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Tuesday, July 11

Cell phones remaking Africa: Congo's emerging airtime economy

This post is a companion piece to the other Pundita post today, Interpreting Africa news: neither sing nor cry. Here I republish Kevin Sullivan’s article in its entirety, I consider it that important. An armload of roses to the Washington Post editor who featured Sullivan's eport on the Sunday Post’s (early edition?) front page.

In War-Torn Congo, Going Wireless to Reach Home --
For Poor, Cellphones Bridge Digital Divide
By Kevin Sullivan
Washington Post Foreign Service
Sunday, July 9, 2006; Page A01

["]KINSHASA, Congo -- Until not long ago, if Zadhe Iyombe wanted to talk to his mother, he had to make the eight-day boat trip up the Congo River to the jungle town where he was raised. In a country with almost no roads, mail or telephone system and a grisly guerrilla war raging, making that exhausting and dangerous trip was about the only way he could find out if his 59-year-old mother was still alive.

Then he got a cellphone.

Now he talks to his mother every day. And once a week, with a simple new feature in African cellphones, he uses a text message to transfer five minutes of airtime to her phone to make sure she can always call him.

"Now I know immediately how she is doing," said Iyombe, who lives here in the capital, 400 miles southwest of his mother's home. "These phones make everything easier. It has totally changed life in Congo."

As surely as the light bulb and the automobile before them, the cellphone and text messaging are radically changing the way people live in the developing world. In widespread use for about five years in much of Africa, technology long taken for granted by the world's rich has made life easier, safer and more prosperous for the world's poor.

For the first time, millions of Africans are able to communicate easily with people who are beyond shouting distance. Farmers and fishermen, for example, use text messaging to check market prices, eliminating middlemen and increasing profits -- and preventing long trips to the market on days it is canceled.

In cities, cellphones are becoming a basic tool of electronic commerce, allowing consumers to transfer money to merchants with a few presses on the keypad.

Restaurant owners now can advertise by sending bulk texts to their customers, promising something delicious for lunch. People call a doctor, mechanic or police officer instead of walking miles to find one. News of births, deaths and illnesses instantly reaches the farthest corners of the jungle, where mothers like Iyombe's struggle with the concept of their children's voices emerging from a little plastic box with buttons.

"Before, if you had a sick baby in the middle of the night, he could easily die," Iyombe said, holding the Nokia phone that has raised his ambitions and expectations of life. "Now you can call somebody to help."

Worldwide, there are more than 2.4 billion cellphone users, with more than 1,000 new customers added every minute, according to industry analysts. About 59 percent of users are in developing countries, making cellphones the first telecommunications technology in history to have more users there than in the developed world.

Cellphone usage in Africa is growing faster than in any other region and jumped from 63 million users two years ago to about 152 million today, according to David Pringle, a spokesman for the GSM Association, a trade group that represents cellular companies whose customers account for 80 percent of the global total.

Few places are seeing faster growth than Congo, which has 3.2 million cellphone customers and just 20,000 conventional land lines. At least 8,000 new cellphone customers sign up each day here; the number of users has increased more than tenfold in the past five years.

When one of Congo's first cellphone networks opened in 1999, it had capacity for 4,000 customers, but 30,000 people lined up outside the office demanding a phone, said Gilbert Nkuli, of Vodacom Congo, the largest of the five cellphone companies competing in the country's booming market.

Africa has attracted multimillion-dollar investments from many of the world's major cellphone companies, including Finland-based Nokia and U.K.-based Vodafone. Vodacom Congo is co-owned by Vodafone and a South Africa-based company, while Celtel, the second-largest provider in Congo, is owned by a Netherlands-based company that has operations in 14 African countries.

The two operators have built about 700 cellphone towers across Congo. Vodacom's Nkuli estimated that 70 percent of the country's 60 million people now live in areas with cellphone coverage.

"People would rather be without a shirt and trousers," Nkuli said, "and they'd rather go for days without food, instead of not having a phone."

Dealing in Minutes
Down a rutted dirt road on the tattered outskirts of Kinshasa, Iyombe, 36, sat in the tiny two-room house he shares with his wife. He had been hoping for a career as an electrician, but when he finished his training in 2001, he couldn't find a job. The Congolese economy had been run into the ground by three decades of corrupt dictatorial rule by Mobuto Sese Seko. Then, after Mobutu was overthrown in 1997, the country dissolved into a war that has left 4 million people dead.

Amid all the despair, Iyombe spotted something new and promising: people carrying cellphones. The more he looked, the more he saw his future in the little gadgets. So he saved and borrowed, spending $500 for his first phone (the average price has since come down to about $40), and started charging people to make calls.

Now he's at the heart of Kinshasa's new airtime economy, in which minutes on a cellphone are a commodity that can be used, bartered or sold for cash.

In Kinshasa's noisy street markets, thousands of people sit at little wooden benches with signs that say appel , French for "call." They keep one or two -- sometimes four -- cellphones in their laps. They buy airtime in bulk from phone companies, then charge customers a small premium to make calls.

Amid the exhaust-choked chaos, airtime dealers sit patiently under colorful umbrellas or in wobbly plastic chairs offering exactly the same service as perhaps 30 or 40 other dealers working the same corner. They're all busy all the time.

At his little stand, which was the first one in his neighborhood, Iyombe said, he sells hundreds of calls a week and makes a profit of about $20 -- a fantastic weekly wage in a country where most people live on $1 a day. Iyombe supports his wife and pays rent for an aunt and school fees for two nephews. "I love my work," he said, wearing the bright red T-shirt of Celtel.

