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Where Africa and Technology Collide!

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The Case for Connectivity (part 2)

(Part 1 here)

I’ve argued before, alongside others, that the main inhibitor of ubiquitous and perpetual internet connectivity at a global level isn’t a technology problem, it’s a business model problem. Mostly the tech exists to put the signal everywhere. What we overlook when we say this is, that while that is true, it’s unsavory to point out that many of “those users” are not valuable – that the population covered won’t make a good return on business investment. So, even if you covered the initial cost of the equipment outlay in those areas with a subsidized government funds, without a proper business model to support the ongoing operations of running the network, then the ROI would be weak and maybe even negative.

A low cost tower set up in rural Africa

The unspoken technology issue

Many of the incumbent ISPs and mobile operators have sunk too many resources into legacy technology, and then subsequently, outsourced their technical capacity and platform knowledge to foreign firms. This leaves them in an unfavorable position when it comes to new technology that would decrease the cost of rollout by up to 90%, or of taking advantage of how software is changing the way networks work. Due to heavy GSM investment, the industry thinks it best to switch those from 2G/EGDE to 3G. This misses the mark though, it’s iterative change driven by sunk costs, ignoring the fact that we’re moving to a data-only network world. GSM is a dead man walking. IP networks are the future.

It’s not just me saying this, two years ago Deloitte was saying,

“African MNOs should create business models around smartphone users and brace for the rise of the data exclusives and data centric phone users.”

This then provides the opportunity. This is the time to bring new networks without legacy business or technology paradigms, and the ability to apply web-scale economics to the network itself, backstopped by new open software stacks and business models that don’t rely solely on end-user payment.

Fortunately at BRCK we’ve been able to find great investors and strategic partners who see this bigger picture and understand the investments needed to make change happen in this connectivity industry of ours. BRCK, alongside some other firms, are on the forefront of changes happening across all types of data pipes, at the infrastructure level all the way through to the retail side – for both people and things. And as we start running the numbers it becomes increasingly clear just how big of an opportunity this actually represents. It only helps that many incumbents are stuck in aged technology stacks and legacy business models, so the window for positive change is here and profits are substantial.

East Africa Railways train

A new railroad

I tend to think of what we do in the connectivity space as similar to our forebears building railroads, making it easier, faster and more efficient to move data and connect far-flung parts of the world. The 1990’s brought us the rebels in the form of scrappy upstart mobile operators and ISPs, they were real cowboys and renegades then! Inspiring leaders, courageously trying everything from pre-paid credit models in Africa, to thinking of mobile credit as cash, to digging the first fibre cables into the hard parts of the continent. Regrettably, these cowboys have handed the reins over to our modern day robber barons, sitting fat and happy on their oligopolies (or monopolies), and making damn sure that no one else has a chance to build something better if they can help it.

I like to think that at BRCK we are building the new connectivity railroads. The tip of the spear for us is unlicensed spectrum, where we take advantage of the ability to roll out public WiFi hotspots without much in the way of regulatory or political hurdles. We layer this with a free consumer business model, so that anyone who can get that signal can connect and take advantage of the whole internet. The underlying economics of the Moja platform are built around the idea of a digital economy. Businesses create engagement tasks that users can complete to earn value within the system. Users then spend their value on faster connectivity, premium content, or additional services. The flow of value into and out of the Moja platform creates the monetary value necessary to profitably run the network.

This is just the BRCK model though, and as I sit on some global boards and in meetings I hear of the others trying their new models as well. New technology stacks, driven primarily by open source software (and some key open source hardware plays), are a big part of the significant decrease in the cost profile (both CapEx and OpEx). But again, the business models… this is where we see the real changes coming and I’m excited to have a front row seat.

As these new railroads are built, by us and others, there lies such great opportunity for economic growth, social development, and business profit.

