Tag Archives: Mobile

Mobile Money Infographic for Kenya (2013)

The GSMA Mobile Money for the Unbanked unit has just released a new infographic on the history and metrics for Kenya’s mobile money giant Mpesa, from Safaricom. It’s an extensive and incredible chart. Download and save this one for later, it has all the information that you need.

A Kenya mobile money infographic (2013) by the GSMA

A Kenya mobile money infographic (2013) by the GSMA

Interesting figures for 2013:

Average value per transaction: $29
Percentage of GDP transacted: 31%

By April 2013 Mpesa:

  • Averages 142bn Ksh transacted per month. ($1.67 billion)
  • Has a total of 56 million transactions per month
  • Has 23 million customers
  • Has 96,000 agents around the country

Also in 2013, the Kenya government levies a flat tax of 10% on all Mpesa transactions. Safaricom also raises charges to counter this. All users now pay more, but it’s hidden so that you don’t see the charge, unless you do the math on the balance remaining after you send funds.

Means of money transfer before and after Mpesa

Means of money transfer before and after Mpesa

Ghana’s Saya App Pitches at TechCrunch Disrupt

There’s a Ghana email list of tech guys that I’m on. Opening my email this morning, I was pleasantly surprised to see that a Ghanaian team was pitching last night at TechCrunch Disrupt.

Saya is an app for texting. That mixes SMS, Facebook chat and hyperlocal findability to get in conversations with those near you. They’re on Android, Blackberry and waiting for their iPhone app to be approved.

Robert’s pitch revolves around the 5.8 billion NON-smartphones in the world, and how that market has needs that need to be addressed by apps like their own. Ways to communicate via SMS in a much more elegant way.

Saya isn in a tough position, trying to get US and European-based investors to think that anything to do with old tech like SMS can be big is quite difficult. Their paradigm is set in the West’s way of thinking about being intoxicated the newest tech, not understanding how much of the world more fully uses each technology before discarding it.

Without knowing anything about how many users Saya has, I can say that it looks like an app that will really work in Africa and therefore many other parts of the world. Just looking at the app, it seems that they have a strong focus on product, and are paying attention to things like design details that really do matter.

Good job guys, and good luck!

How Safaricom Steals Your Internet Bundle

99% of Kenya’s 6.5m internet users access it via mobile, of which Safaricom owns 77% marketshare.

In Kenya, when you buy a 1.5Gb internet bundle from Safaricom you pay 1000ksh (~$12). You’ve paid for the data, and there is no additional cost to Safaricom if you were to use that data today or a year from now. The whole concept of data bundle expiry is ridiculous, as noted by Safaricom CEO Bob Collymore when he visited the iHub:

“When you go into a petrol station and fill up your car, does the owner of the petrol station tell you to bring it back on Wednesday to take back what’s left in the vehicle? Of course not. So I ask, why the hell are we doing that?”

Bob goes on to say that he isn’t going to be an apologist for this practice, that there is a problem with leaving the data there ad infinitum. That 60 days is probably too short and that Safaricom does need to change how they handle this.

  • Until recently they just held your data hostage. If your data expired, you could recharge with just a few shillings of data, this would re-trigger your “old” data that was past the expiration, and have that available to you again.
  • Today, it is “data gone, money stolen” after expiration. They cut you off if you haven’t used all of your internet bundle in the nominal 7-90 days, no matter how much is remaining.

I brought this up with Bob Collymore, and his chief executives when they visited the iHub earlier this year (see video), at which point he admitted that it was indeed a dubious practice that would be changed to something much more open to users. You’ll see what Bob says at the 1:17 mark in the video below.

Here Bob is on video speaking to this point (I’ve saved the link to go to the right point in the video):

The other day I caught a Tweet from Sunny Bindra about some surprising changes:

Safaricom is actually very responsive on Twitter, probably the best big company on social media in the Kenya. They followed up with Sunny with this:

So, Safaricom didn’t broadcast this significant change in the way data bundles are handled broadly. Apparently, “publicized on our website” means quietly posting a PDF somewhere in the morass that is their website to notify the data using public of the changes.

