Welcome to ITACIRFA’s first edition of a new blog segment titled ‘Week’s Worth Knowing’. 

What we hope to achieve with these posts is to provide our readers with some of the top ICT articles and happenings impacting frontier and emerging markets over the past week; and more importantly, we try put them in context. Hope you find them insightful and refreshing, and we certainly look forward to your comments and suggestions as we go on.

Thanks and Enjoy!

Tizen-OS Phones out in 2H 2012 – The new Linux based operating system with links to the Linux Foundation and other mobile manufacturers is expected to debut in the smartphone market in the third or fourth quarter of 2012. With the most Linux developers shifting allegiance from the MeeGo platform to Tizen, and with Samsung leaking its first Tizen smartphone, we should expect a new major player in the market and more options for OEMs besides Android which a dominant player in the market. All good news in my opinion.

Links to check out:
Tizen Powered Smartphones Out by Q3/Q4 2012… by Cosmin Vasile
Tizen 1.0 hands-on: Can Samsung … Compete with Android? by Tim Verry

Kasuwa: Nigeria’s Answer to Amazon? –  Rocket Internet GmbH, a major European startup incubator, is set to launch an Amazon-like e-Commerce platform aptly named Kasuwa.com and has great hopes to dominate the Nigerian market. The Samwer brothers, who own the tech firm, are by no means doing anything new or innovative for the market (think Dealfish and DealDey) however, Rocket Internet’s track record of taking existing ideas and successfully adapting them to other markets may give them the edge needed to be successful in Africa’s largest market.

Links to check out:
Kasuwa… ‘Amazon For Nigeria’ Get Ready For Launch by TechLoy

Open Innovation Africa Summit 2 begins May 28th, 2012 – Nokia, InfoDev and CapGemini will host the second Open Innovation Africa Summit (OIAS2) this week bringing together 200 of the top policy makers, entrepreneurs and developers to participate in healthy debates and discussions on strategies to support innovation ecosystems for Africa. This is expected to be an insightful event as Africa is increasingly showcasing how innovative entrepreneurs are leading the way, leveraging technology and ICT to address economic and social challenges on the continent. Good luck to all the participants!

Links to check out:
Summit to Encourage ICT Development and Innovation from ITNews Africa

Image courtesy of NASA on the Commons

It is indeed a refreshing read and I encourage everyone to give it a read. I did however feel compelled to distill its content in this blog post in a comprehensive and amusing way (and for your reading pleasure of course!).

The article starts with a breakdown of the realities of the Nigerian ICT sector. Mobile telephony, it explains, thrives due to the effective regulations and policies put in place, and the results have come in the form of everyone (and their mamas) having two or more mobile numbers, and Glo Mobile, a major  mobile provider, constantly  assuring me that I will be a millionaire any day now.  Data and broadband penetration, however, have been abysmal in Nigeria and the irony is that the challenge is not in bringing the capacity to the country but in getting capacity distributed cheaply across the country since there is no national or open backbone network (Oh NITEL, how thou art failed us!). The ultimate effects of poor distribution networks have given rise to what I’d like to call the “Last Mile Marauder”. This is a term mainly referring to companies (primarily ISP providers and telecom operators) that have taken advantage of the void of a national backbone and have invested in building extensive terrestrial fiber optic networks and are subsequently charging exorbitant prices for access across them.

