A Lesson on Cellular Economics

It's Tuesday night. Laura has had a long day, and I'm tired too. Neither of us particularly feels like making anything for supper, so we call Mimmo's. Tuesday night is two-for-one pizza night.

And an hour later we receive a lesson on cellular economics in Africa.

My cell phone rings, but only once. I retrieve it from the office, punch in the code to unlock it, and a message appears to tell me that I have one missed call. An unknown number.

At home, I would have just stopped there. Probably someone dialled the wrong number, realized it, and hung up. But that's not how cellular economics works in Africa.

I suspected that this was the "Mozambican answering machine," so I hit redial. Sure enough, it was the pizza delivery man, lost. Five minutes later, we had our pizza, only slightly cold.

I wrote previously that cell phones are ubiquitous. That only tells half the story. Most people don't actually have any credit on their phones, so it is very common to receive a one-ring phone call. Call me back, please. On your credit.

In Mozambique, outbound calls are charged; inbound ones are not. That simple fact has a profound impact on cell phone usage here. Everyone with a cell phone is an amateur economist.

* * * * *

In Bangladesh, the Grameen Bank's "telephone ladies" made popular a micro-enterprise of what amounted to a roving phone booth: a lady would receive a loan for a cellular phone and make her living by selling airtime to people in the community who didn't have telephone service but needed to make a phone call.

In Mozambique, a similar model is used by South Africa's OneCell. Even in the capital of Maputo, the streets are dotted with OneCell's bright orange umbrellas. Under these umbrellas, entrepreneurs sell phone calls over a cellular network.

These, like the phone booth back home, will soon be extinct.

* * * * *

Everyone has a cell phone, but few have credit. Sounds like prepaid credit is valuable, right? Right.

In fact, it is a convenient way for people to store and transfer wealth. By punching in a particular series of digits, followed by a recipient's phone number, users can transfer credits from one to another.

Imagine wanting to purchase a small bunch of bananas from the sidewalk vendor, but not having any money left. Rather than handing him cash, you can instantly "deposit" some of your wireless credit from your phone to his (that is, if you've conserved your prepaid credits!).

For the vendor, having less cash means that there is less risk of being robbed.

And I hear -- though I haven't seen it yet -- that there are even enterprising individuals who will purchase the street vendors' excess cell phone credit at a modest discount and resell it to people wanting to replenish their phones.

Cell phone credit, it turns out, functions as a second currency in Africa. Without, I would imagine, having to pay taxes to the government. Yet.