If you follow the links to the PDF, you’ll find the following:

What is the Validity period?
This is the time frame that you have to use the bundles, when this period elapses it means that any remaining bundles will have expired and will not be available for use.

(Note: there is conflicting information on how long bundles will last, you can only find out by topping up a bundle. I did this for 1.5Gb and found that it’ll last 80 days, not the 30 that they say in the PDF. I don’t know if it’s more/less time for other bundle amounts.)

It’s in Safaricom’s best interest for you to keep buying more data, over and over, even if you haven’t used it. It costs them nothing to let you use it over a longer period of time, or to keep recharging it.

In Conclusion

I’m disappointed with Safaricom, especially after Bob Collymore came to the iHub and said he was going to fix this, not break it further.

This is an outright fleecing that the Safaricom team should be questioned on. In a country where they are the monopoly player on the primary source for people to access the internet, this makes them appear like a bad actor.

Basically, we’ve gone from a bad system that was promised to be made better, but which had a corrective option, to a worse system that has no option.

Other Safaricom Data Miscellany

While I’m at it, let’s go ahead and talk about a few other ways that the data service that Safaricom raises the bar for bonehead usability: buying data bundles themselves.

Case 1:
You used to be able to send airtime to a SIM card on your Safaricom modem. Then, using the inbuilt Safaricom Broadband app, send an SMS to 450 with the amount of the bundle that you wanted to buy, now 450 only seems to work for checking your balance.

With the new service updated in the aforementioned PDF you can now only use the USSD code to update it.

Solution now?
Take the SIM card out of your modem, load it in your phone and do the USSD code. Once confirmation is received, switch that SIM card back to the modem.

Yes, that’s correct. Instead of being using the software that comes native with your modem, you now have to use a phone to update your bundles. Why would you change your system to not work with everything that people use? I’m quite curious actually. I can’t understand this decision from a either the business or the product side at all.

Case 2:
Safaricom wanted to make it easier for people with modems, iPads, Android tablets and smartphones to be able to update their bundle (good idea). They created http://portal.safaricom.com/bundles for this purpose. Let’s say you’re out of data, you have no credit on your phone. How do you get to this page?

Solution?
There are none. You’re stuck because this page isn’t zero-rated. This is mind-boggling in it’s oversight. I have no data, therefore I cannot go to your page to load more data. Seriously… who is the genius that thought this up? Or, probably more accurately, what form of bureaucracy is in place that allows this mediocrity to persist?

Further, if you’re Safaricom who controls 77% of the consumer internet access in Kenya, why wouldn’t you zero-rate your whole Safaricom.com domain and make it free for anyone to surf, even if they don’t have a single shilling on their phone?

[As a resource, here is the latest quarterly Communications Commission of Kenya (CCK) PDF report on the tech scene in Kenya.]

Quick Hits Across African Tech

What Africa’s Entrepreneurs Can Teach the World
Ghanaian friend and TED Fellow Bright Simons does a piece for Harvard Business Review on African entrepreneurs, excess diversification and hyper-entrepreneurship. A quote:

Then there’s the tendency toward what I initially saw as excess diversification. My think-tank colleagues and I were stunned to see how many concurrent businesses the typical entrepreneur owns and manages in Africa. One famous waste utility entrepreneur had about 66 different businesses. On the whole, the businesspeople we studied appeared to run an average of six businesses.

Twinpine: Nigerian Mobile Ad Network
Forbes does a piece on a startup that I hadn’t heard about yet from Nigeria, Twinpine, who is setting up a successful mobile advertising network.

Re-inventing Finance
There’s a good talk by Sean Park from Lift 2012 called, “Reinventing Finance: an Emerging (Digital) Reformation” where he talks about the changes in the money space, with examples of who to look out for.

