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Kenya’s Tech Regulation Conundrum

A lack of regulation, or at least a more relaxed regulatory environment, have been directly responsible for Kenya becoming a hub of innovation, specifically in the mobile payments and banking space.

The gorilla in Kenya’s room is Safaricom. The posted a Ksh 21billion pre-tax profit yesterday, citing growth and profits in almost all areas, including 137% growth in data services, which they see as the next big cash cow.

Safaricom has directly benefited from this environment and their savvy marketing and business moves have left others in the dust. Businesses should be allowed to make profits and smart strategic decisions rewarded by profit and market position should be expected and encouraged – else why do they do it?

A couple of weeks ago new regulations, put together last year by the CCK, were floated by the Monopolies and Prices Commission. These rules were intended to curtail the massive growth of firms like Safaricom and the ScanGroup, to the detriment of competitors and the market as a whole. Naturally, the only firms upset with these rules were the incumbents.

Just yesterday, Dr. Ndemo, the permanent secretary for information and communications decided that Kenyan professionals who drafted these new rules weren’t professional enough and called in consultants from the United States to review them. While it is true that the Monopolies and Prices Commission is weak in ability to fulfill its mandate, this move comes off as an appeasement by Dr. Ndemo to Safaricom as it came out on the same day that Safaricom was having it’s annual shareholder’s meeting. It makes you wonder who dances to whose tune.

Both sides have good points. Smaller firms do have an uphill battle, not only due to their size, but also due to the unfair practices that larger firms tend to busy themselves with in Kenya to keep the competition at bay. However, large firms also have point. If they are playing fair, should they be punished for being better than everyone else?

Too much regulation in a sector can cripple a country’s innovative business growth, especially technology (see South Africa’s banking rules…). Dominant players have the same effect.

Maybe, instead of adding unnecessary regulations, governments should look to truly and strongly punishing unfair and dirty practices that are already on the books. A 200,000 Ksh ($2,500) fine is the most that Kenya’s monopoly commission can do, and it’s laughable at best.

Mxit is Imported into Kenya

May 21, 2010 / HASH / 26 Comments

Mxit is a massive mobile social network that was started in South Africa a couple years ago. Today, Safaricom announced a partnership with them, using their marketing muscle (7 pages of ads in today’s newspaper) to import Mxit into Kenya.

[For the time being, we’ll ignore the complete ripoff of Twitter in their marketing...]

Mxit is a free instant messaging platform that uses the data network, thereby making it cheaper per message than sending an SMS. They claim 19 million users, most a younger demographic, who spend time chatting with friends or in chat rooms. MXit also supports gateways to other instant messaging platforms such as MSN Messenger, ICQ and Google Talk.

Local apps and entrepreneurs react

This should be a slap in the face to Kenyan programmers and tech business entrepreneurs. The model to build the same type of mobile social network has been openly working and available to do for at least three years.

To be fair, Mbugua and the Symbiotic team tried to create something like this a year ago, called Sembuse. Both he and Idd Salim aren’t very happy about this latest move, claiming that Kenyan entrepreneurs can’t get the same access or opportunities as their South African counterparts.

From Mbugua:

“The issue is not that they have a partnership with Mxit but that from personal experience, local developers and companies suffer greatly in their quest to have such partnerships.”

From Idd:

“Most likely, the marketing retards at Safcom were convinced to believe that Mxit will increase data ARPU for Safcom. Mxit is meant to be a replacement to SMS. … So Instead of sending an SMS, you will use Mxit. Safaricom will lose KSHS 3.5 per SMS, but gain KSHS 0.003 per data exchange over Mxit. Talk of Safaricon Conned! Pwagu amepata pwaguzi.”

The issue with Safaricom

On one side, the Sembuse team have a point. Safaricom has been promising to open up their API and platform for real extension. This has never been fulfilled. They have promised to (honestly) engage with the local programming community, and this hasn’t happened either. They were publicly called out on all of these facts and more at the Mobile Web East Africa conference this year.

