Information and Communication Technologies for Development

I am a recent user of mobile technology having resisted subscribing to a mobile phone service until I started my second year of graduate school which meant separation from my family. So maybe I am not the right person to comment on its usefulness but there is something that I found very fascinating during my last trip to Cameroon. An which may also explain the success of the mobile technology in Africa.

It is true that the prepaid alternative has been the bonanza for telecom operators as it opened the market to an enormous number of individuals, especially low-income individuals, who did not maintain a consistently solid level of revenues that was required by the monthly plans. But one feature that I found equally important is the distribution channels used by telecom operators. If you happen to run out of credits in any streets of Douala, you will always find someone, often a woman, to provide you with credits in exchange of cash. The transaction is very simple and very fast. These ladies often hold a set of phone cards which need to be scratched in order to obtain the secret code to replenish the mobile phone. They may also ask you a phone number and have the credits shipped to the account of the person (e.g: oncle in a remote village).

At the top of the distribution channel, the operator deals with a limited number of distributors who have themselves a limited number of affiliates, affiliates who themselves might have affiliates and so on. At each level of the distribution channel there is redistribution of the total revenue through commissions. And at each level, there is a strong incentive to perform as each affiliate is allocated a limited number of cards. It is my guess that selling these cards constitutes for some of these ladies their sole source of revenues as they don't have any other activity. Moreover, this activity does not require any specific skills (just the ability to count and phone) which offers an opportunity to low-income and low-skilled people.

It is difficult to know whether they are fairly retributed for their effort but the availability in great size of this cheap labor has certainly help the telecom operators. As opposed to the US where you have to go to a store to buy more minutes, in Cameroon, everything happens right in the street. This is a lesson for any entrepreneur attempting to build a successful business in Africa. The idea is to replicate the telecom experience and build a distribution network that is ubiquitous and not very costly relying on the availability of a large pool of young unemployed and low-skilled individuals to market even high-tech/high-value products such as mobile service.