Infographic: Mobile Web East Africa
Interesting numbers, quotes and data from the Mobile Web East Africa conference.

30 Brilliant Startups Across Africa
If you’re looking to find some startups from many different countries across the continent, Memeburn has an article, selecting 30 companies that are doing cool, new things in tech in Africa.

African Domains
I’ve been having fun following a Twitter handle @AfricaDomains recently, and the Africa Domains blog is worth a read as well.

Kenya: Big vs Small
Big international firms (think IBM, Dimension Data, etc.) are beating out smaller local firms to lucrative government contracts, which makes up a significant portion of the annual tech spend in the country. The Nation opened up this debate with this article, that then went on to have a real face-to-face debate by the end of the week.

InMobi Mobile Media Consumption Research Q4 2011 – Global Results

Will The Real Payment Disruptor Please Stand Up

Farhad Manjoo makes a compelling argument for why the real winners of the payments revolution are the same players we already know, the credit card companies and the banks, in his, “Don’t mess with credit: Why the future of payments is already in your pocket.

“Nearly every start-up working in payments is simply creating a new front end for your credit card. That’s not a small thing; we need new ways to use our credit cards. But we shouldn’t forget the true winners in this new marketplace—whatever innovations we see in payments over the next few years, there’s a very good chance that most of the rewards will flow to Visa and MasterCard.”

This is true… if you live in the US or Europe.

It’s also why Mpesa is so important, as it represents a new form as well as a new source.

Mpesa destroys the paradigm of payments as we knew it

It’s a good thing that Mpesa happened in Africa. It offered a new way of thinking about money and payments, without the legacy baggage of banks and regulations meant for another century. The powerful banking interest were held at bay, not by great power, but by indifference – this is Africa afterall, who cares about this market?

With Mpesa, and without a bank account:

  • People can send and receive money.
  • People can store up to $1000 in the system, creating a pseudo-savings account.
  • There are no credit card companies involved.
  • There are no banks involved.

Mpesa is big now too, big enough to garner a lot of attention from the the credit card companies and banks. M-PESA has over 14 million users in Kenya, 9 million in Tanzania, and hundreds of thousands in Afghanistan and South Africa now too. It now processes more transactions domestically in Kenya than Western Union does globally, somewhere in the range of 25% of Kenya’s GDP is transacted on it.

The banks actively lobby against mobile-based payment and money systems now, globally, as it constitutes a massive competitive threat that they are unable to compete with due to a multitude of reasons, one of which is simple transaction costs. The credit card companies are watching closely too, and moving. Mastercard and Visa both are working on mobile offerings, seeking to link with mobile operators in order to bypass a would be competitor.

Mpesa isn’t perfect – we need a payment system that works across mobile operators and can be synced (easily) with any bank, if needed. While it could improve, it’s still worth pointing out the really big missed opportunity here is by Vodafone. Like I’ve said before, if Mpesa was rolled out at as an independent company led by Michael Joseph, it could battle the credit card companies of the world and unseat them in many markets.

What’s interesting to me is that in the arguments in the US and Europe on “the future of payments” the real innovation, with real numbers, isn’t being mentioned.

Update. some new blog posts on this topic:
Could we live without cash?
Payments, the more things change…

Pivot East: East Africa’s Startup Pitching Competition

Mark your calendars, buy your tickets, submit your applications!

We’re ramping up to the Pivot East pitching competition, where the best startups in East Africa come to show what they have, pitch their startup to investors, media and the judges for a chance to win the prize money.

Pivot East will be held at Ole Sereni Hotel in Nairobi, June 5th and 6th. Last year we had over 100 applications for the 25 slots, and we’re expecting even more after seeing how well Pivot25 did last year (writeups by TIME Magazine and CNN). Last year we saw startups from Kenya, Uganda, Rwanda and Tanzania, and this year we’re hoping to see some from South Sudan and Somalia as well.