Main One Cable, the authors of the paper, also did an great job highlighting what they feel should be key indicators (Availability, Low-Cost/High Quality, Competition & Consumer Protection) that can help  measure the progress broadband penetration given the current state of things; quite frankly, the state looks grim. Moreover, the broadband provider follows up on its constant message of encouragement in developing of a National Broadband Policy, and I must say, it did not miss a beat in identifying ‘Needed Imperatives’ which are:

Regulation

Specifically, there is no cost based rationale for bandwidth from Lagos to Abuja or Port Harcourt to be more expensive than bandwidth between Lagos and London but such is the reality because there is no enforcement of the existing regulations for infrastructure sharing

This statement I believe speaks for itself. The crux of the matter is that the current state of play will certainly be a race to the bottom. Everyone trying to build their own private national backbone is surely akin to crabs trying to make it out of a steam pot.  Building out a private network is a huge investment and charging others a lot to gain access to it may be beneficial in the short term, however in the long term, it will not only stifles competition but inevitably be a hindrance to broadband penetration, which ultimately discourages innovation and is a disservice to the nation (Oh Telco, why art thou so stingy!?!). Sound policies that would regulate access and control pricing in support of broadband penetration is not only needed but is simply good governance.

Policy and Investment Incentives

… if we continue to deliver  satellite based communications services to our schools, where is the opportunity to migrate  to fiber and ensure that our students have enough bandwidth to support learning in today’s environment and that gets our educational institutions once again competitive?

Again, I give kudos to Main One Cable for highlighting the fact that market forces are not the only ones with a role to play, but government can be an instrument for good given its assets (Spectrum & Right of Ways) and its power to push policies/initiatives that promote broadband penetration. Sadly, we find that the current state of affairs is simply one of exploitation.

Governments worldwide (and even in recent history) have played major roles in the development their nations’ ICT sectors (the paper gives some examples including the inception of the Internet which was pioneered by a U.S. government initiative called NSFNet). So it isn’t a farfetched notion that Nigeria can also adopt a national policy that could help stimulate the demand for broadband access by supporting initiatives that ultimately require broadband access i.e. education and research programs as well as promoting ICT intense initiatives across its departments and agencies. Such actions are sure to demand an improved and world-class ICT infrastructure; hence broadband penetration.

Bottom line, Nigeria is a nation of great potential and has a market that most African nations would die for. It is also clear that technology and broadband access will place a major role in any country’s effort to propel itself in being a leading economy in the future. Having been recognized as an N-11 country and may very well be on its way to joining the BRICS, it would be a travesty if the nation cannot address the issues hindering the progress of broadband penetration like it did to bring about its mobile renaissance.

There is a need for a comprehensive national policy for ICT in Nigeria… and the need is now.

An interesting models that is beginning to take hold in Africa is was is typically referred to as the Technology Hub (or tech hub), which provides a resource rich environment and creates a framework that nurtures innovation with goals that go beyond assisting the successful launch of an innovative company locally, but also to help develop companies that can become players on the global stage. Trailblazing organizations that are leveraging the tech hub model to make an impact on the continent include the Kenyan based iHub and the Nigerian based Co-Creation Hub (or CCHub). I got a chance to visit CCHub in recent weeks and decided to put a bit of a spotlight on the good folks at the young tech hub setting up in a challenging environment where such a model is desperately needed.

CCHub Nigeria is the brain child of Bosun Tijani and Femi Longe. After years of being involved in the tech industry abroad, the partners decided to establish a preincubation environment to help mobilize and nurture young and motivated individuals in the city of Lagos who are focused addressing social problems in the country, Nigeria and beyond. Though not a full-fledged tech incubator, Co-Creation Hub (CCHub) serves as a conduit where innovators and social entrepreneurs can network and meld minds. It’s also is playing an important role of convergence, where budding local techies, business savvy folks and investors can connect and collaborate.

Located on the Lagos Mainland, the CCHub is an exciting place to be and you truly get a sense you are around the next generation of web entrepreneurs in Africa. With large open spaces, and ambiance that resembles that of a hip and cozy cafe, the tech hub facility offers an environment that encourages, innovation, collaboration and a place to hold intellectual conversations about novel ideas that can address social issues.

For its members, CCHub offers services such as access to its facilities, which include ICT services and conference rooms. In addition, members also benefit from the access to its network of industry experts and potential investors as well as access to exclusive events that feature guest speakers as well as hack-a-thons. CCHub is also involved in initiatives, partnering with mobile developers, Praekelt Foundation and Google Nigeria designed to help mentor its members but also brings a sense of credibility to their mission.

