September 25, 2009
Mobile operators killing SMS revolution
Joshua Goldstein writing for Business Daily describes how African mobile networks are costly because the price of sending an SMS is kept up by high taxes and interconnection fees.
However, there is reason for hope. Mobile companies and regulators around the developing world are recognising the “economics of abundance”— that more users at lower prices will result in more revenue.
In the Philippines, for example, according to telecom expert Steve Song, mobile providers charge less than one US cent per SMS on average. What is striking about this is that they manage to generate three times the revenue per capita from SMS traffic as compared with South Africa where the average SMS costs over nine US cents.
Also, in Uganda, for the first time in the telecom industry’s history, MTN agreed to lower the price of a premium SMS to 5 US cents for Farmers Friend, one of the newly launched Grameen and Google services, aimed at poor farmers.
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