How mobile for development changed lives in the past decade

Kenya has developed a reputation as one of the most technologically advanced nations in Africa over the past decade, with established Internet infrastructure that has aided it to benefit from mobile for development, a position underpinned by its strong Internet penetration and adoption through its well-established set-up, disruptive innovations that’s closing digital divide — driving socio-economic growth into the future.

Latest Communications Authority of Kenya (CA) data show that mobile penetration has hit 112 percent, with 53.2 million subscribers, a 13 percent year-on-year rise. Telco giant Safaricom also slashed its price per megabyte by 42 per cent in the year ended 2019, a stimulant for the growth.

At 13.7 megabits per second, Kenya’s average data connection speed is almost twice the global average, second in Africa, and even beating the United States’ speed of 10.7mbps. This has aided its rising popularity of solutions-based innovations.

M-Pesa, Kenya’s flagship mobile innovation, has also played a key role as a catalyst for growth. The innovative apps have spurred financial inclusivity, boosted health, education, humanitarian and energy-related services.

As the Fourth Industrial Revolution unfolds, government has not been left out as witnessed in its usage in mass registrations of persons through Huduma and on e-citizen digital services and e-payments. Here are some of the milestones over the past 10 years.

SUBSCRIPTIONS

Latest GSM Association (GSMA) insights show that for the past 10 years of mobile for development, 823 million people have been connected around the world but lack mobile broadband coverage and 37 mobile operators have made 52 commitments to reduce gender gap in their mobile money or Internet customer base.

Further, 14 million smallholder farmers benefited from mobile agricultural services while more than two million women and their families accessed life-saving health and nutritional information via their mobile phones

Mobile money digital transaction value grew at more than twice the rate of cash in, cash out values in 2018.

There are currently 155 mobile operator signatories of the humanitarian connectivity charter, operating in more than 108 countries, £33 million (Sh4.4 billion) additional funding raised by ecosystem accelerator start-ups through crowding-in.

There are 1.6 mobile-enabled pay-as-you-go solar home systems are now installed globally, and the digital identity programme working with partners to develop innovative identity solutions for the one billion people.

Globally, the number of unique mobile subscribers reached the five billion mark in 2018. Since early 2019, more than four billion people in emerging markets, or 62 percent of the population, can benefit from the access to mobile, according to GSMA.

Ten years ago, about a third of the mobile subscribers had a mobile Internet subscription, today it is more than two-thirds who are active mobile Internet users, representing more than 2.6 billion people.
This revolution in mobile access worldwide has impacted social systems and shifted the way people communicate and access to information.

SUSTAINABLE GOALS

The GSMA represents the interests of mobile operators worldwide, uniting more than 750 operators with over 350 companies in the broader mobile ecosystem, including handset and device makers, software companies, equipment providers and internet companies, as well as organisations in adjacent industry sectors.

It opened its regional office in Nairobi in March 2018, and in sub-Sahara Africa, has presence in Democratic Republic of Congo, Cote D’Ivoire, Nigeria, and Zambia.

While celebrating 10 years of mobile for development, GSMA looked back to reflect on the milestones and its contribution to all the 17 of the UN Sustainable Development Goals (SDGs).

Two-thirds of global population (5.1 billion) are mobile subscribers, half (3.5 billion) are using Internet services.

The sector contributed $3.9 trillion (4.6 percent) to global GDP. Two billion use their mobile phone to purchase goods and services while 1.3 billion access health services and 1.4 billion use mobile to improve their education or that of their children. Additional 140 million people in rural areas connected to the mobile Internet for the first time.

DIGITAL INCLUSION

Mobile ownership and Internet adoption remain far from universal — away from rural, illiterate, and disabled persons.

Across lower-middle-income countries, 15 percent of adults still don’t own a mobile phone and 45 percent will still be off by 2025, according to GSMA. There is still coverage of 750 million people globally who live in areas not covered by mobile broadband networks and 3.3 billion people who are covered but might not be using Internet services, revealing a glaring usage gap.

One way to resolve the barrier, according to GSMA, is through mobile Internet skills training toolkit, designed to introduce customers to mobile internet and equip them with necessary skills to use popular applications.

Estimates indicate that more than 75 percent of refugees and displaced people are women, children, elderly and persons with disabilities.

Kim Viljoen, GSMA insights manager, says digital inclusion can only be achieved if most underserved population are placed at the centre of product and service ideation, design and development.

MOBILE MONEY

“In the early days of mobile money, there was a lot of uncertainty and not many success stories. Fast forward to its second decade, the mobile money industry continues to reach new heights,” says GSMA.

“Today, many industry players have scaled, growth in transactions and accounts is steady, mobile money has become the absolute essential innovation, intersecting with almost every other development topic and it is enabling a breadth of partnerships in humanitarian, in agriculture, in energy, among others, many of which were not imagined in the early days of mobile money.”

With 866 million registered accounts and live services across 90 markets, the mobile money industry is offering a financial future to millions of customers around the world.

The third Global Findex shows transformative progress in financial inclusion around the world, with 515 million more adults reporting account ownership in 2017 than in 2014. The mobile money industry has played a pivotal role in this journey.

The majority of these countries are in sub-Saharan Africa, where mobile money is the leading force for financial inclusion with 21 percent of adults having a mobile money account — nearly twice the share in 2014.

More than one billion people remain off-grid, but in less than five years, the solar pay-as-you-go model has improved the quality of life of some eight million people, primarily in sub-Saharan Africa.

