MEA)

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eMarketer projects that smartphone penetration across MEA will grow more than 31% this year, but fewer than 9% of the entire population will have such a device.In 2018, that share is expected to approach 15%.

Communications accross Middle East and Africa (MEA)

Affordability is the key to much of the smartphone boomin the region—and in African countries particularly. Tablets are also proliferating, though they more expensive(shipments of PC tablets to MEA grew 111% year over year in Q4 2013, according to the International Data Corporation.

With respect to more basic mobile phones, MEAis already a star, and eMarketer estimates that 672.6 million people in the Middle East and Africa will have at least one mobile phone in 2014, and pass 730 million in 2015.

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African population as a potential target

African youth-driven urbanisation provide a large and concentrated audience for media and products without relying on unreliable infrastructures.The same audience can serve as powerful brand advocates among rural population.

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African population as a potential target

Low-cost handsets and smartphones are changing the digital landscape rapidly, leapfrogging Africa pastthe PC to create a digital infrastructure based largely around mobile technology.In Sub-Saharan Africa, only 12 percent of the population owns a desktop PC, with laptops at the same level of penetration; already, 18 percent of the population owns a smartphone.

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African population as a potential target

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African population as a potential target

This chart is an example that shows that african population is more focused on services that can be useful even on “dumb”phones, like SMS and in particular, USSD.

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There are huge variations as well between the consumer landscapes of the different major metropolitan areas. Moreover African cities encompass great inequality, with many urban populations remaining in the BoP, and most continue to be blighted by blackouts and energy rationing that have a huge influence on their inhabitants’ priorities.

African population as a potential target

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Peter Njoki is the eldest child of three, the only son and the main hope and comfort to his mother Mary since her husband passed away.

He lives with his family in ‘Koch’, a sprawling Nairobi slum that is home to thousands of families.

Peter’s father was a boda boda (bicycle taxi) driver but the family had to sell the bike to pay for his funeral expenses. Mary now helps to make ends meet by

selling mangoes. However, the main support for the family these days is Peter, who dropped out of school to take on as money became tight.

Peter has always loved phones. From the age of 10, he was nicknamed <mtundu wa simu> or ‘the take-apart guy” because of his habit of rebuilding and customizing handsets.

In Koch, most people like Nokias. As they say, you could use one as a ball in Rugby sevens and it would still work. There are cheaper, fake Chinese versions on the market, but you can’t depend on these in the same way. Pete is now 23 years of age and he has loads of

phones. Or rather, he has loads of phone parts. He sometimes heads to River Road to help the small traders fix phones and when he was there

last year he saw an ad for the new Ideos smartphone. He is now saving to get one.

Peter’s first money-making venture was to take the family’s basic Nokia 1100 and lend it, for a fee, to others in Koch. Everyone would club together and buy airtime and then share the usage: people couldn’t easily afford this by themselves. Recently though, Safaricom brought out lower value top up vouchers so that each person buys for themselves.

As a Kenyan, Peter is proud to be on Safaricom, and when the national operator introduced the mPesa mobile money service,

he quickly used it to start up his next big project; taking responsibility for the funds in the neighbourhood ‘chama’ or saving group. His latest idea is to market a game to teenagers based on missed calling. He is getting the slum kids to try out

the idea and is refining it. He then plans to ask the chama for investment to try and launch the game himself at schools or colleges. Kids prefer to play than learn but he reckons if he can find an educational angle, the schools might also be interested.

Besides paying for his sister’s school fees, Peter has been able to invest in a genuine, second-hand pair of Nike Airs for himself. He feels these went

some way towards impressing his girlfriend Faith, and the couple already have big plans for the future: looking to buy a property on the outskirts of Nairobi and putting money aside for their kids’ education.

African population as a potential target : stories

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African population as a potential target : storiesThe day starts early for Christine Awino. Her meetings often begin at 7am – and by then she has already been awake for close to two hours. First, she must prepare herself, ensuring that she is well turned-out for a day spent with her interior design clients. She checks in on the house girl that lives with her family in a gated community in the South C district of Nairobi, ensuring that

she is on course to get her 5 daughters ready for school on time. Then she has time for a quick breakfast before she leaves the house.

As an entrepreneur, Christine knows that she must be creative – and open-minded. Besides the interior design for which she is

best known, she also paints and organises events. The vast majority of her work comes through word of mouth and recommendation. She recently launched a website to advertise her business after friends who make furniture told her that they were getting more orders by advertising online. In her office she has a computer with Internet access and email but it is her mobile that is her business lifeline. Without it how could she stay in touch with clients and pick up emails when working on location? Her two eldest daughters, aged 12 and 10, both have phones. She bought them so the two girls could stay in touch with her when not at home – and also so they can play games, take photos and download music the way their friends do.

