The economic benefits of rural internet use are far from realised in South Africa, and elsewhere on the continent. A new technology is increasing efficiencies for mobile networks, and lowering the costs of rural coverage.
Opportunities given by digital money transfer service M-Pesa to safely store and manage money have lifted 2 percent of Kenyan households out of poverty, according to Popular Science.
The same technology has enabled 185 000 women to save more and start a business. Mobile technologies have also facilitated the rise of mHealth and apps like Hello Doctor, offering real-time medical advice. The applications of these technologies are often life-changing.
Using phones to register births and gather population data
From 2015, nurses in Tanzania could register births using a mobile phone, giving parents a birth certificate in a matter of days, and giving the state verified and real-time data to aid their future planning.
This ability to verify identity is increasingly important as governments across Africa, like South Africa, require mobile network operators (MNOs) to register the identity of their customers.
But in Africa “the identification gap is particularly acute … with more than 400 million people across the continent lacking an official ID, the highest proportion of the total population of any region. The problem disproportionately affects those in rural areas, vulnerable populations and women, compounding challenges such as asserting property rights and gaining access to financial services or subsidies,” reports the GSMA’s The Mobile Economy Africa 2016 (PDF).
Poor business case for rural coverage
Already tenuous commercial opportunities for mobile operators to bring connectivity to rural users are rocked by systemic problems common to low-income rural areas which contribute to challenges around identity verification.
The cost, coverage and technical literacy of rural users, combined with the high costs of network deployment and maintenance make the average rate of return per user (ARPU) too little to incentivise MNOs.
On offer: a village voice and data network
Vivada (village voice and data) is a solution created by World Telecoms Labs to address cost, coverage and technical literacy in a rural context. What is remarkable is that it looks to do all three – with compelling results as it won Best Connectivity Solution for Africa at AfricaCom 2016, and its deployment in rural Tanzania won the Best African Project at the Global Carrier Awards.
“Our background is old-school prepaid telephony. Remember back to the scratch cards – the same disciplines apply when breaking into a rural market place – price sensitivity and word-of-mouth, value and trust, is absolutely crucial. These aren’t obviously technology factors, but they’re significant factors for a successful business,” says Simon Pearson, Business Development Director at World Telecoms Labs.
“We don’t impose the solution of what we think works, rather Vivada can be adapted to the context,” he said.
The technology allows for multiple mobile network operators to not only share the infrastructure, allowing for a decrease in the total cost of ownership, but also to see their share of its use. This allows for them to be billed according to use – why should you subsidise your competition, notes Pearson.
How Vivada tackles cost and coverage and technical literacy
Coverage: It lowers the price point for connectivity, and so increases the return on investment in a rural setting. This attracts more coverage by operators.
Cost: Solar power and optimised satellite backhaul means operational costs are significantly lower. And there are more opportunities to generate an income.
“The Vivada system supports a blend of money-making services. Business models can be created using mobile voice calling and SMS. We offer support to create Wi-Fi networks, cyber cafés and call shops (for those without mobile phones) as well as money transfer. We estimate that in order to make a living, customers in each village will probably adopt at least two services.”
Technical literacy: As the convenience of mobile communication and internet access become apparent, so more users will use them. This can be seen in the way M-Pesa was adopted.
Vivada’s technology gives MNOs scope to broadcast signal over areas that they weren’t able to previously, allowing them to enter new markets or increase their efficiencies in existing markets. In Tanzania, a virtual mobile operator saw the opportunity to use the incumbent operators’ spectrum in rural areas and provide connectivity through the Vivada platform. “While sub-letting spectrum may be a hard swallow for MNOs, if there is unused rural spectrum and it can be profitably leased out, then the network is generating an income it wasn’t able to before,” Pearson said
Governments have an obligation to ensure that spectrum does not sit idle but should be employed as “efficiently and effectively as possible,” says the GSMA. “Reducing the digital divide between urban and rural areas will boost economic activity, help to alleviate poverty, improve healthcare and education, expand financial inclusion and enhance agriculture. There is no time to lose.”
Featured image: Brian Harries/Flickr