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Africa’s Mobile Phone Future: IP Based, Not SMS

By Wayan Vota on September 15, 2009

With all the hype around the use of text messaging on mobile phones, like Google Trader or FrontlineSMS, it seems that the future of communication in Africa will be SMS.

Yet, Erik Hersman recently asked a great question: Should we be Building SMS or Internet Services for Africa?

David looking for an IP-based future

What a lot of people don’t realize is that for the first time, last year, mobile phones shipped to Africa with data service capabilities outnumbered the simple SMS-only phones that are so prevalent on the continent (Gartner 2009). Of course, this doesn’t mean that there will be a majority of IP accessible phone users immediately, but it is on its way.

Equally important to understand, and a point that increases the momentum of the mobile services over IP argument, is the fact that where there is mobile penetration, there is also available data services. This stands true in Uganda, where MTN says there is 92% GPRS coverage on their network. It’s even true in countries still trying to catch up, like Liberia, where though there are only islands of coverage, that coverage generally comes with data.

Expanding on Erik’s observations, I see several trends that will have the next generation of African ICT solution developers crunching IP code, not developing SMS extensions:

High SMS costs

Currently, text messaging is one of the the most profitable activities for mobile network operators. An SMS costs them next to nothing to transport and deliver, yet those 140 characters are grossly expensive to the end user. Any type of automated SMS traffic (Twitter for example) would quickly bankrupt a company who attempted a large scale activity. This is stifling SMS creativity.

Ability to innovate

Mobile network operators continue to run very closed systems, only allowing very few applications to run directly on their networks. They do allow IP-based services however, with data plans. And with an Internet presence, entrepreneurs can also get international attention and investment, and attract computer users too.

Demand for video

Already, market IT entrepreneurs are selling video compression services so movies can be played on phones. As soon as there is a critical mass of data service phones and plans, expect to have movie services start offering daily downloads. Churches will lead (a sermon a day), and commerce will follow closely behind. Services like this are impossible with SMS, but easy with IP.

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Wayan Vota co-founded ICTworks. He also co-founded Technology Salon, MERL Tech, ICTforAg, ICT4Djobs, ICT4Drinks, JadedAid, Kurante, OLPC News and a few other things. Opinions expressed here are his own and do not reflect the position of his employer, any of its entities, or any ICTWorks sponsor.
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16 Comments to “Africa’s Mobile Phone Future: IP Based, Not SMS”

  1. Mike McKay says:

    Great post! I am so pleased to hear that the data shows that IP capable phones are taking over in Africa. Mobile phones successfully leapfrogged analog lines in Africa, and now it looks like they are poised to leapfrog desktop and laptop machines as well. The second leap will be even more profound, crazy and fast than the first leap.

    While I think that having phones that can access packet based data is good, I think it is critical that those phones have a standard way of dealing with the data. For too long mobile phones have been pushing Java, but what we need is HTTP. IP isn’t enough, we need to be able to GET/POST/UPDATE/DELETE from every phone, big and small. Quality, standards-driven web browsers are key to wide scale mobile phone innovation in developing countries. Once people can view source on their phone, they will mimic and remix their way to a renaissance of creativity, commerce and community driven development.

  2. techmasai says:

    Do we really have to choose, or can both work together to provide new and interesting solutions to our problems. I think we are going to see a hybrid of both technologies being offered to different economic demographics as Africa develops in the near future.

    The IP approach will probably pick up with the middle class and city guys who demand better and more innovative solutions for their bucks. In the rural areas the SMS approach will probably work better because it is simplier, cheaper and more accessible with infrastructure investments.

    I think both have a part to play, and ruling out one method is folly at best, and disastrous at worst

  3. Leland says:

    Very interesting stat on data phone availability and very heartening. A nice cross platform app development suite is what’s in order here. I’ve seen a bit about MS OneApp that sounds very promising, especially given that (in my limited experience) MS is seen as a very legitimate name and is adopted readily.

    In the meantime, I agree that hybrid technologies is the way to go. Can’t shut out the rural poor, but SMS is severely limiting to those whose wealth is on the rise and can afford fancier hardware.

  4. Wayan Vota says:

    No need to choose between SMS and IP, as if we can only have one or the other. SMS will always have its place – just look at how much SMS is still active in smartphone dominant markets, only that the real innovation and opportunity is with IP-based systems.

    SMS has a great advantage that Mike just reminded me of with his quest for standards. The SMS protocol works on every phone and with every mobile phone company. Its limited in what it can do, but its not held back by the issues of IP compatibility complexity.

  5. Wayan Vota says:

    “Mobile networks are costly in Africa. The price of sending SMS texts is kept high by a combination of high taxes, interconnection fees and network provider choice. And because mobile networks are closed, no one can deploy a new application without the network expressly adding it to a consumer package.

