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Demand for Internet Growing, but Infrastructure lags Behind

18 November 2021 Comments (0) Business

Broadband penetration across the African continent is limited, and to meet the growing demand, the continent needs an additional 700 data centers, which will require collaboration between engineers, telecoms and governmental organizations.

Current state of internet in Africa

Broadband penetration across the African continent is limited. Even the leaders for internet penetration – South Africa, Nigeria and Kenya – only have broadband penetration of 64%, 45% and 40%, respectively. This is a far cry from countries like the UK, that boast a 96% penetration. This disparity has been highlighted by the pandemic, but even putting aside the increased demand on internet services during Covid-19 restrictions, demand for internet is growing fast on the continent, following a similar path to the rest of the globe. Streaming services, ride-hailing and banking are all leading the growth in content consumption. A new report by African Data Centers Association (ADCA) and Xalam Analytics has calculated that in order to meet the growing demand, the continent needs an additional 700 data centers for an additional 1000MW of capacity.

Differing responses to pandemic pressures

Across the world, the Covid-19 pandemic forced people to work from home and stay indoors. In countries with high broadband penetration internet usage more than doubled. On the African continent the situation varied. In Uganda, Rwanda, and Nigeria peak traffic actually decreased at the end of March 2020, while in South Africa usage spiked. This has been put down to the fact that in offices in Uganda, Rwanda, and Nigeria there is typically a good internet connection. This allows high-bandwidth applications to be used, but as people adjusted to working from home and using their own, often limited internet connections, these high-bandwidth applications caused problems. By contrast, in South Africa where internet infrastructure is more developed, industries were much better prepared to work from home, and so internet usage increased.

Server racks with telecommunication equipment in server room

With growing demand, Africa offers opportunities

For the data center sector, Africa offers a land of opportunity. The industry only entered the continent in 2008, and investment and development has been slow and uneven. IBM entered in 2016, and more companies like Microsoft and Huawei have joined since then. More than 30 Tier III or higher data centers have come online since 2016, effectively doubling the region’s hosting capacity. Despite this, only one third of Africa’s cities with a population of over 1 million have a local data center that meets Tier III standards.

Demand for internet services is growing across the world and more and more devices and industries are taking advantage of high-speed internet, so demand will not shrink. On top of that, Africa’s median age is 20 years old, less than half that of Europe, and an age at which data consumption is particularly high. This makes Africa a golden opportunity for those looking to invest in data centers. Investment was valued at $2 billion dollars in 2020, and the data center industry in Africa is expected to value $6 billion by 2026.

Concerted, coordinated effort required to meet requirements

ADCA’s report, while positive about the future growth prospects of internet in Africa, did warn that achieving the 700 data center target would be challenging. The land, power, and water requirements for data centers of a meaningful scale would need national, regional, and local government involvement. It also would come with a high cost. The average yearly cost to operate a large data center ranges from $10 to $25 million, before taking into account the upfront costs of building the data center and the initial set-up. When including access, power, network connections, servers, storage units, and software licenses the cost can be significant. One mile of fiber-optic connections alone can cost as much as $250,000. To make things more difficult, the infrastructure supply chain in Africa is significantly less developed than in Europe, Asia or the USA and many important components will have to be brought in from overseas.

With such a high price tag, it is clear that collaboration will be important. Industries must invest in connectivity across the continent, with engineers, telecoms and governmental organizations working together to improve connectivity and capacity across the continent as a whole.

A varied continent means varied challenges

While unified and coordinated action is required, addressing the continent’s data problems will also require looking at each region individually. With 54 countries, 2,000 spoken languages and vastly differing populations and population density, there is no universal approach to the problem. In many of the remote and poorly connected areas mobile internet like 4G may be the most economical option, and still a lack of access to electricity will be a major consideration. Nonetheless, the prospects of rapid growth demand and usage of the internet makes the investment a promising one.

Photos : cio.com / infotechlead.com / iclg.com

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Tidjane Dème : the face of Google in Francophone Africa

29 May 2016 Comments (0) Africa, Featured, Leaders

Tidjane Dème

Meet the face of Google in French-speaking Africa

Senegalese Tidjane Dème, 41, is working with Google to unlock affordable broadband access for Africa. Dème has worked for the giant global internet search and advertising giant since 2009.

