11 Young Entrepreneurs in the Mobile Telephony Sector in Ghana

11 Young entrepreneurs in the mobile telephony sector in Ghana Robert L. Afutu-Kotey Introduction The mobile telephony sector in Africa has grown at a remarkable pace over the past decade and the continent continues to record the fastest growth in the number of people with mobile phone access (Aker & Mbiti, 2010; Etzo & Col- lender, 2010). This has led some researchers to describe the phenomenon as having created a “revolution” (Etzo & Collender, 2010: 659), although the rate of growth has not been uniform across the continent. As the subscriber base of various networks expands, a large informal economy has emerged, providing opportunities for many young people across sub- Saharan Africa to engage in self- employment and entrepreneurship (Chiumbu & Nyamanhindi, 2012; Etzo & Collender, 2010). In Ghana, this group is dominated by young people engaged in selling airtime, mobile phones, and phone accessories, or offering services recharging phone batteries and repairing mobile phone sets. Despite the increasing research interest that has accompanied these develop- ments, entrepreneurial activities within the mobile telephony sector have been overlooked.1 Accordingly, this chapter explores the various types of mobile telephony businesses young people engage in. It draws on extensive fieldwork conducted in the city of Accra with young entrepreneurs working in the sector to identify which mobile telephony businesses young people establish, who these young people are, why they decide to go into such businesses, the various kinds of support available, and young people’s aspirations for working in the sector. In examining these issues, the chapter seeks to assess the role of informal mobile telephony businesses as avenues for generating employment through entrepreneurship among young people. Emergence of the mobile telephony sector and spatial concentration in Accra Influenced by the World Bank and other international development organisa- tions, as well as by global changes within the telecommunications sector, Ghana embarked on a programme to liberalise the sector in the early 1990s (Wallsten, 1999). The aim of these initiatives was, among others, to enable private sector 168 R. L. Afutu-Kotey participation in the provision of services in order to increase access and coverage. To this end, one strategy involved liberalising the mobile telephony subsector and introducing changes to the regulatory framework of the telecom sector as a whole (Frempong, Esselar, & Stork, 2005). Following the liberalisa- tion of the Ghanaian economy, licences were issued to four mobile telephony companies: Millicom Ghana Limited (a subsidiary of Millicom South Africa, currently operating as Tigo), Kasapa Ghana Limited (a joint venture between Kludjeson International and Hutchinson Whampoa of Hong Kong, operating currently as Expresso), Scancom Ghana Limited (operating currently as MTN), and One Touch (currently operating as Vodafone). With the recent licensing of Airtel and Glo, the total number of operators currently stands at six – one of the highest on the continent. While initially slow, the mobile telephony sector in Ghana has witnessed remarkable growth, rising from over 100,000 subscribers to the various networks in 2000 to over 25 million by 2012, according to Inter- national Telecommunication Union data sources. There has also been a corresponding rise in the number of young people engaged in informal support businesses in the sector. Even though these businesses are located across Accra, five localities were selected for this study (see Figure 11.1). Kwame Nkrumah Circle and Madina were selected as the mapping exercise, conducted as part of the data collection, revealed these localities as being hubs or clusters for mobile telephony businesses in Accra. The other three localities were selected due to having a concentration of specific Legend Study Sites Towns Study Road Road Railway Line Water Bodies 0 5 10 20 District Boundary KM Figure 11.1 Map showing study sites in the Greater Accra Metropolitan Area (source: RSGIS Lab, University of Ghana). Young entrepreneurs in mobile telephony in Ghana 169 mobile telephony business activities: at Kaneshie lorry station there are many businesses engaged in mobile phone battery recharging; Tema lorry station is a good example of a transport terminal that accommodates the mobile phone accessories trade conducted on push-trucks; and the Legon–Madina road repres- ents a typical busy road network where young people engage in mobile telephony airtime street trading. Methodology The chapter is based on a broader study titled Youth Livelihoods and Entrepre- neurship in the Mobile Telephony Sector in the Greater Accra Metropolitan Area (Afutu- Kotey, 2013). Using various field instruments – questionnaires, life- trajectory interviews, biographical interviews, and in- depth interviews – primary data was collected from the five study localities above and from institutional sources. The questionnaire survey started by mapping and listing all business activities in four of the study localities,2 followed by stratified sampling and the use of a random number generator in Excel. In all, 354 young people aged 15–35 were interviewed. Issues covered by the survey included, among others, their current business activities, motivations for starting these businesses, financing, skills acquisition, and support for business operations. Life- trajectory interviews were conducted with 15 young people purposively selected in order to obtain a viable representation of the various business types in the sector, the gender dynamics involved, and the study locality. These indi- viduals were interviewed once every four months over a period of three years. The aim of the interviews was to monitor changing trends with respect to business activities, support, and growth. In addition, 25 biographical interviews were conducted, covering issues similar to the life-trajectory interviews. In order to obtain information on legislation, policies, and programmes regarding the mobile telephony sector and the informal economy generally, 13 key informants were interviewed. These included officials from two commercial banks, two microfinance institutions, the Accra Metropolitan Authority, and the Madina Zonal Council. Others included four knowledgeable entrepreneurs with at least 10 years’ working experience in the mobile telephony sector and two executives of the Tip-Toe Lane Traders Association, located in the Kwame Nkrumah Circle in Accra. Unravelling youth engagement in different mobile telephony businesses Over two- thirds of the entrepreneurs interviewed were young men, highlighting how the mobile telephony sector is male- dominated. This ties in with recent studies that indicate the gendered nature of work in the informal economy in Ghana (Ghana Trades Union Congress, 2011; Gough, Tipple, & Napier, 2003; Langevang & Gough, 2009) where an increasing number of men work, although women still dominate the sector overall (Overå, 2008; Wrigley- Asante, 2008). 170 R. L. Afutu-Kotey Although Ghanaians clearly constitute the majority of the young people working in the mobile telephony sector (87%), there is a Nigerian presence in the sector (13%) in line with the increasing flow of Nigerians into different sectors of the Ghanaian economy in recent times. Generally, education levels among young people in the sector are relatively high and this transcends gender barriers. In total, 45% have completed senior high school (SHS), while 33% have completed junior high school (JHS), and only 6% have no educational qualifications. Although about 3% of respondents have completed tertiary education or its equivalent, this group comprises only young men. The observed trend in educational qualifications falls in line with the general trend within the Ghanaian population of increasing numbers of young people who have successfully completed either primary school, JHS or SHS, but cannot find further formal educational or training opportunities to foster their educational aspirations (Palmer, 2009). The study identifies five main types of businesses that engage young people in the mobile telephony sector: trading in mobile phones, airtime or top- up units, mobile phone repair, recharging of phone batteries, and mobile phone accessories. The following section describes young people’s engagement in each of these business types. Mobile phone sales In the early years of the sector’s emergence in Ghana, mobile phone use was limited mainly to the few elite groups that could afford the new technology – politicians, business people, and others who wanted to position themselves in a particular social class. As competition in the sector intensified with the licensing of additional operators, the cost of operating a mobile phone decreased significantly as service operators shifted their emphasis from contract or post- paid lines to pre- paid or pay- as-you- go lines, thus widening the customer base. With increasing taste for the new technology among Ghanaians, young business people identified an opportunity in the sector. Many Ghanaians travelled to Europe and Asia to import mobile phones. Some of these importers included young university students who would occasion- ally transform themselves into seasonal entrepreneurs on return from vacation in Europe and import mobile phones into Ghana. As the demand for the new technology increased, these young traders brought in new and used mobile phones. Currently, the sale of mobile phones, both new and used, is an

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