Originally posted on the GBI Portal – Page 37

Cablegate on African broadband: 2007 (Ghana, Kenya, Ethiopia)

Quite a few WikiLeaks cables deal with the behind-the-scenes of African broadband affairs. Using CablegateSearch.net we have listed the “juiciest” cables (if African broadband can be described as such), below. The U.S. was very interested in broadband, most notably ownership of the SEACOM fiber-optic cable and competing with Chinese investment.

{WikiLeaks}

Next up are four cables from 2007. The main themes are Ghana’s ICT initiatives, Kenyan fiber projects (which will succeed – SEACOM, TEAMS, or EASSy?), and fiber investment in Ethiopia (via U.S. or China?) :

Ghana

Summary: As of 2006-7, Ghana has multiple ICT projects underway that should vault the nation into a regional leader. Further privatization is needed, as is rural connectivity, but mobile growth and ICT training facilities look promising.
U.S. viewpoint: Ghana’s ICT sector is promising but faces challenges in privatization, regulatory gaps, power supply, and general business climate. Government projects should have positive results for the private sector.

Notes:

60% of investment in ICT has failed since 1992.
ICT contributed 6% to the GDP in 2005 versus 1.8% in 2000.
In 2003, >50% of fixed lines were in the Accra area. Only 10% of the Ghanaian population lives here.
Four mobile operators all offer broadband as of 2006.
Internet cafes charge US $0.45 – $1.60 per hour.
Ghana is extending an existing 600km fiber optic cable ring connecting Accra, Tema, Kumasi, and Takoradi.
Broadband over power-line was explored.
E-government, m-banking and e-agriculture intiatives were discussed.
Run-down of 7 education initiatives.
Link: Ghana’s ICT Development: Is The Glass Half Full?, October 11, 2007

Kenya

Summary: Numerous (3 or 4) fiber-optic services are ready to undergo construction. Last-mile solutions are not far behind.
U.S. viewpoint: High-speed broadband will allow East Africa to connect with opportunities for job growth and a global marketplace starting in 18 months. The upside is enormous.

Notes:

SEACOM expects their undersea cable to be live by March 2009. (was eventually July 2009)
The perception of progress on EASSy is a distraction that has caused potential customers to delay in committing to SEACOM.
Link: Kenya And East Africa: A Step Closer To Fiber Optic Connectivity, August 13, 2007

Ethiopia

Summary: Ethiopia plans on purchasing 14,000km of fiber cable from China. Negotiations to connect via Djibouti have been flat for 3 years.
U.S. viewpoint (adopted from Ethiopian Minister’s comments): Ethiopia needs approximately ten years to transform its ICT sector. There is debate whether to use Chinese or American companies as examples or investors. State-owned ETC must lower rates in order to accelerate development.

Notes:

A massive US $158 million project will bring fiber transmission backbone, mobile services in 9 cities, plus hundreds of thousands of wireless phone lines. The goal of completition is September 2007.
Plans are in the works to connect to cables in Kenya, Sudan, and Djibouti.
Ethiopia needs major human capital over the next 5-8 years.
The ICT Minister has traveled to India, Egypt, and China. He has plans to visit Silicon Valley.
Link: Ethiopia: Laying Groundwork For Development Through Fiber Optics, May 3, 2007

Kenya

Summary: U.S. firms, along with Kenya, are racing to give East and Southern Africa broadband connectivity to the rest of the world. SEACOM look to be completed within two years.
U.S. viewpoint: Kenya must decide whether it will merge with SEACOM or go ahead with its TEAMS cable. Additionally, the U.S. strongly favors the SEACOM cable over TEAMS or EASSy, writing how, “the good news is twofold: first, that at least one of the three cables is moving towards fruition; and second, that the current frontrunner will be owned, managed, and built by U.S. companies.”

