MOBILE COMMUNICATION AND DEVELOPMENT: A STUDY OF MOBILE PHONE APPROPRIATION IN GHANA by Araba Sey A Dissertation Presented to the FACULTY OF THE GRADUATE SCHOOL UNIVERSITY OF SOUTHERN CALIFORNIA In Partial Fulfillment of the Requirements for the Degree DOCTOR OF PHILOSOPHY (COMMUNICATION) August 2008 Copyright 2008 Araba Sey

ii Acknowledgements My sincere gratitude goes to my supervisory committee chair, Manuel Castells, and committee members Francois Bar, Mizuko Ito and Clara Irazabal. Their guidance, support and critical comments throughout this process have been both challenging and intellectually stimulating. I had the privilege of financial support from the International Development Research Center (IDRC), without which I could not have conducted the amount of fieldwork needed for this research. I am grateful to all the IDRC officers who were involved in the administration of my grant, in particular Laurent Elder, Stephane Roberge, Steve Song, Jean- Claude Dumais and Khaled Fourati. An additional grant from the Annenberg School for Communication made it possible for me to carry out follow-up fieldwork. I acknowledge the contribution of my research assistants ��� Ofori, Charles, Harriet, Abigail, Jerry, Vincent, and Kwesi ��� not only in doing significant legwork, but also participating in several discussions which gave me unique insights into the communication technology landscape in Ghana. All of my research respondents (several of whom wish to remain anonymous) deserve mention for the time and energy they committed to enabling me acquire the data I needed. Several friends and colleagues were a continual source of encouragement and inspiration to me throughout my doctoral studies. From the University of Ghana, Dr. Kwasi Ansu-Kyeremeh consistently pushed me to complete the doctoral program as quickly and excellently as possible and Dr. Owuraku Sakyi Dawson was a rich source of ideas on research literature and appropriate processes for my project. Likewise, Dr. Godfred Frempong of the Science, Technology and Policy Research Institute (STEPRI) and Dr. Amos Anyimadu of the Technology Assessment Project (TAP) were invaluable informants on the Ghanaian mobile phone industry. Finally I am grateful to my family: KK, Baaba, Esi, Ekow, and Arama and friends Larry, Jemima, Daniel and Esi for uncountable moments of practical and spiritual encouragement.

iii Table of Contents Acknowledgements ii List of Tables viii List of Figures xi Abstract xiii CHAPTER 1: Introduction 1 1.1 Background to the Dissertation 1 1.2 Mobile Phone Adoption in the Developing World 3 1.3 Communication, Communication Technologies and Socio-Economic Development 5 1.4 Mobile Phones and Internet Access 8 1.5 What Works? Targeting Consumers at the ���Bottom of the Pyramid��� 11 1.6 Research Problem and Study Objectives 14 1.7 Scope of the Study 18 1.8 Outline of the Dissertation 19 CHAPTER 2: Theoretical Framework 22 2.1 ICTs, Economic Development and Poverty Reduction 22 2.1.1 Digital Divides, Leapfrogging and Universal Access 22 2.1.2 Explaining the Link between ICTs and Development 27 2.1.3 Facilitating ICT Use for Social and Economic Development 35 2.1.4 Shared Access to ICTs: The Model for Developing Countries? 39 2.1.4.1 Mobile Phone-Based Shared Access: Mobile Payphones 40 2.1.4.2 Access and Use of Public Payphones in African countries 42 2.1.5 Cost: A Major Barrier to ICT Adoption and Use 46 2.1.6 The Role of Intermediaries in the ICT Industry 47 2.2 The Sustainable Livelihoods Approach to Poverty Reduction 49 2.2.1 The Sustainable Livelihoods Framework 49 2.2.2 Critique of the Sustainable Livelihoods Approach 53 2.2.3 ICTs and the Sustainable Livelihoods Approach 55 2.2.4 Mobile Phones and Livelihood Sustainability 56 2.3 Innovation, Adoption and Technology Appropriation 57 2.3.1 Approaches to the Role of Technology in Society 57 2.3.2 Diffusion of Innovation 60 2.3.3 User-Driven Innovation 61 2.3.4 Technology Appropriation 63 2.3.4.1 Definitions and Models of Technology Appropriation 65 2.3.4.1.1 Technology Appropriation in Organizational Context 66 2.3.4.1.1.1 Structurational Model of Technology 66 2.3.4.1.1.2 Adaptive Structuration Theory 69 2.3.4.1.1.3 Technology Adaptation Process 71 2.3.4.1.2 Technology Appropriation in Social Context 74 2.3.4.1.2.1 BEAN Framework 74 2.3.4.1.2.2 Technology Appropriation Model 75

