JOHANNESBURG, South Africa-Pay phones may not be the panacea to Africa’s need of extending telephony, but in rural areas where there is little or no fixed infrastructure, wireless-and specifically GSM-pay phones provide a viable option. Wireless pay phones can be an ideal tool to encourage entrepreneurship and foster economic development within disadvantaged communities.
South African network operator MTN, as a community service obligation, in June 1994 pioneered the concept of GSM pay phones. According to targets set by their licenses, the South African cellular operators have the Universal Service Obligation of deploying 30,000 community service telephones in areas with the greatest need of telecommunications services. These areas are traditionally underserviced with less than one fixed line per 100 people. MTN was requested to deploy 7,500 community telephones and Vodacom, licensed earlier, 22,500.
MTN, together with the local pay-phone manufacturers group Telephone Manufacturers of South Africa (TEMSA), developed the first fully integrated GSM pay phone in Africa, with the first unit deployed in Alexandra township in June 1994. The phones are still in use, operated with a prepaid debit card and providing free emergency facilities. The pay phones are placed outdoors to provide 24-hour access and are consequently open to significant levels of vandalism.
Vodacom originally approached Siemens to develop a GSM phone to be used in underserviced areas, and Siemens in turn outsourced the function to a South African company called Psiek. The company has so far manufactured 14,000 Siemens GSM Interface (SIGI) phones, which are in service and housed either in converted shipping containers or as stand-alone pay phones in spaza-or informal retailer-shops and cafes. The Community Division of Vodacom currently deploys community phone shops and several pay-phone products.
Vodacom has 1,176 community phone shop franchisees operating in 2,135 community phone shops in disadvantaged areas in South Africa. People in previously underserviced areas are making more than 53 million calls each month from Vodacom’s community telephones, and local operators are receiving sizable commissions from the network operator Vodacom each month.
Outside South Africa
Vodacom has exported the concept to Tanzania, where it has recently been granted a GSM license. The operator has agreed to deploy 10 community phone shops during five years in Tanzania.
Similarly, following regulatory obligations, MTN Uganda has to install 2,000 pay phones in the first five years of its license, which it received in 1998. It has established a joint-venture company, Publicom, to manage the rollout of the phones. More than 900 pay phones have been installed in less than six months, and the demand is positive. Prepaid card phones, coin-operated phones and combi-phones, which accept both coins and cards, are available.
But overall, the deployment of wireless pay phones is slow and does not meet the dire need of bringing telecommunications to small, distant communities. Initially, the volume of production of pay phones was also low. However, the rapid development of GSM technology has seen the creation of GSM integrators and solution providers through which the development of cost-effective prepaid pay phones has taken place.
“In my opinion, it is essential that there be a coordinated approach to rural communications and a coordinated implementation strategy. This would leverage maximum benefits to the underserviced community,” said John Moore, MTN’s manager for pay-phone operations, who has been studying the concept for many years.
“Historically, there has been a tendency to concentrate toward number of lines rather than developing delivery solutions to meet the needs of people. With a high level of coordination, it would be practical to produce a variety of best-fit sustainable solutions catering for the differing circumstances found in society. These solutions should embrace the full range of telecommunications facilities and not be restricted to voice. In this regard, the Grameen Phone project in Bangladesh demonstrates a practical solution for bringing communications to the people.”
Grameen Phone, a GSM carrier in alliance with Norway’s Telenor, introduced a micro-lending scheme in disadvantaged areas in Bangladesh. According to the scheme, money is lent mainly to women, who apply to buy cell phones to be used as pay phones. Stop watches and calculators are also distributed so the operator can work out costs. There are more than 1,000 village phones currently in place, and the village operators keep around US$2 profit per day, twice the average per-capita income. This phone business has so far proved successful, and the scheme is not shackled by regulatory restrictions.
“The speed of deployment and redeployment of wireless pay phones, specifically GSM, and the ability for it to provide a ready tool for entrepreneurial opportunities demonstrates the excitement created by this technology,” said Moore.
