You are here: HomeBusiness2015 10 27Article 390152

Business News of Tuesday, 27 October 2015

Source: Graphic.com.gh

Telecoms growth triggers economic revolution

Digital The springing up of mobile phone shops and kiosks, street-corner airtime vendors and giant billboard ads and a school girl writing a text message as she hurried along the street is evidence of the mobile phone revolution.

Ghana has experienced an incredible boom in mobile phone use since 2009. Today, there are more than 32 million mobile phones in the country and almost four out of every five of the population own a mobile phone, and that number is growing rapidly every year.

Ghana’s Mobile Voice subscriber base increased from May’s 2015 figure of 31,961 million to end June 2015 with 32,363 million. The penetration rate for the month under review was 119.41 per cent.

MTN’s subscriber base increased from 14,642,806 at the end of the previous month to end June with 14,886,291.Their market share at the end of the review period was 46 per cent.

Not just a phone

For many Ghanaians, these ubiquitous devices are more than just a handy way of communicating on the fly: they are a way of life.

Mobile phones carry huge economic potential in undeveloped parts of Africa, including Ghana. A 2005 London Business School study found that for every additional 10 mobile phones per 100 people in a developing country such as Ghana, GDP rises by 0.5 per cent.

It also enables communication and the movement of money, mobile networks can also be used to spread vital information about farming and health care to isolated rural areas vulnerable to the effects of drought and disease.

At a half day workshop with the Journalists For Business Advocacy (JBA) in Accra, Corporate Services Executive of MTN, Mrs Cynthia Lumor, described the upsurge in mobile phone usage as a revolution.

“What we are witnessing in the country at the moment using our mobile phones is not just a technological advancement, but an economic revolution seeing what mobile money is doing in the lives of many”, Mrs Lumor said.

Ghana’s largest telecom company, MTN started the mobile money concept in August 2009 and in five years up to 2014, the patronage of mobile money had gained momentum and the volumes are rising astronomically.

Within the five year period, the value and volume of transactions had jumped from GH¢2.4billion as of 2013 to about GH¢11.6billion in 2014, according to the Bank of Ghana (BoG). The number of transactions have almost quadrupled since 2012; from 30 million to about 106.4 million in 2014.

Registered MM customers have also increased from 3,303,837 million in 2013 to 5,424,650 million in 2014, representing a 64 per cent increase, while the total number of subscribers also increased from 20,346,016 million in 2013 to 21,721,814 in 2014 million.

MTN Mobile Money leads the pack, as 4.8 million people out of its 12.7 million subscriber base are registered on mobile money, with a monthly transaction in excess of GH¢18.5 million.

Today, Mobile Money outlets are everywhere: the distinctive canary-yellow buildings and kiosks that house them are dotted around not just in the cities, but the greater part of the country.

The MTN network reaches 85 per cent of Ghanaians, and Mobile Money is available everywhere MTN has coverage. Many of the villages along the Accra-Kumasi highway for example, however minor or remote, have at least one tell-tale splash of yellow.

Digital divide

Despite the proliferation of phones in Ghana, however, a digital divide persists.

How can information be understood and properly implemented when more than a third of the country's adult population cannot read or write? And can complex and detailed information be managed by anything less than a smartphone, which is beyond the means of most Ghanaians?

There are other more fundamental challenges. Unreliable network coverage in remote areas of Ghana is a significant problem. Keeping smartphones charged in villages that don't have electricity is another. Some ingenious solutions have been devised but low battery power remains a constant headache.

In spite of these obstacles, the programme appears to be working – and its potential for expansion not just beyond Ghana’s borders, but also into other areas such as health care and education is becoming clear. If the digital divide is being bridged in some of Africa's poorest communities, and the information is getting through, why stop at Mobile money?