By Alison Stringer

The mobile Internet, and in particular Social Networking Sites (SNS), are set to play a major role in big business’ attempts to transform an estimated four billion people who live in poverty into consumers. These “aspirational poor”, those who earn less than $2 a day and “who make up three-fourths of the world’s population–could contribute an additional $13 trillion in annual sales to the global economy, if only companies would drill deep enough to reach them” (Prahalad in Johnson & Nhon 2005).

This paper will argue that it will be the mobile Internet that will ultimately transform these millions of people into consumers. Further it will suggest that social networking applications are likely to be the means by which this previously untapped market will be leveraged. The increasing popularity of social networks amongst the world’s poorer citizens stands to benefit both the individual and the innovative marketer. The paper will draw primarily on information and statistics collected about the penetration of mobile handsets into the African continent, the subsequent rise in Internet access and the popularity of SNSs, which has followed. The importance of online social networking sites to marketers will also be discussed, and the paper will also touch briefly on the similar scenarios that are taking place in other developing countries.

C.K. Prahalad, author of “The Fortune at the Bottom of the Pyramid” and economist at the University of Michigan, informs us that “Nearly 4 billion people have been under the radar screens of large companies up until now” and that generating opportunities for these people to consume would create the world’s largest, hitherto untapped market (Prahalad in Johnson & Nhon 2005). One might think that commodifying the world’s poor in this way is rather unethical, but

Prahalad argues that squeezing profits from people with little disposable income – and often not enough to eat – isn’t capitalist exploitation. In fact, tapping the spending power of the poor can reduce poverty, he maintains. Expansion by multinationals into new markets creates new jobs – product-distribution networks and shops, for example – and income earned from those jobs ripples through local economies, creating more new jobs, a phenomenon that economists call the multiplier effect. (Prahalad in Johnson & Nhon 2005)

According the International Telecommunication Union (ICU), in 2006 Africa “accounted for 14% of the world’s population, but for only 5.6% of all fixed and mobile subscribers worldwide” (ICU 2007). Fixed lines in particular were few and far between with a continental average of 3 lines per every hundred people. Many African countries fared even worse than this with national averages “of fewer than 1 main line serving every 100 people” (ICU 2007) it is no small wonder the region has been dubbed “the least wired region in the world” (ICU 2007).

Recent figures show that on a global scale, 65 Terabytes (TB) of compressed data was consumed by around 19 million user in September 2008. Africa accounts for only 5TB of this, which equals around 8% of the world’s Internet traffic for that month, around 1.5 million users (Sauter 2009). So while Africa still lags behind the rest of the world, it can be seen that advances are being made.

There is a digital divide between various regions of Africa. Countries like Egypt, Morocco and South Africa have a significantly higher level of fixed line penetration than do areas like Nigeria. Almost “three quarters of the continent’s fixed lines were found in just 6 of the continent’s 55 countries” (ICU 2007). The mobile phone, untethered from physical land-lines, has thus played an important role in providing telecommunications to large numbers of Africans and beginning to bridge the digital divide. Of the 221 million telephone subscribers in Africa in 2006, 198 million were subscribed to mobile services; in fact, the area had the highest mobile phone growth rate in the world, growing an average of 50% every year from 2001 to 2006 (ICU 2007).

Access to the Internet has been much lower for large tracts of Africa than for many other areas of the world due to the low levels of wired access across the continent. The advent of wireless Internet has the potential to turn this situation around. To illustrate, by 2009 there are reports of 300 million GSM subscribers in Africa many of whom are using mobile handsets that have the capacity to run the Opera Mini browser (Sauter 2009).

The expense of Internet access in Africa is also a barrier, given the level of poverty: 80 euro cents¹ per megabyte (MB) in Nigeria, in Uganda 1 euro per MB, on the Ivory Coast unlimited monthly access for 15 Euros. (Sauter 2009). In Egypt, Vodafone ran “a mobile Internet promotion with Opera Mini. Daily access to the Vodafone mobile portal and 3 MB off portal […] is 14 euro cents,” (Sauter 2009) triggering 400,000 Opera Mini downloads in just one month.