Google recruited him to be its lead for Francophone Africa in Dakar well before most Africans had regular access to the internet, he noted, and Google understood that.

“Their approach was: ‘In a few years, Africa will be ready. It will be a big business opportunity for us,’” Dème recalled.

He said Google had also decided it didn’t want to recruit an expatriate for the job. Instead they were looking for someone with tech skills, with knowledge of the region and experience working in it.

“For them, that combination was necessary to develop their activities in the region.”

Tech education, experience

With European studies in technology, a stint working in Silicon Valley in the United States, and a record of entrepreneurship in Senegal, Dème fit the bill.

After high school in Dakar, a scholarship enabled him to continue his studies in France. He studied science at the prestigious Ecole polytechnique in Paris, where he discovered programming and computer studies. He went on to do specialized studies in telecommunications and information technology at the National College of Advanced Techniques, also in Paris.

From there, Dème worked as a consultant to Cap Gemini, one of the first information technology firms in France.

At Cap Gemini, “I was often the youngest, most inexperienced in a position where I could learn a lot from my colleagues,” he said.

Witness to the dot.com boom, bust

Then he joined a U.S. telecom start up with an office in Paris, which led to a job in Silicon Valley and a close-up view of the internet boom of the early 2000s.

“There was still a lot of energy and innovation in the Valley, but the bubble was about to burst,’’ he recalled.

After a few years, he returned to Senegal to start his own company. Actually, he attempted to start several companies but none took off.

Learning from failure

The lesson of failure? “It was necessary for someone like me who wanted to do entrepreneurship, innovation. You come out of a certain academic background and an early career that makes you believe you belong to a certain elite. It is a very good thing to discover your limits and learn to work with people who complement you.”

He also worked as a tech consultant in Dakar. In this role, in 2008, he met Google officials who wanted to launch a push in Africa from an office in Dakar.

Skeptical of Google

“At first I was very skeptical because I figured they would immediately try to market their products,” he said. “But they just asked what can be done to develop a dynamic, open internet for Africa.”

That convinced him to take the job.

Since joining Google, Dème has focused on fostering a technological community that can develop local content and supporting development of startups that ultimately will drive internet access and adoption. He also directs a Google team working on encouraging infrastructure investment in Africa.

Expense is a barrier to access

According to Internet World Stats, less than 30 percent of the population of Africa had access to the internet in 2015.

A May report by the World Economic Forum said affordability of broadband and equipment was a major hurdle to greater internet adoption in Africa.

Other obstacles are lack of skills and lack of understanding of the economic value of internet access, the report said. Finally, many African countries would require massive investment in infrastructure to assure affordable access to citizens.

But Dème is helping to change that. He sees a bright technological future on the continent – Africa will surprise the rest of the world.

“People underestimate the capacity of Africans … to use tools solve problems in their lives. It is the same for the internet and for every new technology that comes along.”

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Smartphone opens up new possibilities for Morocco

23 May 2016 Comments (0) Business, Featured, Middle East

morocco smartphone

Mobile and internet penetration in Morocco continues to grow and crossover, as the country embraces technology.

Technology, and in particular smartphone technology, is changing the way Moroccans live their daily lives. More significantly, the nation’s nascent love affair with smartphones and web apps offers great opportunities for economic growth.

The National Authority of Morocco’s telecoms regulator (ANRT) released a report, earlier this year, that assessed the growth of the telecoms market from 2010-2015. The report found huge growth in mobile phone use, both in terms of penetration and the average time spent using a phone per customer. At the forefront of this expansion, the report highlighted falling costs, especially in areas such as 4G, which has helped bring the use of mobile phones and the Internet more inline. This expansion has seen a 146% increase in the average monthly usage of mobile owners in the past 5 years.

Embracing new ways of living

It would be foolish to dismiss the impact that smartphone technology can have within a country. The Arab Spring movement was, in part, driven forward by the use of social media platforms such as Twitter, which allowed on the spot reports and information from everyday people. While Morocco is a stable country, without much of the political unrest found elsewhere in North Africa, the impact of smartphones and online activity has the potential to bring about an economic revolution.

