A tale of two countries

The arrival of plentiful and cheaper bandwidth is beginning to drive the uptake of services and applications in East Africa.

June 18, 2010
A tale of two countries

Both individual and corporate behaviour is changing as they get to grips with what they can now do that they couldn’t before. Visits to both Kenya and Tanzania gave Russell Southwood an opportunity to look at how they compare and what lessons they hold for countries elsewhere on the continent.

Like South Africans, Kenyans are great technology gadget early adopters. I spotted my first iPad in Africa on the flight into Nairobi and a senior broadcast executive I met was singing the device’s praises. Facebook is already out there in the Kenya’s rural areas as the young reach out beyond the limitations of their physical horizons.

Ten years ago everything was static websites that were the equivalent of “online brochures. Now everyone and their aunt is putting up content management systems and plugging in transactions and adding video clips. The Central Management and Depositary Company (that handles share transactions for the Stock Exchange) is offering people online access to monitor the trades being made by their brokers.

The stats for Opera Mini in Kenya make it in the top 5 of African countries. I’ve never heard anyone say they’re using Opera Mini but whichever way you look at it, a good chunk of Internet use is now on mobile. Safaricom has 3 million data users and it’s streaming local broadcast programmes (from comedies to news) and selling downloads in suitably impressive quantities.

Leaving nothing to chance, Safaricom has teamed up with Strathmore University to offer a mobile apps course and Nokia has done something similar through Ovia. The first two local Ovia apps – Africahotornot and Whazzup (an events guide) – are out in the market and Ovia pushing hard to get more local content.

According to Moses Kemibaro of digital agency Dotsavvy:”The problem is that people are not aware of local sites. We need to make them more visible. Discovery is currently through word of mouth or on the social web.” To solve this problem, Naspers has put money into an online directory of mobile sites and Yellow Pages has launched a mobile site. Pigia.me (call me in Swahili) has a classified ads site that is available on both mobile and PC.

Online media is beginning to feed off itself at a local level. A comedy music video was made featuring local super hero Makmende by a group called Just a Band and went viral on You Tube. The character who is a potent combination of Bruce Lee, Afro-America’s Shaft and a play on Kenyan humour has over 60,000 friends on Facebook. In March Kemibaro blogged about the phenomenon and it was picked up internationally driving 21,000 unique users in one month. Out of the 81% of Kenyan users of the blog, 18% are accessing it from their mobile phone. At the less culturally rich end of the spectrum, local property developer Thika Greens has put up a video clip of its new scheme. Bandwidth is still slightly too slow for easy viewing of video clips but that doesn’t seem to be deterring people. With the launch of new, cheaper international bandwidth from EASSy in mid-July after current testing, things can only get better.

One sign that Internet is being taken more seriously in Kenya is that the advertising agencies are beginning to set up their own digital agencies. The country’s largest ad agency Scanad (that controls the majority of billings in the country) has set up Squad and others like Young and Rubicam and Wunderman have done the same. Long-time specialists like Dotsavvy and Three Mice might regret this but probably have more than enough specialist knowledge to stay one step ahead.

The component of advertising budgets dedicated to online can go as high as 5% but is usually much less. Advertising agencies and digital agencies are busy designing landing pages on sites for lead generation but online – whether on mobile or PC – remains a “nice-to-have” rather than essential part of the budget.

Tanzania’s economy and population are far more spread out in a much larger country and although the official language Swahili (which is to Kenyan Swahili as Received English is to street slang) has built national cohesion, it means that there is much less interaction with the Anglophone global conversation. Also the influence of Kenya’s much larger international diaspora is not to be underestimated.

Although Dar es Salaam is increasingly the location of large, high-end private property developments, there is not the same energy and edginess that seems to drive Kenya in both good and bad directions. But there are almost certainly more Tanzanians of an entrepreneurial mindset than there were at the end of the socialist experiment under Nyerere. Also whereas urban Kenyans and their media are complaining vigorously about the speed and cost of their Internet, Tanzanians do not seem so bothered as perhaps the Internet has not yet reached critical mass either on mobile or laptop.

To speed the transition, local voice and data challenger Sasatel has just launched an offer you can’t refuse: an Acer emachines notebook with a mobile broadband modem and a 600 MB Budget Surf package for TS599,000. It is also offering time-based bundles instead of data allowances so that customers can actually understand what they’re getting and a smartphone from Huawei for TS199,000. But as one local ISP admitted to us:”Tanzania is behind the Kenyan market. It’s much less sophisticated. With things like Facebook usage, they’re 3 years behind but there’s no reason why they won’t catch up quite quickly.”

In terms of bandwidth used, Kenya is probably using two and half times as much as Tanzania. Claims for data enabled customers vary from 5-40% depending on the operator and there are 16-17 million subscribers. One of the larger operators has 300,000 3G enabled handsets on its network. The country generates 14-15 million page impressions a month for international websites. Between Vodacom’s M-Pesa and Zantel’s Z-Pesa, there are around 4.2 million accounts for M-money services. Although Blackberries are very visible amongst professionals as are a sprinkling of cracked iPhones, no operator is offering iPhones or HTCs. Tellingly, Nokia’s Ovia did significantly less well in Tanzania than it did in Kenya.

However, in the corporate market, things are moving more quickly. According to another local ISP:”Companies are becoming more and more sophisticated in how they use bandwidth. Some corporates with remote sites are using biometric solutions to ensure their security guards are on duty. They have to send a fingerprint ever hour to ensure no-one is substituting for them. CCTV is becoming more prevalent.” Several data centres are in the offing.

With the announcement of the opening of Phase 1 of Tanzania’s backbone and the publishing of its prices in national newspapers yesterday, a national fibre network is at last beginning to become operational. But whilst Kenya has talked up its prospects as a country with a digital future and put in place things to lay the foundations, Tanzania has had a much less well-articulated vision of what it wants out of the digital tomorrow and arguably moved more slowly. Other countries on the continent might do well to watch and compare their prospects to these two front-runners: the future doesn’t just arrive, it has to be made.

Balancingact-Africa

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