Notes:

Payment and signed contracts have secured SEACOM in the global queue of fiber cables.
The government of Kenya has promised an operational fiber system by 2008. They may feel that TEAMS can be completed before SEACOM due to its shorter length.
Some feel that EASSy’s monpolistic ownership structure will preclude cheap bandwidth delivery, and even if it success there, it may not return profits given the competition with SEACOM.
Link: U.S. Companies In Lead To Bring Fiber Optic Connectivity To East And Southern Africa, April 20, 2007

September 20, 2011/by actualize

Connectivity, Democracy & Governance, Originally posted on the GBI Portal

Nigeria’s elections set new records in use of social media

In Nigeria, a study says, elections held last April brought the use of social media in the political field to new levels. UN Africa Renewal’s André-Michel Essoungou reports.

By André-Michel Essoungou

In 2008, then US presidential candidate Barack Obama broke new ground by using social media in ways never seen before. Yet it was Goodluck Jonathan, the recently elected president of Nigeria, who took the extraordinary step of announcing his bid for the highest office on Facebook. On Wednesday, 15 September 2010, he informed his 217,000-plus fans on the world’s most popular networking platform of his intent. Twenty four hours later, 4,000 more fans joined his page. By the day of the election, on 16 April 2011, he had over half a million followers.

Mr. Jonathan’s online campaign was only one illustration of the social media fever that gripped Africa’s most populous country (with around 150 million people) during its most recent presidential, parliamentary and local elections. A report by two researchers who helped track online traffic during the month-long polls argues that the country’s use of social media reached unprecedented levels.* “Nigeria set a new record for recent African elections in the number of reports tracked using social media,” it says. In addition to the approximately 3 million registered Nigerians on Facebook and 60,000 on Twitter, almost every institution involved in Nigeria’s elections conducted an aggressive social networking outreach, including the Independent National Electoral Commission (INEC), political parties, candidates, media houses, civil society groups and even the police.

The report notes that between 10 March and 16 April 2011, the electoral commission posted almost 4,000 tweets, many in response to voter queries. Using Twitter, commission officials at polling stations around the country also were able to communicate among themselves, and even confirmed the death of one of their members who had been attacked. “Twitter ultimately proved to be the most efficient way to interact with INEC,” the document authors report. The commission’s use of social media led to its website receiving a record 25 million hits in three days during the presidential election. “By using social media to inspire voters, the electoral commission has redefined elections in Nigeria,” analyzed Punch, the country’s most circulated newspaper.

The boom in use of social media during elections also helped the media expand their readerships. Shortly before the polls, the Daily Trust newspaper had 32,000 fans on Facebook. A few weeks later, the number had more than doubled to 65,000, placing its online reach beyond its print distribution of 50,000. To build up its fan base, the newspaper also used social media in its reporting. Journalists solicited and used questions from Facebook fans for interviews with the chairman of INEC. Since the elections, the Daily Trust has further increased its Facebook presence, with 95,000 fans by July 2011.

The online networking platforms reflected popular interest. Unsurprisingly, social media use reached its peak during the presidential election on 16 April. On that day, a total of 33,460 text messages and 130,426 posts on Twitter and Facebook were sent by some 65,000 voters.

The content was mixed, the authors point out. “Social media, especially Twitter, was used to report occurrences [of fraud] — truthful as well as fabricated.” Yet, they add, it played a mostly constructive role during the post-election violence by exposing unfounded rumours.

“Social media tools,” the report concludes, “revolutionized the efficiency of election observing by increasing coverage and reporting, while minimizing costs…. They changed how information was disseminated in Nigeria. Citizens accessed information directly and more accurately, resulting in unsurpassed participation in politics during the 2011 elections.”

That upbeat assessment, however, needs to be put in context: An estimated 70,000 people posted contents online during Nigeria’s polls, but they were just a tiny fraction of the registered 73 million voters. Still, a new trend appears to have begun.

___

Africa Renewal www.un.org/africarenewal

September 18, 2011/by actualize

Agriculture, Originally posted on the GBI Portal

CRS & ICT: Data collection and the Humanitarian Cloud

Shaun Ferris (CRS) demonstrates data collection methods. Photo credit: KDMD.