A friend told her about the Please Call Me mobile service – and though she has never used it herself, she has made sure her daughters know how to get in touch with her this way, if ever they need to.

Christine may be busy – but work is only a means to an end for her. The most important feature of her life is her family. She is proud of her husband, who owns a taxi business – and proud of the fact that they have already been able to pay off their mortgage together. She will not discuss how much she and her husband earn; it’s not appropriate for a married woman to talk that way. She exposes as little of her personal life as possible and although she has a Facebook profile, she is very cautious about how she uses it. These things are not good for marriage.

Christine is a strict disciplinarian. She enforces order on her children as a way of ensuring that they behave well, get a good education and can get ahead in life. Her sense of order also helps her to keep time available for her family in her hectic week. She often works on both Saturdays and Sundays, heading to her office to avoid distractions. But she always takes her family to church; always makes time to take them to the swimming pool on Saturday afternoons. And always has two hours free on weekend mornings for playing with her girls.

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African population as a potential target : storiesRejoice Buadi has always worked hard. In the village where she grew up, thirty miles from Ghana’s capital Accra, there is simply no other way to survive. Rejoice rents a plot from a neighbour and farms yams and the woody shrub cassava, which she sells in order to feed her family. Usually there is enough to make ends meet; but when the rains fail she is forced to borrow money. And the rains are far less predictable these days.Rejoice’s great support is her community. They rally around to lend her money when times get tough. And they support in other ways as well. When local kids steal the money she makes from selling her yams, the village headman sounds a gong to rally the community to find the perpetrators. “In

the community there is harmony,” she says.Rejoice gives back to her neighbours in any way that she can. When she has water, she freely shares it with those who have none. In recent years she has something else that she can share: a mobile phone. It was her husband who first gave her this device and

showed her how to use it – and her 9-year old daughter who came up with the idea of sending SMS messages to stay in touch with her cousin in Accra, without the need for expensive phone calls. Rejoice uses her mobile to listen to her favourite hymns whilst out working in her fields, or keeps up with the religious radio shows that are her favourites; when she hears a particularly inspiring hymn she likes to share it with her friends using the Bluetooth feature on her phone. Whenever a neighbour needs a phone, Rejoice is happy to lend hers. Last month, when one of the other farmers fell sick,

she gave the phone to his wife to call a relative with a car who could take him to hospital. Rejoice does not consider charging money to loan her mobile this way.Her ambition is to save money. She wants to stop having to rely on the social groups from which she borrows when neighbours cannot afford to lend to her. Many are reasonable but some charge very high interest rates – and these are the ones she is often forced

to turn to when times are most desperate. A bank account would help her to save and also to protect her money from thieves. By saving she can help to secure the future of her two daughters, and ensure they continue in education. But there are no bank branches near her village. Her cousin in Accra has told her that some mobile operators now offer banking services. Rejoice hopes that they will soon make such services available in her area. Until then, she will continue trusting to God and her community to support her.

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African population as a potential target

One of the first ideas that may come to ming is to create specific application to launch on the African market.It is there fore import to take into consideration:- the breakthrough application may have,- the cost per install (CPI).

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African population as a potential target

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Mobile applicationsbreakthrough

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African population as a potential target

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African population as a potential target

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African population as a potential target

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African population as a potential target

Cost per install (CPI)What it costs an advertiser to get an app installed by a user on his or her device. All cost data in this presentation is indexed to the Global CPI on the InMobi Network.

Country CPI Index = ---------------------X 100

If an imaginary country Krypton’s CPI = $0.53, and Global CPI = $2.1, then

Krypton CPI Index= -------------X 100 = 25

Global CPI

Country CPI

$0.53$2.1

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African population as a potential target

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African population as a potential target

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African population as a potential target

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African population as a potential target

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African population as a potential target

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African population as a potential target

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African population as a potential target

African markets are far from virgin territory.Even if famous brands appear absent, the consumerneeds they seek to service may already be metthrough other, less conventional means.Social networking is already a dominant feature ofAfrican mobile life – as the take-up of mobile banking and mobile wallet services often based on simple USSD solutions that do not depend on smartphone technology and are therefore widely accessible to anyone with access to a phone. Another example: M-Kopa is currentlytrialling a solar lighting system that can be controlledremotely through a SIM card. This enables ‘high-risk’customers, who were previously unable to get creditto pay for electricity, to pay for their lighting on aday-by-day basis.

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Thank you