CorpComms Magazine

Most people in the UK probably view their mobile phone as a lifeline, without which they feel out of touch with their social circle. But for 1.2 mn people in Kenya, their mobile phone handsets really are their salvation.

With just a simple text message, Kenyans can transfer much-needed funds to family members or friends. 'People working in urban areas can send money to relatives in rural areas, who then take the mobile with the text message to a registered outlet, like a petrol station or supermarket, and reclaim the credit,' explains Chris Burgess, the 44-year-old newly appointed director of corporate responsibility at Vodafone, the mobile phone group.

The Kenyan initiative, M-Pesa, which launched in February 2007 following a successful six-month pilot scheme, is just one of many ways Vodafone is working to improve communications across its global footprint. 'This was very much a case of, Here is a problem, we have the technology to solve it,' Burgess says. 'We worked closely with the UK Department for International Development (DIFD).'

Indeed, Vodafone was successful in winning funds following a competition run by DFID to encourage private sector companies to engage in innovative projects to deepen the provision of financial services in emerging economies. The depth of the funding problem was initially identified by the Financial Sector Deepening Trust, run by DFID, which found that 17 percent of Kenyans surveyed sent and received money within the country, while 28 percent relied upon transfers from family and friends as their main source of income.

The most popular way to transfer money was via a family member or friend, or even sending it on the bus or via taxi. There are just 450 banks to service a population of around 36 mn, and these are predominantly located in cities and on the coast, to serve the tourist industry.

'There are obviously dangers for people carrying cash. But this scheme is secure,' says Burgess. 'The holder of the SMS text message must produce proof of identity, and will have a PIN number.'

Good works, good business

Such was the success of the pilot that Vodafone is considering launching similar schemes in other African countries. It has also announced a partnership with Citigroup to deliver a cross-border version of M-Pesa. But this isn't a purely philanthropic gesture: Vodafone takes 5 percent commission on all funds transferred across its network in Kenya. Last October alone, this was worth £375,000.

'We need to draw the distinction between Vodafone Foundation, which is a philanthropic operation, and corporate responsibility, which is related to how the business operates and behaves,' Burgess points out. 'But it is also fundamentally about enabling people to access communications and technology for their social good. Parts of society are excluded from being able to do that, such as in emerging markets.'

Among the initiatives Vodafone has launched in these emerging markets is a starkly pared-down version of a mobile phone. While teenagers in Europe may want an all-singing, all-dancing handset with a built-in MP3 player and state-of-the-art camera, teenagers in many parts of Africa just want to be able to communicate.

'It is a stripped-down handset, offering basic voice and text functions,' explains Burgess. 'But our research is telling us that it is having an enormous impact.' This is particularly true in areas where there is no fixed line network and, for the first time, people are able to communicate remotely.

Such initiatives bring responsibility, however, and Vodafone has worked hard in these areas to educate mobile phone users about the company's pricing structure and tariffs. It has liaised closely with various NGOs on how to communicate the costs involved. 'The general view is that the best way to manage a mobile phone account there is on a pre-paid basis,' explains Burgess. 'We want this market to be sustainable on a long-term basis.'

For every market Vodafone enters or operates in, there is a presence from the corporate responsibility department. 'We build stakeholder relations in each market,' says Burgess. 'We engage with, for example, Oxfam and DFID on products and services in the emerging markets, and we discuss with local NGOs what would be helpful. We have lengthy discussions on the ground, which enable us to refine and address what each local market really needs.'

Burgess is aware some critics might claim people in emerging markets need food and water before a mobile phone, but retorts: 'Some of these are very isolated communities. We are trying to bring benefits to their lives. And we are giving people the chance to make the decisions for themselves.'

Expanding network

It is also simpler for a mobile phone operator to respond to these needs than a fixed line provider because a mobile network is easier to roll out. 'But installing base stations brings with it certain difficulties,' says Burgess. 'For example, how do you power them? This is a particular issue in remote areas where they are unlikely to have a power grid.'

Vodafone is experimenting with small wind turbines and local power sources. 'It is early days but we are also investigating the possibility of using technology that would benefit local communities,' Burgess adds. 'There are all sorts of problems with leaving high-tech equipment in the middle of remote areas, however.'

Vodafone is acutely conscious of its carbon footprint, particularly in areas where it is breaking new ground by entering the marketplace. The company is responsible for approximately 1.25 mn tonnes of carbon dioxide a year, equivalent to the output of around 160,000 UK households, of which 80 percent relates to its network.

'We are looking at energy efficiency, and how to reduce the impact of our carbon footprint,' says Burgess. 'We want our infrastructure to be carbon-neutral, and we are looking at how to achieve that with big-ticket items, but we're also committed to recycling equipment, such as handsets. Corporate responsibility is an integral part of our business.'

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