|Submitted by Mike Grenville on Tue, 12 Dec 2006 11:36|
Text messages are helping resellers replace scratch cards in Africa and South America.
Africa has the quickest growth rate in pre-pay communication, over and above any other region in the world apart from Eastern Europe. Africa had more than 60 million pre-pay subscriptions at the end of 2003 increasing to 100 million in 2005, nearly doubling the size of the market in just two years.
For GSM operators in Africa, as well as in Asia and Latin America, 75-90 per cent of their revenue comes from pre-pay. In these places, few people have credit cards or bank accounts and so scratch cards are mostly used to top up credit. However, as well have having distribution problems to remote areas, they are also vulnerable to theft.
XIRING believes that the pre-pay communication solution that they have developed, in conjunction with Expand, will provide operators with a secure and flexible way to resell credit.
All the operator has to do is provide the merchant with a time credit, which is uploaded onto a smart card and inserted into a mobile XIRING reader. After inserting the correct PIN code, recharge numbers are generated which can then be resold o mobile phone users. The user then sends a SMS to the operator with the recharge code and receives a SMS in return with their time credit.
There are two styles of offline card readers - one small and other like PDA size which can connect to small printer as required legally in some countries.
Roger Mechri,(pictured) International Indirect Sales Manager, XIRING comments: “This type of pre-pay solution is particularly valuable in the developing world, such as Africa, where there is an absence of telecommunications infrastructure and where there are very few cash points and even fewer people with bank accounts. The mobile pre-pay technology allows GSM operators to increase their distribution channels, reaching a much larger network of people, even those individuals in the more deprived regions."
“This virtual pre-pay solution also provides greater security allowing operators to get rid of scratch cards and the associated problems of control and distribution. Africa has the quickest growth rate in pre-pay communication, over and above any other region in the world apart from Eastern Europe. Africa had more than 60 million pre-pay subscriptions at the end of 2003 increasing to 100 million in 2005, nearly doubling the size of the market in just two years.”
Launched February 2006, so far three companies are using the solution in Africa; MTN Nigeria has 5,000 terminals distributed, Nginge Boke 2,000 terminals in South Africa, Expand in Seychelles and in South America Umbryo in Brazil is running a pilot. Discussions are progressing with two operators in Madasgascar - Orange & Madagascar Telecom.
"The technology is encouraging an entrepreneurial spirit amongst small businesses keen to distribute the solution, thereby helping to stimulate the local economies in Africa" said Mechri.