A variety of emerging technologies connects the digital fieldworker to the value chain, according to Shaun Ferris of Catholic Relief Services (CRS) in his presentation, “CRS ICT4D Strategy,” at the ICT4D (Information and Communication Technologies for Development) August Meetup. According to Ferris, project progress tracking and data sharing are two of the challenges his organization faced while collecting data from their beneficiaries. New technologies and/or new uses of existing technologies are helping to bridge this gap. In his presentation to the ICT4D group, Ferris showed the audience that a combination of hardware, software, and data-sharing technologies were used to ensure a more efficient transfer of data.

In partnership with the IT-focused non-governmental consortium NetHope, CRS beneficiaries and the international agricultural community share their information via the “Humanitarian Cloud.” The Humanitarian Cloud concept borrows its name from the information technology term, “cloud computing.” Cloud computing, is “anywhere access” to data or, more simply, web-based data. Universal access to data is vital in ensuring equal distribution of services, particularly to underserved areas. Connecting to this Humanitarian Cloud from rural areas with limited internet access, however, was one of the challenges faced by Ferris’ project.

Recognizing the reality of intermittent internet access, the CRS project needed a data collection tool that was both available offline (for data input) and online (for data transmission). In addition, they needed software which was available on mobile devices such as tablet PCs and smartphones. To address this need, they found software in which they could create customized forms and collect data, both on- and offline. Using a form designed in iFormBuilder and accessed via mobile device, the fieldworker or project staff member are now able to add data to the Humanitarian Cloud.

Access to remotely-shared data, however, is not without its caveats – as one participant brought up in her question to Ferris. Ethical use of the data, as well, is an important consideration, continued the questioner, of which only the most technologically savvy of the fieldworkers might be aware. Ferris echoed the questioner’s concern and mentioned that data integrity, fieldworker privacy, and responsible use of data in a “Facebook world” factor into their internal confidentiality processes. To better address confidentiality of the data, Ferris mentioned the opportunity to learn from the best practices of mobile health data collection projects. While data usage and confidentiality is important, the overall benefit, as another participant mentioned, of sharing data and the various positive outcomes it can produce, can be a worthwhile tradeoff in supporting fieldworkers.

Ferris also put the call out for Ag Technology providers and practitioners in his announcement of a possible CRS ICT4D conference in DC in November 2011.

September 14, 2011/by actualize

Agriculture, Originally posted on the GBI Portal

Two Questions on the Sustainability of Grameen’s Android App for Farmers

The Grameen Foundation Center launched a comprehensive Android phone-based project for Ugandan farmers recently, that could significantly improve farming processes, but how sustainable is the initiative?

The project is a high-tech response to fundamental challenges in agriculture, including unclear pricing structures and markets, unreliable weather forecasts, and a myriad of inefficient or absent extension services about when and how to plant crops. Each Android phone has an open-source data-collection app that feeds into Salesforce.com.

The Grameen innovation counters the electrical challenges in the East-African country, that would otherwise doom projects dependent on electrical power, by utilizing rechargeable batteries which solar energy can sustain. (PC World reports on this in detail)

The project is organized around 400 select farmers, known as “community knowledge workers“, who own Android phones – and 3 in 4 of all their peers value their high-tech extension services. But an Android phone costs US$600 plus upkeep costs, nearly twice the per capita income in Uganda. So, how do these smart phone owning farmers acquire them legitimately? The project offers select farmers loans to purchase the phones. On the surface, this approach suggests a level of sustainability, but I have a two questions:

Are the benefits of using a smart phone, compared to a regular phone, so great that a farmer ought to take a loan and bear upkeep costs (combined) twice his/her country’s per capita income simply to access information? Of course, information is important, but it is only one variable among many that must be resolved to result in improved earnings for the farmers.
Even if in the long-term ‘community knowledge workers’ charge for the services they offer, and even pay a fee to the platform providers, how long will it be before they can recoup and repay their loans? What is the interest rate on these ‘Android loans’?

These are critical questions that ought to be answered in order for us to truly grapple with the potential economic impact of deploying this sophisticated technology.

