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SMILE, South Africa

Mott MacDonald has advised a start-up telecoms venture that is using new, inexpensive technologies to cut its overheads and offer mobile phone access to economically disadvantaged people in Africa.

Someone earning a pound a day clearly can’t afford to buy a mobile phone, so the SMILE concept removes the need to own the handset.

For people who have to spend most of their income on food, access to a mobile phone isn’t a luxury – it assists in finding work, buying and selling produce, gaining medical help and transferring money.

Mott MacDonald was engaged by SMILE, a new telecommunications operator in South Africa, to provide social, economic and technical engineering advisory services to help it finance and launch a new low cost business aimed at providing accessible, affordable communications to the lowest income socio-economic groups in various African countries.

We helped build the business plan, secure venture capital, assemble a project team and secure licences for the development of a service allowing people to make mobile phone calls for a fraction of the cost charged by established network operators.

Challenge

The service has to be delivered at the lowest possible unit cost – so it had to be demonstrated that a phone network for economically disadvantaged customers made commercial sense and was bankable.

Solution

We helped developed a business model that involved breaking the telecoms service down into its most basic element, units of time, and making those units as cheap as possible. This was achieved by hiring out handsets and selling air time.

How the SMILE concept works is that agents operate SMILE phones in shops or kiosks, provide customers with a free phone number and mailbox and sell air time by the second.

Operating overheads are kept down using inexpensive technologies such as broadband wireless and voice over data lines.

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