Cell phone

The pace of change in Africa is astonishing. And what better example to illustrate this than the revolution in telecommunications? It is hard to think of a more transformational industry than the cellular phone. Its impact has been big elsewhere in the world but, for the most part, fixed land lines were part of the infrastructure fabric. Communication was always possible.

But this was not the case in most African countries. 17 years ago, when I first moved to Sudan, it was very difficult to make an international phone call. I remember well visiting the matchless Acropole Hotel in downtown Khartoum to use, at vast expense and inconvenience, their crackly international telephone line. All Oxfam had at the time was an antiquated telex machine. 12 years ago, in Njombe, SW Tanzania, it was almost impossible to make a land-line international telephone call, even from my employer's (Tanganyika Wattle) offices, though we did have a satellite phone in case of emergency. And nine years ago, in Zimbabwe, I bought my first basic Nokia model and plugged in to Econet. Since then, like most people, the cell phone has become an integral and essential part of my life. Increased network coverage, competition, international roaming mean that it is now unusual not to be able to communicate even from the most rural locations.

In Central and East Africa the most successful of the early communications businesses was the well-named Celtel, founded by one of Africa's most celebrated entrepreneurs, Mo Ibrahim. Over a period of about 10 years, Celtel expanded rapidly and, in 2007 was acquired by Kuwaiti investors and rebranded as Zain. Aesthetically this was a disaster. Celtel had irritating slogans with meaningless punctuation - for example "Make. New Friends." or "Change. Your World." - but its billboards were otherwise attractive. After the change in branding, Zain introduced a truly hideous shade of pink into the East African landscape along with the trite slogan "A wonderful world". Sickly pink buildings now litter Uganda's towns and villages.

Besides creating the ability to communicate, the cell phone is now, through initiatives like M-Pesa and Zap, becoming a money transfer medium. Sending airtime - and using the transfer of airtime as an unofficial currency - has been used for some time, but Safaricom's ground-breaking M-Pesa in Kenya has enabled goods and services transactions to take place through telephone transfer. This promises to have a major impact on rural communities, in particular, by accelerating the velocity of money - effectively, increasing money supply.

Taxes on airtime and on company profits have provided Governments with substantial increases in tax revenue - wth very little extra work! Service providers collect and remit duties through the sale of airtime and - due to their size and scale - are examples of good compliance with revenue requirements. In many African countries, cell phone providers top the list of annual tax payers (though collectors would be more accurate) - a remarkable feat given the fact that inefficient state-owned fixed-line monopolies collected and paid a tiny amount of tax until the dawn of the cell phone era.

Popular culture has also benefited enormously. Competition among service providers in the industry for advertising and sponsorship activities have resulted in a stream of sponsored concerts - the latest and most-hyped of which will hit Kampala in late January - the R Kelly I believe concert supported by Zain - but which also benefit the local music, dramatic, fashion and artistic scenes.

And, better still, the cost of communication - domestic and international - has fallen steadily due to competition. The transformation is complete and provides a great example to anyone who doubts the potential of the African market to adopt new technologies and offer investment opportunities.