WERE2011_PIVOT25-1610

Categories

As last year there are five categories, each of which will have five startups that will pitching in them. If you think you have a prototype, a deck and a business plan to wow everyone with, let’s see it. Applications are open.

  1. Financial Services
  2. Business and Resource Management
  3. Entertainment
  4. Mobile Society
  5. Utilities

Getting more information

Pivot East is put on by the m:lab East Africa, an incubator for startups in the mobile apps and services space. All profits go to support the facility. This year support comes from Samsung, and we’ll be announcing a few more big names in the coming weeks. If you’d like to be one of them, contact us.

If you have any questions, we’re having a meeting a Baraza at the iHub on Monday the 6th of February from 2.30pm to 3.30pm. If you’re a startup wanting to know more, or are media or an investor, come by and talk to the organizing team.

[Note: for more on last year's here is my blog post retrospective.]

UPDATE:
The Pivot East Team will be coming to Uganda on the 20th February 2011 at Makerere. You can book your tickets for the event on the link below:

http://pivotuganda.eventbrite.com/

Infographic: Mobile and Internet in Tanzania

The iHub Research team has worked up an infographic on Tanzania to match their past ones on Kenya and Uganda. We’re looking at 50% mobile phone penetration in Tanzania, with about 22 million connected, where Vodacom has the largest market share at 42%.

The crazy stat is online: In Tanzania, only 2.5% of the population has access to the internet, 80% of those on mobile phones.

Hats off to Patrick Munyi (@ptrckmunyi) for the great design!

The “Mobile Web” as text and voice

The mobile web revolution has already spread around the world. The phase of it that we live in is where we see the internet hitting critical mass based on the availability of web connectivity on mobile devices. Data is widely available, and the costs continue to decrease at an alarming rate. We’re seeing the disruption this is causing already, from businesses to consumers, and within the political structures of entire countries.

THE MOBILE WEB from Duniamedia on Vimeo.

Dunia Media, out of Switzerland, has put together a good video showcasing this change.

Interestingly enough, this video showcases iCow and M-Farm, both providing agricultural data to farmers, not in a browser, but as text or voice messages. One could think the title to be a tad misleading, as the “mobile web” term is largely applied to web interaction on a browser on a phone.

What I like about this take though is this; the internet allows for a paradigm that doesn’t care what device you have, whether PC or phone, as long as you have a database and a channel you’re in the game. As long as the device has some type of text or voice communication it is suddenly a read/write platform.

What we’re seeing in applications coming from Africa is a way to stretch the use-case of “old” messaging technology like SMS, USSD or voice into new ways of data transfer that challenge Western conceptions of what the internet is.

Thoughts on Africa’s Mobile Operators and Disruption

Generally speaking, mobile network operators (MNOs) were highly disruptive in the 90′s, but have continued to decrease in this over the last decade. Operators are no longer the offensive, attacking force of yesteryear, instead they’re putting up barriers and defensive walls trying to protect what they have and hide.

Instead, the disruption comes from the open web. Whenever the operators put up a blocker to what users want, usually in the form of price or access to their infrastructure, the web finds a way of displacing them. Examples abound in location based services, text messaging, video and photos.

There’s a reason operator revenue is shifting away from voice and SMS towards data. The products that got the operators here are receding in relative value. The user wants what’s available in the open web, and that’s just not found, or being provided, by the operators.

So, what is an MNO to do?

Change. Disrupt someone else. Innovate.

One of the biggest disruptors, even in this decade of MNO mediocrity, has been Safaricom – the 800lbs gorilla in my own back yard. They’ve invested in new technology, products and business models like few others, and are reaping the rewards of those strategic moves.

Do I like having a monopoly player in my market? No.
Do I feel bad for the other MNOs (Orange, Airtel and Yu) who are crying now? No, they did this to themselves.