iv 2.3.4.1.2.3 Production-Consumption Continuum 77 2.3.4.1.2.4 Technology Evolution Cycle 79 2.3.4.2 Designing for Appropriation 81 2.3.4.3 A Technology Appropriation Framework for Mobile Telephony in Ghana 85 2.4 The Research Goals 89 CHAPTER 3: Methodology 92 3.1 Research Design 92 3.2 Finding a Starting Point 93 3.3 Data collection 94 3.3.1 Interviews 95 3.3.2 Surveys 97 3.3.3 Field Observation 97 3.3.4 Mobile Payphone Operators��� Business Records 97 3.4 Selection of Research Sites 98 3.4.1 Urban Sites 100 3.4.2 Rural Sites 102 3.5 Sampling 103 3.5.1 Interview Sample 104 3.5.2 Survey Sample 105 3.6 Research Process 108 3.6.1 Interviewing 108 3.6.1.1 Equipment Vendors 109 3.6.1.2 Mobile Phone Network Providers 110 3.6.1.3 Payphone Operators 111 3.6.1.4 Mobile Phone Subscribers and Users 113 3.6.2 Observation 114 3.6.3 Surveys 115 3.7 Data Analysis 115 3.8 Field Challenges 116 3.8.1 Selection of Research Population 116 3.8.2 Interviewing Company and Government Officials 117 3.8.3 Interviewing Mobile Payphone Operators 117 CHAPTER 4: Structure of the Mobile Phone Industry in Ghana 119 4.1 A Brief History of Telecommunications Development in Ghana 119 4.2 The ICT for Accelerated Development Policy 126 4.3 Mobile Phone Use in Ghana: Research Evidence 129 4.4 From Contract Phones to Prepaid Transfers: Evolution of the Mobile Phone Industry 132 4.4.1 Introduction of Mobile Telephony 132 4.4.2. From Analog to Digital 134 4.4.3 Introduction of Prepaid Billing 136 4.4.4. Introduction of Mobile Payphones: The Space-to-Space Phenomenon 140 4.4.5. Introduction of Electronic Airtime Transfers 146 4.4.6 Value-Added Services 148 4.5 Market Characteristics 149 4.5.1. Network Coverage and Subscriptions 149

