Wednesday, November 16, 2011

"Want to become an internet billionaire? Move to Africa"

A recent published post was titled "Want to become an Internet billionaire? Move to Africa". This article was also referenced in another article published by Forbes: "Africa Could Make You An Internet Billionaire".

The authors are speaking about the ICT opportunity in Africa which I described in a paper published last year: "The New Nomads and Cloud Computing in Africa". One of the author was invited by UK Prime Minister David Cameron who took a high-level delegation of corporate CEOs to Nigeria and South Africa to highlight "one of the greatest economic opportunities on the planet".

So can Africa make you a billionaire?

First Africa's environment is not even close to where California was when Silicon Valley started in the early eighties at the beginning of the IT opportunity that made many billionaires in the US. So it may take much longer for the opportunity to develop and millionaires are more likely than billionaires in the near future. But I understand the need to attract readers with flashy titles.

Second and more importantly the question is who is "you"? Clearly in the mind of David Cameron, it should be British people and most VCs investing in the market are investing in startups managed by people from the developed world. Most of the startups operating in Africa indicated in the article are actually managed by British people. Other nations like India are also lining up to size the opportunity.

I personally have nothing against that, I think that the opportunity is for grab by anyone. But my wish is that African young entrepreneurs will grab it first and that we will see ICT solutions developed by Africans for Africans. Africans have a major advantage over people from the developed world: their knowledge of their region and their innovative spirit that has nothing to envy to that of their colleagues in developed nations.

Recently I attended a major IT innovation conference in Johannesburg. Ninety five percent of the people attending where white South Africans or expatriates! One sponsoring vendor organized a contest for the best innovative application. The winner was a solution developed to use twitter to share comments about wine that you are drinking! I'm not sure that this is the type of "innovation" that Africa needs right now!

More than ever before, now is the time and the opportunity for Africans to control their future in this IT industry before someone else does it. There are many "someone else" vying for the same market but Africans should not fear that competition because this time they have the home field advantage!

Sunday, November 6, 2011

Interesting use of ICT in Rwanda

As you may know, I now live in Rwanda since September 1st, 2011. I'd like to share with you some simple applications of information and communication technology I experienced or saw since I'm here.

In this first posting on that subject, I'd like to describe the experience of acquiring and using a mobile phone in Rwanda and probably in most of Africa.

But before speaking about Rwanda, let's go through the experience of buying a mobile phone back home in the US. By the way in the US they call it cellular phone not mobile. Cellular is a name based on technology. "A cellular network is a radio network distributed over land areas called cells, each served by at least one fixed-location transceiver known as a cell site" - wikipedia, while mobile rather describes a major advantage of the phone for the user. From a marketing point of view therefore mobile is a better name.

So if you want to buy a mobile phone in the US, you need to provide a picture ID. They will then record all your information in their system (and you hope it is safe). Next they will ask you for a credit card and perform a credit check on you. If you pass all these tests, they will then ask you to sign a contract committing for 2 years with a penalty if you cancel before that date. So now that they hold you prisoner, they inform you about the cost which you have to pay every month. They will offer you many options depending on how many minutes you think you will need. At the end of the month, you'll pay the price even if you did not use all your minutes, but if you exceeded the limit of minutes allocated, you'll pay an expensive price per exceeded minute. By the way this is only to use your phone in the US. If you want to use it abroad, you need another more expensive contract. And I forgot, if you want to send SMS you also need an addition to your contract with obviously an additional cost. Then you need to buy your phone, and they need to activate it. By the time all this is done you probably spent one hour in that shop.

In Rwanda, if you want to buy a mobile, you go to the shop. You select the phone you want. In my case I bought a simple Nokia phone. They offer you the choice between different phone numbers, you select one and they install the corresponding SIM card in the phone. They then activate the card and you are up and running. Total time: 5 minutes, total cost $23. The card is preloaded with enough units for a couple of days. I did not need to provide any ID or credit check. As soon as I was out of the shop, I was able to call my daughter back in the US with that mobile. And I was also able to send and receive SMS!!!

You only pay for what you use by loading units in your phone. You can buy units from young sellers at any street corner. You buy a card, let say for RWF5,000 (USD8.30), you scratch the code on the card, enter it in your mobile, and the units are added automatically to your phone. With RWF 5,000 I usually last two-three weeks. That money on my phone is actually mobile money. I can use it to pay for other services. For example, I bought an internet USB modem. I can charge my units to that modem from my mobile when I need to use it.

You may wonder why such a difference. While I did not really investigate this, I'll share what I think. In the US, mobile phone companies came out of traditional Telco companies renting land lines, i.e. fixed phone lines to your house to connect a fixed phone. So obviously, they needed to know your address and name to ensure that you ownd the house where they were going to dig a hole to connect the phone cable. They need upfront payment to pay for this labor and for the material. When they offered mobile phones, they did not see the need to fundamentaly change their billing system. In Africa, they were no landline phones or very little. Mobile company came to the market and wanted fast penetration. They offered an easy process to acquire a mobile phone.

