Bottom Of The Pyramid Overspending On Mobile Services

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Written by Kevin Mwanza

Expert at a World Consumer Rights Day event in Nairobi said on Friday poor African’s are spending too much on mobile phone services to the extent of foregoing basic needs, ITWeb Africa reported.

Paul Nderi, Youth Education Network programme assistant, said that low income earners, otherwise referred to as the ‘base of the pyramid’, are over-spending on mobile services.

“Majority of the poor … actually use prepaid services as they load cheaper credit where they spend more than those people who are on postpaid services,” Nderi said, adding that a low-income Kenyan who earns about $2 a day spends an average of $0.60 on telecommunication services on a daily basis.

Dorothy Mwikali, a financial advisory expert at investments firm Baobab Capital told ITWeb Africa, “Most of those on pre-pay services either do not know the advantages of post-pay plans, or simply do not have the cash to pay for their monthly subscriptions in one payment.”

But Mwikali urged consumer bodies such as the Consumer Federation of Kenya to be on the forefront in educating subscribers on available subscription plans and to help them save money in the long run.

“Mobile companies will not do that for us, as they are in the business of maximizing profits. It’s only by empowering subscribers with the power of knowledge, will this country be able to move forward economically,” Mwikali said in conclusion.

A mobile revolution in Kenya that has seen the east African Nation lead the world in mobile payments and banking, has helped increase subscribers in the nation to over 70 percent with 31.3 million people connected to a mobile device, according to the country’s industry regulatory body, Communications Commission of Kenya.

Over 25 million people in the country use mobile cash transfer services.