Mobile businesses reach even the poorest countries

Tuesday May 29, 2018

In some places it is easier to hail a ride than turn on the faucet

NEW YORK — Mobile-based services, including money transfers and ride-hailing, have spread rapidly around the world and are becoming available in many of the poorest countries.

In some places, more people have mobile payments or apps close at hand than clean drinking water or electricity.

Last year, the number of mobile subscriptions reached 70% of the population in the least developed countries of Africa, Asia and elsewhere. Services once seen as suited only to developed countries are reaching huge and previously untouched markets.

Japan’s Aeon Financial Service is riding this wave. At the end of April it launched a mobile payment service in Cambodia, targeting both large and small retailers in the country. It hopes to attract 300,000 to 500,000 users by 2020.

WorldRemit, a London-based remittance startup founded by Ismail Ahmed of Somalia, offers money transfers to more than 140 destinations using mobile phones. M-Pesa, a Kenyan mobile payment service, handled around 6 billion transactions in 2016, equivalent to nearly half of Kenya’s gross domestic product. Another Kenyan company, BitPesa, is looking for business partners in Asia for its blockchain-based payments service.

Myanmar’s Oway, sometimes called the Uber of Myanmar, is a popular ride-hailing company that also offers travel services. In Tanzania and Burkina Faso, an app called Esoko gives farmers information on crop prices and weather. Jumia Food, which delivers meals in 11 African countries, has a loyal following in large cities. Some of the continent’s least developed countries offer unique local services, such as an app in Ethiopia that converts the local calendar to the Gregorian calendar.

According to the International Telecommunication Union, a United Nations agency, the world’s 47 least developed countries have a combined population of 979 million, or 13% of the world total. In 2017, mobile subscriptions in these countries had more than doubled from 2010, when they were equal to 30% of the population. As of last year, high-speed 4G service was available in 32 of these countries. One, the West African nation of Senegal, aims to reach 90% of its population with 4G by 2025.

Accounts for sending money via mobile phone jumped fivefold over the five years through 2017, to 690 million worldwide, according to industry group GSMA. Sub-Saharan Africa, home to many of the world’s poorest countries, accounted for half of that growth.

Customers wait to have their mobile phones repaired at a market in Khartoum, Sudan.   © Reuters

In the early days of the industry, mobile phone users in developing countries were mostly middle- and upper-income people in large cities. But privatization of state-owned telecom operators and an influx of foreign investment have brought down prices, putting mobile services within reach of many more people.

In countries such as Gambia, East Timor, Cambodia, Lesotho and Mali, the number of mobile subscriptions exceeded the population in 2016. Gambia, for instance, had 139 subscriptions per 100 people, exceeding Japan’s rate of 130. In these countries, where only 70% to 80% of population have access to clean drinking water within 30 minutes, mobile service is easier to get.

Mobile phone ownership is growing fast even in areas that have seen conflict, such as South Sudan and Yemen. “Civil wars have not slowed cellphone adoption,” said a U.N. official.

Nikkei staff writer Eri Sugiura in Tokyo contributed to this report.

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