A street vendor who sells prepaid Vodacom airtime, makes a call on his cellphone in Alexandra township in Johannesburg, South Africa, on Monday, January 28, 2013. Almost two decades after Vodafone Group Plc entered Africa, the region -- where most people earn less than $2 a day and mobile phone towers run on diesel -- is turning into one of the company's biggest profit generators. Photographer: Nadine Hutton/Bloomberg

Chris Spillane and Charles Wachira

IF EMILY Parsitau wanted to light her home to ward off lions and intruders, she had to walk for an hour to buy paraffin at the nearest store. Now, she uses a SIM card.

The farmer’s four-roomed home in Kisamis, a rural area on the fringe of Kenya’s Rift Valley, has never had access to the national power grid and she relied on paraffin lamps, when she could fetch the fuel, to light the path towards her cattle, which attracted predators and thieves.

That all changed in March when she bought M-Kopa Solar, a sun-powered lighting system that uses cellphone technology to track usage and stores energy for when her home and pathway need to be lit up.

“Before we bought the bulbs I was fearful of lions,” the 42-year-old mother of six said in her cramped sitting room under a ceiling stained by paraffin smoke. “They would attack our cattle in the thick of darkness. Nowadays the lions hardly show up because of the lighting.”

With the light, her children no longer have to finish their homework in the dark.

Mobile technology is revolutionising life for many of the more than 1 billion people in Africa for whom services like banking, the internet and affordable energy were previously considered luxuries, rather than everyday staples.

Extra Importance

“The impact of mobile has been bigger in much of sub-Saharan Africa because a lot of the infrastructure that people in more developed economies take for granted isn’t there,” said Matthew Reed, the principal analyst for the Middle East and Africa at telecommunications research consultancy Ovum in London. “Mobile has an extra importance because it’s been able to bridge some of those gaps.”

Safaricom, which is 40 percent owned by Vodafone Group and pioneered the mobile-money transfer service M-Pesa, is part of the reason Parsitau is less fearful when venturing from her home at night.

East Africa’s biggest cellular operator is helping to market M-Kopa. Customers agree to pay for the solar panel with regular installments and M-Kopa is then able to monitor payments that are made by M-Pesa. The company is able to deactivate the solar panel via the SIM card if payments are missed. Once the panel is paid for, clients get to keep it.

The product is just one example of how phone companies in Africa are extending their reach and revenue beyond maturing voice and text-message markets and offering services and devices that require data.

MTN Group and Vodacom Group, South Africa’s largest phone companies with a combined 252 million customers in Africa, have developed smartphone devices priced at less than $100 (R1 064) to boost data revenue. They offer an expanding middle class access to online retailing, social media and content such as music-streaming service Spotify.

“At the moment it’s very hard for people in Africa to buy online,” MTN’s chief marketing officer Pieter Verkade said. “By linking our mobile money services to online services it becomes a much easier transaction. One of the main payment systems will be mobile money in many of our markets.”

Townships targeted

Vodacom will next month start to sell its own low-cost smartphone as it seeks to increase the number of people using data, according to Phil Patel, the head of the company’s consumer business unit. The phones will be marketed in South Africa’s townships.

“In township areas the smartphone penetration is around 27 percent today and our plan is to double that,” Patel said on Monday. “This is the only way they can access the internet.

“People using Facebook in township areas are actually growing substantially faster than those using Facebook” in richer urban areas as the use of the internet over cellphone devices is one of the only ways they can keep in touch.

Vodacom is benefiting from growth of its data and businesses elsewhere in Africa.

Much of that is being driven by M-Pesa, which has introduced tens of millions of Africans to banking. The system processes more transactions within Kenya every day that Western Union does globally, according to the International Monetary Fund.

Payments for M-Kopa are made via M-Pesa and the embedded SIM allows the firm to deactivate the lighting system when payments of as little as 40 shillings (5 cents) a day are missed. The incentives for people to keep paying include a phone-charging USB port and radio, which remove the need to travel to kiosks to pay for their mobile devices to be charged or to buy batteries for their radios.

Since Parsitau bought the system, she no longer has to make the two-hour round trip to a river lower down in the valley to fill jerry cans with water that were then lugged back to her home by donkey. If the river was dry, she’d have to spend about 200 shillings to travel to Kiserian about 20km away to fetch water by minibus taxi. – Bloomberg