Johannesburg is one of South Africa's largest cities but less than 1 percent of the population has access to land phone lines or Internet service. South Africans are forced to use prepaid cell phones with rates often triple what Americans pay for service. For example, a 20-minute cell-to-cell phone call costs 50 rand (about $8).
These huge fees are limiting South Africa's competitiveness amongst countries such as India and China, which have significantly lower telecom rates.
The largest telecommunications providers in South Africa, Vodacom and MTN, blame the high prices on the cost to build infrastructure across a massive country.
But entrepreneur Rael Lissoos, who describes himself as a "geek with Robin Hood urges" believes there is a way to help South Africa enter the 21st century. He has started his own business; Dabba Telecom to reach out to an over worked and under paid population.
By buying in bulk, Dabba Telecom is able to sell more phone and Internet service at a low price, therefore saving people money.
Daba Telecom began in 2008 and is committed to eliminating the digital divide in South Africa. To date, they have placed 9,000 free phones in homes with the goal of reaching 25,000 by the year's end. Lissoos said, "Our revenue is now growing quite a lot. It's like probably 30, 40 percent a month now." With those figures, Lissoos is on his way to making huge profits while providing basic modern tools to millions of people.
Quotes
"We can buy in bulk at like one rand, and sell it at 1.2 rands, and, actually, people normally would be buying it at three rands. That's win-win. We have got a margin. People are saving money." Rael Lissoos
"His immediate goal is to more than double the number of households with Dabba phones, to 25,000 by the end of this year. If it proves sustainable, Lissoos says this could be the model across the developing world." Fred de Sam Lazaro
Warm Up Questions
1. Name three basic tools of modern life?
2. How have cell phones changed our lives?
3. What is a "profit"? Why is a profit important for a business?
4. How much does your cell phone cost? How much does service cost?
Discussion Questions
1. What is Daba Telecom?
2. Why does Rael Lissoo believe cheaper cell phone service is important for South Africa?
3. Do you think it is important that Rael Lissoo's business makes a profit while providing cheaper cell service for poor communities? Why or why not?
4. How has Rael Lissoos been able provide affordable cell phone and Internet service to millions of South Africans?
5. What ideas do you have that can help others?
Additional Resources