    This means that many new ideas will never reach the market, not due to engineering challenges, but because of the underlying cost structure of SMS.”

    This is from the aptly titled Africa’s SMS crisis – and how to stop it by Joshua Goldstein

  6. John says:

    Thanks for the post, it’s rather interesting.Phones are the prevalent computing devices in Africa, but they have numerous drawbacks as far as I know. Today I came across an article where african man Mbugua gives an interview and says that : “The mobile phone is the most important new technology.It is accessible. It is used in Kenya as a mobile wallet. A lot of people don’t have credit cards or even bank accounts. So since 2007 a service was established that has 8 million users and is used to pay even cab drivers or pubs. Meanwhile there were a couple of international mobile conferences in Kenya.”

  7. kiwanja says:

    Great post, Wayan. And just the one main comment.

    With our work on FrontlineSMS we’re totally focused on building tools which work *today* for NGOs, hence our strong focus on SMS. Saying that, we do have web functionality built into the software – for when and where web access is available – and we’re adding MMS features this year. So, for us it’s about building for what’s available. I don’t for one minute think that SMS is the future, but there will always be a place for it in the mobile communications data mix.


  8. Qnetic says:

    What many people don’t realize is that SMS can be received and sent entirely over IP. SMSC’s (Short Message Service Centers) which switch the SMS traffic can send and receive SMS messages over the 3G and 4G radio networks as well as over the legacy 2G air interface. In addition, the signaling involved between the SMSC and the cellular network can be via SIGTRAN (IP based) as opposed to legacy SS7 (TDM based). In addition, SMS traffic can be transmitted to/from applications via SMPP (an IP based protocol), HTTP (for WWW access). Many SMSC’s also support size and content limited email to SMS interoperability. Therefore SMS messages can utilize IP for end-to-end service. Almost all carriers/operators support unlimited text messaging at a modest cost and SMS now interconnects to virtually every SMS network (CDMA and GSM). Unfortunately with IM each service provider uses a different implementation. Which one do you pick do you pick? In addition, the different IM service providers do not interoperate very well. In addition IM does not support push services.

  9. Balogun-Nigeria says:

    With VoIP (making phone calls over internet) and also SMSoIP(Text message over the internet). Both of these are cheap or free. See Skype.

    I forsee a sitution in future, where phone calls and sms will be free. Telecom companies will charge just for internet connection. Telephone companies will metamophose into ISPs.

    Any telecom company that donot catch up with this revolution will fold up.

  10. futherxxx says:

    Most people won’t recognize the fact that ip based communication is the best thing that has ever happened to the sms ride it while you can …7th wave.

  11. davve says:

    So these are the trends for the next years. Nobody expected free phone calls just like in the case of 800 numbers but still I think the telecom companies should review the SMS prices.

  12. anamika says:

    Landline or POTS (plain old telephone service) is soon to become a thing of the past. There is a lot of buzz surrounding this topic right now, and really no need for me to rehash what’s already been said, and being discussed elsewhere. What I’d like to talk about now are some alternatives to landline phone service you can start using today.

  13. allecthomson says:

    Once people can view source on their phone, they will mimic and remix their way to a renaissance of creativity, commerce and community driven development.

  14. luke markses says:

    I also agree with you friend as many people don’t know the fact as ip based communication is best. As here mentioned in one of para as High SMS costs People like to pay cost for these SMS but in real thing mobile operators get profit in this But sending sms is done by using free bandwidth but still operators pay high charges for 1 single sms. Anyways Thanks for discussing here about this situation.

  15. jason jacoway says:

    Very nice post. I think companies should review about their SMS costs. And I strongly agree with it that IP based communication is best is the best thing that has ever happened to the sms ride it while you can….

  16. Leonard says:

    IP is the wave of the future. The problem is designing systems that work with the “now,” which in most African countries, isn’t the Internet. In addition, in many African countries (even those w/ undersea cable links), monopolies have resulted in INSANELY expensive bandwidth. Many countries also *require* mobile operators to buy bandwidth from the state incumbent, instead of operating their own VSATs or buying from other ISPs. This makes IP expensive for everyone, doubly so for the end user. Add that to the fact that its audience is crazy small compared to the number of people with cell phones, and it just makes more sense to design for SMS right now.
    In 10 years, it’ll be a different story, I’m sure. Maybe less, what with all of these undersea cables showing up and all. But today, there are huge parts of the continent where Internet is simply unavailable, and there are huge segments of the population who have not and will not ever use it (illiteracy, expense, lack of access, and a million other reasons). SMS is much more accessible and much cheaper.