Mobile business models in African rural communities

Goetz, Marieta (2009-03)

Thesis (MPhil (Information Science))--University of Stellenbosch, 2009.


Mobile telephone subscription in developing countries has increased by more than 500 percent since 2005, with Africa experiencing the highest growth rate globally. Amongst Africa’s 306.5 million subscribers, recorded in 2008, an unexpectedly high adoption rate of the technology by poor, often illiterate rural communities is observed. Mobile telephony generally provides African rural users access to electronic communication for the first time. Providing access to communication, information and knowledge, mobile phones present a platform for economic and social interaction in rural Africa. The extent of the resulting positive socio-economic impact on the developing world has lead to mobile telephony increasingly being viewed as a potential development tool for the socio-economic upliftment of the rural poor. This thesis is inspired by the potential for value creation to end users of mobile telephony, leading to the proposition that the rapid expansion of mobile telephony in rural Africa can contribute significantly to the sustainability of these communities’ rural livelihoods. For this proposition to be valid, mobile telephony has to provide value beyond being communication tool. It has to provide value in income generating activities by increasing opportunities for access to financial and social capital with mobile business models appropriate to the rural African context. To assess the appropriateness of mobile value offerings, the rural African context was analyzed using the Sustainable Livelihoods Framework. Through multi-level analysis, the challenges and issues that influence the lives of the rural poor were explored and the dominant livelihood strategies in terms of income generating activities were identified. Apart from agricultural income streams, waged labor, migration and micro-entrepreneurial activities provide non-agricultural income streams. Creating an appropriate mobile business ecosystem for rural Africa requires the collaboration of a complex network of actors within a value constellation to co-produce value for the end users. Three conditional factors were identified for mobile telephony and emerging mobile business models to contribute successfully to sustainable livelihoods: adaptation of the technology by providers, user appropriation to make the technology their own and the assimilation of it into their livelihood strategies. These factors were researched for validation through the study of existing literature and reported case studies. It was found that these three conditional factors were unequivocally met. Firstly, the mobile telecommunication industry active in Africa is seen to successfully adapt and innovate solutions that are relevant to African rural communities’ vulnerabilities and livelihood strategies. Secondly, African mobile phone users have successfully adopted and appropriated mobile telephony to create value for themselves in their livelihood strategies, often independent of external interventions. They are claiming ownership of the technology and not merely using it as a communication tool. Thirdly, by assimilating mobile telephony into their livelihood strategies, value-creation within their income generating activities have been made possible. This value creation is impacting users’ social and financial capital positively. This thesis concludes that mobile telephony and emerging mobile business models are contributing to increasing African rural dwellers’ income generating potential, reducing their vulnerability to shocks, and providing them with a voice; thereby contributing to sustainable rural livelihoods.

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