September 14, 2011/by actualize

Agriculture, Agriculture Markets, Farmer to Farmer, Originally posted on the GBI Portal

Joining ICT4D to learn about using technology for agricultural development

Judy Payne, Shaun Ferris, and Grahame Dixie at the ICT4D meetup. Photo credit: KDMD.

On August 22, the ICT for Development (ICT4D) Learning Network hosted an expert panel on how ICTs, or information and communication technologies, are enabling agriculture and improving livelihoods worldwide. The event, held at the USAID Public Information Library, was co-organized by Appropriate IT and the USAID-funded FACET Project, which is being implemented by FHI 360. FACET works to enhance agricultural value chains and facilitate trade in agricultural products across Sub-Saharan Africa by providing technical assistance on the use of ICT tools to improve competitiveness and productivity.

The first presenter on the panel was Grahame Dixie, the Agribusiness Unit Team Leader for the World Bank’s Agriculture and Rural Development department. Dixie’s presentation covered a lot of the new research by IFPRI and others about how farmers and people in agriculture value chains are using ICT and what the effects are. Focusing mainly on telephones (both public land lines and private cell phones), he explained that there is good evidence that phones are raising rural income (Peru), improving commercial farmer income (Philippines), and leading to changes in cropping mixes and marketing methods (Morocco). That said, according to Dixie, the most important function that phones seem to serve is to connect players in the value chain in a way that promotes trust between them, leading to sharing of critical market intelligence.

In Grahame Dixie’s experience, a critical area where technology can play a big role is logistics. To illustrate this point, he told this story about women backyard poultry producers in Bangladesh:

“[The women] found out that the prices that they received for their chickens was less than half that of the prices in the nearest major market. They decided to contact the visiting trader and demand an explanation for paying so badly. The trader explained that he had to cover all his costs of getting to and back from their village over the few chickens they could sell him, and he could not afford to pay them more. How many chickens would he need to buy to be able to pay sensible prices? Fifty, he replied. They found that he has a cell phone and now actively seek out sufficient chickens to sell from an extended group, and call him in when they have aggregated a sensible critical mass. The prices have increased–and this in turn has incentivized the production of more chickens.”

After talking with farmers, researchers have found that the most useful market intelligence appears to be the simplest—contact information, especially of buyers, input suppliers, and transporters. They also found that the crops for which ICT integration generates the most farmer benefits are high-value, semi-perishables. Another finding was that the person in the value chain who seems to benefit most is the trucker/trader with a cell phone. Dixie wondered if there may be a way to squeeze that additional profit now accruing to the trader to either end of the value chain to push more benefits to the farmers and/or end buyers.

As his presentation focused so heavily on cell phones and SMS technology, Dixie concluded with a brief look at costs. According to him, the prices of SMS messages in many countries are high and bordering on “iniquitous,” especially when compared to the cost of actually transmitting the message. The current cost/price structures, he said, might mean a role for regulators or possibly an open source software for broadcasting SMS.

September 13, 2011/by actualize

Connectivity, Originally posted on the GBI Portal

Cablegate on African broadband: 2008 (Senegal, South Africa, Uganda)

Quite a few WikiLeaks cables deal with the behind-the-scenes of African broadband affairs. Using CablegateSearch.net we have listed the “juiciest” cables (if African broadband can be described as such), below. Many of the cables are extremely telling of what goes on behind closed doors and how the U.S. viewed African telecoms prospects from at least 2006-2009.

{WikiLeaks}

Next up are three cables from 2008. The main themes are greater competition in Senegal’s mobile market, broadband in South Africa ahead of World Cup 2010, and Ugandan President Museveni’s views on ICT challenges:

Senegal

Summary: Sudatel, reportedly an independent, private firm, will begin operation as Senegal’s 3rd mobile operator in October 2008. Over the next fifteen years, the company will invest US $500 million. The arrival of Sudatel will increase competition, especially in the mobile market.
U.S. viewpoint: Sudatel’s plan sounds ambitious. However, Senegal’s mobile market is rapidly expanding and Sonatel is losing its fixed-line monopoly. Effective ICT policies and decent infrastructure bode well for growth. 3G and Blackberry service are modernizing the telecommunications sector. The main concern is privacy, especially among customers of government-backed operators.