Opera Software, creators of the Opera Mini web browser, claim that amongst the top ten African countries using Opera Mini², page-views “increased by 374%, unique users increased by 177%, and data transferred increased by 183%” between November 2008 to November 2009 (Opera Software 2009). That represents a phenomenal growth, but it is worth bearing in mind that these countries represent the telecommunications elite of the African continent.

This paper is more concerned with the state of affairs in the less affluent, less wired countries of the continent. These are the areas where, with so little access to fixed line networks, the mobile phone and mobile Internet stand to really make an impact on the everyday lives of the common people. These are also the areas that have become of such great interest, as a potentially huge new market.

At present is not uncommon for entire villages to share one mobile phone, instead of using public phone boxes (Wray 2009). And “across the continent roadside kiosks proliferate where people ‘rent out’ mobile phones” (Wray 2009). In this way people are able to contact friends and family, they are also increasingly able to access the Internet with some regularity (Wray 2009).

Dan Steinbock tells us that driving the phenomenal expansion of mobile Internet in many developing countries “is the explosion in prepaid service that has already made cell phones available to millions of low-income users in Europe, once excluded by monthly payments and credit checks” (2007, p.31). In Latin America, for example, the number of mobile phones tripled between 1999 and 2004 (Steinbock 2007, p. 31). In Russia too, there has been “extraordinary mobile growth in the past few years. The Russian mobile phone market grew to 187 million handsets in 2003, according to IDC, 88 per cent more than in 2002″  (Steinbock 2007, p.32).

Prepaid mobile services have other benefits for the poor and the marketer alike, for example in Rwanda “local craftspeople without electricity or telephone lines can take credit card payments through their cell phone[s]” (Sullivan 2007, P.125). The mobile SIM (Subscriber Identity Module) is seen, by many as the key “stepping-stone to mobile banking” (Sullivan 2007, P.125) and m-commerce (mobile commerce). Prepaid minutes loaded onto phones, no matter how small, have value, turning the mobile phones of the poor into virtual wallets (Sullivan 2007, p.125). This ability to make “financial transactions by sending text messages on a cell phone” (Sullivan 2007, p. 127) could be seen as a key ingredient of a marketing strategy targeting the world’s poor.

In Africa, while there have been significant increases in mobile phone usage and ownership, the cost of data transmission as noted previously has served to exclude many from the marketplace. A pending merger, however, between Kuwait’s telecommunications company, Zain, the third largest telecommunications provider in Africa, and the Indian telecoms giant Bharti Airtel, is likely to serve to bring down prices for the consumer (Virto 2010). At present, while the “total cost of mobile ownership is around $10 in African countries, the rate is as low as $2.5 in India, due to fierce competition in the national market” (Virto 2010). It is anticipated that he merger could increase competition in Africa and stimulate lower costs and increased access to the potentially huge African mobile market.
From a socio-cultural perspective access to wireless Internet would allow “many Africans to have access to basic services for the first time”; services such as health information, and education (Virto 2010). Access to to social networking allows for the sharing of information, increased access also exposes this new group to new commodities; goods and services entirely foreign to them, but made to seem entirely desirable.

Mobile Internet and Marketing

The Internet boom of the 1990s caused businesses worldwide to restructure themselves around Internet applications, deploying web technologies for customers and business transactions (Steinbock 2007, p.39). The current boom in wireless Internet will also necessitate “major re-engineering in the retail industry around mobile data applications” (Steinbock 2007, p.39). At the very least, websites will need to be constructed with the smaller dimensions of mobile screens in mind. Marketers must also learn and adapt to new marketing strategies, as broadcast media is no longer the primary home of advertising.

The Internet, and particularly social networking sites (SNS), have stimulated shifts in the dynamics of marketing, so that now targeted advertising along with viral marketing is, to a great degree, replacing broadcast advertising. Brett King describes another form of marketing which he labels “tribal marketing” (2010). This method of marketing is inspired by the ways in which physically extant social networks utilise mobile telephony. Rather than a huge web of multiple loosely connected networks of friends, as can be witnessed on SNS such as Facebook or MySpace, the tribal model relies on smaller groups of friends. Within such groups one member will be the pivotal point, the centre of the group, the person that modern marketers like to call the “key influencer” (King 2010). The marketer’s aim is to create “compelling viral offers that [...] can roll out via MMS to a key influencer so he or she can send it on to their valuable network” (King 2010).