In many ways Safaricom walks arrogantly through the Kenyan market, lying, stealing and cheating their way to even larger profits. However, they also push the edges. While others are happy to sit back and make their current margins, Safaricom takes risks and eats their lunch. Innovation, whether it’s home built, bought or stolen still has the same effect.

Business reality

For whatever reason (marketing, value add, etc), Sembuse didn’t catch on – it hasn’t reached critical mass. Numbers of users, rather than technology ability even when it’s better, are the things that larger companies are looking for in this type of play. If you don’t have half a million users, you aren’t even in the game.

Though I’m no Safaricom apologist, I can’t fault them for making a decision to go with a tested product from an established business. Yes, SMS is currently a cash cow, especially here in Kenya. However, everyone can see the writing on the wall: data is the future, and controlling the channel is more important than anything else.

As David Kiania from the Skunkworks list noted, “Rule No. 4 in business: Cannibalize your revenue and business model before your competition does it for you.”

I’m more disappointed that no Kenyan company has been able to make a go at this by themselves, just like Mxit did years ago. You don’t need Safaricom or any other mobile app provider to be successful in this space, Mxit if anything, has proven that.

Like I said 2 years ago, this is a sure win if you can pull it off correctly. The technology to do this is not new, as Idd Salim points out as well, neither is the model – so you know that the strategy here is on marketing and communications to show the value add to potential customers.

More than anything else, Kenyan entrepreneurs should be upset with themselves for missing a sure opportunity, not upset with Safaricom for making a good business decision.

MKesho: Linking Banks and Mobile Payments

May 20, 2010 / HASH / 3 Comments

People are excited about M-Kesho (money for the future) which launched yesterday, where Safaricom has linked their mobile payments service Mpesa as a joint venture with Equity Bank in Kenya. This basically extends Mpesa into a bank and insurance company, with the future offer of microcredit as well.

Equity bank has 80 branches in Kenya.
Mpesa has 17,500 outlets in Kenya.
There are approximatey 8.4 million bank accounts total
Equity has about 4.5 million bank accounts
Mpesa has 9.5 million users
Kenya has 107,000 credit cards in circulation

See the pattern? These are are big companies with huge local connections and inroads into the popular culture. This is a strong indicator that every Kenyan will have access to banking and insurance via mobile phone very soon.

“This is a bank account introduced by both Equity and Safaricom where customers can earn interest from as little as 1 Ksh. Customers can withdraw cash from their Equity Bank Account to their Mâ€PESA accounts and customers can also deposit through their Mâ€PESA accounts to their Mâ€KESHO Bank account. Other features of the account include Micro credit facilities (emergency credit availed through Mâ€PESA), Micro insurance facilities as well as a personal accident cover that translates into a full cover after 1 year. For one to open this account, the person must be an Mâ€PESA subscriber.”

Reality Check

As others have pointed out, there have already been links between mobile payment systems like Zain’s Zap and banks like Stanchart. So, this isn’t exactly groundbreaking and new. Why is it big then? It’s big because of who is doing it: the giants of the banking and mobile sector.

Rombo has written a particularly good post about M-Kesho. She asks some hard questions, like who really benefits out of this deal: Equity or Safaricom?

It’s hard to say, but I wonder if the pressure put on by regular banks onto the regulator about how close to a bank Safaricom’s Mpesa really has forced their hand. Did they have to choose a banking partner in order to stave off the regulator, or did they do it to increase market share and positioning?

Finally, I think this move, like the moves made by Safaricom in the past on this mobile banking space are shortsighted. Yes, it gets them more subscribers and it does solidify their grip on the mobile market in Kenya, that is working. However, mobile money and payments are much bigger than just one operator or one bank. Becoming the “Visa of the mobile payments space” all over Africa (the world?), is a much bigger deal than being the biggest fish in Kenya’s small payments pond.