CCHub is certainly one to keep an eye on and I’m looking forward to blogging about the them in the future.

While there is data to suggest that countries in sub-Saharan Africa are experiencing healthy economic growth, and that the Internet and ICT are playing a major role in their advancement, it is also clear that the progress isn’t uniform across the board (even within the nations themselves. There are regions on the continent that have benefited and other that have not. The challenges in many cases are unique and cannot be surmised with a broad stroke; hence it is important to view them in the proper context. With a focus on Nigeria, the challenges that impede the impacts of ICT on the economic landscape include the inefficiencies of power generation & distribution, the lack of comprehensive ICT policies at the governing level, low broadband penetration and high connectivity costs to name a few.

There are, however, promising signs that the status quo is sure to change and many of these changes will be experienced in 2012.

The Push for Policy
The Federal Government of Nigeria is upping the ante, and has become to further the conversation in regard to the improvement of ICT in the country. By pushing initiatives such as the Cashless Society Initiative by the Central Bank of Nigeria, the promotion of the State Accelerated Broadband Initiative and the Wire Nigeria Project (WiN) projects by the National Communications Commission, steps are being made by the authorities that can truly move the needle further in the right direction. The Federal Ministry of Communications Technology has also released a draft of its proposed ICT policy which aims to ‘harmonize’ the existing and disparate regulatory policies under a single national policy, and addresses the convergence of technologies across the sectors and verticals of communications. According to the Communications Minister, Mrs. Omobola Johnson, Nigeria is determined to increase broadband penetration from 6% to 12% in the country.

Taking the Broadband Bull by the Horns
A major obstacle facing broadband penetration in Nigeria is the infancy of its terrestrial cable/fiber network beyond the shorelines and major cities. Typically, the financing (or guarantee of financing) for major infrastructure projects laid upon government entities. Examples that come to mind are the construction of the Kainji Dam in the 1960s in Nigeria and the construction of the US Interstate Highway system in the 1950s). Alas, given the lethargic nature of government bureaucracies, the political gamesmanship to enact comprehensive policies compounded by the dilapidated state to the country’s principal telecom company (NITEL), many organizations (particularly Telcos), are taking matters into their own hands.

Players in the market are placing bets and building their own private terrestrial networks in a race to own a good share of the infrastructure needed to support the country’s growing demand, which is sure to reap rewards to the nth degree. Another reason for the increased number of private networks is as a response to the high cost of moving data across privately owned infrastructures that make up the national backbone. In the absence of good policies, apparently it’s probably a wiser strategy to build your own network in order to offer your own services.

“The price of moving Internet capacity from Lagos to Abuja is much higher than the cost of moving capacity from Lagos to London due to high cost of national terrestrial backbone infrastructure. This is partly because you have to buy that infrastructure from people who own it for their own proprietary use.” – Funke Opeke, CEO Main One Cable

Companies like MTN Nigeria are currently building a fiber network with over 8,000 km of cable to date. Globacom Nigeria is also making strides with its growing national and metro fiber network connecting a growing list of Nigerian cities. Phase3 Telecom is connecting multiple countries in West Africa, and Main One Cable, a major player in the submarine cable market, has also put some skin in the game and is building its own network infrastructure as well as investing in distribution infrastructure, which would have direct access to its own undersea connectivity to the rest of the world.

In recent news, the Federal Government has announced its plans to adopt an open access model, which is welcomed by many operators and services providers in the market. The question (now) is how soon such a policy for an even platform will be implemented to deal with Nigeria’s increasing demand for cheaper and faster Internet service? Until then, I believe it is safe to say that the private sector would look to solving the needs of the market before the public sector gets around to it.

Tune in for the conclusion of this blog where I explore other promising signs.

