By Wayne Chinembiri, LL.M, a Legal Researcher at Ericsson

Introduction: Mobile money in action

The introduction of mobile money has been a revolutionary turning point in as far as financial inclusion in Africa is concerned. Mobile money has quickly spread throughout Africa and has enabled the fast and seamless money flows with a simple click of a button. Sub-Saharan Africa remains a forerunner in the mobile money space, accounting for 70% of the global market.[1] In countries such as Zimbabwe, Kenya, Tanzania for instance, mobile money is not only part of daily life, but it is a saving grace that facilitates access for people living in remote, rural areas to instantly receive money for sustenance in times of emergencies. Considering that accessing traditional banks or Automated Teller Machines (ATMs) in rural areas is almost impossible, it is no wonder that mobile money has such a strong foothold in Africa. But this is only made possible by cellular standards that power mobile connectivity.

What is mobile money and how do cellular standards help financial inclusion?

  • Mobile money defined

Mobile money is a financial service provided typically by a mobile network operator (MNO), such as MTN Mobile Money, TMCEL and Orange-Money which enables the user to operate an account for receiving, sending money and making payments for goods and services from their mobile phone.[2] There is no need for a user to have a bank account and the mobile money account is normally linked to the cellphone number of the user. In order to emphasize its wide reach, Africa has been termed “the epicenter” of mobile money globally.[3] Therefore, mobile money is very significant as it is replacing the need for ‘hard cash’, ATMs and traditional banks while encouraging greater participation of more Africans in digital banking services.

In this sense, since the mobile money service allows access to financial services to deposit and withdraw money and to save finances or take out loans, it can directly cause financial inclusion of many Africans. African women are especially affected by lack of access to financial services. Mobile money can grant access to financial services such as micro-loans and insurance. Unbanked women and youths, among others, can leverage this financial inclusion to fund entrepreneurship activities and escape poverty. Facilitating nearly USD 2 billion dollars a day in global transactions, estimates are that over 500 million mobile money accounts are in Sub-Saharan Africa alone.[4]

Moreover, 73% of Africans interviewed in a 6-country survey believe that mobile money is encouraging growth for local businesses and social enterprises in their countries. [5] Mobile money is helping them with bookkeeping capabilities, cash flow and easy access to loans, thereby incorporating microentrepreneurs into the financial system. Therefore, mobile money is enabling Africans to access and pay for day-to-day needs including buying food, paying tuition fees for their children, accessing medication, selling goods and expanding businesses. Mobile money collects the payment history of each customer. Thus, entrepreneurs, farmers and the unbanked can use this history to access credit and/or insurance.[6]

  • The 2G GSM cellular standard and mobile money

Mobile money depends on the connectivity guaranteed by cellular telecommunication standards such as the second generation (2G) up to the latest fifth generation (5G). These standards are widely adopted technical specifications that companies follow to give new and existing products, services and processes higher performance while remaining interoperable. For example, mobile phones that comply with cellular standards will be interoperable and communicate with other devices regardless of where they were manufactured or the difference in manufacturers.

The 2G standard is of particular importance because it supports USSD (Unstructured Supplementary Service Data) communications that are the low-cost backbone of most mobile money ecosystems. The USSD allows rapid communication between the mobile phone and the MNO. Processing a simple transaction in a mobile money account such as sending or withdrawing money requires the user to communicate directly with the MNO. This is done by sending a message usually through USSD or via mobile internet through a mobile money application.

R&D efforts behind essential technology

Cellular standards are very crucial to the mobile money ecosystem. However, there is a very strong research and development (R&D) commitment behind standardization. For instance, 2G to 4G cellular standards (and now 5G) were developed by the 3rd Generation Partnership Project (3GPP). 3GPP is a partnership project between seven Standards Development Organizations (SDOs) and includes members such as companies, research centers and universities. While there are thousands of members, 70 % of the contributions are mostly proposed by only ten companies. These companies have made huge investments into R&D and put in millions of working hours to develop and contribute technical solutions which may become part of a standard.

For example, to help in developing the 3G and 4G cellular standards, Ericsson proposed 70, 000 technical contributions to 3GPP. Contributing towards the development of 3G and 4G standards alone cost Ericsson more than 3.5 million working hours in 3GPP technical meetings only. In 2019, Ericsson made 18,243 contributions to help develop the new 5G cellular standard.[7]

While companies and other stakeholders invest significant resources into R&D, guaranteeing a fair and adequate return on investment is very important. For this reason, some companies propose their technical contributions in the hope that they may be included in the standard. However, these companies make a contractual promise to grant access to the standardized essential technology, which is patented, from the very first day to potential users and in exchange for reasonable royalties.

Guaranteeing fair and adequate returns for inventors

Generally, a patent is an exclusive right granted to persons for the protection of their inventions, provided that these inventions satisfy the requirements of novelty, non-obviousness and industrial applicability.[8] When a patent is essential to a given standard (a Standard Essential Patent or SEP), any product, process or service that is designed to comply with the standard must make use of the patented innovation.

