How Nokia and Prepaid Airtime Fractionalization Gave Rise to Africa’s Digital Economy: Guest Post by Niti Bhan

What can we learn about the digital society emerging in Africa without the trappings of legacy infrastructure and institutions?

3 seemingly unrelated events in different parts of the world in the early to mid 90s converged, to culminate in the perfect storm  – what we now call Africa’s Rising digital economy.

One was in the mid 1990s, in a small city in northern Finland, where engineers and designers began work on the product development of a mobile phone that would eventually become one of the best selling Nokia models ever – the 3310, released in Europe and the Far East in the year 2000. The continent of Africa was not yet on their radar as a target market and Nokia’s impact on sub Saharan Africa, as well as its iconic success for its legendary durability was still some years in the future.

The second event was around the same time, in 1994 – 1995. Portugal Telecom’s mobile telephony division TMN, invented the prepaid business model whilst researching ways to lower barriers to credit services, and thus reach a wider audience. They too, were not thinking about the farmers, traders, or biashara vendors on the African continent, for whom the prepaid plan would turn out to be a godsend, matching their needs for flexibility and control over the timing and amounts spent on cellular services. This, too, was still a handful of years in the future.

The third is the liberalization of African state owned monopolies such as in telecommunications in the mid 1990s which opened the doors to private sector operators in cellular telephony, and thus, to competition.

These 3 events would prove to be a fertile time for the perfect storm and the firm foundation on which today’s African digital economy thrives.

Continue reading “How Nokia and Prepaid Airtime Fractionalization Gave Rise to Africa’s Digital Economy: Guest Post by Niti Bhan”