Peter, Here are a few quick thoughts in case they may be of use.

1) Isn't a kind of relationship established under the prepaid model when
you get the SIM card? Then you're more or less committed to using the
service associated with it. As for the companies knowing their users,
are there no ways of keeping track of usership via means as simple as
counting SIM cards sold or as complex as censusing traffic (sorry if I'm
clueless on this point)?

2) What about an intermediate step of considering the complexity of the
market? It may be that there is room for an upmarket service in some
countries even while the basic prepaid model for most people can be
retained. In any event, it's hard to imagine that longterm contracts
such as the (US-based) examples you gave would be feasible for most
people in Africa - or practical for the companies to maintain.

3) Another level of market complexity in Africa is language. Already
there are localization efforts at varying stages of completion for
Amharic, Swahili, and several southern African languages (not to mention
Arabic). In some countries this would be not only an access issue but
one of expanding markets (and even perhaps user loyalty). There's even a
TTS for Swahili text messages in Kenya. But in Niger not so long ago,
where over 50% speak Hausa, about 25% Zarma and less than a quarter are
proficient in the official language of French, even the recordings you'd
hear on your cellphone were in either French or English (options 1 & 2;
no other choice). Some simple adaptations to linguistic realities in
many countries could expand the attractiveness and usefulness of the
service, especially to people with very limited means. Well worth the

4) What are the practices in other countries - say, in Peru? (since you
mention deSoto) In China, cellphones are ubiquitous and not just among
the oft-written-about expanding middle class. There are different
services, and although I don't know the market well enough, there are
cheaper and more expensive services, and prepaid cards are the general

Hope this helps.

Don Osborn

On 7/28/05, Peter Baldwin <[EMAIL PROTECTED]> wrote:

> I am writing a report for infoDev on demand patterns for ICT in
> sub-Saharan Africa with the overall goal being to convince telecom
> operators that there is more demand for services that they might think,
> and thus that there is money to be made in rolling out more
> infrastructure. (Astute readers may recall a request for examples that I
> sent out some months ago.) Since mobile phones have emerged as the
> "killer app" (at least for the time being), many of the cases I have
> been studying do, in fact, deliver services over the GSM network.
> My research has lead me to the preliminary recommendation (among others)
> that telecoms adopt a Prahalad-like approach: basically, that they
> package mobile telephony in quantities that customers in sub-Saharan
> Africa can afford, using what could be considered the prepaid model,
> Version 2.0: instead of scratch cards, end-users could "top-up" their
> accounts using the handsets themselves.  Now, however, my research has
> led me to "Stimulating Investment in Network Development: Roles for
> Regulators" <>. In
> this publication, one of the authors, Amy Mahan, makes a compelling
> argument that the pre-paid model produces negative incentives to
> building infrastructure. In essence, her arguments follow reasoning
> perhaps best expressed by de Soto; namely, that relationships are what
> is important, and are themselves a source of capital. By signing that
> hated two-year service agreement with Cingular or Verizon, we in the
> developed world are in essence sharing some of the business risk with
> the telecom, thus enabling them to make some predictions about their
> customer base, churn rate, etc., and enabling them to invest in
> infrastructure accordingly. How can a telecom operator have a
> relationship with its customers if it doesn't even know how many of them
> there are, let alone who or where they are?

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