Online shopping has exploded in Morocco, and the use of mobile phones for web purchases has grown at an astonishing rate. This not only benefits online giants, but encourages local companies and outlets to take advantage of the new trend. Research carried out by MasterCard illustrates just how rapidly the use of smartphones for shopping has increased. In 2013, MasterCard reported that only 9% of users had made an online purchase via their phone in the previous few months. When this survey of 4,000 people was repeated in 2014, the figure had soared to 66%!

Aaron Oliver, head of emerging payments for MasterCard Middle East & Africa, said, “With rapidly increasing internet penetration rates and availability of secure online payment options, the country’s e-commerce industry is well placed to achieve significant growth.”

E-commerce could provide Morocco with a source of revenue that shows no sign of diminishing on a global level, never mind in an emerging market – where the scope for increasing penetration is even larger.

Are social media and apps the second wave of growth?

The ANRT report on mobile expansion showed that in 2012, only 16% of mobile phone owners in Morocco owned a smart phone. By 2014, this figure had risen to 38.2%, which indicates just how quickly the mobile landscape has changed. However, social media has not yet reached anything like the ubiquitous nature of its standing in Europe and North America. This is, like most areas involving the Internet, changing and it is changing at pace.

The Arab Social Media Report found that by 2014, Facebook penetration in Morocco was at 16% of the population, and had a growth rate of 13%, which was the second highest in North Africa.

With social media come apps, social media games and the proliferation of advertising. All of these things open up doors for startup companies, and a wider customer base for existing businesses.

It is therefore no surprise that Moroccan game designers and entrepreneurs have already begun to drive the second wave of Moroccan internet and mobile growth. The private telecom group Inwi now hosts an event called Inwi Days, in which game designers have 24 hours to create a new web game, and pitch it to a panel of judges in order to win a $12,000 prize.

Méditel Telecoms have launched a similar competition for app designers, and while this development of technology is fairly new, the majority of winners have maintained clear roots to Moroccan culture and traditions.

Inwi Days gave two games, Trombia and Runner Roul, the shared first prize, and both games were inspired by Moroccan culture.

Méditel’s app challenge was won by the app Maroc Culture, which is a trivia game that tests the player’s knowledge of Moroccan culture and traditions.

As mobile phones become even more popular, and the Internet plays a greater role in the lives of people across Morocco, such markets will continue to grow. A young generation of innovators is now taking advantage of these openings to create new businesses and trends, but ones that remain quintessentially Moroccan.

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Cyber threat looms over Africa

20 May 2016 Comments (0) Africa, Business, Featured

africa cyber crime

As more people transact banking and business online, experts raise questions about security from hackers targeting the continent.

Amid global alarm about cyber theft, authorities warn that banks and other businesses and institutions in Africa are increasingly vulnerable to online fraud and theft.

African and international cyber security experts, including representatives of government and the United Nations, will gather in Nairobi in June to discuss online threats and how to fight them.

As more Africans use the internet, businesses and governments are providing more transactions and services online. But experts are raising questions about whether those sites are secure from cyber criminals.

Many small and mid-sized businesses cannot afford expensive security measures such as firewalls and malware protection while governments also use templates to build their websites, which cost less but may also be more vulnerable to attack.

Kenya, Nigeria, South Africa see attacks

Kenya, Nigeria and South Africa are among African countries that have already suffered millions of dollars in losses to cyber crime.

Nigerian officials estimated the country’s institutions lost $630 million annually to cyber attacks, theft and software piracy, nearly one percent of the country’s gross domestic product while online bank fraud more than doubled.

“Global tracking of cyber-attacks indicate that Nigeria is among the countries with high numbers of software piracy, intellectual property theft, and malware attacks,” Babagana Monguno, Nigerian national security advisor, said at the recent inauguration of a 31-member Cybercrime Advisory Council.

Monguno called the threat “a serious challenge to our resolve to take advantage of the enormous opportunities the internet brings.”

Nigeria’s new Cybercrime Advisory Council, established through 2015 legislation, is charged with promoting information sharing and making recommendations designed to improve cyber security. The country’s National Cybersecurity Policy and Strategy outlines the legal, technical and institutional systems that will be required to fight cyber-attacks in Nigeria.