That's it for now, next I'll talk about SMS based services.

Seeya later alligator

Saturday, November 5, 2011

The Critical Role of Academia for Information and Communication Technologies Development in Africa

I. ICT in Africa

There is no doubt that ICT penetration in Sub-Saharan Africa is accelerating, driven by recent infrastructure investments and new technologies.

In communication technology, Africa is the fastest growing mobile market in the world, crossing the 500 million mobile subscription mark [1] in third quarter 2010 and reaching 50% penetration, and as someone joked "there are now more mobile phones than light bulbs in Africa". While in rural areas the rate of mobile penetration is lower, typically below 10%, this number does not take into account that in those underprivileged areas, mobile phones are typically shared between several people.

Broadband Internet access capacity has also significantly increased in the past years with the connection of several high capacity ocean cables like the 4.72Tbps EASSy cable on the East coast of Africa. In addition, new cables are following the changing trade landscape of Africa. Africa’s trade with other developing countries (sometimes called South-South trade) accounts now for more than half of Africa’s trade [2], up from less than 30% only 20 years ago. As an example, the 12.8Tbps SAex cable and the 3.84Tbps IME WE cable are linking Africa with Brazil and India.

Unfortunately, those high capacity cables only reach the coast of Africa and do not penetrate inland. There are only two exceptions: the SEACOM cable reaching Johannesburg in South Africa and Kigali in Rwanda. Africa’s inland is still mostly depending on satellite communication for Internet access which is not adequate for VoIP and cannot offer the same bandwidth as the cable technology.

Some tend to see the glass half empty: "The African Internet has the highest data packet loss and the worst throughput figures of any region in the world" [3]. I tend to look at the glass half full considering that 10 years ago the large majority of African population did not even have access to basic communication like mail, media or phone. The lack of effective communications infrastructure has traditionally been one of the biggest obstacles to economic growth. The changes in communication described above had more impact in the last 10 years on people’s lives than any other technology in the last century.

In information technology (IT) however, penetration has been much slower because the traditional IT model developed in Western countries was not appropriate for most of Africa. In that model, when enterprises want to use IT to manage their operations, they need to invest in buying the business software and the hardware (server or PC) to be installed on premises. That capital expense, but also the infrastructure (electricity and Internet) and more importantly the expertise required to manage such systems were not affordable or available to most SMEs in Africa. This situation can actually turn out to be an advantage as the absence of legacy IT systems will make it easier for Africa to leapfrog into the next technology generation.

II. New Technologies

In Africa hope comes from those new technologies [4]. Cloud computing technology integrated with mobile devices and broadband internet offers a new model for easy access to IT resources located in remote cloud data centers. Cloud computing is the use of the Internet for the tasks you used to perform on your computer. Instead the tasks are actually running on servers located in the "cloud"(in a cloud service provider’s data center). You don't have to worry about buying anything, you pay only for what you use with no need for upfront capital investment and you aren't on the hook to operate it.

The challenge is that most of the large cloud service providers do not operate data centers in Africa. This is where governments need to either lead by investing in the building of data centers or partner with telecom companies to provide cloud services from their existing data centers.

Another challenge for this cloud service model to succeed is for telecommunication providers to deliver guaranteed quality and stable Internet communication.

III. The need for new software

Beyond the need for these ICT infrastructure investments, there is a larger challenge. Most business software applications used by SMEs have been designed in the Western world for the traditional IT model based on PCs not mobile devices. In addition, their functionality is often not appropriate for Africa. E.g. e-commerce software is mainly based on the usage of credit cards for payment which are mostly not in use in Africa. Africa uses mobile money. These days anyone with a mobile phone in Africa can now pay for goods or transfer money to friends and family. Kenya for example has four mobile money transfer platforms: M-Pesa, Airtel Money, Orange Money and YuCash.

Therefore in Africa a new generation of business software will need to be developed based on the software-as-a-service model delivered from the cloud to Internet mobile devices.

Most existing business software has been developed in the Western world in locations where software engineering skills were easily accessible like Silicon Valley near Stanford University’s leading computer science school starting multi-trillion dollar software and IT services industry.

IV. The role of academia

It would be difficult to develop software for Africa from California as the environment and the needs of Africa’s market are quite different. It will require software engineers with a deep understanding of that market. Those engineers should be educated in Africa and this is where African universities need to play a critical role. Many universities in Africa develop curricula based on those from western universities’ computer science schools with the hope that it will provide them with better recognition and world ranking. But now that ICT penetration in Africa is finally accelerating, it is time for universities to be more aligned with relevant regional needs. This will require for academia to work very closely with industries and private sector to identify those priority areas where ICT can deliver significant value. Then they need to integrate those areas in their curricula to teach skills that address the regional industry needs. In addition, students’ internships in industry during their studies should become the norm. Only by having students working for several months in enterprise for solving real problems will they perfect their ICT skills. In addition, good internships should naturally lead to employment by the same company after graduation. More than any other measurement, the feedback from those internships should be a good indicator of the university education quality. Universities should integrate that feedback to continuously improve their education programs.

