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Cablegate: Niger: Poor, but Not Too Poor for Cell Phones

VZCZCXRO2004
RR RUEHMA RUEHPA
DE RUEHNM #0943/01 3321110
ZNR UUUUU ZZH
R 281110Z NOV 09
FM AMEMBASSY NIAMEY
TO RUEHC/SECSTATE WASHDC 5485
INFO RUEHZK/ECOWAS COLLECTIVE

UNCLAS SECTION 01 OF 02 NIAMEY 000943

SIPDIS

DEPT FOR AF/W, AF/EPS, AND EEB/CPS

E.O. 12958: N/A
TAGS: ECPS ECON SOCI PGOV KWIR NG
SUBJECT: Niger: Poor, but not too Poor for Cell Phones

1. Summary: Cell Phone usage is Niger is expanding rapidly, despite
high costs to users with very limited means. With four service
providers, cell phone growth has left landlines far behind. A
Government of Niger (GON) survey indicates that men are twice as
likely as women to have a cell phone, although use is roughly the
same. Half of cell phones users are rural residents, who decrease
housing, food, and/or clothing expenditures to afford use of cell
phones. Cell phone accounts are prepaid, and use prepaid cards to
add credit; card sellers earn as much as mid-level GON employees, as
do cell phone repairers. Finally, cell phones play a key role in
livestock and grain trading. End summary.

A Booming, Competitive Industry Despite Costs
---------------------------------------------
2. Cellular telephone service has been growing at exponential rates
in Niger, with national service now provided by four companies:
Celtel (now Zain), Moov/Telecel, Orange, and Sahelcom. Despite a
per capita income less than USD 300 and poverty rates above 60
percent, the number of cellular telephone accounts increased an
average of 171 percent per year during the period of 2000-2005, and
reached a national usage level of 12 percent by 2008. Even with
competition among companies, the cost of mobile calls in Niger is
the second highest in West Africa. Costs for national fixed-line
telephone calls are the highest in the region, and there has been
virtually no growth in the number of fixed landline subscribers.
Over 97 percent of telephone subscribers in Niger use mobile
telephony.

Informational, Social, & Economic Gains
---------------------------------------
3. Benefits of growth in cellular communications include access to
information, facilitation of business transactions, organization of
social and family activities, and employment for youth, particularly
young men with minimal schooling. Urban re-sellers of prepaid cards
report average monthly earnings in excess of the monthly pay of
mid-level bureaucrats.

GON Statistics Office Reveals Cell Phone Market Trends
--------------------------------------------- ---------
4. The Institut National de la Statistique (INS) recently released a
report on the economic and social impacts of mobile phone use in
Niger. Titled "The Impact of Mobile Telephony on the Living
Conditions of Users and Market Participants," the report is based on
a survey of cellular phone users and individuals who provide related
products and services, including resellers of prepaid charge cards,
vendors of mobile phones and accessories and repairmen. The survey
included individuals in the Niamey urban area and two rural
communes.

More Men than Women Use Cell Phones, Many Rural Users
--------------------------------------------- --------
5. Cell phone owners are almost twice as likely to be men (65.3
percent) as women (34.7 percent), but women who do own cell phones
typically use them as much as men. Rural users accounted for just
over half of cell phone owners surveyed (Note: Over 80 percent of
Nigeriens live in rural areas, where landline telephone coverage is
extremely poor. End note.) Half of the individuals surveyed
reported a monthly income under USD 115 and monthly cellular
spending averaging 10 percent of that income. While 39 percent
reported spending much more money than they did before acquiring a
cell phone, 41 percent reported that their spending had not
increased significantly but rather they had cut spending on housing
(25 percent), food (20 percent), or clothing (14 percent) to
compensate.

Accounts Prepaid, Recharge Card Sellers' Earnings
--------------------------------------------- ----
6. Most Nigeriens use prepaid cellular accounts and recharge their
accounts by purchasing prepaid cards from street corner re-sellers
who line the boulevards of Niamey and other urban areas. Most
vendors of prepaid cards are young (average age 21 years) and
single. Despite lack of education or prior work experience, they
reported an average monthly income of USD 165, which is higher than
the salary of a mid-level government worker in Niger. Almost half
of the card resellers surveyed reported that they had been victim of
theft by individuals who left without paying for them. Repair of
cellular phones provides employment for a smaller number of
individuals, who reported slightly lower monthly income than the
re-sellers. Cell phones and cellular accessories are sold by
resellers on the street and in market stalls. Of the equipment
sellers, 70 percent are self-employed; they reported almost the same
average monthly income at around USD 130 monthly, as did re-sellers
who work for someone else.

Role of Cell Phones in Livestock/Grain Trading
--------------------------------------------- -
7. The survey evaluated the impact of cell phone use on livestock
and grain traders. Traders reported that before the advent of
cellular communications they had to visit the markets every day to
learn prices and availability of livestock and grain, and found it
impossible or inconvenient to contact customers to advise them of

NIAMEY 00000943 002 OF 002


the arrival of new merchandise. All of the grain and livestock
traders surveyed reported that they now use cellular communications
to contact clients; almost half reported using cell phones to
contact those from whom they obtain products to schedule delivery to
the market, and 22 percent of livestock merchants reported using
cell phones to compare prices at various markets in order to take
their stock to the market with the highest prices.

Poor Use Cell Phones, But in Different Ways
-------------------------------------------
8. The survey found that even though the poor use cellular
communications, they do so in a different way than those with more
money. Unemployed and rural workers do not use cellular
communications with the same intensity as those employed in the
public or private sectors. The elderly, rural users, and the less
well educated use cell phones less than the young, urban users and
the well educated, but the increased availability of communications
is a benefit to all.

ALLEN

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