PARTNERSHIPS

To date, there are four billion unique mobile subscribers, 2.7 billion mobile Internet users and 299 million active mobile money users in emerging markets.

Nevertheless, mobile operators face a plethora of challenges, including sustainable competitive advantage in the telecoms sector, which is increasingly becoming difficult to achieve. Digital disruption has made it difficult for telcos to keep up with the pace of innovation.

According to VC firm Partech, in 2018, out of 54 African countries, only 146 tech start-ups raised a total of just $1 billion (Sh100 billion) in equity funding.

Today, in emerging markets, more than anywhere else, there are opportunities for operators and start-up to collaborate. Mobile operators have reached the scale that start-ups lack, while start-ups have the local innovation mobile operators need.

Donors have played a vital role in supporting emerging digital ecosystems in developing markets, providing risk capital for ideas that companies may not have had resources to pursue.

For instance, DFID’s early investment in Safaricom’s M-Pesa, which enabled the service development team the freedom to experiment.

This helped grow the seed of an idea, which first aimed at allowing microfinance institution customers to repay small business loans, to the flourishing financial service that by 2016 had lifted 194,000 or two percent of households in Kenya above the poverty line as well as being forecast to generate 50 percent of Safaricom’s revenues between 2019-2022.

FRONTIER TECH

By implementing new digital technologies such as blockchain, artificial intelligence (AI) and Big Data, organisations are finding new ways to strengthen the efficiency of their programmes, make better-informed decisions, and reach more people with fewer resources.

Early blockchain projects are being used to improve people’s access to self-sovereign identities, bring new levels of transparency to the distribution of international aid, and improve the efficiency of cash transfers.

Early evidence shows that these projects could provide mobile network operators new opportunities to create new revenue streams, cut know-your-customer compliance costs, and related barriers as well as contribute to the SDGs.

Africa’s phone shipments fell 1.9 percent year-on-year in 2018, basic and feature phones accounted for 59 percent of all shipments (215.3 million units), compared to 41 percent for smartphones, a potential frontier for growth.

CONVERGENCE

The social impact of digital is profound: for individuals, mobile phone ownership supplemented with Internet access is associated with an improvement in how people evaluate their own lives, as evidenced by Gallup’s analysis showing increases in both average life evaluations and net positive emotions.

At the macroeconomic level, it’s now beyond questioned the economies of the future will be digital. World Economic Forum and Accenture analysis estimate the combined value of digital transformation to industry and society at $100 trillion over the next decade.

Over the last decade, convergence between models is becoming prevalent, from messaging platforms such as WeChat getting into payments space to ride-hailing apps such as Grab venturing into logistics and food deliveries.

A similar trend is also observed in the mobile for development space, where mobile money providers are shifting towards ‘payments as a platform’ model, connecting consumers with third-party services.

DIGITAL INCLUSION

Recent technological advancements can have a positive impact on the barriers that lead to digital, financial and social exclusion.

However, all initiatives using new technologies should be deployed in a manner that respects an individual’s privacy and incorporates principles of ‘privacy by design’. Due to low levels of digital literacy, many low-income consumers do not see the importance of keeping their personal information or mobile devices, secure and private.

In terms of exclusion, few are more excluded than people with disabilities (PWDs).

Today, about one billion have some forms of disability, with up to 190 million facing severe impairments, making it hard to navigate society and much-needed services.

Research shows that in many countries, a disability and development gap is growing: unless people with disabilities are routinely included in development efforts, their socio-economic status often remains static while the status of their non-disabled peers surges ahead.

Another striking statistic is that only 10 percent of PWDs have access to the assistive technology they require to live more autonomous lives.

The gender gap in mobile phone ownership remains static at 10 percent and increases to 23 percent for mobile Internet use and 33 percent for using mobile money.

“As mobile technology continues to be a critical enabler of economic growth, if women are digitally excluded then they will be increasingly economically and socially excluded as well,” the report says.

E-CITIZENS

As citizens move from paper-based to digital forms of identification, mobile operators will find new opportunities to unlock access to a wide range of critical services, including those offered by public institutions.

The digitisation of agricultural value chains is a key emerging area and offers growth opportunities for mobile operators. In developing countries, agriculture contributes between 10 percent and 35 percent of gross domestic product. Smallholder farmers and agribusinesses, however, face many inefficiencies within agricultural value chains.

The mobile industry has an opportunity to address these challenges. Mobile operators can partner with AgriTech innovators to develop digital tools to boost productivity.

CLIMATE CHANGE

Beyond the dissemination of information via mobile phones, technology is crucial to bridge the data gap in weather monitoring and forecasting.

For instance, microwave data from backhaul networks and mobile-based geolocation data – GPS, cell ID, can be combined with Big Data from satellites and sensors to create flood warnings or hyper-localised forecasts for communities that are vulnerable to climate change.

Further, services such as digital weather and crop insurance are replacing the traditional insurance model. GMSA study with CGAP revealed that digital payments increased water service provider revenues by 15 to 37 percent while decreasing collection costs by 57 to 95 percent.

UN Office for the Coordination of Humanitarian Affairs estimated that in 2019, there will be 150 million people in need of aid, and in 2018 this came at a cost of $22.5 billion.

A digital connected system, accessible and sustainable mobile-enabled services can play a central role in supporting people affected by crises — with about 93 percent of refugees covered by 2G and 3G networks, offering opportunities for digital humanitarian response.