ICTworks by Inveneo

This is a screenshot of an Internet bandwidth speed test I did at a hotel in Dar es Salaam. At 1.65 Mbs, that's the fastest speed I've ever recorded in my Africa travels, and it compares favorably to what most American Internet users get in their homes and workplaces. This is the sign that SEACOM, TEAMS, EASSy, GLO-1, MainOne are having real impact on the cost and speed of bandwidth available to ISPs and end consumers.

But what are Internet Service Providers doing to capitalize on this near-glut of bandwidth? That is the question that should be keeping them, and you, up at night. Here is a great opportunity to make money as Africa goes digital. But how? Russell Southwood offers 7 strategies for ISPs (and all ICT businesses, really) to increase market share and profitability in this changing landscape in his post, Going from shortage to abundance – strategies to target Africa’s broadband consumers.

Below, I've condensed the post and each point for your quick review. Be sure to visit the original post for the full story.

Currently, there are three broad types of operators who are in this market: firstly, Africa’s traditional independent ISPs who have lived largely on corporate subscribers and a small number of wealthy individual; the mobile operators who have come in and expanded the market with mobile Internet; and alternative insurgent challengers like Wananchi with its Zuku brand. The African consumer broadband market is still just being born so no-one has yet got a full grip on the market. Consumers are fickle and go where price and bandwidth seem most advantageous.

In the interests of creating a strong and vibrant African broadband consumer market, here are our seven tips on making this market work:

1. Be honest and straightforward

The operator that is consistently honest and straightforward has every chance of winning this game. If you say to your customers, you have two choices, price and bandwidth speed: which do you want? For those budget customers, set a much higher provisioning (2 mbps as a minimum) but clearly indicate that this speed may be considerably less during busy periods. For those who need higher speeds, charge more and give them a demonstrably better service (perhaps 8 mbps as a minimum). Set up bandwidth speed comparison tests internally first and then allow your customers to use them. Use the information gathered to drive out bottlenecks at the national and local level.

2. Service – Making things work

The mass broadband market in Africa needs to work on a “plug-and-play” basis. The household consumer needs to be able to open the box, plug in a limited number of cables and then follow the on-screen prompts to get things working. Household broadband needs to be cheap, well-supported and reliable equipment so that CPE costs are kept as low as possible.

3. Branding, character and use

When they took off, African mobile operators were selling aspiration. If you had a phone, you were somebody. Africa’s broadband Internet brands desperately need some “character”, something that will mark them out and make their customers smile and remember them. They need to be able to convey a different version of the aspiration message. There won’t be necessarily the same level of Internet users so the aspiration message has to be more finely honed.

4. Encouraging maximum use by offering maximum capacity

The strongest way to promote the largest “critical mass” is not by dealing it out in “penny packets” but by offering the maximum available capacity at prices that will encourage young and old to do the kind of things on the Internet that people do the world over: things like social media (Facebook, Facebook and Facebook), Twitter and You Tube are giving some idea of where things can go. If there were 1.7 million Nigerian Facebook users in August 2010, imagine how many more there will be in a year’s time.

5. Expanding the potential market

To expand the potential market, you need to expand the number of devices that can handle interesting Internet applications. You need to be offering ever-cheaper smartphones with the prize going to the first to offer one for US$50. You need to offer even cheaper feature-rich phones (with a i-Phone-style interface from someone like Snaptu) to the less well-off at below this price point. In this way, the existing basic phones in the market will shrink and the number of customers with Internet access will increase.

6. Building the device pyramid

The challenge with this device ownership pyramid is the same as for the handset pyramid. Mobile phones that can access the Internet are a great thing but they have their limitations. Therefore how do you get all those people who might have access to a PC at work and/or have a feature rich phone to get some sort of wider PC usability? (The main barrier to greater use is size and use of keyboard functions but there are other issues.) Somewhere around the netbook/tablet area is a device that long-term may cost between US$75-100 that will broaden this part of the pyramid and give PC-like abilities to a much wider number of broadband users.

7. Spreading everyday usage

The lesson of the success of Facebook is obvious in hindsight. The average African professional organizing his or her social life on a Friday afternoon is the “human equivalent of Facebook”. So the insight is really a very obvious one for operators. They need to introduce apps and services that drive everyday use. These might come from elsewhere but in time there will be local variants. In places like India and Brazil, the local variants stamped out their own ground by not being in English. Watch for local variants and see whether they can be marketed successfully to create new, local social media.

Operators need to keep coming up with ways to weave the Internet into everyday use so that it becomes as natural as….well, picking up your mobile to make a call.