Targeted advertising relies heavily on companies that specialise in data mining; such as Esperion, Acxiom, and ChoicePoint (Hirst & Harrison 2007, p.286) to collect, collate and sell consumer information to marketers. Similarly tribal marketing relies on the collection of information about mobile usage via Call Detail Records (CDR). These

are the day-to-day transaction data recorded by mobile network operators to enable accurate billing on your mobile bill. These CDRs contain all of the information required to map social interactions within tribes with substantially more accuracy than an online social network. (King 2010)

King also tells us that there “is a lot of discussion about how social media will play out from a mobile perspective, and how marketers in particular can monetise and leverage social media for real revenues and brand influence in the future” (King 2010). Marketers themselves are urged to use social networking sites to create a good brand experience. Consequently, social networking sites such as MySpace, Facebook and Bebo, have become web-based microcosms; where business professionals, artists and consumers coexist (Rutledge 2008. p.20).

Marketers in these new microcosms must “focus on brand development, viral marketing, and customer management rather than a direct sales pitch” (Rutledge 2008. p.20). Pure product promotion is becoming the hallmark of the past, as marketing in this modern arena “means creating a site that offers meaningful content of interest to your target audience: music downloads, games, quizzes, interactivity, useful information and so forth” (Rutledge 2008, p.22).

Globally, as “we start to see massive adoption of smart or App phone handsets, the promise of potential migration of social media onto these platforms are hailed as the real future of 2.0 with endless possibilities” (King 2010). While in Africa, smart phones are too expensive for the majority of people, free applications like Opera Software’s mobile browser, Opera Mini, will run on a wide variety of cheaper phones.

The social networking site, Facebook, offers a mobile version of its social networking application and boasts “over 300,000 users in Kenya, is the most popular site in South Africa, and is growing by 20,000 new users per month in Nigeria and Ghana – 3x the US growth rate.” (ICT) Needless to say Facebook itself is encouraging this rapid growth by providing interfaces in Swahili and Afrikaans and proposed versions written in Zulu and Hausa (ICT).

Alongside Facebook, Twitter, a micro-blogging SNS, is also rising in popularity; it is the ninth most visited site in South Africa and Kenya (Wray 2009). “Email services such as Hotmail and Gmail are also popular as is YouTube. The online video site has its highest rankings in Egypt, at number three, and Libya, at number four.” (Wray 2009) Opera Mini is an extremely popular mobile browser facilitating African users to visits to news sites such as the BBC (which is popular in Nigeria, Kenya, Ghana, Namibia and Zambia) and CNN in Nigeria, Ghana and Zambia (Wray 2009). Sport oriented sites are also popular “with French sports newspaper L’Équipe the sixth most visited mobile web site in Ivory Coast. Egyptian mobile phone users flock to Arabic language sports portal Filgoal.com and Libyans prefer rival Koora.com” (Wray 2009).

Facilitating the access of the poor to a global repository of information and a plethora of outside, but online networks, increases their social capital. Increasing social capital influences an individual’s and a community’s quality of life, health and economic performance; at the same time encouraging innovation (Coleman, Kennelly, Liukkonen, Baron & Fountain in Yang, Kurnia,Lee & Kim 2008, p. 2). “Classical social theories, such as works of Durkheim and Marx, already suggest that the involvement and participation in groups can have positive consequences for individuals and communities” (Portes in Yang, Kurnia,Lee & Kim 2008, p. 2). It remains to be seen how mobile technologies and in particular online social networks will influence social, cultural and economic change in developing areas of the world such as Africa. Change itself, however, seems very certain indeed.

Social Networking sites, accessed via mobile Internet, are the fastest growing trend in Africa at present. Because of the poor quality and often-complete absence of fixed-line networks, mobile phones are the only way that many African people can access the Internet. With access to cheap mobile handsets and the promise of imminent cheaper Internet access, this is only the beginning. Given a suitable platform from which to educate and recruit consumers, marketers are poised and ready to take advantage of the worlds largest, previously untapped market, the poor people from developing countries like many of those in Africa.

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Social networking and the Mobile Internet; picking the pockets of the poor by Alio Stringer is licensed under a Creative Commons Attribution-Noncommercial-Share Alike 2.5 Australia License.

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