Cell-phone adoption in Africa continues to grow at a rapid pace; the continent is on track to hit the billion cellphone mark in 2015. Many African mobile users don’t have monthly plans with a carrier. Instead, they own phones and buy minutes as they go, “topping off” as their call-time dwindles.
Competition for selling minutes results in fierce mobile-carrier price wars; customers buy minutes from whatever company offers the best deal at the moment. It’s cheaper to call numbers within a carrier’s network, so users often buy minutes from different networks and rotate SIM cards, depending on whom they’re calling. But developing customer loyalty is a huge challenge for prepaid phone-card marketers. How can any one carrier gain a stable edge over its competitors?
Perhaps with a small add-on of ... insurance. That's right: a number of carriers have teamed up with microinsurance providers to offer policies when customers meet a minimum amount topping off their prepaid cards. For many of those who live on a few dollars a day—for whom it is worth taking cell phones apart and swapping SIM cards to save a cent or two—this plan will be the only insurance they have. The system is win-win-win: a great deal for the mobile carrier, the insurance company, and the newly insured.