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The Case for Connectivity (part 1)

As with most CEOs of younger companies, I find myself on the investment raising treadmill. Doing so for a company focused on internet connectivity in frontier markets provides an extra layer of complexity, since it’s not a sexy of a proposition as a new app for ecommerce, agtech, fintech, etc might be. Those are easier to invest in since you’re playing with a world of software, not any hardware or infrastructure to muddy your hands with. Unfortunately, in my BRCK world, we have to deal with atoms, not just bits and bytes (though we do those too). Which is why many of my conversations find me explaining why connectivity is critical – thus this post.

What I find interesting is that everyone wants to benefit from a basic underlying availability of connectivity, but few understand what it is or why it is so important. If you’re with me at a public event, I’ll eventually spout off something along the lines of, “you can’t have a 21st century economy without power and connectivity.” This is my simplified way of stating that for any industry to be meaningful on the world stage (or even their own country stage), they need the ability to move data. If power and connectivity are the foundation, then the aforementioned ecommerce, agtech, fintech, and others are all pillars that stand on that foundation.

Economic growth

I’ve written before on how smartphone penetration has reached critical mass and proceeds on a noteworthy trajectory across Africa and other frontier markets. Africa, coming from a largely 2g/Edge based on old legacy GSM technology will have some of the highest growth rates in mobile data subscriptions globally, driven by chat apps and mobile video, as we transition to data-only networks. In 2022, there will be eleven times more mobile data traffic in Central and Eastern Europe and Middle East and Africa (Ericsson 2017).

Mobile subscriptions (global)

  • 250M smartphone subscribers in 2016
  • 770M by 2022 (Y-o-Y growth of 30%) (Ericsson 2017)
  • Over half of mobile phone shipments into Africa in 2016 were smartphones (Deloitte 2017)

All of this means that there are millions of new customers available for new, smart, and data-intensive financial products, agricultural services, marketplaces, logistics, and the list goes on. This is why we’re seeing the rise and rise of startups in these spaces, as well there should be.

What we’re not paying attention to is this: the market is still smaller than it could be.

Imagine that you’re finding amazing market traction with your new mobile lending app, or with your logistics system, or with your online goods marketplace. Imagine that you’re doing well, however did you know that you’re only reaching 20% of the people who own smartphones in the country…. Oh, right, that’s the piece that’s surprising! You could be doing even more, growing faster and capturing more market share if only the other 80% of smartphone owners in your market could afford the costs of getting online regularly to use your service.

This is where BRCK is stepping in with our Moja platform (free to consumer internet). You’ll benefit greatly from our growth. We’ll benefit greatly from your growth.

Social development

Even though I’m largely driven by the economic reasoning for connectivity alone, since I believe that the best way for us to make significant change in Africa is to grow wealth for everyday Africans, there is a strong social argument for widespread and affordable connectivity as well.

Connecting an additional 2.5 billion people to the internet would add 2 trillion dollars per year to global GDP and create 140 million jobs

  • It enables improvements in health (Deloitte 2014)
  • Unlocks universal education (Deloitte 2014)
  • Strengthens civil society through public services, social cohesion, and digital inclusion (Deloitte 2014)

It turns out that if we connect people to the largest, greatest network of knowledge and information in the the world, then a lot of great social benefits are realized across a number of important areas. It’s hard to argue against more jobs, better education, better healthcare, more informed citizens, and a stronger civil society in any country.

Connectivity is the foundation

Like everyone else not involved in the plumbing and distribution of the internet, I used to think of this only academically. It’s easy enough to understand and think through intellectually. However, I found that in living it, in dealing with the practicalities of the internet, in coming to know the end-user I began to appreciate just how important connectivity is. Building a new app or service can have big effects, changing the affordability equation for connectivity and you send a shockwave reaching everyone, everywhere.

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An Undersea Cable History and Primer

There’s a great resource that Built Visible has just written about the history and power dynamics of the internet’s undersea cables. It’s well worth a read, if even to just get a snapshot view of the surveillance programs that governments use to tap information, as well as seeing a map that plays by year to see how it all got built out.