Related Articles

• Closing the Loop – Part I
• Closing the Loop – Part II

Mobile payment technologies has certainly had its success in countries like Japan for many years now; its various forms however have  failed to catch on in other parts of the developed world. The challenges facing the adoption of mobile payment technologies are primarily because of the dominance and easy access to broadband connectivity. Furthermore the maturity of offerings from banking and financial institutions (i.e Visa and Mastercard) that facilitate transactions and the flow of commerce across the Internet make it quite difficult for the mobile payments to compete.

Developing countries, however are at a disadvantage  as broadband accessibility is low and the  infrastructure to support broadband penetration is lacking. This has clearly stifled the opportunities for eCommerce, electronic banking and other activities on the Internet to occur and flourish, as well as disenfranchised large segments of the world’s population (particularly the poor) that could benefit from these technologies. Luckily, the mobile telecommunications industry has been quite successful, particularly across Africa in the last decade, primarily because it solved a pressing need by becoming a reliable alternative to Africa’s poor or dilapidated telecommunications infrastructure. Furthermore, mobile users that can afford the expensive data plans also have an avenue to access the world wide web albeit the data rates are sub par to their counter parts in industrial nations.

And now, after many years of success providing basic telephony services, the mobile telecommunications industry has identified another opening and is poised to transform the global landscape yet again!

Countries in developing nations are at the forefront of the revolution as money transfers and electronic payments and purchases can now be conducted between people in both rural and urban areas using devices they already own…their mobile phones. Individuals can now send money securely or purchase items without the using of cash or a credit card (which hardly ever used in most developing continent).

In Africa, some of the offerings leading the way include Safaricom’s M-PESA (Kenya and Tanzania), MTN’s Mobile Money (Various countries), First National Bank’s eWallet (South Africa) and Pagatech’s PAGA (Nigeria).

Why Mobile Payments Make Sense

According to the United Nations Conference on Trade and Development (UNCTAD), Africa currently has 40 million mobile users and growing. The 2011 ITU Facts and Figures report also highlight that only 4% of mobile users on the continent leverage mobile broadband services (the numbers are even worse for fixed broadband subscriptions). Again, the challenges are predominantly due to expensive data costs, and a lack of regulatory policies that encourage the development of key backbone infrastructures needed to open up regions that would ultimately benefit from broadband accessibility (but I digress). The key takeaways from these reports are that most Africans have the medium (mobile phones) to engage in eCommerce and other transactions across the world wide web (via GPRS), but cannot leverage such  services given the affordability barrier. There are however other mobile technologies that do not leverage the Internet which can provide a compelling solutions in commercial transactions for millions of mobile users that do not have affordable access to the Internet.

What I find compelling about the mobile payment revolution is that these service platforms (and solutions) are leveraging technologies already in use by the growing mobile user demographic. Mobile technologies such as SMS, PSMS and USSD are supported on very basic of mobile handset and therefore have the ability to extend financial and banking services to large untapped populations without the need for users to adopt new technologies, purchase newer high-end smartphones, or be subjected to high-cost, low-speed Internet data plans. The mobile payment technologies adapted in regions such as Africa can leverage existing infrastructure, which makes the services easy to adopt by consumers and merchants alike.

There are of course other impressive mobile payment technologies which are not suited for developing nations today. One in particular is the near field communication (NFC) standard (Google Wallet anyone?) which already ties in to standard eCommerce and mobile banking practices today. NFC however has a high cost of adoption (new PoS systems, newer and more expensive smartphones, security concerns)  thus making the technology harder to catch on… even in developed countries.

Bypassing the Status Quo

Services that adopt technologies such as SMS and USSD make it extremely convenient for individuals and small businesses to engage in commerce without having to deal with large banks or financial institutions. This is extremely disruptive and has the potential of revolutionizing how business is currently being done in emerging economies, by provide more levels of safety and security which could address cultural and social barriers that previously could have hindered commerce.

