1 July 2009

Africa’s poor: Google’s premium SMS in the crossfire

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Katrin Verclas of Mobile Active points out that the new Google/ MTN/ Grameen collaboration on mobile information services in Uganda is very expensive, and this is creating some problems:

“This will, be definition, limit access of such services to the poorest individuals in the country who are least likely to afford an SMS almost eight times the cost of the cheapest SMS in country. Which means that Grameen Foundation’s headline for it’s press release “GF, Google and MTN Uganda Launch New Mobile Services for Uganda’s Poor” might just be a bit misleading.”

But Erik Hersman, who reflects on the same issue on his blog White African, doesn’t agree:

“The question posed is if people who are claiming to help the poor should charge, and if so, should they make a profit?

I think we’ve seen from the Grameen model in Bangladesh (ex: Grameen Bank and Grameen Phone’s Village Phone program) that you can (and possibly should). By doing so you help both parties; first, by providing a service that consumers value and are willing to pay for, and second by making the business of running an operation self-sustaining. Many good business, or project, ideas die due to lack of sustainable cash flow. .”

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