The world's undersea cables, mapped over time

The world’s undersea cables, mapped over time

5 Good Recent Reports on African Tech – 2014

I keep meaning to write blog posts on each of these reports on tech, most of them on Africa, but can’t seem to get it done. Instead, I’ll just post a link to each, a visual, and why I think it’s worth reading.

1. The Akamai “State of the Internet” Q3 2013 report

[Akamai Report – PDF Download]

Has good information on overall usage globally, and trends. In Africa, even though they have a node in Kenya, all we’re seeing is stats on South Africa, Egypt and Morocco. However, there is a really fascinating chart by Ericsson in it on wireless usage.

Mobile data vs voice growth globally - 2013

Mobile data vs voice growth globally – 2013

2. GSMA’s “Digital Entrepreneurship in Kenya” report 2014

[GSMA – Entrepreneurship in Kenya report 2014 – PDF Download]

The GSMA puts together some fantastic reports, due to the amount of data at their fingertips due to their association’s membership. Alongside the iHub Research team, they’ve done a deep dive into the tech entrepreneurship side of Kenya, and you can see the results here.

tech-in-kenya-stats-2013

3. Deloitte’s “Value of connectivity” report 2014

[Deloitte’s – Extending Internet Connectivity report 2014 – PDF Download]

The Deloitte folks do a study and argue that an increase in internet penetration could have a large impact on an emerging market country’s GDP.

“Deloitte estimates that the resulting economic activity could generate $2.2 trillion in additional GDP, a 72% increase in the GDP growth rate, and more than 140 million new jobs.”

Internet penetration worldwide - Deloitte Report 2013

4. infoDev’s “The Business Models of mLabs and mHubs” report 2014

[The Business Models of mLabs and mHubs 2014 – PDF Download]

I’ve had a front-row seat to infoDev’s work starting and supporting places like the m:lab in East Africa. After doing it for 3 years, here’s their indepth report on what’s working, not working, how much money has been spent and what the future might look like.

Comparison of Key Results across mLabs - 2014

5. McKinsey’s “The Internet’s transformative potential in Africa” report 2013

[MGI Lions go digital_Full report_Nov 2013 – PDF Download]

Mostly useful due to the interest large corporates and banks put in McKinsey, this report makes that the greatest impact of the internet in Africa is likely to be concentrated in six sectors: financial services, education, health, retail, agriculture, and government. What they’ve done particularly well is gather a large range of numbers from diverse and various sources to make better sense of what’s going on.

Penetration and usage vary widely across the continent

O3b Satellite Internet (Finally) Launches

5 years ago I wrote about the news that Google had invested, along with others, in this new internet connectivity via medium-orbit satellites for the parts of the world that were hard to reach with terrestrial cable or even mobile phone towers, called O3b Networks.

Last week O3b finally launched.

A Russian Soyuz-STB rocket launched from Kourou in French Guiana today, 25th June 2013 at 19:27 UTC.

The rocket carried the first four satellites of the O3b Constellation. O3b will provide internet access for hard to reach parts of the world. 8 more O3b satellites will launch in a further two launches later this year and then in 2014.

Who are the first users?
First is Telecom Cook Islands, who will receive the first commercial signals across the network this summer and then Maju Nusa, soon to roll out a state of the art 3G backhaul network in Malaysia built on O3b’s low latency capacity.

The plans originally were to have these over Africa as well, let’s see if that happens.

Building the BRCK: A backup generator for the internet

Why do we rely on equipment made for the Berlin, Orlando and Tokyo when the conditions we have in Nairobi, Lagos or New Delhi are completely different?

The BRCK is Africa's answer to internet connectivity

Today we’re announcing the BRCK: The easiest, most reliable way to connect to the internet, anywhere in the world, even when you don’t have electricity.

We have a BRCK Kickstarter going, where we’re asking for your on taking it from prototype to production.

The BRCK is a simple, and it came from us asking:

“How would we design a redundant internet device for Africa?”