Internet bandwidth - everyone wants more, no matter where you are or who is looking at the screen. Yet, its as much a matter of perception as anything else - when you've had the fast stuff, everything else is slow.

Look, the Internets are faster already!

But there are ways to speed up any network. To get more computer user happiness, you will need to take a 3-part approach that includes effective network monitoring, sensible usage policies, and a consistent enforces of management and usage rules.

The network management bible is How To Accelerate Your Internet - a practical guide to bandwidth management and optimisation using Open Source Software. But not everyone has time to read a book, so the good folks at Aptivate have distilled its knowledge down.

Here are the 8 key points from their Network Management Basics:

1. have a clear, simple and strict Internet access policy, and enforce it.
2. have enough bandwidth, AT LEAST 3 kbps per computer, uncontended. So if you have 1000 computers, you should have 3 MBits dedicated bandwidth, or 60 MBps if it’s shared or contended with a 20:1 contention ratio (typical ISPs).
3. have competent network administrators. If you don’t have them, then hire or train them.
4. implement good network management practices, e.g. by following the advice of the BMO Book.
5. start by solving the problems that users complain most about, to give them the best possible service.
6. monitor your network to understand how Internet bandwidth is being used.
7. block misuses of Internet access that are causing problems for legitimate use of the Internet connection.
8. ensure that client PCs have good, fast antivirus, perform well, are regularly reformatted and reimaged, and have strong local security to prevent unauthorized software installation.

In addition to the book, check out the companion wiki for more bandwidth optimization tips & ticks.

Russell Southwood of Balancing Act has a new report out on bandwidth in Africa, and "African Fibre and Satellite Markets" is a pretty grim assessment of satellite's future on the continent.

Satellite service in decline

The overall balance of satellite vs fibre use in Africa’s top Sub-Saharan markets 20 markets goes from 45.6% vs 54.4% in 2008 to 11.9% to 88.1% in 2014. Of these top 20 markets, the top 5 markets (South Africa, Nigeria, Kenya, Angola and Sudan) make up the majority of bandwidth demand across the continent and are the countries that will experience the fastest bandwidth growth over the period.

So satellite operators and resellers will not only be selling into a smaller share of the overall bandwidth market but will become niche players in many countries. There will be growth but most of it will be on fibre.

Satellite operators need to demonstrate that they can respond to these new market circumstances by transforming what they offer. Satellite is dead! Long live satellite!

Firstly, they need to make innovations in terms of delivery. Secondly, they need to find ways of bringing costs down so that those who are beyond fibre or wireless have some chance of joining the party. The market needs satellite broadband offers in the US$20-40 per month range.

Maybe the big transition from satellite to fibre will re-energise the operators and get them thinking harder about how they retain market share.

Read more details on the report or you can purchase the report.

I was perplexed at The 3 Reasons Why Kenya is Beating Nigeria in Internet Business Opportunities. Could the author Wayan Vota simply be courting controversy as a means of drawing traffic to the blog? I will attempt to review the reasons listed in the blog post as to why the author is of the view that Kenya leads Nigeria in Internet Business opportunities.

1. Safaricom

Safaricom? When did Safaricom start offering Internet connectivity over a 3.5G network? Only recently. As at the last time I was in Kenya (February 2010), Safaricom was still offering a special promotion of unlimited Internet access for only 9,999 Kenyan shillings with each subscription lasting only a week. The promo was obviously a means of raising awareness on its new 3.5G network.

In contrast, MTN Nigeria has been offering super-fast Internet over 3.5G since the 2nd quarter of 2008. In addition, Zain and Glo Mobile both offer super-fast Internet using 3.5G technology covering all the top cities in Nigeria.

Nigeria may have more mobile phone players, and cheaper voice rates, but their 3G data services are no where near the quality and reach of Safaricom.

I used Safaricom’s mobile broadband service in Nairobi and Mombosa and frankly speaking, I have experienced faster Internet in Nigeria and Ghana. Safaricom’s service is no where near excellent. It disconnected intermittently and I had reconnect manually on several occasions. I have been too busy since I got back to publish a detailed review based on about 14 days of using Safaricom’s mobile broadband.

An AccessKenya Fibre ad on a road in Nairobi Kenya

2. Seacom & Teams

Yeah. Seacom alone is a big deal. The hotel I lodged in Mombasa offers Internet connectivity using Swift Global. Swift Global is linked to Seacom. The speed was simply wickedly fast. Seacom was launched July 2009 and currently has an operational capacity of 100 Gbit/s. Considering Kenya (and the whole of East Africa) got their first taste of real Internet only recently, they still have some catching-up to do compared to their West African cousins.

