Since its launch in April 2008, handset provider Mi-Fone has been catering to mass market sectors in emerging markets, providing affordable handsets with in-demand functionality – and all the while making sure to invest back into the markets that have made it profitable. Developing Telecoms editor James Barton recently had the opportunity to catch up with Alpesh Patel, founder and CEO of Mi-Fone.
Set up by Patel using his life savings, Mi-Fone has thus far avoided soliciting outside investment but managed to become profitable by its second year, largely by learning from the successes and failures of larger firms that had ventured into Africa before and planning its strategy accordingly. The firm’s commitment to Africa is evident from Patel’s determination that his company’s growth will provide direct benefits to its markets: “Brand building in Africa produces a profit margin, and this is invested back into the business and into Africa – we’re employing and training local people, but also providing community services.”
The firm’s focus then is solely on Africa; Patel notes that the company has established itself as the first African mobile devices brand. A firm that decides to sell devices in a massive growth market is going to face some stiff competition from the industry’s biggest hitters, but Patel knows this – he is optimistic that his firm will overcome this challenge. “A company can’t just sell devices to succeed – it has to sell experiences”, he says. “Our mandate is to communicate directly with the consumer, to establish the kind of features that he or she wants, and to design a device that becomes indispensable to their life.”
Perhaps the most obvious element of Patel’s strategy is the Mi-Apps platform, which can be accessed from any of the firm’s product, but is also handset agnostic, highlighting the firm’s emphasis on user choice. The software allows customers to purchase first party and hosted third party apps through an ergonomic interface, allowing them to customise their device with content of their choosing – a key differentiating factor in many African markets, according to Patel. “Status and individuality are of key importance in Africa”, he says. “People will pay a little extra for value added, compared to a market like India where people are perhaps more price conscious.”
The feature phones offered by Mi-Fone offer a wide range of content and services, but fall short of offering sophisticated smartphone functionality due to the minimal Java processors which power them – and keep their prices low. This isn’t a problem, claims Patel – it’s more important that the phones are affordable, and for this they need only services which are directly relevant to the consumer’s life: email, mobile banking, instant messaging, m-agriculture services, educational content, and music and entertainment.
However, establishing the significance of these services to particular consumers is of paramount importance. Patel maintains that his fifteen years of experience in Africa’s telecoms sector have shown him that the biggest mistake companies make is to treat the continent as a homogenous market, rather than attempting to understand the requirements of each individual market. “Products and services are not necessarily transferrable”, he says. “What works in Kenya might not work in Uganda.”
The firm is currently present in twelve different African markets, and is aiming to expand throughout the continent. Going forward, says Patel, the company’s focus will remain on handsets. “It’s all about the device - people can’t afford laptops, they want access to all these services via a low-cost device, and there needs to a sole, integrated model that allows people to pay for the content they access.”
It is clear that the concept of integration is at the heart of the Mi-Fone’s design ethos – most of their handsets feature built-in social networking functionality, and the firm is currently developing technology to integrate mobile financial services as well. Patel explains that the company works with tech specialists – developers, cloud providers, etc. – offering them branding for their newly developed white label services.
Other in-demand hardware features are incorporated in order to distinguish the handsets – and some, such as dual-SIM, provide are beneficial for both consumers and operators. “People have two SIMs for several reasons – business and pleasure, week and weekender packages, or simply because interconnect costs are very expensive and they want to talk to friends on other networks”, notes Patel. “This allows operators to target existing mobile users to increase their penetration.”
Penetration rates in Africa are very low – currently, they sit at 60% for voice and just 5% for data, making the entire continent a massive growth market. “There is a lot of room for data to grow”, says Patel, “and Africans want connectivity via a device. An affordable data device will therefore give you control over that market.”
