As we progressively discover Tanzania, there is one thing that we cannot help notice: the colours of houses seem to have changed. In Mozambique, houses and businesses were mostly yellow or blue reflecting the colours of the two main mobile phone carriers in the Mozambique. In Tanzania, there is a lot more red or green, also the colours of the main Tanzanian mobile phone operators. It seems that one of the main ways that mobile phone operators have found to advertise in countries were very few people have television – let alone electricity – or are even to able to read is to use colour, generally bright and distinctive, for brand recognition and to increase their visibility. They offer the paint that people can use for their house. When I inquired about this in Mozambique, I was told that people were not receiving any money for this; the mobile phone companies would simply provide the paints and logos.
And it seems to be very effective. In fact, even in the most remote areas, such as the Nyassa region of Mozambique, small towns would look like a patchwork of yellow, blue and white and … a lot of people of course would use mobile phones. We were already surprised in India by how many people had mobile phones. In fact as a friend told us, the market penetration of mobile phones in India is higher than that of soap. For example, it was not unusual to see men in Rajasthan in traditional clothes chatting on the latest mobile phone at the camel fair, knowing that most of them would still use ashes to wash themselves – the traditional way – instead of soap. We have seen a lot more people than we expected in Africa on mobile phones, even amongst more traditional group such as the Masai people.
There is another reason why mobile phones work so well. Mobile phone companies make it possible to transfer credit from one phone to another, allowing therefore de facto micro-transfers of money. It is difficult to emphasize how important this can be is in Africa. Here people used to travel, sometimes a phenomenal amount of kilometres, to bring just a few dollars to their village after working in the periphery of cities. A mobile phone account allows people who are not generally eligible for bank accounts a safer way to deposit their money: when they have the cash, they simply buy a recharge card at the local shop instead of queuing at the local branch of a bank. When they need to pay for their shopping or send some money to their family, they simply transfer some of the balance of their mobile account.
One may wonder what mobile phones companies find in all this, most companies don’t really want to enter the territory of the highly regulated and competitive world of banking, and they certainly do not want to be considered as banks. Mobile phone companies simply charge a small amount for every transfer and only allow transfers between accounts within the same company. As a result, most people who own a handset also have a collection of SIM cards that they use depending on who they need to call or transfer money to.
I am not sure this was the intended effect from the carriers’ perspective. After all, providing cheap or free calls and text messages to people having the same carrier is a typical infectious marketing technique to keep people on the same network. And since most people do not have a bank account to pay their bills, carriers also had no other choice but to provide a prepaid service and balance transfer service is they were to ever reach the majority of the population who live in rural areas. The fact is that people have turned these features into their advantage. Companies have now recognised that and started advertising for cheaper and more convenient transfers.
Given that a lot of houses do not have electricity, it seems surprising that people buy electrical goods, but this can easily be overcome. There is always someone in the village or a village nearly who is connected to the grid where people can charge their phone. We have seen some local shops with dozens of phone chargers ready to revive any phone and sometimes only thanks to a solar panel on top of a frail roof. The market for second hand handsets is big here.
I was actually quite impressed by how inventive and simple this was. Effectively, by using their SIM card as their mobile bank account, people have solved many problems. They have removed the need to travel vast distances, the need to open a bank account for day-to-day expenses or the need to carry money around. They created a different type of cashless economy. We use credit cards, they use SIM cards.