It would need to do the following:

  • A router for 20 people
  • With 8+ hours of battery for when the power goes out
  • That fails over to 3g when the Internet goes out
  • That travels, so you become a mobile hotspot
  • With cloud-based backend that supports every country
  • On device with both a software and hardware API

As a web company, being connected to the internet when you need it is a big deal, small outages cause lag that ripple through the organization. Even in Nairobi with it’s 4 undersea cables and growing tech scene, we still have power and connectivity problems. Could we do something to scratch this itch of ours that would help others too?

Since we travel a lot, we decided that it needed to work in every country. The BRCK had to work when the power was off for a full day (8 hours), had to fail over to 3g internet when the ethernet didn’t work, it also had to work in any country we were in, by just changing the SIM card. At the same time we wanted it to be accessible for both software and hardware extensions by others.

Having a BRCK cloud means that you can login to your device from anywhere in the world, load apps and services on to it, such as a VPN, Dropbox or other services and also control sensors and other devices connected to the hardware. We think that the BRCK model of both a software and hardware API represents the glue that will make the internet of things work.

As Ushahidi we’ve always used simple technology to create tools and platforms that work for us in Africa, and which is also useful globally. This holds true for the BRCK too. We’re redesigning technology that’s been around for years, but making it work for our needs in Kenya.

BRCK-header

Some History

A year ago I jumped on a plane from South Africa back to Kenya without my book and my phone battery almost dead. Funny enough, these happenstances which leave me bored and with nothing to do but think have lead to my most interesting ideas (I’m sure there’s a lesson in there somewhere…). I subsequently broke out my notebook and started sketching out what I thought would be a fun hardware side-project for Ushahidi’s core team that would give us something to work on, when we were too fatigued with the normal coding/work.

We live in possibly the most interesting time for technology in history, where we’ve created this incredible thing called the internet, connecting us globally while at the same time getting to the point where the people who can code software can also “do” hardware. An era where analog and digital are democratized and the making of both attainable by anyone with a computer.

Making things is hard. It’s harder in Africa. I can’t overnight an order of processors, boards or 3d printing filament here. There aren’t an over abundance of local fabrication facilities or tools, and the milling machine you find might be in disrepair and take you two days to calibrate. We’ve got our work cut out to create the right spaces for prototyping and small-scale fabrication on the continent.

We actually started with Jon Shuler doing a lot of the early builds being done by him at his home in California. I’d bring these builds back to Brian Muita and team in Kenya where he was hacking on the firmware to make the system work. All the while hoping that air travel security would let me through with what to all appearances looked like a remote detonation device…

The BRCK being built at the University of Nairobi FabLab

By prototype version 5 we were in Nairobi with a bunch of plastic, using the University of Nairobi’s FabLab to mill the body. There was a fair bit of repair and adjustment needed on the machines to make it work. Like most things in Africa, you either fix what you have or you don’t do it, because there isn’t another option. After a couple days we got it within close enough allowances that we could do it. It still wasn’t pretty, but we knew it would work by then.

That was all just the hardware bit. Concurrently we wireframed the software side, ensuring that this device was much more useful than just a MiFi on steroids. The BRCK Cloud falls directly in Ushahidi’s software development wheelhouse, so we set about creating a simple responsive interface that would work on both phones and big screens.

BRCK setup - mobile web

The software side does three things:

  • A simple setup interface with only 3 form fields. Router setup is scary and hard, so we’re trying to take the pain out of it.
  • A dashboard, so you can see if your BRCK is running on backup or primary power, how fast your current internet connection is, your provider, and how all of these have done over the last hour, day, week and month.
  • A marketplace for free apps and services, as well as the place for others to offer up their own creations to the rest of the BRCK users around the world.

While having a device that was remotely programmable and that could run its own apps and service is important, we realized this was only half of the equation. We would need to create a similar interface for hardware creators and users. This means we needed the device to have hardware ports for everything to connect to, from temperature sensors to Raspberry Pi’s (as an aside, I want to get a Raspberry Pi hooked into the BRCK, thereby making a small, working server). We also decided to put special hex nuts at the top that would allow you to pop the top and get into the guts easily to do your own re-jigging.