Notes:

Will create more than one thousand jobs.
The number of mobile users is expected to increase by 1 million by 2011.
Sudatel represents 60% of transactions on the Khartoum, Sudan stock market.
650,000 registered Internet accounts as of September 2007 (96% are Sonatel ADSL)
Unfortunately, the US $200 million license fee paid by Sudatel was spent on a March 2008 OIC summit instead of on ICT infrastructure.
Link: Sudatel Should Bring A New Dynamic To Senegal’s Ict Sector, July 2, 2008

South Africa

Summary: The SEACOM undersea fibre cable will be operational in advance of the 2010 World Cup. The South African government still needs to understand the cable’s ability to deliver sufficient bandwidth.
U.S. viewpoint: SEACOM is a close ally of the United States and the 2010 cable will mark the beginning of U.S. ICT standards in Africa. The company has sought the help of the U.S. Embassy to promote their new cable. Additionally, SEACOM will provide low-cost bandwidth for USAID projects. And, there is potential need for U.S. businesses to install land-based infrastructure.

Notes:

SEACOM needs better marketing to consumers. Most publicity has been on finance and management, but not academic initiatives.
Link: SEACOM Only Undersea Fiber-optic Cable Project Slated To Be Online In Advance Of 2010 Fifa World Cup, June 12, 2008

Uganda

Summary: President Museveni recently criticized the East African Community IT infrastructure, urging political leaders to solve the problem.
U.S. viewpoint: Museveni’s proposed solutions to East African infrastructure problems are shortsighted. “Museveni’s public jibing at his two ministers present at the meeting might suggest that he expects action, but his continued tolerance of the incompetent and corrupt Public Works Minister belies his words.”

Notes:

Museveni decried how Asian economies are taking off but African ones have been relatively stagnant for 40 years. He does not blame bad governance for Africa’s woes.
Energy remains a challenge, with Uganda only having 400 MW capacity and needing 48 MW additional per year to keep up with demand.
Museveni acknowledged the need for broadband, and in turn, data processing centers.
Link: Ugandan President Decries Eac’s Infrastucture Needs, April 29, 2008

September 13, 2011/by actualize

Agriculture, Humanitarian Assistance, Originally posted on the GBI Portal

Pakistan Floods – Use of Information and Communication Technology

One of the things that I spent a great deal of my time during the first half of this year is being launched today. With great support from Intel and Microsoft we at NetHope are launching a 60 page case study report on the use of information and communication technology (ICT) in the Pakistan floods last year.

In this report we look at how the humanitarian community responded, how ICT played a role in the response and how information management was utilized during the response.

Back in 2006, Paul Currion wrote a report on the use of ICT in the 2005 Pakistan earthquake. In our report we look back at his findings and identify ways in which things have progressed in these five years. Interestingly enough in many cases not much has changed.

One of the key things that has changed in these five years is easier access to connectivity. Whereas in 2005 most organizations relied upon V-SATs as the only available connection, the humanitarian organizations today relied much more upon broadband and mobile connections.

It is our hope that this report provides a great insight into the state of ICT and information management within the humanitarian system and that it generates discussions on how to further improve.

I want to use this opportunity to thank all those who contributed to the report, either by responding to our survey or be willing to participate in our interviews. Last but not least I want to thank everyone who helped review my often rough text and special thanks to our media queen Paige for making the report look so nice.

The report can be downloaded here

September 13, 2011/by actualize

Agriculture, Health, Originally posted on the GBI Portal

WHO releases 2011 Compendium of New and Emerging Health Technologies

The World Health Organization (WHO) has released a compendium of innovative technologies that may address global health complexities and improve health outcomes in low-resource settings. It presents a snapshot of technologies, either under development or commercialized, that address specific health problems and offer proposed solutions. Each technology is featured in a one-pager which showcases the product functionality and specifications, developer’s claims of product benefits, usage information, development stage, as well as future work and challenges for the product. According to the WHO, the compendium 2011 aims to raise awareness of the critical need for development and dissemination of novel technology in developing countries.

