Mobile Phone Prices Penalise Informal SMEs in Africa

According to a Link Centre survey, SMEs respondents in 17 countries in Sub-Saharan Africa state that mobile phones are either important or very important for their business. While the percentage of respondents supporting this argument is around 95 per cent across formal, semi-formal and informal businesses, the importance attributed to other ICT items such as fixed-lines, fax, computers and internet connection decreases significantly with the degree of informality. Interestingly, the main reason highlighted by informal SMEs (50.8 per cent of respondents) for not possessing ICT is the high price of mobile telephony. This percentage drops to 31.5 and 22.9 in semi-formal and formal businesses. Thus, any decreases in mobile phone prices would help informal businesses the most.

Source: Gillwald, A. and C. Stork (2008), “Towards Evidence-Based ICT Policy and Regulation: ICT Access and Usage in Africa,” Vol. I, Policy Paper Two, Research ICT Africa, www.researchICTafrica.net