Mobiles and Technology Spending in East Africa


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  • Presentation Agenda: How are mobile phones and mobile phone services transforming lives? Objective: To examine the external environment of telecommunications in East Africa and observe the spending behaviour changes at the micro household level on mobile phone and mobile phone services. (rural, agricultural Kenya and Uganda) Why is Google in East Africa? Review the institutions which influence the changing telecommunication environment in Kenya and Uganda. - international institutions, policy, regulators, the market - trends within the industry. What does the ‘D’ really mean in ICT4D? - the progression of ICT4D research towards development studies. Literature review of consumer spending on ICTs. Case Study: the 2 As and 3 S , not AASSS - Access vs Affordability - Livelihoods Framework: Case Study of Katote, Uganda. - the Spending Behaviour changes: Substitution, Savings and Self. Discussion: how can policies better serve or target the poor and vulnerable given the high value for telecommunications?
  • Mobiles and Technology Spending in East Africa

    1. 1. UKZN - SDS Seminar October 22, 2007 Kathleen Diga Mobile Phones and Spending Patterns in East Africa
    2. 2. Telephones Worldwide <ul><li>4 billion mobile & fixed phone subscribers </li></ul><ul><li>61 % from developing countries </li></ul>
    3. 3. African Mobile <ul><li>In 2006: 192.5 million subscribers (ITU 2007) </li></ul><ul><li>4.8 % world users BUT increase of 660 % since 2001 </li></ul>
    4. 4. African Mobile
    5. 5. Uganda Telecom <ul><li>- GNI $338 USD </li></ul><ul><li>3 million subscribers </li></ul><ul><li>27.4 million people </li></ul><ul><li>- 2.4 billion minutes of domestic calls (2006/07 fiscal year) </li></ul>
    6. 6. Uganda Mobile
    7. 7. What we are Learning The importance of: <ul><li>Policy </li></ul><ul><li>Mobile Telephony </li></ul><ul><li>African Expertise and Innovation </li></ul><ul><li>ICTs and Health Service Delivery </li></ul><ul><li>Not just focusing on mobile technology </li></ul><ul><li>Networks </li></ul>
    8. 8. The Importance of Policy <ul><li>Inappropriate regulatory policies that inhibit growth and competition are the single biggest barrier to connectivity in Africa today </li></ul><ul><li>Policy analysis and influence is necessary in development; we cannot be lead by mere technological solutions </li></ul>
    9. 9. Uganda Telecom Policy <ul><li>Uganda Communications Act (1997) </li></ul><ul><li>National Framework </li></ul><ul><li>Uganda Communications Commission </li></ul><ul><li>Rural Communications Policy & Rural Communications Development Fund (RCDF) </li></ul>
    10. 10. Rural Access <ul><li>In Uganda, 80% of the population live in rural areas. </li></ul><ul><li>research is required to monitor and evaluate that the goals of universal access are being met </li></ul>
    11. 12. ICT4D research <ul><li>Technocentric </li></ul><ul><li>More focus on impacts and development centred, theoretical framework </li></ul><ul><li>Heeks found ICT4D focus more on “case application of the theory rather than the theory itself </li></ul><ul><li>Gender inequality in ICTs </li></ul><ul><li>Household expenditure studies ( Milne, 2006, Maliwichi et al. 2003: 227; Ureta, 2005) </li></ul><ul><li>Banerjee and Duflo from Massachusetts Institute of Technology (MIT) </li></ul><ul><li>PICTURE Africa </li></ul>
    12. 13. The Importance of Mobile Telephony <ul><li>Mobile telephony is THE critical African technology of today </li></ul><ul><li>80% of all phones in Africa are mobile phones </li></ul><ul><li>Africa has the fastest growing mobile market in the world </li></ul><ul><li>Mobile phones are business, a health link, a 1000 conveniences and necessities in one easy to understand device </li></ul>
    13. 14. Mobile biz
    14. 15. Case Study: Uganda
    15. 16. Research Problem <ul><li>1) how access to mobile phones and mobile phone services affect the spending behaviours within poor households in Eastern Africa, and </li></ul><ul><li>2) how have these adjustments in spending habits within homes actually assisted the poor out of poverty. </li></ul>
    16. 17. 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
    17. 18. Livelihoods Framework