Digital Connectivity in Northern Kenya

May 1, 2010 / HASH / 10 Comments

A couple of people have wondered how Iâ€™m able to stay connected, to put up blog posts, update Facebook and tweet pictures to Twitter while in what would seem the true bush. Well, this is the true bush, but every once in a while you come upon an island. This island is where one of the mobile phone networks has dropped in a tower and a power supply for it.

The short answer

I carry all of the data modems available from Safaricom, Orange and Zain. I also carry my data connected mobile phone (this trip itâ€™s the Nexus One), and an unlocked multi-purpose modem. To this I add my Acer Netbook, which Iâ€™d feel a lot better about losing than I would my Mac, and that completes the setup.

The long answer

In Gatab, on Mount Kulal, you can get two signals. One is Safaricom, that reaches all the way up the mountain (if youâ€™re standing in the right spot) from Loyangalani on the shore of Lake Turkana. The other is from Orange Telkom, with a tower on the mountain itself. Both are powered by windmills.

Where else will you find a connection?

South Horr
Logologo
Laisamis
Loyangalani
Gatab
Baragoi
Marsabit

These are the towns that I know of with cell phone towers. Whenever you have a voice connection up here, you also have a GPRS connection (always Edge, never 3g). The Orange connectionâ€™s are CDMA, not the normal EVDO â€œ3g+â€ speeds that you get in Nairobi and Mombasa.

Sometimes all you get is the one tree within 20km that gets a signal…

Mobile Web East Africa – Stream

February 3, 2010 / HASH / 25 Comments

[I probably won’t be able to keep this up all day, but I’ll try to blog/stream what’s happening here at Mobile Web East Africa as best I can. Refresh for updates]

It’s day one of the Mobile Web East Africa conference in Nairobi. This is a new conference, started up in South Africa to great success, and now spreading to other regions of the continent.

Paul Kukubo of the ICT Board

Paul Kukubo, of the Kenya ICT Board, is talking about the future of tech in Kenya, and how the government’s aim is to be a major hub for technology in the region. Explaining how the changes in the industry are brought into context for the government’s vision 2030. He talks about mobile payments, digitizing of government documents and processes, developing software standards and the growing tech community within Nairobi.

Paul continues with mentioning how their approach is to influence policy formulation, intellectual property, data protection, linkages to venture capital and basically catalyzing growth in the ICT sector between government, the public and business.

Rick Joubert of Yonder Media

Rick Joubert, from Yonder Media, “the mobile phone is the most ubiquitous consumer device in the world.” He goes on to talk about how the phone is now even more spread through South Africa than radios. There are 2x as many phones as TV sets. There are 6x more mobile phone subscribers than internet users (in South Africa).

Rick defines the Mobile Web this way:

Tier 1: The WAP internet
Tier 2: The mobile web application internet
Tier 3: Web browsing on phone

**Interruption**
PS Ndemo, who I know and like, is going to give a short address. This isn’t cool, as he’s interrupting Rick Joubert mid-talk (and a very interesting one too). Case-in-point for why government needs to get out of the way more than anything else in the technology field… [Yes, I note that this is probably the American viewpoint on equality coming out].

PS Ndemo is talking through how there were 3.5 million internet users in Kenya last year. Now, with the cost of laptops dropping, we now see 500 laptops sold per day (there were only 20k per year sold before).

Kenya also has the digital villages project (Pasha) with the World Bank is seeing long lines of individuals in far off places coming in to try the internet, get on Skype and figure out how to set up email and other services.

PS Ndemo, ever the gracious person, has at least apologized for the interruption and made amends to the speaker and the conference as a whole. There’s a reason I like him… 🙂

**Back to our scheduled program**

“The Apple iPhone is the number one handset on every continent in the world, except… Africa”. The Nokia 3110 and Samsung E250 are the two biggest phones on the continent. The fact of the matter is, the real money is being made in the inexpensive DVD/Nollywood areas, not in the mobile web yet. Services that play to USSD, Voice and SMS are where the real opportunities lie.

