The Economist calls it the “the biggest thing to pass between India and South Africa since Mahatma Gandhi moved from one country to the other.” They add their voice to the speculation online about Bharti Airtel, the largest mobile-phone operator in India, holding “exploratory” talks to buy South Africa’s MTN, the biggest operator in Africa.
What I find interesting is that the potential for disruptive innovation is currently seen as flowing only one way, that from India to Africa, with Bharti bringing its experience operating in India’s low cost, high volume environment where subscriber growth has famously propelled the country to second place globally in mobile subscriptions. This is not a bad thing, as I’ve observed before, as introducing disruptive pricing models in Africa would create a similar explosion of growth and wireless service usage.
What intrigues me however is what kind of innovative new practices could possibly flow from Africa to India and how will this influence what’s happening in the markets there? Airtime as defacto currency is a trend that has not yet really taken off in India, the patterns of mobile subscriber penetration and their demographic make up are different from what happened across sub Saharan Africa. But as the Indian operators continue to look lower and lower down the economic strata to increase their share of the pie as well as penetrate deeper into rural India, will the African experience begin to cross pollinate local business models and services?
Dave had attempted to open a Wizzit account as well as an MTN Money account – both mobile banking initiatives in South Africa – and his experience was an eyeopener. He now uses MTN Money and will sing the praises of its simplicity and ease of use if asked. The Reserve Bank of India has recently been making noises about creating the structure for mobile banking in India by mid June and this year’s budget had emphasis on ‘inclusive banking‘. While Indian banks wait around to see who will dip their toes in the water first (my personal experience tells me they’ve been waiting around since late 2006 to bank the unbanked) what will happen if this transcontinental mega mobile merger goes through? MTN’s format and systems for financial transactions are already tested and in place, transplanting them might be easier with localization for Indian needs giving Bharti a head start in this space with a ready made solution even as others quibble around wondering what happened.
The Indian mobile subscriber growth rates are not indefinitely sustainable, already handset sales are slowing. Focusing on rural India and improving infrastructure will offer another few years, but as ‘everyone who can own one will soon own one’ the future is obviously pointing to services and applications on the wireless platform rather than the hardware itself. Africa’s lead in grassroots mobile innovation is a result of necessity rushing in to fill the vacuum of infrastructure and services. India’s situation has been different, while considered shaky, her postal service, railways and basic distribution mechanisms are far advanced in terms of service and performance than most African nations.
The potential for cross pollination has already begun to be explored by Tata. What happens when the same kind of subscriber growth happens across Africa? When Indian software engineers and application designers apply their skills to the African solutions? I’m looking ahead to see what an information network spread across the ‘developing world’ like this one might actually become when ideas can flow freely between the continents. I’m seeing a mobile internet that joins Europe to India by the way of Africa. I’m seeing the next billion online.
The Economist starts and ends their article with quotes from the Mahatma, focusing on the two companies themselves, their operations, subscribers and revenues. But Gandhi’s ideas that join South Africa and India in a shared history changed the course of the entire world, not simply his own