GSMA Report Explores the Value of Pay-as-You-Go Solar for Mobile Operators in Africa

On a trip to Africa just a few years ago, I was unable to recharge my mobile phone because the power was temporary unavailable in the city that I was visiting. This experience was a reminder that the value of a mobile phone to an individual is diminished if she is unable to keep device charged on a regular basis. Given the ubiquity of mobile phones in developing countries and their important value not just as a communication tool, but their use for utilizing value-added services such as education, business management, and mobile banking.

According to a study produced by the GSMA's Mobile for Development Utilities program, which aims to improve access to basic energy, water and sanitation services in underserved communities using mobile technology and infrastructure, the pay-as-you-go (PAYG) "solar model has spread rapidly across developing countries as a means of delivering energy services. Over one million PAYG devices were sold during the first six months of 2019. The growth of PAYG solar has only been possible with the rapid growth of mobile money and mobile connectivity that allows customers to pay by instalments, and companies to remotely control and monitor the solar home systems (SHS). And in turn, the PAYG solar industry has helped to drive the adoption and use of mobile money, by giving customers a regular and essential use case. Solar energy provides mobile subscribers with a convenient, safe and affordable way to keep their phones charged."

Available in English and Français, the report explains that it is "the first multi-country analysis to quantify the value of that synergy for the mobile industry. This was done by looking at mobile usage data from cohorts of PAYG customers starting six months before, and through the first six months of making SHS payments, and comparing this same analysis to a control group (not using PAYG solar). Five mobile operators from Uganda, Rwanda, Benin, Côte d’Ivoire, and Zambia worked with us to provide aggregated and anonymized mobile money and GSM data in order to measure the commercial value that the PAYG solar industry has for the mobile industry. The key findings from this analysis are as follows:"

PAYG solar customers show significantly increased mobile money usage, beyond just solar payments

"Across markets there is a clear trend showing that PAYG solar customers increase their mobile money usage from 27 percent up to 113 percent," the report says. "Customers made more mobile money transactions not only to pay for the solar home systems, but more transactions overall. This shows that PAYG solar can drive a range of mobile money transactions, and therefore makes a very important use case to develop mobile money ecosystems."

PAYG solar drives adoption of mobile money

"Across markets, 21 to 31 percent of PAYG solar customers were new to mobile money, or reactivated their accounts (after being inactive for 90 days or more)," notes the report. "This demonstrates that PAYG solar companies are laying the foundation of mobile money by introducing, or re-introducing customers to the service through their agents, and providing them with the essential training to keep making their payments for each PAYG solar instalment."

PAYG solar customers yield increased overall revenue for mobile operators

"It is striking that overall revenue did increase at higher rates than the control group in all markets. This shows that PAYG solar customers increase their usage of other mobile services, such as voice, SMS, and data more than other customers. Specifically, in two markets where we had data (Côte d’Ivoire and Uganda), PAYG solar customers significantly increased their usage of mobile data. This finding is particularly important because it shows that in an era where mobile operators are struggling with declining voice revenues, PAYG solar can lead to broader digital inclusion."

PAYG solar demonstrates the case for strengthening and broadening collaboration

The report asserts that "[t]hese findings provide robust evidence for the immense value that PAYG solar has for mobile operators to grow their business - helping them to reach more consumers and deepening their use of mobile services. Nonetheless, there are limitations to this kind of study, and we faced gaps in the data, for example we found it difficult to measure the impact of PAYG solar on reducing customer churn for mobile operators due to the limited timeframe of the study."

In addition to the aforementioned findings, the report presents three key actions for the mobile industry to stimulate PAYG partnerships:

1. "For mobile operators already working with PAYG solar providers, there's a need to look at how deeper collaboration with these partners can further drive these mutual benefits.
2. "For all mobile operators, investing in mobile money as a full business platform is essential to attract innovative service providers, and allow them to quickly and affordably put it to work.
3. "Mobile operators can gain unique business intelligence on their partnerships from their data."

Lastly, I share in the "hope that this analysis provides the groundwork for deeper research on synergies between mobile operators and PAYG solar providers, as well as other PAYG services that are gaining traction in emerging markets, such as prepaid water and cooking gas."

What recommendations do you have for how mobile operators can support sustainable development initiatives?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.