Technology Under Development…

Assisted vaginal delivery instrument
Blood collection drape estimating postpartum blood loss
Fetal heart rate monitor by mobile phone
Infant warmer
Isolator system for laparoscopic surgery
Lab-in-a-backpack: point of care screening/diagnostic
Low-technology child restraint car seat
Microbial water testing kit
Mobile health record system for pediatric HIV
Mobile phone image transmission for diagnosis
Mobile phone pulse oximeter
Off-grid refrigerator
Orthopaedic external fixator
Pedograph
Point-of-use water purifier
Portable cell sorting and counting device
Portable system for pre-cancer screening at point of care
Portable telemedicine unit
Portable transcutaneous haemoglobin meter
Single-size contraceptive diaphragm
Subcutaneous drug delivery device
Woman’s condom

Commercialized Technology…

Birthing simulator for training
Fetal heart rate monitor
Isothermal nucleic acid amplifi cation system for POC diagnosis
Manual wheelchairs and mobility devices
Medical data communication system
Mobile technology to connect patients to remote doctors
Newborn simulator for resuscitation training
Non-pneumatic anti-shock garment
Oxytocin in prefilled auto-disable injection system
Parasitological test system
Phototherapy for neonatal jaundice treatment
Point-of-use water disinfection system
Portable haemoglobin meter
Portable ventilator
Prefi lled auto-disable injection system
Reusable neonatal suction device
Self-powered pulse oximeter
Solar thermal cooking and autoclave device
Transcutaneous bilirubin measurement system for infants
Treatment response software application
Ventilator using continuous positive airway pressure
Water filter

September 12, 2011/by actualize

Connectivity, Originally posted on the GBI Portal

Cablegate on African broadband: Apr-Jun 2009 (Tunisia, Kenya, South Africa)

Quite a few WikiLeaks cables deal with the behind-the-scenes of African broadband affairs. The various dialogues regarding the telecoms situation in Africa are surprisingly detailed and often proceed for well over a dozen paragraphs. Essentially, the United States routinely monitored the economic prospects in each country and provided updates to Washington.

{WikiLeaks}

Using CablegateSearch.net we have listed the “juiciest” cables (if African broadband can be described as such), below. Many of the cables are extremely telling of what goes on behind closed doors and how the U.S. viewed African telecoms prospects from at least 2006-2009. The sentiments within the U.S. government probably still ring true today.

Summaries and notes will be listed in approximate reverse chronological order. Next up are three cables from April-June 2009. The main themes are censorship, undersea cables (SEACOM), and political engagement with social media:

Tunisia

Summary: Despite a global economic crisis, Tunisia’s IT sector continues to grow and contributes 10% of the GDP. Telecoms privatization is on the increase, but the Internet remains censored.
U.S. viewpoint: In general, Tunisia is moving in the “right direction.” Economic growth from domestic demand and the fact that Tunisia is close to meeting Internet goals are promising. However, quality of service still has weaknesses and government restrictions and censorship will potentially limit Internet penetration.

Notes:

The number of mobile phones surpassed the number of fixed line subscribers in 2003.
2.3 million Internet users as of August 2008, but only 365,000 subscribers.
ADSL connections expected to double from 2008 to 2009.
6,500 Tunisian websites by December 2008 (up 12% YoY).
Many coastal areas have broadband, but interior areas are behind.
2008: Goals set for one e-mail address for each citizen, 1 million computers by 2009, one public Internet center in each village by 2010.
Link: Tunisia’s It Sector Growing, But Some Challenges Remain, June 16, 2009

Kenya

Summary: The Seacom broadband cable will improve Internet access across East Africa. Competition will increase, access costs will decrease by 80%, and a knowledge-based society will be one step closer. Foreign investment will hit $10 billion.
U.S. viewpoint: Broadband is poised to arrive at Kenya in a hurry, with three fibre-optic links set to begin within a year. With a sound national ICT policy in place, along with a good BPO environment, Kenya is poised to become a global destination for business. E-government and e-learning will also blossom. Challenges are lack of trained personnel, lack of equipment, and the hard fact that many areas will still not have immediate access to the national fiber network.