SEPs are, therefore, made available to potential users on Fair, Reasonable and Non-Discriminatory (F/RAND) terms and conditions. SEP holders make a contractual commitment with SDOs to license these essential patents on F/RAND terms so that implementers who wish can incorporate the patented technical solutions into their products. In this way, innovative products that comply with the standard are made available to the public.

F/RAND licensing seeks to strike an appropriate balance between the interests of three main stakeholders: the public, the patent holder and the implementer. Examples of specific benefits for the public include standard-compliant devices using ultra-fast connection speeds enabled by 5G, estimated to be 100 times faster than the previous 4G networks. For the product developer, access to essential patented technology is made available from the very first day. [9] And finally, fair and adequate rewards are secured for SEP holders, thereby encouraging continued investment in the development of future cellular standards.

Court interdicts or injunctions must also be made available to SEP holders where they make F/RAND offers and face an unwilling licensee.[10] To be considered willing, implementers should therefore clearly and unambiguously indicate a willingness to enter into a F/RAND licensing agreement, and should negotiate in a target manner.


Mobile money can enable growth of small businesses and entrepreneurship which creates employment opportunities and eradicates extreme poverty. Cellular standards that enable mobile money can transform African livelihoods. Mobile money is an important solution to financial hardships in Africa. Indeed, mobile money can enable financial inclusion and economic participation especially for African women and youths.[11]

However, in order for mobile money to achieve its full potential, it requires a stable, well-functioning mobile network. In fact, about 50% of Africans claim they would use mobile money more if they experienced better network performance.[12] Improvements in coverage and quality of mobile network connectivity will not only encourage faster adoption of mobile money but will allow more Africans to save, invest and access loans through their mobile phones.

Moreover, strengthening patent protection is advisable, as it can encourage investment into expansion of the telecommunications infrastructure and R&D investments into cutting-edge technology.[13] Adequate patent protection allows inventors to recoup their investments and provides them with incentives to keep reinvesting in R&D leading us to the next level of technology.[14]

Therefore, it is imperative that private and public stakeholders continue to support F/RAND compensation for the use of cellular standards. This would positively impact financial inclusion through uptake of mobile money and digitalization in Africa.

Disclaimer: Wayne Thembani Chinembiri is a Legal Researcher at Ericsson. The views expressed in this article are the author’s alone and do not necessarily represent those of the company.


[1] GSMA (GSM Association). 2021b. “State of the Industry Report on Mobile Money 2021.” GSMA, London, accessed on accessed on 23 June 2022.

[2] Mobile money is considered to cover the provision of financial services through a mobile device like a phone, to send, receive, deposit, withdraw and save finances, pay bills and take out loans. Suppliers can be banks, CSPs, remittances, financial payment companies or social media companies. For more comprehensive discussions on the subject of mobile money in Africa, see Ericsson “Mobile financial services on the rise: Exploring the consumer perspective in Sub-Saharan Africa” Ericsson Consumer and Market Insight report, September 2021 accessed at on 7 June 2022.

[3] GSMA (GSM Association) 2021. “State of the Industry Report on Mobile Money 2021.” GSMA, London, accessed on accessed at 26 April 2022.

[4]  GSMA “State of the Industry Report on Mobile Money 2021” n1 above.

[5] Ericsson “Mobile financial services on the rise: Exploring the consumer perspective in Sub-Saharan Africa” Ericsson Consumer and Market Insight report, September 2021 accessed at on 14 April 2022.

[6] Demirgüç-Kunt A., Klapper L., Singer D., Ansar S., Hess J. (2018) “The Global Findex Database 2017: Measuring Financial Inclusion and the Fintech Revolution” World Bank, Washington, DC.

[7] Ericsson, “Standardization leadership” accessed at accessed on 20 June 2022.

[8] African Regional Intellectual Property Organization (ARIPO) “What are Patents?” accessed at accessed on 6 April 2022.

[9] ETSI “What is FRAND?” accessed at on 6 April 2022.

[10] 4iP Council, “National Courts Guidance-Negotiating Licenses for Essential Patents in Europe” accessed at Accessed 11 April 2022.

[11] Demirgüç-Kunt A., Klapper L., Singer D., Ansar S., Hess J. (2018) “The Global Findex Database 2017: Measuring Financial Inclusion and the Fintech Revolution” World Bank, Washington, DC.

[12] Ericsson “Mobile financial services on the rise: Exploring the consumer perspective in Sub-Saharan Africa” Ericsson Consumer and Market Insight report n2 above.

[13]J. Anton H. Green and D. Yao (2006), “Policy implications of weak Patent Rights” accessed at on 26 April 2022.

[14] Ohlhausen, M.K., 2016. Patent rights in a climate of intellectual property rights skepticism. Harv. JL & Tech.30, p.103 accessed at on 15 June 2022.