The plan for the future is that you’ll be able to stack components under the BRCK like Legos, so that if you need an additional battery pack, a temperature sensor, solar charger, or other product you could do so with ease.

For a full rundown of the all that the BRCK can do, check out the Kickstarter. If you want to get into the real details, see the spec sheet.

Final Thoughts

This week I’m in Berlin to speak at re:publica – and as this post goes live I’m finalizing my talk. I find myself driven to tell the story of Africa’s great potential and growth, tempered by my experience building companies, communities and products here. I see the other entrepreneurs, hungry to create new products and driven by the same powers that are seen in their European and American counterparts. Here, it’s a harder road to hoe in many ways, it takes more grit, more determination and more belief in a future that is not yet realized to do it.

I look at the success we’ve had as Ushahidi and what this new hardware product means to us, and I’m humbled that we have the luxury to self-fund the R&D to get it to this stage, while so many my peers are struggling to take great concepts to even the prototype stage. The opportunities afforded us by our international awareness, the advantage of attracting and hand-picking the top talent that come through the iHub, the ability to have funds that we can risk on a half-baked original idea, a Board who believes in us and trusts our decisions – these are what I’m grateful for.

For this same reason, we’re committed to making a difference for our friends and peers in Nairobi. We’re going to build a makerspace through the iHub that allows others to start from a better position. A place that will give hardware hackers and entrepreneurs a chance to get trained on tools and machines, meet their peers and take risks on their own crazy half-baked hardware ideas. We’re calling this Gearbox.

Gearbox - an iHub Nairobi initiative for makers

We’re looking for corporate, academic and other partners right now to make it a reality. I’ll write about it more at another time (as this post is already too long). However, if you’re interested in being a part of this initiative, do let me know.

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.]

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 Google Global Cache hits Kenya

In January I wrote about the way the Google Global Cache is affecting Uganda – how local web caching is completely changing the internet user experience for that country. We’ve known for a couple weeks that this was underway in Kenya too. Well, here are some numbers on that.

Here’s the aggregate month:

We’re seeing the overall traffic increase 300% from around 100Mbs to around 400Mbs. Those are some pretty impressive numbers, no matter how you look at them. Why is KIXP/TESPOK not making some noise about this significant achievement?

How does it look across the ISPs that are using it?

KDN hosts the cache:

Wananchi:

Internet Solutions:

Africa Online:

Phone and Internet Mesh for African Villages

In the words of Steve Song, Village Telco is “an easy-to-use, scalable, standards-based, wireless, local, do-it-yourself, telephone company toolkit”. He’s just put out a new video making it very clear just how useful this system is.

The team over at Blinktower has done an exceptional job of creating a short, concise and eminently understandable video of what Village Telco is.

The Village

Often, we get caught up in our high tech wizardry and get overly excited about the newest Android app or the best new web app built in African Megalopolis #5. And by “we”, I mean “I”, since I too am a tech guy who is endlessly intrigued by the latest, newest and shiniest.

What we forget is the village. “Up country”. What happens when we get comments like this last week from the new CEO of Safaricom, Bob Collymore, threatening to do away with their rural network:

We’re OK with losing market share (faced with unrealistically low rates) and focusing on Nairobi and high-income communities. The people in remote districts are receiving calls (more than making them). If rates decline, why should I continue to do that?”

Some rural communities have never had connectivity of any kind, voice or data. Others have it now, but could lose it if their revenues don’t prove to be high enough for big operators. Who is going to fill that niche?

I think the answer lies in technology like Village Telco. It’s a business, not an aid program. Where an entrepreneur can get a link to the network started (or not), and then mesh out from there to the whole community. People pay for access, and profits can be made.

For the last few years, a dedicated team of enthusiasts have been building the initial hardware and software. Both of which are open source. It’s a low-cost way to get into the telco business. Here’s to hoping that more entrepreneurs take a serious look at rural connectivity.

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