If you’re using a mobile phone in Africa you’re likely paying for credit as you go, whenever you need the data or call time. Pay as you go credit is by far the most popular option for the majority of people across Africa, but mobile contracts are beginning to get a toehold in some places: mostly the larger cities, where leading smartphone handsets are starting to become available but are beyond the reach of the majority of people without structuring the payment through a contract.
In South Africa, the mobile contract market is still finding its level: while it’s cheaper overall to get onto a contract, the savings seem to be disproportionate to those paying as they go.
One writer noted that the data market in particular is very regressive in South Africa. As the country has some of the expensive prices for data in the world, people who can afford a contract get a much better price for their data over time than people who buy it only when they need it. It’s effectively more expensive to be poor.
As the majority of people in South Africa are still on pay as you go packages, rather than contracts, they’re at a profound disadvantage: not using one is hardly an option as so many vital services are available via mobile, including mobile banking, and health guidance and weather advice. The main problem here is that these services are disproportionately needed by poorer people in more rural parts of the country. Those in cities have access to physical banks, doctors’ surgeries and as a rule their jobs are less dependent on the weather.
Isolated rural communities have been increasingly revolutionised by their access to internet services, with mobile banking getting many people into the banking system for the first time which is much more secure than their previous need to keep physical money in their house or on their person.
While there’s clearly a large market for a contract that serves the needs of these people, a side effect of the pay as you go model is that it allows friends and family have migrated as members of the African diaspora to send credit home using international mobile top up services. This is a vital and popular way for people living abroad to make important contributions to the lives of the people they have left back home, and for now it’s not going anywhere.