Driving forces:

Growth in data networks and coverage
Mobile data access charges
Local content
Better quality handsets shipping at the cheapest possible price
Mobile wallets, mobile commerce, mobile banking

Business models and monetization routes:

Commerce
Transactions and financial institutions
Content
Advertising

Rick projects that the “size of the prize” in mobile advertising is approximately $8 billion per year in Africa.

Rick finishes showing a video from LynxEffect on how consumers see mobile web, the seductive side of it.

Eric Cantor of AppLab Uganda & Grameen Foundation

I wrote about AppLab and their work with MTN and Google last year. Eric wants to talk about a critical look at a critical space, the 95% of the African population that doesn’t own a smartphone.

(Get the full presentation of Eric Cantor’s slides as a PDF)

“There are more people having conferences and running too many pilots around the use of social mobile work than there is real practical applications and scaling of the products in the market.”

Technology: Be Patient
SMS is not the only way. It’s very challenging and very expensive to work with SMS. One way to adjust this focus is into voice – people like people, and want to talk with each other.

Handsets need to evolve. Nokia 1100 vs Java 1680 ($20 vs $60) – we’re waiting on the $40 smartphone.

Eric reminds us that we need to get back to the Four-Ps of marketing. We can’t forget user experience, the services might be serious, but still need to be fun to use. At the AppLab they don’t believe what they hear (because everyone says “yes, this product will be great in our market”). They try to dig deeper, learned from Google, on what customers really want and see what people are really using.

Question time

I’ve asked the question for Eric Cantor about why we’re not seeing very simple data hooks built into some of the USSD and SMS applications running in Uganda. (more on this here: “Should we be building SMS or internet services for Africa?“). Eric agrees that there is a lot of upside in that space, and that they’re trying to push more towards the data channel, but until we start seeing more data-enabled handsets in ordinary people’s hands out in the villages, it’s just not a main priority yet.

Robert Alai asks what is driving advertising growth in South Africa? Is it the large companies, or smaller organizations?
Rick responds saying that it’s large companies trying to reach their customers, from banks to Coca Cola and everyone in between. Businesses build grow in this space to find solutions for that, and that’s primarily small innovative companies (like his own), small nimble startups.

Agatha Gikonda of Nokia East Africa talks about the Ovi Store and the opportunities for local developers to create applications and put them on the store to make money.

Peter Arina of Safaricom

What are we going to do to drive interent usage in Kenya? Some stats:

Mobile users are estitmated at 19.05m subscribers. Kenya population estimated at 40m with 22m being the addressable market (15yo or older).

70% of mobile data users spend less than 20ksh on a monthly basis. Industry data enabled handsets estimated at 5m or 26% of GSM users. Cost of a 3G handset is 3x higher than that of a non-data enabled handset. Computer prices are way too high compared to the disposable income of majority of Kenyans.

“The cost of devices that access the internet is the biggest barrier to entry for ordinary Kenyans.”

Cost of broadband (price) is prohibitive due to infrastructure investment.

Local content – the most popular sites accessed on the Safaricom network is Facebook and YouTube. Limited content which is highly priced, is also a barrier locally. There’s a need for high quality data enabled handsets to get good experience.

Conclusion
Mobile data users estimated to reach 10m in the next five years subject to availability of affordable devices, increase awareness, local content development and drop in data prices. Safaricom is trying to work directly with the manufacturers to get more data-enabled devices into normal Kenyan’s hands.

There is a need for more local content that is relevant at affordable rates. Need for reduction in frequency costs, a creation of daily usage habits among users and a need for the government to remove VAT on modems.

Questions
@Kahenya is asking a question. Safaricom is trying to become more affordable, it’s still the most expensive network in Kenya. It’s still has no fixed rate for the mobile data network access. It doesn’t work for small and medium sized business, is Safaricom doing anything to change this?

Peter Arina says they are trying to be cautious. They’re trying to focus on quality (bull$%@& as they have the worst network connectivity in Kenya). He says that they have plans to reduce the cost of data as well, but he has no details on it.