Nigeria’s telecom sector is years behind. Yes, the Glo cable is coming, but with the current restrictive regulation, I bet it will still be cheaper for Nigerian companies to buy bandwidth microwaved over from Benin.

Really? The assertion by Wayan is highly inaccurate. Nigeria is presently the leading telecoms market in Africa with the most liberal telecom regime where several players are digging it in a highly competitive & dynamic market using various technologies. Nigeria is where GSM meets CDMA. Where 3.5G knocks head with EV-DO. Nigeria’s telecom not only offers a big basket of flexible options but is also the biggest in Africa.

SAT-3 WASC route

Nigeria has been served by the SAT-3 cable (whether directly or via Benin Republic is inconsequential in this context) since 2002. SAT-3 has a capacity of 120 Gbit/s; however, plans are in place to nearly triple SAT-3’s capacity to 340 Gbit/s soon thanks to technological advancements allowing 2.5 Gbit/s wavelengths to be replaced with 10 Gbit/s wavelengths.

Wayan wrote about the Glo-1 cable with a heavy dose of pessimism. Glo-1 is powered by Globacom Limited, a privately-owned commercial entity. I wonder what “restrictive regulation” would stop Glo from pricing its broadband services competitively. Already, Glo Mobile recently announced new mobile broadband packages offering much more data for the same old price, leaving its competitors to play catch-up.

Wayan forgot to mention that MTN Nigeria (a private entity) recently won a bid for the rights to SAT-3 and by inference, the submarine cable would witness a much better management in Nigeria.

Wayan conveniently excluded Main One, another privately-owned submarine cable that is set to be launched soon with an initial capacity of 1.28 Tbits/s serving Nigeria and some other West African countries.

Yet another cable is ACE. ACE (Africa Coast to Europe) submarine communications cable  is a planned cable system along the west coast of Africa between France and South Africa. Etisalat Nigeria (a Nigerian telecom operator) is part of the ACE consortium. ACE would become operational in 2011 with a minimum capacity of 1.92 Tbit/s.

Some vital stats

• Nigeria: 11,000,000 Internet users as of Jun/09, 7.4% of the population, per ITU.
  Population: 154.7 million (UN estimate).
• Kenya: 3,359,600 Internet users as of Jun/09, 8.6% of the population, per ITU.
  Population: 39.8 million (UN estimate)

3. Kenya Power & Lighting

If there is any single factor that would be the albatross of e-commerce development in Nigeria, it would be the lack of power. However, I am forced to reflect in this direction: if Nigeria could achieve this much as epileptic as power supply is, what wouldn’t it achieve when there is adequate supply?

I am far from being complacent and desperately hate the poor power supply in Nigeria but the modest achievements in the present hostile business environment deserve some commendation.

While it is true that Kenya is the regional IT hub in East Africa, Nigeria is the IT hub of a much bigger regional block (West Africa). In summary, Kenya does not beat Nigeria in the Internet business arena. It is a good thing that Africa gets more Internet connectivity but if there is any country to pitch against Nigeria in Africa, it is certainly not Kenya.

Recently, Google put on the hyped G-Nigeria Day, which was actually a 3-day Google-fest in Lagos. Reading the impressions others had about the event was telling - most Nigerians seemed to be ambivalent about its worthiness to their efforts.

Yet Oladejo Fabolude over at Digital Crossings seems to have found the real essence of the event in his post I Went For Google’s G-Nigeria Day And All I Got Was A Lousy T-Shirt:

What Google need to take away from this experiment, get a bunch of techies into a room, provide Wi-Fi, provide them a little prodding to get them headed where you want them to go, move out of the way and watch them at work. Kind of like the Indian experiment that put a computer in a wall and just let street children do what they wanted – with amazing results.

From that event, I got to meet several Nigerian tech bloggers, exchanged a couple of phone numbers, blog addresses, followed and was followed by some more people on Twitter. I got a few answers to some tech issues from the audience and had some deficiencies about my blog pointed out. In order words, I connected with people – and that was the success of G-Nigeria Day. That was just me, I could see many other people connecting much better with the Google personnel and each other.

And that's the brilliance of Google's efforts in Africa - get ICT implementers together where they can talk about technologies and methodologies, give everyone access to them, and build relationships with people creating solutions.

Now I hope they capitalize on the Nigerian enthusiasm, before Ghana lives up to its title as the ICT hub of West Africa.