Let’s dig into their golden-child, Mpesa, the mobile peer-to-peer payment system that’s did $3.15 billion in transaction in just the last 6 months(!). How do you know they succeeded in innovating? Well, the easy answer is looking at their profitability and user tie-in that they get from Mpesa. Look more closely and you’ll notice the other signal, all of the bank lobbies in other countries have put up huge walls, blockading an aberration like Mpesa from having sway in their country.

[Sidebar: A warning to everyone who wants to see innovation in their country. Over regulation of telecommunications and banking strangles it. South Africa and Nigeria are cases in point.]

So, Mpesa sounds to everyone like a huge success story. It is, and it’s not. What we think of as an amazing disruptive product is really only halfway up the mountain. There are too many corks being popped while money lies sitting on the table. This stems from 2 main things, which seem to be an issue of Vodafone primarily, since they own the IP for Mpesa and own a 40% stake in Safaricom:

  1. The lack of leadership by Vodafone to NOT open up an API that other businesses could build on and increase usage. They’ve stifled innovation on their own product.
  2. Their lack of vision in the global payments space. Their shortsideness in not spinning out Mpesa as its own company to take on Visa and Mastercard directly. This was one of the few products and business models that could do that.

More MNO Innovation

So, Safaricom might be stifling its own product, but they’re still not short on disruptive features and products. They do fall prey to bureaucracy and political infighting, but they’re also one of the most aggressive MNOs globally, always trying new things. Three more examples:

  • Creativity in 3g data pricing and accessibility down market.
  • First-movers in 3g and exceptional data coverage countrywide.
  • Okoa Jihazi, their product that gives a loan of credit from the operator to users who are tight on cash.

Other examples of MNOs who are innovating in Africa are:

Airtel Madagascar working with Movirtu with their new Cloud Phone, a way for people to share a phone, but keep the SIM card in the cloud.

MTN, testing Mobile Phonebook by FeePerfect out of Cameroon, a product that puts a phone book into everyone’s phone.

Small + Big

Clearly, innovative products can come to market through MNOs. What’s the common denominator on these products though? Most of them came from small companies and were then incorporated into the MNO.

Ideas come from outside, they come from the edge. Scale comes from inside, from the massive infrastructure provided by the MNO. They have to work together to succeed.

I work with, and talk to, hundreds of entrepreneurs. They have ideas, prototypes and products that just might be what the users want. They lack the access to the infrastructure to roll it out.

As an MNO, you boost your chances of success in this increasingly chaotic space by not walling everything off, but by opening it up.

Infographic: Mobile Phones in Uganda 2011

The iHub Research team has been at work pulling together the mobile phone stats for Uganda and putting it into an infographic. It’s good to see the 41% density of mobile phones and impressive numbers starting to show up from the 1 million users of Uganda’s MTN (60% market share) Mobile Money solution.

So far they’ve done Kenya and Uganda, next up is Tanzania (I believe), so keep an eye on the iHub blog for more.

Africa: Turning the World Upside Down

Whitespace in business is defined as a place, “…where rules are vague, authority is fuzzy, budgets are nonexistent, and strategy is unclear…” It’s the space between the organizational chart, where the real innovation happens. It’s also a great definition for what we see in Africa, and it’s the reason why it’s one of the most exciting places to be a technology entrepreneur today.

I just finished with a talk at PopTech on Saturday where I talked about “The Idea of Africa” and how Western abstractions of the continent are often mired in the past. It’s not just safaris and athletes, poverty and corruption – it’s more nuanced than that.

Today I’m in London for Nokia World 2011 and am speaking on a panel about “The next billion” and how it might/might not turn the world upside down. In my comments tomorrow, I’ll probably be echoing many of the same thoughts that came out over the weekend at PopTech.

Here are a few of the points that we might get into tomorrow:

Horizontal vs Vertical scaling

I talk a lot about this with my friend Ken Banks, where we look to scale our own products (Ushahidi and FrontlineSMS) in a less traditional format. As entrepreneurs you’re driven to scale, but our definition of scale in the West tends to be monolithic. Creating verticals that are incredibly efficient, but which decreases resilience.