v 4.5.2. ARPU Support Strategies 155 4.5.3. Billing and Pricing 155 4.5.4. Handsets and SIM Cards 159 4.6 Network Technology 163 4.7 Market Fragmentation 166 4.8 Innovativeness in the Ghanaian Mobile Phone Industry 168 4.9 Conclusion 172 CHAPTER 5: Intermediary Services ��� Mobile Payphone Operators 175 5.1. Intermediary Services in the Mobile Phone Access/Use Gap 175 5.1.1. Signal Coverage 175 5.1.2. Physical Presence of Network Providers and Points of Sale 177 5.1.3. Affordability 179 5.2. Mobile Payphone Operators: Characteristics and Experiences 180 5.2.1. Overview of Survey Responses 181 5.2.1.1. Operators 181 5.2.1.2. Patronage 184 5.2.1.3. Benefits and Challenges 185 5.2.2. Mobile Payphones in Community Context 186 5.2.2.1 Rural Research Site: Apemanim 186 5.2.2.1.1. Access to Media and Telecommunications 189 5.2.2.1.2. Payphone Services in Apemanim 191 5.2.2.1.2.1 Operators 191 5.2.2.1.2.2. Payphone Usage Patterns 194 5.2.2.1.2.3. Clientele 197 5.2.2.2. Peri-Urban Research Site: Prampram 198 5.2.2.2.1 Access to Media and Telecommunications 200 5.2.2.2.2. Payphone Services in Prampram 202 5.2.2.2.2.1. Operators 202 5.2.2.2.2.2 Services and Usage Patterns 204 5.2.2.2.2.3. Clientele 209 5.2.2.3. Urban Research Site: Osu 210 5.2.2.3.1. Access to Media and Telecommunications 210 5.2.2.3.2. Payphone Services in Accra 211 5.2.2.3.2.1. Operators 211 5.2.2.3.2.2. Services and Usage Patterns 212 5.2.2.3.2.3. Clientele 222 5.3. Rural and Urban Variations in Revenue Generation 222 5.4 Impact of Electronic Transfer System 224 5.5 Conclusion 229 CHAPTER 6: Consumer Appropriation of Mobile Telephony ��� Owning, Sharing, Using 232 6.1 Accessing Mobile Telephony 233 6.1.1 Paths to Ownership and Subscription 233 6.1.2 Multiple Subscriptions 237 6.1.3 Access for Non-Subscribers 241 6.1.4 Sharing Access 242

vi 6.1.4.1 Non-Commercial Sharing between Subscribers and Non-Subscribers 243 6.1.4.2 Non-Commercial Sharing between Subscribers 251 6.1.4.3 Commercial Sharing: Payphones 253 6.2 Mobile Phone Usage Patterns 264 6.2.1 Calling Patterns to Manage Cost 264 6.2.2 Conserving airtime 265 6.2.3 Buying Airtime 267 6.2.4 Major Mobile Phone Uses 271 6.2.4.1. Call Frequency and Duration 271 6.2.4.2 Free Late Night Calls 274 6.2.4.3 Flashing 275 6.2.4.3.1 Flashing to get a Return Call 276 6.2.4.3.2 Flashing to Greet or Tease 277 6.2.4.3.3 Flashing as ���Women���s Work��� 281 6.2.5 Text Messaging 282 6.2.6 Beyond Calling, Flashing and Texting: Use of Other Phone Features 284 6.3 Mobile Phones and Livelihoods 285 6.3.1 Business vs. Personal Use 285 6.3.2 Perceived Value of Mobile Phone Ownership and Use 289 6.3.4 The Downside of Mobile Phone Use 291 6.4 Conclusion 292 CHAPTER 7: Interactions: Network Providers, Intermediaries and Users 294 7.1 Owning 295 7.1.1 Prepaid Billing 295 7.1.2 Multiple Network Subscriptions 296 7.2 Sharing: Mobile Payphones 299 7.3 Using Airtime 307 7.3.1 ARPU Support 307 7.3.2 Flashing 309 7.3.4 Free Late Night Calls 311 7.4.4 Electronic Credit Transfers 312 7.5 Policy and Regulation 318 7.6 Mobile Phones as a Livelihood Resource and as a Source of Livelihood 319 7.7 Conclusion 320 CHAPTER 8: Conclusion 323 8.1 Network Providers: Technology, Business Models and Profit at the Bottom of the Pyramid 324 8.2 Mobile Payphone Operators: Shared Access to Mobile Telephony 325 8.3 Mobile Phone Users: Access, Affordability and Communication 327 8.4 Mobile Phone Use as Technology Appropriation 329 8.5 Mobile Phones and Poverty Reduction 333 8.6 Theoretical and Policy Implications 334 GLOSSARY 344 REFERENCES 346

