Not since Columbus gave whisky to the native Americans and Livingstone the whooping cough to the pygmies have we seen such unbridled generosity pass between the haves and the have-nots.
I`m talking about prepaid - whether it`s a way to sell electricity, water, cellular or even Internet. Prepaid vouchers are the great South African contribution to global financial instruments. The prepaid voucher gives dirt-poor people the right to talk to people they can`t necessarily see, probably more than they see a need for. It doesn`t ask who you are and it doesn`t care that you live nowhere in particular and can`t afford credit. It brings the great unfleeced into the fold to be shorn, making them pay higher call rates than contract rates, because poor people don`t qualify for contracts.
You`ll notice bitter irony dripping from my words. Why am I so against prepaid? Well, to begin with, am I? No. Water and electricity are good things, but in order of importance, telephony and Internet are probably less important than food and medicine. And prepaid rates are appreciably higher than contract rates. Prepaid has its place, but it`s not among the poor. Give it to cosseted suburban pre-teens and drug dealers in Ponte, but don`t give it to someone who fetches water from a diseased well.
Few seem to take this social reality seriously, though. I`ve read thousands of press releases and listened to many, many vendor presentations talk blithely about taking their services to the unbanked, creditless masses. Perhaps in accordance with some corporate social responsibility drive, but not even after an automatic tut-tut.
This seems to me to reek of complacency and greed. Complacency, because the networks` most well-marketed plans amount to prepaid. Not even when coupled with the benefit of providing communication to the voiceless does it have any direct bearing on tangible, grassroots upliftment. The networks should do better, and have in some cases done so (more about that further down). And I say greed, because the tactic of selling prohibitively-priced luxuries is unsustainable.
Most businessmen would laugh if I suggested that greed is such a negative thing, or that exploiting, say, mineral wealth is bad. Most don`t see a need for dressing up their appetite for growth. Their only driving concern is to find new ways to grow, and one of the few good ways left to do so is to create and tap new markets, such as they are. The thing that keeps most captains of industry up at night is not how to take water and food to those who can`t buy it, but how to make them buy stuff they hadn`t until then considered in their Maslow`s hierarchy of needs.
Alternatives
Prepaid vouchers are the great South African contribution to global financial instruments.
Carel Alberts, special editions editor, ITWeb Brainstorm
My contention is that one can`t simply shrug and keep charging high prepaid rates with total impunity if the unbanked ("unbankable" is an unacceptable term) don`t ordinarily qualify for contracts. The networks must concede the prepaid system has failed and keeps failing the poor, and they must do more to market other solutions, locally and on the continent, to escape blame.
What, then, are the alternatives? There are plenty. Mark Levitt, business consultant at Saicom, a provider of cellular payphones, says GSM payphones in themselves are a cost saving. According to my search on the Web, little by way of such phones are available elsewhere in Africa. In essence, phone operators provide pay-as-you-go calls to the public, but do so on the basis of a contract - between operator and network (or more complicatedly, between payphone service providers like Saicom and the network, mediated by yet more service providers like AutoPage). Could more cost be cut out of the equation if the networks put scalpel to all these service providers, after a credit record has been established. An innocent and probably ignorant question, but one that merits investigation.
Levitt admits prepaid comes at a premium, with one of the difficulties for networks being the costly distribution and payment of pre-printed prepaid vouchers. He says one innovation, "virtual prepaid", allows prepaid users to buy virtual vouchers from payphone operators - with a discounted prepaid voucher presented on a piece of paper rather than a pre-printed voucher.
A further innovation comes in the form of hybrid contract models like MTN`s TopUp and Vodacom`s family packages, which allow for easier qualification for contracts. The user pays a modest monthly fee and gets better rates than prepaid. Once they have exhausted the monthly subscription value, they can continue to use the phone by buying prepaid vouchers - at better rates than prepaid. Now that`s what I call shoulder-to-the-wheel, conscientious innovation!
Levitt predicts that over time prepaid rates will come down, "but they will never be as low as contract rates".
He proffers other alternatives in micro-lenders acting as second-tier service providers that offer contracts to their clientele, with rates somewhere between contract and prepaid rates. "It is certain that over time new banks focusing on the unbanked will also turn to the problem of cellphone credit," he adds.
More tiers? I don`t know. I`d much rather government allowed for free market telecoms competition, as Gary Cousins, developer zone manager at Clickatell, points out. This sort of thing has a way with rates.
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