Notes:

Seacom’s 1.28 terabits per second capacity will increase the average ISP bandwidth by 1000%.
The government has essentially completed a 5,000km national system to deliver the international bandwidth.
1Mbps costs $4,400-$5,000 but actual throughput is less.
Prices should decline, but will still exceed the international average rate by 33-66x.
Increased tax revenue can be invested in other sectors.
Link: Kenya’s New Broadband Infrastructure Promises Growth, May 15, 2009

South Africa

Summary: Political parties in South Africa are using the Internet to reach voters in advance of elections. Only 10% of the population is online, however, so the efforts may not be effective just yet. Mainstream parties have large Facebook presences, but reflect their community bases.
U.S. viewpoint: Obama’s 2008 election campaign caused South African political parties to focus more effort on appearing modern. However, these sites or social media feeds will not likely alter the outcome of the election. Little attention has been paid to mobile campaigns, for example. Still, privatization, broadband, and the 2010 World Cup will contribute to the adoption of online political movements.

Notes:

90% mobile penetration, 10.5% Internet penetration (grew 12.5% in 2008).
The ANC website lacks current election information.
The Democratic Alliance has a more substantial web presence, including blogs and Facebook activity.
Other parties have sites with varying levels of interaction.
U.S. follows South African political Twitter accounts.
Link: South African Political Parties Have Embraced Social Media, But Is Anyone Listening?, April 20, 2009

Tentative Post Schedule:
9/8/11: (2009) Kenya, Zambia, Ethiopia
9/9/11: South Africa, Nigeria, Tanzania
9/10/11: Tunisia, Kenya, South Africa
9/12/11:(2008) Senegal, South Africa, Uganda
9/14/11: (2007) Ethiopia, Rwanda, Kenya
9/18/11: Ghana, Kenya, Ethiopia, Kenya
9/19/11: (2006) Kenya, Kenya, South Africa, Ethiopia

September 10, 2011/by actualize

Agriculture, Mobile, Originally posted on the GBI Portal

Free money transfers in Kenya

The following is a guest post we’re pleased to share by the GSMA’S Mobile Money for the Unbanked (MMU) programme, which seeks to accelerate the availability of mobile money services to the unbanked and those living on less than US$2 per day.

Outdoor advertising for free mobile money sending service in Kenya

One of my first posts for this blog explored how mobile operators could exploit the network effects that characterize mobile moneyservices by “subsidizing” early adopters—that is, by rewarding those who sign up and use a service early with deep discounts or bonuses to make up for the fact that there aren’t many other people on the network to transact with. It’s a classic pricing strategy in networked markets.

Recently, Airtel in Kenya launched a new promotion offering Airtel Money (formerly known as Zain Zap) customers free money transfers to both registered and unregistered customers. Although slated to run only for a short time, this promotion is a clear illustration of an attempt to subsidize participation in a network that has far fewer users than its competitor M-PESA, the most famous and well-established mobile money service in the world.

Such a move is risky, but not crazy. Ignacio Mas has pointed out that the online payments service PayPal lost $23 for every customer they signed up during their first 9 months of operation because they paid large sign-up bonuses and chose not to charge fees that were large enough to cover their variable costs. PayPal racked up millions of dollars of losses that way, but in the process it built a user base that it was later able to monetize: PayPal went on to a successful IPO and now has over 100 million active users around the globe.

For this tactic to work, a networked business must be willing to sustain losses up until the point that it has built a network large enough—which is to say, valuable enough—that users and potential users are willing to pay to use it.

We’ll see if this gambit pays off in Kenya.

Subsidizing early adopters is just one of the tactics that networked businesses can employ to exploit network effects. Previously, I’ve written about how network effects apply to mobile payments and their implications for target market selection and marketing communications.

September 9, 2011/by actualize