Imagine an alternative history. Imagine that in 1995, when Microsoft launched their walled-garden MSN service, which they fully expected would, for all intents and purposes, put the Internet out of business, imagine that they succeeded.
So today when you connected to the network, you connected to MSN’s custom portal which showed you all the sites that were part of the MSN network and fed you advertising from MSN’s premium advertising partners. There would be a modest charge for sending email but it would be more expensive to send emails to your friends who signed up to the one or two competitors to MSN. Let’s say Yahoo and Compuserve maintain their own walled garden portals too. Big vendors would host their resources on all three portals but most would host their resources on one portal and if it wasn’t your provider, you’d would have to gateway through to the site on another portal and of course the standards would not be completely compatible so it would look like crap and possibly not work.
Web browsers would evolve into custom browsers that would lock you into using your subscribed network. If you wanted to use another network, you’d have to purchase another browser (yes, they would not be free) or pay some software hacker to unlock your browser from your current network.
Don’t get me wrong, these networks would still have some pretty amazing content on them and we might marvel at how these custom portals were “changing the world”. The Economist might even write an article about how MSN was making a difference in the developing world. But it wouldn’t be anywhere near as cool as the Internet. You would have email and websites because that’s what you had when MSN took over the Internet, but that would be about it.
How do you measure the cost of lost opportunity? How do you value the incredible might-have-been. Certainly we can look at the Internet now and breathe a sigh of relief that Open Standards and Open Source protocols proved vastly more popular than the Microsoft vision of the Internet back then.
It is a little harder to measure when you’re living in that alternate history. And that is exactly where we are with mobile phone networks in almost every country in the world, rich or poor. We pay network interconnect fees that are frankly just silly. We pay charges for SMSes which are sent on a signalling channel which was never intended to be a revenue generator for the operators. As an MTN subscriber, I can only access services from MTN. This is all nuts but we eat it up like it was what ought to happen.
Why? Sadly it is human nature. Thanks to a cognitive bias built into all of us called anchoring, we “anchor” as a fair price what we have previously paid for an item or service. To put it crudely, if you swallowed it once, you’ll swallow it again. That must be the only reason that we would allow ourselves to pay for services on mobile networks that we wouldn’t dream of paying for on the Internet. I think it’s time to bring a little Internet “anchoring” to mobile networks.
So, in spite of the remarkable things that have been achieved by mobile networks in developing countries, we really need to turn up the heat on mobile operators to offer more realistic pricing to consumers. There are a few ways to do this.
- Lobby your government for effective regulation. A strong and independent regulator can sharply curtail rent-seeking by mobile operators. Nigeria is a great example of how this can happen. South Africa is not.
- Introduce more competition into the market. Sadly, this is not as easy as it should be. Partly because regulators are often not very speedy in allowing new competitors into the market but also because new market entrants are often more interested in getting on the gravy train than in driving down costs.
The world is changing though. Ten years ago, we would have laughed if we heard the news that Google was going to build the largest, fastest, and most reliable data centres in the world using commodity PCs and a free operating system. Yet that is exactly what has happened. At the time, there was the dominant mentality that computers had to be huge and expensive in order to be powerful and reliable. The same logic exists today for telephone networks. And the same reality of cheap hardware and free software exists for the deployment of the telephone infrastructure. Wireless mesh voice networks can be rolled out at a tiny fraction of the cost of traditional telephone networks. That’s where we are going with the Village Telco. Stand by for more news in the next few months.