    18. 19. Research Themes <ul><li>A) Substitution (Cost-Benefit) </li></ul><ul><li>B) Financial Planning </li></ul><ul><li>C) Intra-household Dynamics </li></ul>
    19. 20. Data Collection <ul><li>Dataset - RIA! 2004 e-Access survey </li></ul><ul><li>12 households interviews in total (6 Wakiso, Uganda, 6 Meru, Kenya) + mobile diaries </li></ul><ul><li>Key Informants (airtime retailer, mobile phone repair, microfinance, etc.) </li></ul><ul><li>5 Focus Group Discussions (3 women’s groups, 2 men’s groups, between 5-9 people in group) </li></ul><ul><li>Ethnographic observations </li></ul>
    20. 22. Monthly Consumption Expenditures per household <ul><li>1999: Rural: 109, 400 </li></ul><ul><li>Urban: 266,300 </li></ul><ul><li>Total: 134,100 ($ 81 USD) </li></ul><ul><li>2003: Rural: 113,300 </li></ul><ul><li>Urban: 266,100 </li></ul><ul><li>Total: 139,300 ($84 USD) </li></ul><ul><li>44 % on food, drinks, tobacco, followed by rent, fuel, power (19 %), 3 % to communication and transport </li></ul><ul><li>Source: Uganda National Household Survey: Report of the Socio-Economic Survey (2005: 41) </li></ul>
    21. 23. Poverty <ul><li>Absolute poverty line (Appleton: 2001) in 1993/94 - $ 34 USD per capita per month </li></ul><ul><li>National: 36,433 UGX ($ 22 USD) (2002/03) mean welfare measure per capita </li></ul><ul><li>Meet calorie needs (3000 calories), food basket of poorest half of population, and some allowance for non-food needs. </li></ul><ul><li>34 % spent less than their caloric requirements </li></ul>
    22. 24. Poverty <ul><li>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 </li></ul>
    23. 25. One Household: Umaru 40,000 per capita ($ 24 USD) $ 104 USD last month
    24. 26. Preliminary Findings <ul><li>Village Access (Mobile services) & Ownership with household head </li></ul><ul><li>Purchase: 1st time: 2nd hand </li></ul><ul><li>1) “Mobile phones bring development” </li></ul><ul><li>Savings through Roscas, ‘kibina’, savings box, borrow from neighbor </li></ul><ul><li>“ I saved to buy a call box first and the profits will let me buy a mobile” (shop keeper) </li></ul>
    25. 27. Substitutions: <ul><li>“ 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”. </li></ul><ul><li>Savings in transport expense, wasted time, lost revenue of closed shop </li></ul><ul><li>Replace store bought goods </li></ul><ul><li>-cheaper substitute, like garden, or go without </li></ul><ul><li>“ 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.” </li></ul><ul><li>“ Sometimes I’m hungry, I sacrifice eating.” </li></ul>
    26. 28. Substitutions <ul><li>“ I had only 5000 UGX and decided to put money on my mobile phone and just called them, I didn’t go.” </li></ul><ul><li>“ 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.” </li></ul>
    27. 29. Preliminary Analysis <ul><li>“ Mobile phones bring poverty” </li></ul><ul><li>High Cost of Ownership </li></ul><ul><li>- airtime spending for non income </li></ul><ul><li>earning calls (airtime management) </li></ul><ul><li>- limited mobile phone use to family members </li></ul>
    28. 30. Intrahoushold Dynamics <ul><li>Women working at home given daily allowance </li></ul><ul><li>Use small portion for airtime when necessary </li></ul><ul><li>Exacerbate partner contro </li></ul><ul><li>Small business: use mobile / funds to pay child’s needs - generally not for her personal needs </li></ul>
    29. 31. Vulnerability <ul><li>Mitigate the depth of poverty, coping and recovery </li></ul><ul><li>- less costly with mobile </li></ul><ul><li>Mobiles have brought security and assistance to the unsecure </li></ul><ul><li>BEFORE: </li></ul><ul><li>Insecurity of house and business </li></ul><ul><li>Emergency Provisions : </li></ul><ul><li>Physical Search </li></ul><ul><li>Ex. brick maker </li></ul>
    30. 32. Vulnerability <ul><li>After: </li></ul><ul><li>“ I can’t imagine what would happen If I couldn’t contact grandchildren.” </li></ul><ul><li>- Convenience </li></ul><ul><li>- Timely Responses </li></ul><ul><li>- Improved Planning </li></ul><ul><li>- Less costly </li></ul>
    31. 33. Household Shock: Umaru
    32. 34. 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
    33. 35. Thank you <ul><ul><li>Kathleen Diga </li></ul></ul><ul><ul><li>Masters Candidate </li></ul></ul><ul><ul><li>UKZN - SDS </li></ul></ul><ul><ul><li>Research Intern, IDRC </li></ul></ul><ul><ul><li>Kdiga[at] </li></ul></ul>