vii APPENDICES 368 Appendix A: Additional Data Collection Methods 368 Appendix B: Interview Respondents 370 Appendix C: Data Collection Instruments 372

viii List of Tables Table 2.1: Access to and Use of Payphones (approximate % of respondents) 42 Table 3.1: Summary of Research Site Characteristics 100 Table 3.2: Interviews and Surveys 103 Table 3.3: Survey Sample Characteristics ��� Mobile Payphone Operators 106 Table 3.4: Survey Sample Characteristics ��� Mobile Phone Subscribers and Users 108 Table 4.1: Regional distribution of GT payphones (2002) 124 Table 4.2: Mobile Phone Network Providers 135 Table 4.3 Flashing Units 139 Table 4.4: Number of SIM Cards Owned 153 Table 4.5: Prepaid Tariffs (2006) 156 Table 4.6: Change in Prepaid Tariffs 2003 - 2007 157 Table 4.7: Airtime Price and Expiry Periods - Areeba 158 Table 4.8: Airtime Price and Expiry Periods - Onetouch 158 Table 4.9: Airtime Price and Expiry Periods - tiGo 158 Table 4.10: Electronic (Unit) Transfer Amounts and Expiry Periods ��� Kasapa 159 Table 5.1: Year Business Started 182 Table 5.2: Type of Business 183 Table 5.3: Type of Payphone 183 Table 5.4: Number of Customers Per Day ��� All Intermediaries 184 Table 5.5: Most Frequently Purchased Prepaid Cards 185 Table 5.6: Apemanim Payphone Services 191 Table 5.7: Start Year 202 Table 5.8: Main occupation ��� Prampram Intermediaries 204

ix Table 5.9: Ownership of Business ��� Prampram Intermediaries 204 Table 5.10: Age - Prampram Intermediaries 204 Table 5.11: Type of business ��� Prampram Intermediaries 205 Table 5.12: Number of Customers per Day ��� Prampram Intermediaries 205 Table 5.13: Services ��� Interview Respondents 206 Table 5.14: Profit Generation: Prampram Intermediaries 207 Table 5.15: Ownership of Business ��� Accra Intermediaries 212 Table 5.16: Age - Accra Intermediaries 212 Table 5.17: Type of business ��� Accra Intermediaries 213 Table 5.18: Snapshot of Some Interview Respondents 214 Table 5.19: Number of Customers per Day ��� Accra Intermediaries 216 Table 5.20: Christian Credit Transfers (tiGo) ��� August 14 ��� September 10, 2006 227 Table 5.21: Ayisha Credit Transfers (Areeba) ��� August 28 ��� September 17 227 Table 6.1: Year of Acquiring Mobile Phone 236 Table 6.2: Income and Number of SIM cards 239 Table 6.3: Monthly Income (%) 242 Table 6.4: How often do the Following People Use Your Mobile Phone? 245 Table 6.5: How often do Family Members use your mobile phone? (%) 245 Table 6.6: How often do Friends use your mobile phone? (%) 246 Table 6.7: How often do Neighbors use your mobile phone? (%) 246 Table 6.8: How often do Work colleagues use your mobile phone? (%) 246 Table 6.9: Frequency of using a Family Member's Phone (%) 247 Table 6.10: Frequency of using Friend or Neighbor's Phone (%) 247 Table 6.11: Frequency of using a payphone (%) 248 Table 6.12: Distance from Home to Nearest Payphone 254