In places like Africa, we have this idea of horizontal scaling, where the product or service is grown in smaller units, but spread over multiple populations and communities. Where a smaller size has its own benefits.

In this time of corporate and government cuts, where seemingly oversized companies are propped up in order to not fail, there are some lessons here for the West. We shouldn’t be surprised that the solutions to the West’s problems will increasingly come from places like Africa.

Instead of thinking of Africa as a place that needs to be more like the West, we’re now looking at Africa and realizing the West need to be more like Africa.

Reverse distribution

Will we increasingly see a new set of innovative ideas, products and services coming from places like Africa and spreading to the rest of the world? Why is Africa such a fertile ground for a different type of innovation, a more practical one – or is it?

Disruptive ideas happen at the edge.

Africa is on the edge. While the world talks at great length about the shifting of power from the West (US/Europe) to the East (India/China), Africa is overlooked. That works in our favor (sometimes).

A couple of the ideas and products that have started in Africa and been exported beyond the continent include; Mpesa, Ushahidi and Mxit.


Mpesa – the idea came from Vodafone, but product met it’s success in Kenya. Over $8 billion has been transferred through it’s peer-to-peer payment system. Vodafone has failed to make the brand go global, but the model itself is being dissected and mimicked the world over.


Ushahidi – we started small, from Kenya again, and driven by our Crowdmap platform now have over 20,000 deployments of our software around the world. It’s in 132 countries, and the biggest uses of it are in places like Japan, Russia, Mexico and the US.


Mxit – the famous mobile chat software from South Africa has 3x the number of Facebook users in that country, and has over 25 million users globally.

Like we see at Maker Faire Africa, these innovative solutions are based on needs locally, many of them due to budgetary constraints. Some of them due to cultural idiosyncrasies. Often times, people from the West can’t imagine, nor create, the solutions needed in emerging markets, they don’t have the context and the “mobile first” paradigm isn’t understood.

A good example of this is Okoa Jihazi, a way to get a small loan of credit for your mobile phone minutes when you’re out of cash to buy them, from the operator. They’ve built some safeguards in to protect against abuse, such as you have to have had the SIM for 6 months in order to get the service. It works though, because the company selling it (and many of the mobile operators do across Africa) understands the nuanced life of Africa.

We hold on to technology longer, experiment on it, abuse it even. SMS and USSD are great examples of this, while much of the Western world is jumping on the next big technology bandwagon, there are really crazy things coming out in emerging markets, like USSD internet, payment systems, ticketing and more.

Throughout the world, the basic foundation of any technology success is based on finding a problem, a need, and solving it. This is what we’re doing in Africa. We have different use cases and cultures, which means that there will be many solutions. Some will only be valuable for local needs and won’t scale beyond the country or region. Others will go global. Both solutions are “right”, it’s not a failure to have a product that profitably serves 100,000 people instead of 100 million.

Turning the world upside down has as much to do with accepting this idea of localized success as an acceptable answer as it does with explosive global growth and massive vertical scale.

The Two Big Trends

Trend #1: Adoption by Africans as consumers is increasing.
Trend #2: Technology costs are decreasing

Let’s get back to my talk for tomorrow at Nokia… 87% of sub-$100 phones sold by Nokia are sold in emerging markets. 34% of Africa’s population (313 million) are now considered middle class. The fastest growing economy in the world is Ghana, 5 of the top 10 are African countries (including Liberia, Ethiopia, Angola and Mozambique). Across the continent, the average GDP growth is expected to be at 5+% going forward.

At the same time, we’re seeing bandwidth increase, and bandwidth costs decrease. Mobile operators are the continents major ISPs, and they’re getting creative on their data plans. Handset costs are going down. Smart(er) phones are available for less than ever before. We even have one of the lease expensive Android phones in the world at $80 in Kenya, the IDEOS by Huawei.

