Reaching Africa’s fragmented mobile users
For those launching mobile content and services, Africa’s mobile users are a fragmented bunch. Overcoming this fragmentation is one of the key challenges for both entrepreneurs and developers face.
Russell Southwood looks at how the Law of Circles can help you understand how to overcome these challenges.
Imagine if you will, all phone users in a country as a circle, the largest circle in the image I’m going to ask you to imagine. Then imagine putting in other proportionally smaller circles to represent basic, feature and smart phones.
These numbers vary by African country but let’s say in our imagined African country that there are 70% basic phones (offering only voice and SMS), 25% feature phones (that have access to the Internet) and 5% smartphones (which also have access to the Internet and can use apps).
So If I’m a Kenyan, Senegalese or Ghanaian entrepreneur and I’ve got a great idea for an SMS service, I know that 100% of phones will be able to receive them. Unless I start adding greater functionality with Java and USSD and then that number reduces.
But even with this large number, it is very exceptional for content or services to attract more than 5% of all subscribers as users. Indeed content and services that do so can be counted on the fingers of one hand. The big challenge is it’s very hard (but not impossible) to build a service or content of an absolute “must have” nature around 160 characters.
Attempts have been made to offer services that thread several SMSs together but these have not attracted high levels of users. SMS is essentially e-mail in short pants but again despite various attempts to converge them, they remain separate channels.
Also at the SMS level of the market, you have language challenges. One SMS aggregator reported that it got twice the response levels from SMS campaigns that were in Nigerian Pidgin than it did in English.
The same would probably be true of Swahili in Kenya. Now the percentage of basic phone users able to speak these languages is fairly large so the circle of potential users stays large, although smaller than total phone users. But the situation is much more complicated in say Uganda where several languages are in use in different parts of the country.
So let’s look at the feature phone segment in this imagined African country. Draw a smaller circle representing 25% of users. Amongst this 25% of users there may well be as many as 2,000 or more different handsets, many of which require different set-ups to achieve a seamless service.
But leaving aside this complication, you are now looking at 5% of this 25% of total users as the likely best number of users you can achieve: in other words a very much smaller number. So from the developer and entrepreneur point of view, you can offer much more but it will only be reaching a significantly smaller audience.
OK, so you really want to impress your fellow developers and you design a smartphone app. This may not be a great move as your target audience will be 5% of total phone users in our imagined African country and if you’re lucky 5% of that 5%: in other words, a really small number.
And that’s before you look at whether they’re using Android, iOS or some other operating system which means you have to do the app several times over even to get this small target number. Even in South Africa, where there are around 20% smartphones, the reducing circles still cut the potential numbers significantly.
And there’s always those that comfort themselves with the idea that their app will sell internationally. Yeah right, alongside the several million other apps that are already lining the online shelves of the larger global app stores.
So that’s the problem, I hear you say, but what’s the solution? There are really no easy answers but there are some things that might suggest how it might be possible to find a way through this particular maze.
Mobile and content services that start in one market are bound by the law of circles in that market. If your country has only 2 million subscribers, the chances of launching successfully at any phone level in that market are low. However, the population and wealth scales in Nigeria and South Africa offer much more forgiving circumstances in a single market.
The only way to change the Law of Circles is to have mobile and content services that can appeal across several countries. In the last few weeks we have covered Every1Mobile which attracts over 800,000 visits to its SmartSex channel (on feature phones) about relationships and sexual health across multiple countries.
User generated content mobile platform Bozza has 300,000 users again across multiple countries. Tackling multiple countries is not for the fainthearted but it does offer user levels that make finding a business model easier.
The alternative is to look for a platform that does the work of both getting users and ensuring that your service can be used across multiple phone types. biNu is a good example of this approach. It is a platform aimed at feature phones that presents itself graphically on the screen in many of the same ways as a smart phone but operates on low bandwidth out of the cloud.
You use the pin wheel to click the different screen icons. It has reached 4.2 million users globally, of which a significant proportion are in Africa. It has a partnership with World Reader who have been able to reach and get 0.5 million mobile book readers, of which around half are in Nigeria.
Both smartphones and feature phones are coming down in price so both of these categories will increase in size. Africans who buy smart phones will be the ones who pass on feature phones to their nearest and dearest.
I was recently shown a Chinese Andriod phone that is likely to go on sale in the autumn at US$60-70. Safaricom has chosen to stop selling feature phones to accelerate the use of smartphones. It will be interesting to see if others follow.
The challenge for the mobile operators is how to transition away from the current “small potatoes” revenues from VAS. They need to encourage an ecosystem that will bring them more data revenues through data sold at lower prices.
When LTE arrives, they need to transition to lower prices as quickly as possible to build the numbers in the market. And finally, they need to demolish their “walled gardens” and work to encourage mobile content and service providers who will build mass market numbers. Who’s going to be first to step up to the plate
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