x Table 6.13: Frequency of Payphone Use for Making Calls (%) 255 Table 6.14: Frequency of Payphone Use for Receiving Calls (%) 255 Table 6.15: Weekly Expenditure on Payphone Calls (%) 260 Table 6.16: Frequency of using a Space-to-Space Payphone to Make Calls 261 Table 6.17: Weekly Expenditure on Payphone Calls 262 Table 6.18: What do you do when you run out of credits? (%) 268 Table 6.19: Frequency of Transferring Units to Family/Friends (peer to peer) 269 Table 6.20: Frequency of Calling 272 Table 6.21: Frequency of Calling 273 Table 6.22: Frequency of Making Free Late Night Calls 275 Table 6.23: Frequency of Flashing (%) 276 Table 6.24: Main Reasons for Flashing (%) 278 Table 6.25: Frequency of Text Messaging (%) 283 Table 6.26: Most Frequently Used Phone Features (%) 284 Table 6.27: Less Frequently Used Phone Features (%) 284 Table 6.28: Main Reason for Making Phone Calls 288 Table 6.29: Major Benefits of Owning a Mobile Phone 288 Table 6.30: Major Disadvantages of Mobile Phone Ownership 291 Table 7.1: Average Revenue Per User 307 Table 7.2: Preferences for Mobile Phone Behaviors 317 Table 7.3: Summary of Mobile Phone Appropriations 317

xi List of Figures Figure 2.1: Components and Flows in a Livelihood 50 Figure 2.2: DFID Sustainable Livelihoods Framework 52 Figure 2.3: Structurational Model of Technology 66 Figure 2.4: Enactment of Technologies in Practice 68 Figure 2.5: Major Constructs and Propositions of Adaptive Structuration Theory 70 Figure 2.6: Model of Adaptation Process 72 Figure 2.7: Access, Adoption, Appropriation Ladder 73 Figure 2.8: Technology Appropriation Model 76 Figure 2.9: Technology Appropriation in the Consumption-Production Dimension 78 Figure 2.10: Technology Appropriation at the Margins of Social Power 79 Figure 2.11: Technology Evolution Cycle 80 Figure 2.12: Adapted Technology Evolution Cycle 86 Figure 3.1: Research Sites 99 Figure 4.1: Total Telephone Lines 1993 ��� 2006 137 Figure 4.2: Weekly Space-to-Space Payphones Sales 145 Figure 4.3: Network Coverage Maps (2006/2007) 151 Figure 4.4: Mobile Phone Subscriptions 1994-2006 153 Figure 4.5: Areeba Prepaid Card Promotion 160 Figure 4.6: Unlocking Services 162 Figure 5.1: Apemanim, Central Street 187 Figure 5.2: Road to Apemanim 191 Figure 5.3: Fati and Mohammed���s Payphone Sign 193 Figure 5.4: Number of Payphone Calls - Afrifa 195

xii Figure 5.5: Mobile Payphone Revenue - Afrifa 195 Figure 5.6: Length of Payphone Calls ��� Afrifa 196 Figure 5.7: Prampram 198 Figure 5.8: Length of Calls ��� Christian 217 Figure 5.9: Payphone and Credit Transfer Revenue - Christian 218 Figure 5.10: Payphone and Credit Transfer Transactions - Christian 218 Figure 5.11: Average Weekly Payphone Calls 223 Figure 5.12: Average Weekly Revenue 223 Figure 5.13: Average Weekly Credit Transfer Revenue ��� Ayisha and Christian 225 Figure 5.14: Number of Payphone and Credit Transfer Transactions ��� Christian 226 Figure 7.1: Transfer Price List (2006) 314 Figure 7.2: Transfer Price List (2007) 314