Is it all bright and rosy? Not at all. You’re on the edge, you have to create new markets, not just new businesses. But in that challenge lies opportunity, for it’s from these hard, rough and disruptive spaces that great wealth is grown. If you’re an African entrepreneur, why would you want to be anywhere else?

Infographic: Kenya Mobile Subscribers, Penetration & Internet

The research team at the iHub put together some stats on mobile numbers in Kenya. A special nod to Leo Mutuku for gathering it all from so many sources, and to Patrick Munyi for creating this cool visualization of it. Check out the iHub blog post to read the rest.

an infographic on mobile subscribers, penetration and internet in Kenya

Look for more infographics on the other East African countries soon.

Mobile Apps in Africa (2011 Report)

I maintain that Russell Southwood and his Balancing Act newsletter and reports are some of the best material on pan-African technology and broadcast information that you can find anywhere. Their recent “Mobile apps for Africa: Strategies to make sense of free and paid apps” report is one of them, and here are some interesting tidbits from it.

The report is broken into three parts: device, developers and distribution.

Device

South Africa, Egypt, Nigeria, Morocco, Ghana, Kenya and Tanzania all are good markets for apps, due to their population, 3g pickup and smartphone penetration. It should be noted that the highest smartphone penetration is in South Africa at 10%, though the high-potential countries are expected to grow by 8-10% per year over the next 3-5 years.

“Interestingly, infotainment activities score high off-line (using the phone’s features) and online (mobile Internet).”

Balancing Act provides a very interesting visual of what the “Handset pyramid shift” looks like in Africa.

Africa's handset pyramid, and its shift

Developers

The development of smartphone applications in particular commercial apps will depend on the rate and level of smartphone adoption. Developers in countries like South Africa, Kenya or Egypt with encouraging smartphone penetration rates have more opportunities in terms of apps development and uptake by potential users.

The major international apps stores (Apple, Android, etc) have set a figure of 70% of the revenue generated by apps will be going to the developer. This is very good news for African developers because so far with SMS based content, the revenue sharing model is not in favour of developers since less than 30% of the revenue generated by the content is going to the author. It is African mobile operators that make the most out of them as they take a minimum of 50% of the revenue generated by SMS services. The major international apps stores also offer additional revenue to developers via advertising and in-apps purchases. These revenue streams are becoming more and more significant for developers.

Building into the next section on distribution is the issue that developers have with creating apps for the international app stores. It’s very difficult, and often impossible, to sell apps on them and for African customers to buy them.

Distribution

The major consequence of the “success story” of the apps store is that it
establishes a distribution model for mobile content that breaks away from the monopoly and exclusivity that mobile operators have enjoyed so far on the delivery of services to their mobile subscribers. Today the mobile apps distribution ecosystem can roughly be divided in 4 main groups:

  1. Operating system app stores
  2. Handset manufacturer’s app stores
  3. Mobile operators’ app stores
  4. Independent app stores

So far, most African mobile operators have been little affected because smartphone penetration rates are very low in most African countries and also because African smartphone users still have access issues to the full portfolio of international apps stores.

The report goes on to express Balancing Act’s thoughts on how mobile operators can get into and take advantage of mobile app stores, “While revenue potentials are promising what else do mobile operators have to consider if they want to roll out their own apps store?” The report establishes the following 8 recommendations:

  1. Be OS agnostic
  2. Know the devices on your network
  3. Use “white label” apps store
  4. Source international content from third party content providers
  5. Don’t forget about additional revenue streams
  6. Build a strong local flavour to your apps store
  7. Make apps affordable to your subscribers
  8. Use carrier billing

And there’s More

Unfortunately, I can’t put all of the good stuff in this blog post. There are a lot more interesting points in the report, and you can buy it here. Amongst some of the best are:

  • What smartphones do South Africans want?
  • Nigerians love their BlackBerry
  • Examples of mobile apps start-ups companies in Africa
  • Morocco: Mobile internet users and penetration rate
  • Mobile Internet subscribers and market share per operator
  • Advertising and in-apps purchases potential income for developers

Praekelt: SMS at Scale

Here’s a great video put together by the Praekelt Foundation on the state of mobiles in Africa in 2011.