Unlike mobile technologies such WAP and NFC, it is fair to say that financial institutions (particularly in developed countries) aren’t too thrilled with some of the mobile payment technologies used in regions like Africa since they offer the potential for customers to side step their institutions altogether. Visa however is trying to be ahead of the game, and has made huge investments in the mobile payment industry as they see emerging economies in Latin America, Asia and Africa as quick adopters of such technologies given the growing mobile subscriptions.

Government Initiatives on the Rise

Payments services such as M-PESA have been able to thrive without the involvement of the public sector, however regulations soon to be adopted by the Central Bank of Kenya will make it easier for mobile payment services to provide broader financial services such as formal deposit-taking. Initiatives supported by the Central Bank of Nigeria such as the ‘cashless project’ hopes to position the country as a dominant player in the mobile payments market is promoting the mobile payments industry.

The promise of mobile payments in emerging economies is huge; but this does not mean that they won’t have competition for the traditional transaction mediums (Visa and Mastercard)…And let’s face it, the Internet is still the future. However, while mobile operators and Internet service providers in developing nations try to solve network expansion and broadband penetration issues, there will always be an opening for mobile payment industry to leverage the existing infrastucuture and provide a much needed service thus gaining a foothold; and from what as been observed thus far, the mobile payment phenomenon is poised to be a dominant force on the African continent.

Image via Wikipedia

Under Leo Apotheker’s leadership, WebOS was poised (yet again) to be a game-changer. HP found it a new home as the OS to power the HP TouchPad, the new tablet platform poised to challenge the Apple iPad. Yet again, with poor initial sales, the HP TouchPad was surprisingly abandoned. The news as well as other events at HP led to the ouster of Apotheker and the hiring of Meg Whitman of eBay fame. Now under Whitman’s leadership, the WebOS finds a new home with the open source community. Consider it the most expensive charitable act (probably) in the history of technology.

With this decision, one wonders if this is the final death knell for the famed OS that held much promise. The future WebOS, however is yet to be determined given recent purchases of the discontinued tablet platform. In a tale of irony, the HP TouchPad is currently the 2nd best selling tablet system as it has found a new life after being sold at extraordinarily low prices.

And now, with the recent announcement from Whitman, HP has made a strategic decision to contribute WebOS to the open source community.

“WebOS is the only platform designed from the ground up to be mobile, cloud-connected and scalable…” said Meg Whitman, HP president and chief executive officer.

One can only conclude that HP still expects WebOS to be an avenue of generating sales and providing the core code and its SDK framework, ENYO, they hope the power of a fast growing community behind proven technology would be the way forward. Just recently, HP also released a long awaited update of the Palm Pre 3 smartphone’s WebOS firmware.

Don Reisinger’s article suggests that HP’s open source strategy would not work and gives 10 reasons why. Reisinger’s point is quite valid in my opinion as HP had the chance to leverage WebOS as a powerful alternative to closed source OS like iOS and Windows since Google Android pretty much has the open source strategy all wrapped up.

It would be interesting to watch over the next few months how the open source community embraces the newly open sourced OS and whether it would be able to generate much buzz and rapid adoption similar to projects like Openstack.

I couldn’t help but to ask several questions of myself… How does one differentiate oneself in an industry and culture that is favorable primarily to White and Asian males? Is Silicon Valley the only place to make it as a tech start-up? How about Europe or Asia? What problem(s) am I trying to solve? Who’s my target audience? and the list goes on and on.

A few hours later I came across an interesting article in Wired Magazine by David Rowan which essentially summarizes my long standing view regarding the convergence of technology and where the next big boom is likely to be…Africa!

This got me thinking again and I ended up asking myself just one simply, but important question…Where can I make a difference?