But the role of higher education must go beyond just education. It must nurture a new generation of entrepreneurs that will develop the innovative software required for the mobile digital society in Africa. Too many times, students’ innovative ideas developed during their studies are left as nice academic exercises on libraries’ shelves without impact on the society. Universities should extend their role by encouraging their best and most innovative students to start their own business in innovation incubation centers located on campus. The presence of those businesses on campus will further favor students’ interaction with industry and inspire them about future careers. It is that close interaction between students and businesses that was a critical success factor in Silicon Valley leading to companies like Google or Facebook.


V. is Africa up to the challenge?

While African students don’t always have access to the best schools, they have a major advantage over students from the developed world: their knowledge of their region and their innovative spirit that has nothing to envy to that of their colleagues in developed nations.

The question then becomes: are African nations up to this challenge? If they are not then other nations will seize this opportunity and take away the benefits from African hands. The ownership of M-Pesa by a British company is a good example [5].

One nation is already aggressively positioning itself to take over the mobile digital market and it is not from the Western world. That country is India [6]. India’s environment is much more similar to Africa than the Western world giving it an advantage for developing appropriate solutions. McKinsey reports that India’s Internet users will increase fivefold by 2015, and more than three-quarters of them will choose mobile access. Similar trends have been found in Africa [7].

To win this race Africa needs to implement the necessary conditions and reach the critical mass of expertise for the development of a silicon valley in the region.

VI. Can Rwanda lead?

Several countries have declared their intention of becoming that ICT hub, but the recent announcement [8] by Carnegie Mellon University (CMU) that it will open a campus in Rwanda delivering master degrees in IT and Electrical Computer Engineering may give that country a leading advantage.

The Government of Rwanda (GoR) has just completed the second phase of their 2020 Vision building an ICT infrastructure in the country. That major investment has resulted in making Rwanda the only landlocked country in Africa with broadband internet access through the SEACOM cable. The ICT infrastructure also includes an optical fiber network covering the entire country and a national cloud data center making it probably one of the best ICT infrastructures in the region.

The 2020 Vision is now entering in its third phase with the GoR’s partnership with CMU. The opening of CMU campus is expected to positively impact the quality of education at other local higher education institutions through close collaboration, delivering expert ICT skills that will develop internet based services leading the country to a knowledge based economy.

The GoR’s strategic ICT plan also includes an innovation incubator, a mobility research center, an executive education and an advanced practical training program, all integrated with CMU-Rwanda in a Regional ICT Centre of Excellence to be built with funding from the African Development Bank (AfDB) that was approved last April.


VII. A new model for higher education in Africa

Carnegie Mellon is the first highly ranked research institution to open a campus in Africa with an in-country presence and committed to deliver the same quality of education than on its main campus in Pittsburgh. Instead of adding to the ever increasing number young Africans leaving the continent in search of quality high education, this project’s goal is to develop a new model to deliver quality education in Africa that is adapted to regional needs, and that is integrally linked with economic development so that graduating students will have a direct impact in a region booming with opportunities in technology innovation. The model is based on a partnership between public (GoR), financial (AfDB), education (CMU), and private sectors. Several major IT companies have already expressed interest in partnering with this initiative. This partnership can develop the critical mass of expert ICT skills required to start a regional ICT hub that could represent Africa’s best chance to control its own ICT future and lead the new mobile Internet revolution in emerging markets.

[1] Thecla Mbongue, "Press release: Africa crosses 500 million mobile subscriptions mark", Informa Telecoms & Media, November 2010
[2] C. Roxsburgh & co, "Lions on the move: The progress and potential of African economies", June 2010, pp 14-15.
[3] R. Cottrell, "African Internet continues to fall behind", TechCentral, October 22, 2011.
[4] M. B├ęzy, "The New Nomads and Cloud Computing in Africa", Next Billion, October 27, 2010.
[5] P. Gakure-Mwangi, "M-Pesa earns Vodaphone sh1.8billion in 2010/2011in licensing fees",, August 15, 2011.
[6] L.Narasimhan, "Can India lead the mobile-Internet revolution?", McKinsey Quarterly, February 2011
[7] "Mobile Internet to close the Data Divide in Namibia", Research ICT Africa
[8] Carnegie Mellon News, "Carnegie Mellon To Partner With Rwandan Government for Development of Graduate Engineering Degree Programs", Press Release, September 15, 20111