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From banks to crime, mobile revolution hits Africa

2007-07-11 03:37:48

By Daniel Flynn

DAKAR (Reuters) - From banking to education and even organized crime, mobile

phones are revolutionizing the lives of ordinary Africans as foreign phone

companies scramble for a share of the world's fastest growing market.

Having shunned Africa in the 1990s, the companies are now lured by cheaper

technology, stronger economic growth and the success of pioneer firms such as

South Africa's MTN (MTNJ.J: Quote, Profile, Research).

In the mid-'90s there were more phones in New York city than the whole of

Africa. This year, the African continent passed the milestone of 200 million

cellphone users -- just two years after reaching 100 million.

Analysts predict the figures may nearly double again in five years as Middle

Eastern operators flush with cash like Celtel (TELE.KW: Quote, Profile,

Research) battle European heavyweights such as France's Orange (FTE.PA: Quote,

Profile, Research) for a share in the market.

Nigeria's former Communications Minister David Mark -- now president of the

country's Senate -- once quipped that the telephone was not for the poor. But

those days are long gone and the change for millions of Africans has been

dramatic.

"A cell phone is a source of pride, a status symbol ... for people who used to

be completely marginalized," said Solange Konan, manager of a cocoa farmers'

cooperative in Ivory Coast.

African farmers once faced long journeys, braving potholed roads and bandits,

to check export prices for their goods, but now they just phone the port to

ensure they get a fair price. "It is the greatest invention of the century,"

Konan said.

For the four-fifths of Africans working in the informal sector, mobiles allow

small businessmen from electricians to carpenters to stay in touch with clients

and organize work.

"The mobile has really increased productivity in Africa," said Thecla Mbongue,

researcher at Informa Telecoms and Media.

SIGNALS IN THE BUSH

Mobiles outnumber fixed lines in Africa by more than 10 to one. But with an

estimated 63 percent of the continent's nearly 1 billion people living in rural

communities -- the highest rate in the world -- mobile phone companies face

major challenges.

"Our return on investment can be very, very low in rural areas," said Beston

Tshinsele, general manager of Celtel in Chad, one of Africa's most sparsely

populated nations.

Solar panels and cheap bio-fuels allow Celtel to overcome a lack of power in

the bush, while more powerful transmitters mean coverage is being extended to

the arid heart of Africa.

Cell phones are plugging gaps in other services. With banks scarce outside

cities, Kenya's Safaricom launched a project this year to allow clients to

transfer money using an SMS -- the recipient can then collect cash from a

supermarket or shop.

Many observers hope that mobiles can help achieve the United Nations'

objectives to halve poverty and achieve universal education by 2015 under its

Millennium Development Goals (MDGs).

"Mobile technology can play a fundamental role in reaching the MDGs in Africa,"

said Vitalis Olunga, regulatory affairs head at Safaricom, partly owned by

Britain's Vodaphone (VOD.L: Quote, Profile, Research).

But mobile phones also bring new opportunities for crime.

"organized crime groups are moving away from dirty crimes, like drug

trafficking, into clean crimes, such as telecoms fraud," said Giles Lucas of

software specialists Basset Labs.

Scams include gangs which steal mobiles and then sell calls for cash, or which

hijack lorries carrying charge cards. Mafias may also penetrate the database of

phone companies and remove users from billing lists so they make free calls.

"Fraud is on the upswing because new technologies provide greater

opportunities," said Lucas.

But he added: "If we eliminated all the stolen phones in Africa, companies

would be left with no clients."