Cell operators stymie local innovation

For all their bragging, the cellular network operators are not proudly South African, because they do not foster any real local innovation and would like to see the country being a net importer of technology so they can pad their margins.

This past weekend I saw that Vodacom was touting a cellphone called the Firefly at one of its outlets, here in Cape Town. The phone is aimed at school children, or rather the parents of school children, who want some kind of control over who phones their children and who their children are phoning.

This Firefly phone is pretty enough. It has a brightly-coloured semi-transparent casing, five buttons, a basic LED screen, and 22 numbers can be stored directly into the phone so they are unusable if the phone is stolen.

Vodacom is retailing the Firefly for R500 plus the cost of a Pay-as-You-Go starter pack. Alternatively it comes free with a contract.

But, as the sales assistant explained the phone to me, I felt my blood pressure rise, because there is a locally-designed and manufactured phone on the market called the Malberry. “Why,” I asked, “is Vodacom importing and selling the Firefly when there is a perfectly good local product?”

The reply was: “Oh, you mean the one at the toy shop.”

They [cellular network operators] would rather deal with large companies offering large discounts, than bite the bullet to help foster South African innovation.

Paul Vecchiatto, Cape Town correspondent, ITWeb

Developed by South African design engineer Andre van der Sandt, the Malberry is specifically designed for anyone who needs communications and control access and costs. It is a very simple-looking phone, fits snugly into one’s hand and has the feel and shape of a smooth pebble.

This phone is remarkable by what it does not have. There is no screen, no keypad and there are only two buttons, which are used to make and receive calls, and only four numbers can be stored.

However, it has a couple of very important features, which – arguably – make it a superior product to the Firefly. It has location-based tracking and is only activated by another cellphone that acts as the controller for the Malberry. By sending the Malberry an SMS, the control phone can harvest information such as what numbers have been phoning the Malberry and the duration of incoming and outgoing calls.

Unfortunately for the Malberry, price is a problem. Because it cannot get the scale of economics, it retails for R1 500.

Bronwyn Johnson, founder of cellular marketing company Mymobilit, and Van der Sandt have been canvassing the network operators for support. While it is approved for use over the Vodacom and MTN networks, this is not the case with Cell C, because it does not have location tracking, and the operators have given this product little, if any, consideration.

“We were shocked when we heard Vodacom was now selling the Firefly,” Johnson told me. “They gave us no chance to come back with a revised offer.”

Apparently, Vodacom told Johnson they could not sell the phone because it is featureless, and their sales people are heavily indoctrinated to sell a phone based on its features. But, here they are selling an import that is aimed at the same market segment.

MTN, apparently, rejected the phone out of hand, although CEO Tim Lowry told me at a dinner he hosted for the media that he was not aware of the Malberry’s existence.

Johnson says she is in talks with some of the other cellular players, such as Nashua Mobile and Virgin, but they really need one of the network operators to step in so they can reach a proper scale of economics to reduce the price.

So, the message from MTN and Vodacom is clear. They would rather import a product than explore local development. They would rather deal with large companies offering large discounts, than bite the bullet to help foster South African innovation. And they would rather splurge on sponsoring rugby teams, golf and other corporate social responsibility programmes than see a viable local industry develop.

I don’t believe that Johnson and Van der Sandt are asking for charity; what they are asking for, along with many other local innovators and entrepreneurs, is a fair chance to show what they can do.

If these local innovators are not given a fair chance, the country runs the risk of sliding into what I call an “electronic subsistence economy”, where we become dependent on imported technology to run our communications and e-commerce networks, and local skills and development is stymied.