How a 20-year Old Mobile Technology Protocol is Revolutionising Africa (With Numbers)

A Nokia feature phone dialling a USSD code (Image credit: Rachael Wambua)

Every time you dial *XYZ# to check the airtime balance on your phone, you are using a decades old technology standard called USSD. For a very long time, that’s pretty much all it was used for, but now the game has changed.

USSD stands for Unstructured Supplementary Service Data and I suppose it never got a catchy mainstream alias because it never really took off

(I’m looking at you, Bitcoin).

Mobile operators (especially in Africa — where the market is primarily prepaid) typically use USSD for their internal applications such as balance checks, top-ups, data bundles and promotions.

More recently, banks and utility companies have started taking advantage of the protocol to build mobile banking and utility management applications all across the continent.

Cool Story Bro, So Why Should I Care?

*Well, not every phone — but all phones that support the GSM standard (as opposed to CDMA + others) and that’s most of the phones in Africa. Basically, if you need a SIM card for your phone on the continent, it’s probably GSM.

In the past, developing USSD applications was a specialised activity that was typically performed by network engineers who had some level of professional training. Just see how many USSD developer jobs are listed on LinkedIn.

Over the last few years, banks and other large companies have deployed their USSD applications at great cost due to the engineering effort and equipment required. Until very recently, individuals and small organisations could never even dream of building their own USSD apps.

But now, something truly incredible has happened, with the end result being that:

  • It’s suddenly very easy for developers to build USSD apps
  • The utility of USSD has exceeded use cases far beyond what it’s designers originally imagined

In order for us to understand the incredibly unlikely sequence of events that took place to cause this, we must go all the way back, to the beginning of the mobile revolution.

Sophia Antipolis (Image credit: Wikipedia Commons)

In March of 1997, a little way off the seaside city of Nice in France, a team of engineers from the European Telecommunications Standards Institute (ETSI) released a standards document for the Global System for Mobile Communications (GSM). Based in the technology park of Sophia Antipolis, the ETSI documents standards for use in the global telecommunications industry.

This document, GSM 02.90, covers a little known and obscure niche protocol designed for technical communications between a mobile network operator’s computers and it’s subscribers handsets.

The cover page of the GSM specification document (Image credit: ETSI)

When mobile as an industry started taking off, operators quickly realised that there would be a need for a protocol to facilitate easy machine-to-machine communications to perform tasks that would need the device (in this case, a phone) to query the network.

Thus USSD was born to supplement (it’s in the name) existing GSM standards that were more focused on person-to-person communications.

The designers of the USSD standard (probably) never envisioned a scenario that would have the protocol being used for applications outside of the internal operator network, thus it is a very simple protocol with limited functionality.

USSD’s simplicity is what makes it so powerful, as all phones can easily support it without the processing hardware demanded by smartphone platforms such as Android and iOS.

However, it’s original design didn’t take into account another emerging technology, The Internet, and how the introduction of smartphones would bridge the worlds of computing and telecommunications to form an entirely new industry.

IBM Simon, the first “smartphone” (Image credit: Wikipedia Commons)

The IBM Simon was the first (sorta) smartphone — combining telephony and applications for the very first time. Released in 1994, it could send emails and had a few basic apps.

By the time the USSD standard was coming to life, the industry best practices for building apps were centred around leveraging mobile data to transfer data over the Internet.

Improvements to the quality and power of smartphones as well as the capacity of mobile data networks only fuelled this trend for years. Because of this, most parts of the so called “developed” world have never seen a strong use case for USSD.

The high Internet penetration in some parts of the world has made it such that USSD could never be useful, and thus very little innovation has taken place on top of it.

But Africa is special

The continent has about 18% Internet penetration but over 80% mobile penetration [source]. This 80% that are connected on mobile represent over 960 million people who have phones.

These people have real lives and real problems, and software developers can build apps to solve these problems.

However, software developers truly building for Africa don’t have the luxury of using Internet-enabled technologies or smartphone platforms, simply because their apps would never be adopted at scale through those means.

And while smartphone adoption is on the rise, most Africans’ first phone is still likely to be a feature phone, as low-cost Chinese manufacturers dominate the continental landscape.

Fancy numbers validating my above argument (Image credit: Atlas)

Does this mean that these feature phone users have to be excluded from the app revolution currently changing how humans live all over the world?

The answer is no, and the reason is USSD.

But How?

The original designers of USSD made it to work something like this:

Legacy USSD Workflow Implementation (Image credit: Wiza Jalakasi)

With the advent of the Internet, and a lot of technology innovations that happened in between now and then, USSD now typically works like this:

Modern USSD Workflow (Image credit: Wiza Jalakasi)

Any developer will tell you that building for the Internet is not that difficult at all. Standards for web development are pretty straightforward and the learning process is incredibly democratised (just Google “how to build a website”). There are tons of resources for the everyday individual to leave their digital mark on the world.

The convergence of the world of the Internet and the world of USSD has been made possible through application programming interfaces (APIs).

APIs make it possible for application developers to build on USSD with the same skills and technologies they use for web technologies. This means that any developer who can build a smartphone app or a website can definitely build a USSD app and doesn’t need to learn anything new.

Full-disclosure time before the enlightened but angry call me out in the responses: I lead International Expansion at an API company in the USSD (+SMS, Airtime, Voice, Payments) space called Africa’s Talking — so now you know why I care and that I may have a motive — and that’s ok because nobody really stands to lose here.

Developers all over the continent are taking advantage of these APIs to build incredibly powerful things.

One such example is Qina Jere, a young Malawian developer who has built a USSD app that allows women to track their menstrual cycles and receive notification SMS messages about their fertility windows for family planning.

Bwenzi Lathu — a USSD app running on Airtel Malawi via Africa’s Talking USSD APIs [*384*720#] instantly available to over 3.8 million people (Image credit: Qina Jere)

Now you will notice that there are many such apps available on smartphones, my favourite being Clue (don’t ask) but these apps are incredibly useful for women who don’t have any alternatives or family planning advice — such as the millions of women in Malawi who don’t even have access to electricity but at least own a mobile phone or can get access to one.

The best part about USSD apps is that they don’t need to be installed because they run on the network, not the device.

So the moment a USSD app is deployed to a network, it’s instantly available to every subscriber. You can verify this now if you’re in Malawi and on Airtel by dialling *384*720# to use the Bwenzi Lathu app, with all the information stored in the cloud and transmitted securely. (It all happened like I said it would)

I don’t use the word revolutionise in the title of this post lightly. This technology is literally changing how women plan their lives and families, as they now have mechanisms to control when they want to have children.

Countless industries could benefit from USSD and the continent is already seeing massive uptake in industries such as banking, microfinance and insurance. Just to be clear, I don’t believe that USSD will replace apps (and I’m not the only one) but instead, the technology can be layered on top of existing apps to reach a much wider audience.

In fact, a whole new generation of technology startups are coming up centred around USSD. For example, Biscate in Mozambique and Mines in Nigeria. And these aren’t small startups, they are raising funds in the $1m region because of the scale they are able to reach with USSD.

The question of whether USSD will take over the feature phone app scene is no longer a question of if, but when. The first generation of USSD innovators is already here, and they are already making strides.

What will you build?

VP @ChipperCashApp • apprecentice investor • ex-strategy @usehover • ex-BD/expansion @africastalking • https://wiza.jalaka.si

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