Focus Africa: Cost of Mobile Voice Calls and SMS

While reading "Less Walk More Talk - How Celtel and the Mobile Phone Changed Africa" I did some background research on how much mobile telephony actually costs in sub-Saharan Africa. I expected very cheap prices compared to high income countries but I was very much surprised by the result.

Here are three very different examples in terms of African countries I selected for my background research. Fortunately, the web pages of all network operators were either in English or French and the Yahoo currency converter made it simple to convert the prices given in local currency into euro cents. Like in other countries, each mobile network operator has a number of different prepaid plans to choose from, each with advantages and disadvantages. For my examples below, I took the general basic plan:

Kenya - Safaricom:

• On-net calls: 8 Euro cents / min
• Off-net: 15 Euro cents / min
• SMS: 3.5 Euro cents

Nigeria - MTN:

• Voice calls: 15-17 Euro cents a minute, billed by the second
• SMS: 2.6 Euro cents on-net, 8 euro cents off net

Côte d'Ivoire - MTN:

• Voice calls: 27 Euro cents / min
• Calls to friends: 9 Euro cents / min
• SMS: 6 Euro cents
• Minimum use per month: 7.6 Euros

Côte d'Ivoire - Orange:

• Voice calls: 15 Euro cents / min
• Preferred numbers: 5 Euro cents / min
• SMS: 5 Euro cents

So while SMS messages are generally much cheaper than in Europe, voice calls are quite expensive, especially when taking local salaries and standards of living into account. I've also checked out ARPU (Average Revenue Per User) levels, which probably still mean something in Africa, and they are in between 6 and 10 Euros a month. In many African countries that's probably a significant amount of money to most people but the convenience and live improvement seems to be worth it. And by the way, mobile telephony is by no means only for a few anymore, there are currently more than 300 million mobile subscribers in Africa, that's more than in North America!

In one of the following posts, I'll take a look at prices for GPRS and 3G (!) in Africa and at some statistics of how many people already use it.

Comments

[Rick Beveridge]

ARPU never meant anything, possibly even less in Africa than in the developed world - there are few, if any handset subsidies and so network build costs are dependent on minutes, not the numbers of lines (users)

As stated in our our book (thank you for the review) one of the early recognitions was that the African business could be treated as an FMCG business - and when I worked in beer I didn't care whether a few people got completely paralytic, or a lot of people got mildly happy - it was the total quantity of liquid going out of the door that mattered to the brewery.

Rick Beveridge