Zanzibar's Mobile Revolution

This BBC story talks about how mobile communications have provided opportunity to Zanzibar, an exotic island off the coast of Tanzania, (and where Freddie Mercury of Queen grew up). GSM providers are able to eke out profitable businesses from the poor citizens by providing much needed communication services. GSM carriers in Africa save on costs by using only mature network gear with scale economies, often using second hand equipment from the Western world. They eschew tower construction costs, which are exorbitant in the West, partly because of the absence of NIMBY groups and local regulations. Each tower is mounted higher to cover a larger area. In fact, in many African urban areas, as many as three GSM providers can compete profitably. Prepaid is the bulk of the business across Africa, with per minute rates at 20 cents or less $US5 per month to keep the number active. Free inbound calls are common. Call rates in Africa are fairly complex, since carriers pass on all call termination fees to the calling party. The result is that a call will have a different per minute charge depending on whether you call in-network, another cell network, or a landline provider. My experience in Zanzibar was that almost all established businesses post their landline number and their wireless number in all advertising because the reliability of the landline phone is dubious. It’s rewarding to examine wireless in the greenfield, historically underserved countries of Africa – it clarifies the true benefits of communications, commercial and personal.

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