A large part of Iyombe's business is transferring airtime for his customers. They give him cash, and he transfers the minutes from his phone to wherever the customer wants them sent -- a friend, a relative or a business partner, often in some distant corner of this country the size of Western Europe.

The transfer takes only a few seconds: Iyombe needs only to enter the amount of airtime and the phone number of the person receiving it. Cellphone companies have added that function to phones in the past year.

Iyombe said many of his customers transfer airtime so that family members in the countryside can resell it. Customers in Kinshasa send airtime to a brother or parent in a distant village, who then sets up under a shady tree and acts as a human phone booth. They sell calls on their phone and earn enough cash to feed their families. In many Congolese villages, cellphone ownership marks the divide between haves and have-nots.

Iyombe said text messaging has been slowed by widespread illiteracy but has started taking off in recent months as people learn key words to text, such as "Call me." He said it is becoming more popular largely because a text message costs five cents, compared with 26 cents for a one-minute voice call. When his mother wants to talk to him, he said, she sends a text telling him to call.

"It was a little difficult getting her to use texts, but now she's very good at it," he said, smiling at the thought.

The demand for cellphone calls has sprouted several offshoot industries. For a fee, people type text messages for the illiterate. In places where there is little or no electricity -- which means most of Congo -- entrepreneurs set up small diesel-powered generators and connect plug boards with 30 sockets. People plug in their phones to charge for a couple of hours for about 30 cents.

Iyombe keeps his own small generator to make sure he's never without battery power.
"Without these cellphones, we wouldn't be able to move forward," he said.

Mobile Accounts
Iyombe spoke while sitting in the larger room of his house, which is just big enough for a bed -- and a television he bought in a cellphone transaction.

Last year he walked into an electronics shop in the city center and picked out the 20-inch TV. To pay, he punched a few buttons on his cellphone and transferred a down payment of $150 into the shop's bank account. The shopkeeper received a text message confirmation that the money had been transferred successfully, and Iyombe walked out with his new TV. Iyombe settled his bill with three more $50 payments via his cellphone.

"I went in empty-handed, but I could still buy something because I had my phone," he said.

Conveniences such as laptops, Internet access, ATMs and credit cards are rare or nonexistent in Congo, so entrepreneurs are devising ways to use cellphones to serve the same functions.

Iyombe is one of about 25,000 Congolese subscribers to Celpay, a company that offers Internet banking through cellphones. Celpay customers make cash deposits into their Celpay accounts and can access their accounts, transfer money or pay bills with their phones.

Dozens of businesses, including gas stations and grocery stores, now allow customers to pay for goods through Celpay. The company that distributes Coca-Cola and Heineken beer also uses the system to collect payment, which means drivers no longer have to carry a safe full of cash on their trucks and constantly worry about bandits.

When Iyombe wants to make a deposit to his account, he can go to one of more than 100 "cash points" set up across the country. Most are small booths with a person sitting inside with a cellphone and a cash box, known here as "human teller machines." Iyombe gives cash to the clerk, who sends a text message to Celpay noting the deposit. Iyombe then receives a text message confirmation that the money has been credited to his account.

Lazarus Muchenje, chief executive of Celpay, said his company is trying to capitalize on the Congolese embrace of cellphone technology: "We are using the credibility of the cellphone network." Celpay is owned by FirstRand Banking Group, a major South African financial institution.

At a busy gas station in Kinshasa, manager Tharcisse Tshimanga said he gets six or eight customers a day paying with their phones.

"People trust this," he said. "It's made everything easier."

Tool of Corruption, Peace
Cellphones have also created a new kind of corruption in a country rife with it: People here tell of government officials demanding bribes in the form of airtime transferred to their cellphones. Local officials said they believe armed rebel groups use cellphones and texts to coordinate their operations in the country's eastern provinces, where they fight regularly with 17,000 U.N. peacekeepers, the largest U.N. force in the world.

But the technology is also being used to create peace, as with a program to disarm more than 150,000 men and women who fought in Congo's gruesome war.

One recent morning in downtown Kinshasa, Fiston Disundi walked up to a little white Celpay cash point booth and handed over his government ID.

The woman in the booth entered his ID number into her cellphone and sent a text message to Celpay's computer database. Ten seconds later the response came back. Disundi, 27, was a former soldier who had turned in his AK-47 rifle in January. That meant he was entitled to a monthly $25 cash payment, which she promptly handed over to him.

The World Bank, Britain, France and other big donors have put up $200 million for the year-old program, designed to turn Congo's warriors into wage earners. So far more than 75,000 people have handed over their guns in exchange for job training and a cash incentive: an initial $110 payment, followed by monthly $25 payments for a year.

Initially, clerks using thick account books with handwritten entries were having trouble making the thousands of payments efficiently. So, in February the program contracted with Celpay to modernize the process.

Disundi said when he received his first two $25 payments, he waited nearly six hours in long lines while clerks dug through record books to find his details. But when he went to the Celpay booth recently, the transaction took less than a minute. The system also confirmed that Disundi was where he was supposed to be: Ex-combatants must agree to stay in their home regions rather than gathering with others in hotspots.

Sitting in the shade in the intense morning heat, Disundi, a thin man with a scruffy beard, said he'd been carrying a gun since 1997, when his parents were killed by a mortar shell that fell on their house. "I saw so many terrible things," he said. "I felt nothing anymore. I was just waiting to die."

He said he's relieved not to be carrying a weapon. He wants to become a mechanic so he can support his two children.

"I don't want them to go through what I've been through," he said.

He has no job and almost no money. But he has a cellphone, which rang over and over as he talked. [”]

Copyright The Washington Post 2006
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