The Safaricom rep says that their main goal is to provide services to the Wananchi (the ordinary/mass Kenyan). The question remains then, why is the cost so high for all of their services?

Paul Kukubo asks when Safaricom will open up their network for value added services for developers and other companies. He’s wondering why the revenue share is so high here (currently if you partner with Safaricom, they’ll take about 60% of revenues), meanwhile elsewhere in the world, like Japan, give 70% to the developer.

Paul asks about the issue with the networks taking advantage of the developers who are out there who come to them with ideas and new products.

The Safaricom rep states that this is not the case any longer. They partner with MobilePlanet and Cellulant (as examples, but it’s a poor one because they’re established companies now). He says that at first they start off with a big chunk of the revenues, but as the product does better, then the developer will get more of the share.

Basically, we get no straight answers from Safaricom and only promises of better things in the future with no details.

Jose Henriques, Executive Head: Online Product Management, Vodacom South Africa

6.65% of the African population currently uses PC internet. The top ten countries make up 85% of that.

Some more stats:

Africa represents 15% of the world population, but only 3.9″% of the world’s PC internet usage.
Africa’s PC Internet users have increased by 1359% from 2000 to 2009.
The global service revenue generated from subscriptions to mobile internet access are forecasted by Informa Telecoms & Media to rise from $57 billion in 2008 to $120 billion in 2013.
Mobile ad revenue is estimated to be at $2 billion by 2014. Total value of marketing spend on mobile to be around $6 billion.
Mobile subscription rose from 54 million to almost 350 million between 2003 and 2008.
On average there are 60% mobile penetration in the world. In developing countries the figure stands at 48% , which is 8x bigger than in 2000.
Lack of fixed-line access will drive huge mobile internet usage and revenues.
Vodacom generates 49 million ad impressions per month in South Africa (big opportunity).

(Full presentation by Jose Henriques from Vodacom South Africa)

Questions
What has been defined as a smartphone, is not what we define one as today. How would you define it?
Cheapest data enabled devices are about 2000Ksh in Kenya. Safaricom thinks that these are smartphones.

Mpesa… Why is Safaricom unable to cooperate with and provide third-party access (opening their APIs) to developers in Kenya for Mpesa?

The Safaricom rep says that they are willing to do this, and that they’re hungry for people to come in with ideas and products. No specifics given on this. @TMSruge, the moderator, asks her to provide details on how they are actively trying to seek out and help grow this as there is no API or SDK.

@wanjiku says she’s heard Safaricom saying that they have a tendency to do well with big companies, but holding smaller company money for 3-4 months, hurting their cash flow.

Steve Vosloo asks what types of local content are people really willing to pay for?
The Safaricom rep is out of touch… she states that, “no one is willing to pay anything for mobile content”. This is bunk.

Rick Joubert comes in to state facts on how much money there is being made in South Africa in mobile content, $540 million is the real number just in SA. It’s not whether people will pay or not, it’s whether they find value in local content.

A question was asked of Safaricom, why they don’t open up the ability for third-party service providers to bill consumers? The answer by Safaricom is that they are. (I can’t confirm this)

We have Zap, Mobile Pay, Mpesa, etc… when are we going to have an agnostic system to send/receive money? by @kahenya

MTN rep says to come to Uganda to see this working. It’s there working on the MTN system. It’s a serious issue of not having your payment system to go beyond your own network.

Mpesa is a wall gardened. Kahenya and Teddy Ruge ask when there will be a need to NOT walk around with 3 handsets to send money within each one.

Safaricom states that they can already do this within their system. They lay the blame at the regulators feet for why it hasn’t happened.

**Lunch**

Brett StClair of AdMob

Brett starts by asking, “what is mobile internet?” It’s a website that is built for mobile handsets. Admob puts banner advertisement on these sites. They server 12-14 billion advertisements into this network each month. The man on the street can earn revenues start advertising today. There’s a 60% payout to publishers.