In David’s words, if you want to become extremely wealthy over the next five years, and you have a basic grasp of technology, here’s a no-brainer: move to Africa. I had to remind myself about some of the facts regarding telecommunication and technology in Africa such as:

• Africa has over 110 million Internet users, a number that is poised to grow by 2400% in this decade alone.
• Over half of its Internet users do so via mobile technology.
• By 2013, Africa will have 11 undersea cables, which is likely to result in increased bandwidth and reduced cost.
• African governments are aggressively developing broadband and ICT policies in order to properly regulate the industry and at the same time allow the market to work its magic.
• A landmark study by the World Bank in 2009 indicates that for every 10% increase in Internet penetration, there is a resultant 1.3% growth in GDP.

At the end of the day I could help but surmise that Africa, like many frontier regions, is poised for growth and opportunities in the technology arena are clearly on the front line. Check out the video below on the state of Internet penetration in Nigeria (be sure to click on the You Tube link).

I guess, I just had my eureka moment (yet again)… Are you ready to take a chance on Africa?

“Motorola Mobility’s total commitment to Android has created a natural fit for our two companies. Together, we will create amazing user experiences that supercharge the entire Android ecosystem for the benefit of consumers, partners and developers” Larry Page – Google CEO

In addition to gaining a foot hold in the cell phone market by become a device manufacturer to complement the Android OS, Google also hopes to benefit from Motorola’s cast portfolio of patents as it continues to compete with Apple’s iPhone and RIM’s Blackberry smart phones and defend itself against IP litigation from other mobile phone makers.

“Our acquisition of Motorola will increase competition by strengthening Google’s patent portfolio, which will enable us to better protect Android from anti-competitive threats from Microsoft, Apple and other companies,” Larry Page – Google CEO

Google would also have to be cognizant of other industry players such as HTC, Samsung and Sony Ericsson that developed Android phones and may well create a set of challenges for the Internet search company as it attempts to hurdle through the regulatory review process.

Bottomline: Watch out for the ripple effects of this acquisition! Would the struggling RIM, or Nokia be up for sale as well?

Image Credit: Dekuwa

The strategy is simple; Microsoft is banking on the popularity of Microsoft Office in order to quickly gain market share and lock out the competition. Microsoft owns the productivity space and believes that once more organizations buy into cloud computing, and are comfortable moving more of their applications into the cloud, the move to an established productive suite i.e. Office 365 would be a no-brainer.

Like many other cloud based services, questions remain regarding how easily and quickly Microsoft 365 can be adopted. With the recent attacks and service disruptions on popular cloud platforms (remember Amazon AWS and Sony Online?) organizations are weighing their options to better understand the trade offs before jumping head first in adopting cloud based services.

Office 365 appears to be geared towards the SMB market and it would be interesting to see if Microsoft explores the opportunity to market the platform in emerging markets where SMBs make up a larger share of businesses compared to industrial nations. There certainly seems to be a business case for solutions such as Office 365 and other SaaS platforms in such markets barring regions with limited or poor broadband penetration.

Here’s an interesting piece from the folks from Information Week at the Microsoft Office 365 launch

In my previous article “Is There a Future for Satellite Networks in EMEA”, I highlighted the value proposition satellite networks has to offer despite the growing concerns spurred by the advent of over 20 optic fibre network projects on the continent. Satellite technologies, however remains a  viable, cost-effective method for providing broadband connectivity to thinly populated regions.

Satellite companies like Hughes continue to prove the viability of satellite communications with its recent deal with Vodacom SA to offer services from their HN and HX broadband system solutions to the South African market and beyond. Hughes is also providing the ground segment equipment and satellite terminals to the UAE’s Yahsat 1 Ka-band satellite also intended to support the Africa market.

It would be very interesting to see (and to what extent) what Hughes’ offerings will play in the delivery of converged services. Bundled services packages (telephony, broadband, and many television) are yet to hit mature markets in South Africa and Nigeria and it still unclear if such offerings will help progress broadband penetration and ultimately reduce prices. And speaking of reduced prices, I wonder what Hughes’ competitors are up to in all of this?

Image credit: cliff1066™