xiii Abstract The last decade has seen rapid growth in the uptake of mobile communication technologies around the world. Mobile telephones in particular have demonstrated an exceptional ability to cut through hitherto obstinate barriers to adoption in developing countries. This dissertation examines the processes involved in the introduction, adoption and use of mobile phones ni Ghana, with a view to contribute to understanding of the link between information and communication technologies (ICTs) and socio-econoic development in low-income countries. Through interviews, surveys and field observations, multiple actors in the mobile phone industry are studied ��� network providers, payphone operators and other intermediaries, and mobile phone users. Using the lenses of technology appropriation, sustainable livelihoods, and ICTs for development, mobile phone use is characterized as a cycle of interaction between service providers and mobile phone users. These interactions are, for the moment, driven by cost and affordability considerations linked not only to users��� efforts to conserve income, but also to service providers��� efforts to generate revenue. Thus a stream of innovative delivery and usage strategies circulates between these parties. Amongst these strategies, the role of micro-entrepreneurial intermediaries such as payphone operators has been significant in making mobile telephony more accessible to people with limited income. However, the flow of innovations also has had the result of undercutting the livelihood of these intermediaries. It is suggested that from the perspective of poverty reduction, the major long-term benefits of mobile telephony are more likely to be derived from its use as a livelihood resource (that is, as a communication tool for all activities) than from its use as a source of livelihood (that is, as a direct means of generating revenue).

1 CHAPTER 1: Introduction 1.1 Background to the Dissertation Information and the ability to communicate are essential components of human existence. Electronic communication technologies have made it easier, faster, and cheaper to communicate over short and long distances, bringing personal and competitive advantage to users. The desire to enjoy these advantages is evident in the national communication policies of developing countries, as well as the programs of international development agencies, all of which seek to harness the potential of information and communication technologies (ICTs) for the transformation of their economies. In the process, a variety of policy and practical best practices have been developed to address the challenges of introducing, deploying and enabling the use of these technologies in contexts that differ significantly from the contexts in which the technologies were created. It has also become clear that attention to policy and project planning are not enough to ensure that the telecommunications industry is transformed into a development machine other forces can influence the shape and impacts of the industry ��� including social, economic and political structures, as well as the politics of different demand groups (e.g., Singh, 1999). In recent years, a new hope for ICT access in developing countries has emerged in mobile telephony. Compared to computer-based ICTs, mobile phone adoption rates have been exceptionally high worldwide, hitting 50% (3.3bn subscriptions) of the global population in November 2007 (Reuters, 2007 Telecoms.com, 2007a).1 The process began in August 1981 with the launch of the first mobile phone network in Sweden and Norway and zero percent penetration. However, after taking 20 years to connect 500m subscribers globally, it took the industy just seven more years to reach the 3bn mark (Telecoms.com, 1 As reports on this landmark note however, this does not mean that half the world���s population has a mobile phone subscription, since penetration rates in 59 countries are in excess of 100%, indicating that some individuals have multiple subscriptions (Reuters, 2007 Telecoms.com, 2007a).

2 2007a).2 Additionally, by 2002, the total number of mobile phone lines had officially surpassed fixed phone lines. These statistics are all the more spectacular because the highest growth rates are now occurring in the developing world regions of Africa, Asia and South America. This trend has generated significant interest in the deployment of mobile telephony vis-��-vis other ICTs in developing countries. On the one hand, this interest is demonstrated in the drive by major industry players to pour significant investment into mobile telephone networks in these regions.3 On the other hand, there is increasing recognition of the potential for mobile telephony to bring socio-economic advancement to low-income populations, by addressing longstanding barriers to information and communication capability. There are thus two elements to this story: the delivery of mobile phone infrastructure and services, and the actual use of the technology for global development. It is against this backdrop that this dissertation examines individual and shared access to mobile phones in Ghana. It is concerned with shedding light on the relationship between ICTs and the development process from a user-centered perspective. The user perspective has come to the fore in developing countries, following sharp increases in the adoption of mobile telephony in the 2000s. This chapter introduces the research topic through a discussion of the rationale for the role of ICTs in development, in light of the emergence of wireless communication technologies and the growing popularity of mobile phones. 2 Global penetration was 10% in 2000, 30% in 2005 and 40% in 2006 (Telecoms.com, 2007b). 3 For example, the GSM association reports mobile phone industry plans to invest over $50bn in sub- Saharan Africa between 2007 and 2012 (Telecoms.com, 2007c).