Have access to 53 countries in Africa. Monthly ads serves is 750 million in Africa alone.

African Mobile Web currently has South Africa, Nigeria, Libya, Egypt and Kenya as the top 5. Data prices do have a huge effect on the advertising revenues available in Africa.

Nokia 3110c is the most pervasive phone in the market (3.8%), Samsung E250 is at 3.7% penetration. Top smartphones are the Nokia N70 at 10.8% and then Nokia 6300 at 10.3% and then the iPhone at 8.2%.

Top reasons why South Africa is working:

5 million fixed line internet vs 10 million mobile internet users
Strong operator billing infrastructure
However, mobile money is not mature yet
Early adoption by premium traditional publishers
consumers traditionally have had a fast adoption rate
Due to vast competition for impressions average CPC pricing grew from $0.03 to $0.27 in a year.

Is Africa next? The rest of the world thinks it is, but we need to get the local people to understand this.

Cheapest inventory in the world is in Africa… global accesss average is $0.03, in Africa it’s at $0.01. Local contet providers will benefit as they understand the local African consumers.

Key to making this work:

3g network coverage
Cheap data pricing
GPRS enabled handset penetration

What are the opportunities in Africa?
Strong tend to follow the West and South Africa. Paid for content, reliant on operator billing. Free content, which is ad funded. The top publisher types are communities, portals and downloads. The top categories are music, religion (15%), games and brands.

African traffic is made of 54% Nokia handsets, then 18% Samsung handsets. iPhone requests make up 18 million impressions in Africa.

Quick Hits from Digital Africa

February 28, 2009 / HASH / 2 Comments

I’m on the road to Liberia for a couple weeks, so getting up a quick post on some items that I think are interesting around the technology space in Africa.

Hannes van Rensburg goes off on groups that give financing to European tech companies for work in Africa, rather than the local African companies who are better equipped and more knowledgeable to handle the situation. I agree.

“I really have difficulty in understanding how this mildly succesful UK company can make a difference in Africa. Not only is it unlikely that they will be able to re-use the UK functionality in Uganda (Java phones, ATM switches, etc.), but they are also late. Many Ugandan-based companies have already (or are in the process of) lanching their mobile banking services.”

Solar-powered phones are coming. How will they change the power equation in Africa?

How will solar powered mobile phones change Africa?

Matt Berg writes a good post on leveraging internet with radio:

“Eventually low cost smart phones that are able to access the Internet in an acceptable way (think < $100 Chinese iPhone), will represent a paradigm shift in the way Africans connect to the Internet. Until then, a community radio is probably the best way to make the information on the Internet accessible to rural communities."

Zain launches mobile payment service Zap in East Africa. This is their challenge to Africa’s mobile payments golden-child MPESA (by Safaricom). In the past, Zain hasn’t had a stellar record in marketing and simplification of their services. I hope this is different, as the market needs competitors.

Rural internet, not online but still connected

“Internet access might not be instantaneous, but a USB stick driven off in a cloud of motorcycle dust, or bumping along in an ox cart, can often shift more data than a telephone dial-up connection. And with delayed dial up the customer avoids the frustration of slow downloads: returning later to waiting data.”

Coby Leuschke builds a prototype 12 volt mini computer:

“I was most interested in the 12V DC requirement for use with solar systems. I finally got around to building one from a bare bones kit…”

Thoughts on Ecommerce Problems in Africa

June 29, 2008 / HASH / 23 Comments

Recently, I’ve noticed a sudden buzz about ecommerce in Kenya. Brian Longwe talks about the beginnings of this with Mpesa, emails are bouncing around between companies I know, and last week I spent a morning listening in to what the Kenya ICT Board and Federation had to say about it.

Let me start with the Kenya ICT Board. The meeting was basically about legislation and the fact that ecommerce would be good for Kenya. Of course it is, anything that lowers transaction costs for both buyers and sellers greases the wheels of commerce and increases the amount of trade across all industries and sectors. That’s a given.