I’ve gotten to know Gustav Praekelt over the last few years after we first met up at PopTech in 2008. He’s one of the most astute businessmen I know on the continent, and his ability to grow out his business into the giant it is in the messaging and communication space is proof of that. The Praekelt Foundation leverages the same infrastructure that he’s built out on the for-profit side of what he’s done, and is making a big impact, at scale. You can watch a video of him talking about his projects here.

Africa’s Android Invasion

Mobile phone manufacturers, operators and of course Google started a big push on Android into Africa this year. Samsung, HTC and Huawei are moving Android phones into the market. Some operators are seeing the signals and starting to subsidize Android handsets to get them to a price point that is palatable by a larger number of buyers. Google continues to push for local content, works with developers, does g-[country] events and puts on contests.

While the primary phones in Africa are still feature phones, Android has made a beachhead on the continent and will continue to roll forward. I believe we’ll look back at the landing of the IDEOS phone earlier this year in Kenya as an inflection point, where in 2 years we’ll define the times up until then as, “before Android”.

Developers as Leading Indicators

I see what the local programmers working on as a leading indicator of what everyone else will be using in the next 2-3 years. In the iHub, on the mobile side, we see a lot of programmers excited about, and working on, Android apps. It’s a balance between that and the SMS/USSD core infrastructure apps that Kenya is well known for.

Today, at the g-Kenya event, Google announced the three winners of their Android Developer Challenge for Sub-Saharan Africa. Each of the winners will receive $25,000.

There were 29 finalists came from the following 10 countries, which is a pretty decent spread. However, you can tell from the number of apps in each country where the real powerhouses are.

7 South Africa
6 Kenya
5 Nigeria
3 Ghana
2 Uganda
2 Malawi
1 Senegal
1 Togo
1 Tanzania
1 Republic of Guinea

The one pain point that developers have right now is that they feel pressure to support multiple operating systems. This is Primarily between Android and Symbian if the app is focused on Africa, if the app is global, then add in iOS and possibly Windows and Blackberry.

It will be interesting to see what happens with feature rich HTML5 and how it plays out into the mobile space. At this point, either we’ll see a lot of mobile web apps (working across PCs and all phones with real browsers) or we’ll see a lot of apps. Even if we do see the client-side Android apps, I’m guessing they’ll be more thin-clients than anything else. Only time will tell though.

The Future of Consumer Mobiles in Africa

The years ahead are hard to predict. However, in Africa I think we’ll see an increase in Android handsets and mobile web usage, and a continued decrease in the cost of low-end smartphones and data connectivity.

If I’m an operator, I see the writing on the wall in regards to SMS and USSD apps, and I’m trying to move my user base to data. This means more subsidized phones, and attractive data packages that are wide-spread across my region. I’m making deals with content providers and offering zero-rated (or reverse-billing) packages on data to large content houses in order to increase usage.

If I’m a manufacturer, I’m providing an array of Android handsets that allow my aspirational users to move up from a feature phone to a (we hope soon) $50 Android, then up to a tablet eventually. I’m doing whatever it takes to decrease costs on the low-end to get mindshare. If I don’t do Android (Nokia, RIM) then I’m doubling down on the mobile web and pushing for better browsers on my phones.

If I’m Google, I keep having dev events and competitions, but I also push for better localized payment options for developers in Africa. On top of that, I’m looking for an operator billing link for consumers with attractive percentages for app publishers, that way I attract them and everyone makes more money.

Of course, there’s more, but that’s where I’d start.