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Rural Africa still lacks conections

Week 46, 2010

SIM penetration still remains under 20% in a few parts of the continent, but even in markets where penetration reaches the 50% mark, the level of penetration in most rural areas is below 10%, which represents something of a problem when two thirds of the continent’s population resides in rural Africa.

When on a global basis, the mobile communications industry is after the next billion subscribers, equipping rural Africa is of paramount importance to mobile network operators as well as governments. However, this development may be hindered by lack of access to power in rural communities. MNOs go to the extent of including distribution of diesel in their business model, as fuel is needed to keep the network running, and to power electricity stations.

Besides communications for business and pleasure, mobile communication networks serve as the base for financial inclusion. Money transfer based on mobile networks sees its fastest development in Africa, in terms of number of users, amounts transferred and in new businesses. For instance, in Kenya, where M-PESA is the most well known example of money transfer platform, all mobile network operators now propose their solutions.

The Bill & Melinda Gates Foundation has just announced it pledges US$ 500 million (EUR 368 million) to help create new payment systems that will reach into the world's most impoverished corners and allow families earning US$ 2 (EUR 1.5) a day or less to begin saving money. These Financial inclusion projects all need mobile communications.

Thierry Spanjaard

Chief Editor

Smart Insights