UKZN - SDS Seminar October 22, 2007 Kathleen Diga Mobile Phones and Spending Patterns in East Africa

Telephones Worldwide 4 billion mobile & fixed phone subscribers 61 % from developing countries

4 billion mobile & fixed phone subscribers

61 % from developing countries

African Mobile In 2006: 192.5 million subscribers (ITU 2007) 4.8 % world users BUT increase of 660 % since 2001

In 2006: 192.5 million subscribers (ITU 2007)

4.8 % world users BUT increase of 660 % since 2001

African Mobile

Uganda Telecom - GNI $338 USD 3 million subscribers 27.4 million people - 2.4 billion minutes of domestic calls (2006/07 fiscal year)

- GNI $338 USD

3 million subscribers

27.4 million people

- 2.4 billion minutes of domestic calls (2006/07 fiscal year)

Uganda Mobile

What we are Learning The importance of: Policy Mobile Telephony African Expertise and Innovation ICTs and Health Service Delivery Not just focusing on mobile technology Networks

Policy

Mobile Telephony

African Expertise and Innovation

ICTs and Health Service Delivery

Not just focusing on mobile technology

Networks

The Importance of Policy Inappropriate regulatory policies that inhibit growth and competition are the single biggest barrier to connectivity in Africa today Policy analysis and influence is necessary in development; we cannot be lead by mere technological solutions

Inappropriate regulatory policies that inhibit growth and competition are the single biggest barrier to connectivity in Africa today

Policy analysis and influence is necessary in development; we cannot be lead by mere technological solutions

Uganda Telecom Policy Uganda Communications Act (1997) National Framework Uganda Communications Commission Rural Communications Policy & Rural Communications Development Fund (RCDF)

Uganda Communications Act (1997)

National Framework

Uganda Communications Commission

Rural Communications Policy & Rural Communications Development Fund (RCDF)

Rural Access In Uganda, 80% of the population live in rural areas. research is required to monitor and evaluate that the goals of universal access are being met

In Uganda, 80% of the population live in rural areas.

research is required to monitor and evaluate that the goals of universal access are being met

ICT4D research Technocentric More focus on impacts and development centred, theoretical framework Heeks found ICT4D focus more on “case application of the theory rather than the theory itself Gender inequality in ICTs Household expenditure studies ( Milne, 2006, Maliwichi et al. 2003: 227; Ureta, 2005) Banerjee and Duflo from Massachusetts Institute of Technology (MIT) PICTURE Africa

Technocentric

More focus on impacts and development centred, theoretical framework

Heeks found ICT4D focus more on “case application of the theory rather than the theory itself

Gender inequality in ICTs

Household expenditure studies ( Milne, 2006, Maliwichi et al. 2003: 227; Ureta, 2005)

Banerjee and Duflo from Massachusetts Institute of Technology (MIT)

PICTURE Africa

The Importance of Mobile Telephony Mobile telephony is THE critical African technology of today 80% of all phones in Africa are mobile phones Africa has the fastest growing mobile market in the world Mobile phones are business, a health link, a 1000 conveniences and necessities in one easy to understand device

Mobile telephony is THE critical African technology of today

80% of all phones in Africa are mobile phones

Africa has the fastest growing mobile market in the world

Mobile phones are business, a health link, a 1000 conveniences and necessities in one easy to understand device

Mobile biz

Case Study: Uganda

Research Problem 1) how access to mobile phones and mobile phone services affect the spending behaviours within poor households in Eastern Africa, and 2) how have these adjustments in spending habits within homes actually assisted the poor out of poverty.

1) how access to mobile phones and mobile phone services affect the spending behaviours within poor households in Eastern Africa, and

2) how have these adjustments in spending habits within homes actually assisted the poor out of poverty.

Research Timeline N-Vivo, TAMS Analyzer South Africa Transcribe, datta sort, code, analyze Aug.-Oct 2007 mobile diaries, Focus Groups, Household Interviews Kambakia, Meru, Kenya Conduct field work in Kenya July 2007 mobile diaries, Focus Groups, Household Interviews Katote, Wakiso, Uganda Conduct field work in Uganda) June 2007 request dataset from RIA! 2004 Johannesburg, South Africa Meet partner LINK Centre (Wits May 28-31, 2007 research manual, research tools Durban, South Africa Draft on report - Research Design / Methodology May 2007

Livelihoods Framework

Research Themes A) Substitution (Cost-Benefit) B) Financial Planning C) Intra-household Dynamics

A) Substitution (Cost-Benefit)

B) Financial Planning

C) Intra-household Dynamics

Data Collection Dataset - RIA! 2004 e-Access survey 12 households interviews in total (6 Wakiso, Uganda, 6 Meru, Kenya) + mobile diaries Key Informants (airtime retailer, mobile phone repair, microfinance, etc.) 5 Focus Group Discussions (3 women’s groups, 2 men’s groups, between 5-9 people in group) Ethnographic observations

Dataset - RIA! 2004 e-Access survey

12 households interviews in total (6 Wakiso, Uganda, 6 Meru, Kenya) + mobile diaries

Key Informants (airtime retailer, mobile phone repair, microfinance, etc.)