But how? See, that’s the big sticking point that I’ve been banging my head against the wall over for 2 years now. It’s not enough that you can buy and sell with a Visa or Mastercard in Kenya. As long as you continue to ignore the wananchi (average person), then you’ll only help the wealthy and not see the real gains and advantages of a level playing field.

Which brings me to Brian talking about Mpesa, the mobile phone payment system in Kenya. For, in Mpesa, we have the beginnings of a payment system that can be used by everyone. He’s right about that. What’s wrong is that it’s mobile phone carrier dependent (Safaricom).

What we need is a carrier and bank agnostic ecommerce platform for Africa. Why?

Let’s go back to our “average person” again and talk about banks. They are generally unbanked (thus the use of Mpesa), or if they are, they have only a couple thousand shillings (less than $100) in the bank. The transaction costs for them having to keep their money in these aging institutions is often impractical. They have no, or very limited, opportunities to borrow money and they have no realistic way of getting any type of credit.

So, as can be seen, tying money, credit and debt to banks is not practical.

Now, let’s talk about why it needs to be carrier agnostic. This is even easier to understand. In Kenya there are two carriers; Safaricom (Mpesa) and Celtel (me2u). By the end of the year, there will be four. The barriers to use of a system that relies on one carrier is as ridiculous as requiring any payment system on the web to only go through one ISP. Sure, it makes sense if you’re that company to control that monopoly, but it’s bad for everyone else.

What does this mean then? Where do we go from here?

The upsides of a carrier and bank agnostic payment system is high. Not only would a system like this be used for the obvious domestic transactions (Kenya-to-Kenya) and external transactions (Kenya-to-world), but all of the sudden we have the ability to create real micro-loans and a new system to create credit scores for unbanked people over time. That’s wealth building, and it would transform Kenya.

Well, first off, let those who have the funds to do so, start building the right type of payment gateway. Start in Kenya and grow regionally, then continent-wide. It’s a semi-heavy investment (relative to who you are of course), but the return is absolutely insane. In fact, it’s ridiculous that after this long no one has done anything beyond build monopolies in this space.

[Note: My first post on this from 2 years ago]

Wananchi: Severely Curbing Web Costs in Kenya

June 16, 2008 / HASH / 32 Comments

Wananchi is one of the largest ISPs in Kenya. I was invited to come see the installation of Wananchi’s brand new Intel Sat satellite dish, for use in their new WiMax, fiber and cable TV offerings. Two reasons it was interesting.

First, because it’s being installed in Upper Hill, my old neighborhood. I just don’t recognize this place anymore with all of the new commercial buildings.

Second, and probably more interesting to everyone else, is that this dish is aimed directly at the mass market in Kenya and stands to drastically lower the costs of bandwidth to the home. Wananchi will be offering 512k broadband to the home for 3000 shillings ($). Compare that to the next best offerings by Safaricom with their new 3G service for 2000/= (700Mb) or 4000/= (2Gb), and Access Kenya with 256k at 6000 shillings.

From here, it looks like anyone wanting to stay untethered and who doesn’t have that high of bandwidth consumption would likely choose Safaricom (700Mb isn’t a lot). However, if you’re going to spend more than a modicum of your time on the internet, then Wananchi’s new service is the most attractive.

Wananchi’s towers also have fiber pumped directly into them, so more speed and reliability out of the gate. To manage their large 100 tower rollout in the Nairobi area, they’re piggybacking cell towers with Celtel, and hope to be done by around October. Certain towers, with service off of this new dish, will go live by the beginning of July.

All told, I have to say I’m impressed. Not just by Wananchi’s offering, which will come as great news for the public, but that the communications industry is moving along so quickly. Thought international fiber is still a dream in Kenya, local connectivity is booming.

So, where’s the local version of WordPress MU setup for local bloggers? Where are the local web services by local software guys for local companies? That we shall find out shortly, this weekend at Barcamp Nairobi.

(Update: Full-sized images on Flickr)

Where Africa and Technology Collide!