|Issue:||Africa and the Middle East 2008|
|Topic:||Mobile broadband – bringing services to AME|
Luca Ferrari is SmartTrust’s General Manager for the EMEA region; he has held a number of senior management positions since joining the company. He has an extensive background in the telecommunications market with over 15 years of experience. Prior to SmartTrust, he worked for Ericsson in the UK and with Forem, a space, military and telecommunications applications technology supplier. Mr Ferrari has an MSc in Electronics Engineering (Cum Laude) from the Polytechnic Institute of Milan.
Broadband enabled mobile phones will soon bring revolutionary services, such as banking and money transfer, to rural and low-income segments of society. In Kenya, people without bank accounts already transfer money to people in other parts of the country by buying airtime and transferring it to a third party who, in turn, redeems it for cash. Operators are hoping that the Football 2010 World Cup transmissions to mobiles will spark interest in broadband handsets and the services they provide.
The Internet has not yet significantly penetrated the Middle East and Africa; only a few per cent of the population there access and use it. Only in South Africa, Saudi Arabia, Iran, Jordan, Morocco and the United Arab Emirates do more than ten per cent of citizens use the Internet. However, with the advent of high speed mobile data networks the Internet is set for explosive growth. With nearly ten cellular phones to every landline telephone, mobile networks have already revolutionised communications in the region during the past ten years. The revolution has been limited, however, to voice communications. The Internet and data communications have not yet achieved the same success as voice. Africa and the Middle East are well positioned to leapfrog traditional wireline broadband data services and go directly to mobile Internet access; the growing abundance of mobile devices capable of utilising GPRS and the implementation of 3G networks in the region are the reason. The ability to deliver un-tethered data can vastly better the daily life of the region’s people. Such data access will, for instance, make financial services available to those without bank accounts (the majority of the population), distribute news and greatly improve the quality of social networking with friends and family. With the build out of mobile data networks based on GPRS, EDGE, HSDPA and 3G technology it becomes possible for financial institutions to open for business – all that is needed is a data enabled mobile phone and handheld printer. In remote or less affluent areas without bank services this low cost branchless banking alternative opens the doors to basic financial services. In Sub-Saharan Africa this means that the 45 per cent of the 400 thousand villages reached by a mobile signal can be reached by financial services instead of the meagre 2.6 per cent served by fixed telephone service today. Because the branchless channel has a minimal cost, low value payments, loans and deposit transactions can be effectively delivered to the masses. The branchless banking alternative for financial services means that people do not need to spend a day without pay travelling to the nearest bank office and back. They will also have access to the security a bank has to offer for their savings. In some countries, like Kenya, an improvised version of branchless banking is already in use. Kenyans can purchase airtime and transfer it to the subscription of a third party, typically a relative, who can then cash in this airtime at a local store. This primitive form of fund transfers demonstrates the potential of full service branchless banking. More advanced solutions even allow offline transactions. These could use the mass storage capability of a micro-SD card in the mobile phone and the ability to implement a local security challenge on the SIM card to allow transactions in a store and forward mode. The SIM provides a secure method of identification. This new bank-using population can use low cost mobiles supporting short message technology as self-service terminals to receive basic information about their account status. To realise this potential, mobile operators need to be able to remotely, over-the-air (OTA) manage the terminals and SIMs used. The SIM card provides the secure environment for implementing the banking application and, as it is under the control of the mobile operator, is protected from tampering. The mobile operator securely manages the SIM on the behalf of the customer and financial institution. To use the data services the terminal needs to be automatically detected, properly identified (model, vendor and capabilities) and configured. Ideally, the same management platform should be used to ensure that both SIM and terminal are managed in unison. Unless successfully and consistently managed by the operator, users will not be able to access their mobile financial or data services and will quickly desist. Since the tellers of the branchless bank will not be mobile telecommunications technicians, they will need technical support from the mobile network operator to ensure that branch operations (terminal and SIM) are properly configured at all times. Internet access via mobile phones opens up a new world in a region where access to cable television – perhaps even broadcast television – and broadband Internet is largely unknown. News can always be accessed and can be quickly disseminated throughout the region. Imagine an entire continent cheering on their favourites in the MTN African Cup of Nations and FIFA World Cup competitions, seeing the action as it happens regardless of where they are. The coming FIFA World Cup in South Africa may very well be the spark to ignite data services by motivating people to access the games via the Internet from their mobile phones. The varying degrees of literacy pose a challenge, since text based information in a largely illiterate population has much less value than pictures and video. The great number of languages spoken in the region complicates service adoption considerably; there are about 100 major languages, and almost 2000 languages in all, spoken in Africa. Accordingly, content must be visual to be of universal interest. The 2010 FIFA World Cup, with the universal interest it arouses and its high visual appeal, may well be the catalyst that makes mobile television a success in Africa. Correctly configured devices, as in the case of financial services, are required to enjoy this mobile experience. The Middle East and Africa is a region of extremes; at one end of the spectrum we find relatively uneducated, often illiterate, users of ultra low cost terminals and at the other end we have highly educated smart phone users. It is not reasonable to expect illiterate subscribers to negotiate the intricacies of configuring access nodes, proxies and the like. GSM networks have played a large part in maintaining family unity. Often family members leave home for long periods as they go to where the jobs are. Voice and SMS (short message service) have helped them stay in touch. The ability to access and use data services will help to strengthen and maintain family bonds. Pictures of loved ones can be sent using MMS (Multimedia Messaging Service). Blogs provide a vehicle to maintain ethnic and family connections whilst far from home. The real-life social network prevalent in the region will lift the Internet directly to Web 2.0 where social networking and user created content are so important. Convergence of voice, data and media communications has been pursued by many European and American telecommunications companies, but most Europeans and Americans still use different sorts of terminals for these services. In Africa and the Middle East, operators can skip such convergence problems and immediately offer a triple play service with voice, data and TV on one terminal without, as in Europe and America, displacing existing terminals. Building the network does not guarantee success. The operators of Africa and the Middle East need to avoid a mistake that has contributed to the slow uptake of data services in the industrialised countries. The industrialised world put the focus upon the network, with everything done to support the network and its implementation, but the network and the mobile phone are only ways to deliver services to subscribers. Operators need to centre their attention upon the subscriber. The wide variety of mobile phones in use pose a significant hurdle to the success of data services. Mobile phones have a wide variety of capabilities and money earning potential; a low cost handset with only voice and SMS, for example, will deliver less data revenues that an advanced smart phone with GPRS and 3G support. Africa and the Middle East have repeatedly surprised the world with their rapid mobile network growth, far surpassing even the most optimistic projections of analysts. The continued growth and expansion, especially via phones with advanced data – and money earning – capabilities will pave the way for services that improve the quality of life – financial services to those without bank accounts, championship football, and the warmth of a child’s smile on their father’s phone. It will not be easy for operators, but by focusing upon the subscriber’s needs, abilities and appropriate handsets they will continue to surprise analysts with their success.