5 Focus Group Discussions (3 women’s groups, 2 men’s groups, between 5-9 people in group)

Ethnographic observations

Monthly Consumption Expenditures per household 1999: Rural: 109, 400 Urban: 266,300 Total: 134,100 ($ 81 USD) 2003: Rural: 113,300 Urban: 266,100 Total: 139,300 ($84 USD) 44 % on food, drinks, tobacco, followed by rent, fuel, power (19 %), 3 % to communication and transport Source: Uganda National Household Survey: Report of the Socio-Economic Survey (2005: 41)

1999: Rural: 109, 400

Urban: 266,300

Total: 134,100 ($ 81 USD)

2003: Rural: 113,300

Urban: 266,100

Total: 139,300 ($84 USD)

44 % on food, drinks, tobacco, followed by rent, fuel, power (19 %), 3 % to communication and transport

Source: Uganda National Household Survey: Report of the Socio-Economic Survey (2005: 41)

Poverty Absolute poverty line (Appleton: 2001) in 1993/94 - $ 34 USD per capita per month National: 36,433 UGX ($ 22 USD) (2002/03) mean welfare measure per capita Meet calorie needs (3000 calories), food basket of poorest half of population, and some allowance for non-food needs. 34 % spent less than their caloric requirements

Absolute poverty line (Appleton: 2001) in 1993/94 - $ 34 USD per capita per month

National: 36,433 UGX ($ 22 USD) (2002/03) mean welfare measure per capita

Meet calorie needs (3000 calories), food basket of poorest half of population, and some allowance for non-food needs.

34 % spent less than their caloric requirements

Poverty No growth in consumption, % of people in poverty in rural areas rose from 37 % (1999/00) to 42 % (2002/03) - 7.0 million to 8.5 million persons in poverty

No growth in consumption, % of people in poverty in rural areas rose from 37 % (1999/00) to 42 % (2002/03) - 7.0 million to 8.5 million persons in poverty

One Household: Umaru 40,000 per capita ($ 24 USD) $ 104 USD last month

Preliminary Findings Village Access (Mobile services) & Ownership with household head Purchase: 1st time: 2nd hand 1) “Mobile phones bring development” Savings through Roscas, ‘kibina’, savings box, borrow from neighbor “ I saved to buy a call box first and the profits will let me buy a mobile” (shop keeper)

Village Access (Mobile services) & Ownership with household head

Purchase: 1st time: 2nd hand

1) “Mobile phones bring development”

Savings through Roscas, ‘kibina’, savings box, borrow from neighbor

“ I saved to buy a call box first and the profits will let me buy a mobile” (shop keeper)

Substitutions: “ I also decided to use a bicycle yet I work from far in town for purposes of saving this transport cost and buy[ing] topup for my telephone”. Savings in transport expense, wasted time, lost revenue of closed shop Replace store bought goods -cheaper substitute, like garden, or go without “ Okay, sometimes, I be wanting to eat rice and I say no, then we just eat cassava from my garden and then I buy airtime.” “ Sometimes I’m hungry, I sacrifice eating.”

“ I also decided to use a bicycle yet I work from far in town for purposes of saving this transport cost and buy[ing] topup for my telephone”.

Savings in transport expense, wasted time, lost revenue of closed shop

Replace store bought goods

-cheaper substitute, like garden, or go without

“ Okay, sometimes, I be wanting to eat rice and I say no, then we just eat cassava from my garden and then I buy airtime.”

“ Sometimes I’m hungry, I sacrifice eating.”

Substitutions “ I had only 5000 UGX and decided to put money on my mobile phone and just called them, I didn’t go.” “ That’s very good, I like it. He would rather not give us money for food but put airtime on the phone. Because it is the phone that makes money.”

“ I had only 5000 UGX and decided to put money on my mobile phone and just called them, I didn’t go.”

“ That’s very good, I like it. He would rather not give us money for food but put airtime on the phone. Because it is the phone that makes money.”

Preliminary Analysis “ Mobile phones bring poverty” High Cost of Ownership - airtime spending for non income earning calls (airtime management ) - limited mobile phone use to family members

“ Mobile phones bring poverty”

High Cost of Ownership

- airtime spending for non income

earning calls (airtime management )

- limited mobile phone use to family members

Intrahoushold Dynamics Women working at home given daily allowance Use small portion for airtime when necessary Exacerbate partner contro Small business: use mobile / funds to pay child’s needs - generally not for her personal needs

Women working at home given daily allowance

Use small portion for airtime when necessary

Exacerbate partner contro

Small business: use mobile / funds to pay child’s needs - generally not for her personal needs

Vulnerability Mitigate the depth of poverty, coping and recovery - less costly with mobile Mobiles have brought security and assistance to the unsecure BEFORE: Insecurity of house and business Emergency Provisions : Physical Search Ex. brick maker

Mitigate the depth of poverty, coping and recovery

- less costly with mobile

Mobiles have brought security and assistance to the unsecure

BEFORE:

Insecurity of house and business

Emergency Provisions :

Physical Search

Ex. brick maker

Vulnerability After: “ I can’t imagine what would happen If I couldn’t contact grandchildren.” - Convenience - Timely Responses - Improved Planning - Less costly

After:

“ I can’t imagine what would happen If I couldn’t contact grandchildren.”

- Convenience

- Timely Responses

- Improved Planning

- Less costly

Household Shock: Umaru

Discussion / Further Debate universal access policy is still missing the target on reaching the most vulnerable individuals in society - more targeted programs Universal education for all policy not reaching all society ($ 127 USD a year) Literacy / training on mobile phone use Electrification Possible private public partnerships in the extension of ICT services to specific rural services like health units, education institutes, agricultural extension

Thank you Kathleen Diga Masters Candidate UKZN - SDS Research Intern, IDRC Kdiga[at]idrc.or.ke

Kathleen Diga

Masters Candidate

UKZN - SDS

Research Intern, IDRC

Kdiga[at]idrc.or.ke