Kenya loss put at $150 million

In Kenya, authorities said online thieves took about $150 million in 2014, as cyber crime in that nation tripled over 2013.

A 2015 report noted that 25 percent of Kenya’s internet users are unsupervised teens that may be exposed to cyber crime.

One expert said many businesses in Kenya lack the resources and access to IT expertise they need to protect their online platforms.

Rutendo Hwindingwi, division director for Sage East and West Africa, said businesses need to implement firewalls and use anti-malware tools and have access to IT specialists who can quickly respond when applications or operating systems are attacked.

The Communication Authority of Kenya in April put out a call for tenders a study of e-commerce and cyber crime detection and prevention in the country as the government attempts to develop a strategy to fight cyber crime.

The authority said it had set up a team to monitory cyber attacks, especially those that target government systems.

South African bank customers warned

South Africa has seen cyber crime losses totaling about $65 million, according to one estimate.

The South African Bank Risk Information Center recently warned bank customers to pay more attention to security, especially on mobile phones.

The center’s chief executive, Kalayani Pillay said protecting electronic devices is critical to reducing the risk of being victimized by cyber crime.

Phillay said malware and phishing attacks were on the increase in South Africa, including efforts to target accounts of corporate executives to move large sums of money.

The country’s wealth and particularly its relatively high gross domestic product per capita made it attractive to cyber criminals, she said.

Risk grows with mobile usage

Banks continuously update cyber security measures, but criminals come up with new ways to steal from customers, she said. The risk will grow as more bank customers migrate online, especially banking on their smart phones.

The warnings come against a backdrop of global concern following two large heists this year at Asian banks.

In February, hackers sent more than 30 fund transfer orders totaling $950 million from Bangladesh Bank using Swift, a global money transfer system. The thieves successfully transferred $81 million to accounts in the Philippines.

In May, Swift revealed another heist had taken place prior to the Bangladesh theft but had only been revealed by the second bank, which one researcher said was in Vietnam. The amount of the theft was not released.

Hackers breach bank security

Swift, with 11,000 member banks, processes 25 million messages each day to process billions of dollars in transfers.

In each case, Swift said the cyber thieves bypassed security controls at the local banks to request the transfers.

As concern grows on the continent, the African Expert Convention on Cyber Security, June 22-23 in Nairobi, will bring together experts from government agencies, the United Nations, corporations and investors to discuss strategies for fighting cyber crime.

Organizers hope the event will enable participants to share expertise from different sectors and create partnership frameworks for enhancing cyber security. Participants will also learn the latest technical tools available to protect against cyber threats.

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AIG becomes Africa’s first “unicorn”

28 April 2016 Comments (0) Africa, Business, Featured

africa internet group

African Internet Group (AIG) has become the continent’s first ever start-up company to be valued at over $1 billion.

African Internet Group (AIG) has been a trailblazer since the company was launched, in 2012, and it has now become the continent’s first ever “unicorn” startup. A “unicorn” simply refers to any startup company that becomes valued at over $1 billion, of which there are only 151 across the globe.

While such success is an incredible achievement for any business, to attain such status within only 4 years of launching is an astounding feat.

It is not simply the matter of how AIG can provide employment and services in Africa, but how such success inspires others to pursue their ambitions within the continent.

A groundbreaking year

It was expected that AIG would reach its “unicorn” standing by early this year, as turnover from its numerous brands continued to soar. Then, in March, the French insurance group AXA announced that it had purchased an 8% share of the company for $326 million, and AIG finally had a valuation of over $1 billion.

Within weeks of this announcement, the organization had further investment. French mobile phone company Orange declared it had put a further $85 million into AIG, adding still more revenue to the startup’s burgeoning resources.

While Orange’s plans for cross-promotion with AIG are not yet clear, AXA will look to sell insurance packages through AIG’s largest source of income, its Jumia online retail brand.

Jérémy Hodara

Jérémy Hodara

Jumia was set-up, alongside AIG, by co-founders Jérémy Hodara and Sacha Poignonnec to provide African customers with an online shopping experience that matched the one offered by Amazon to consumers outside of Africa. While primarily focused in Nigeria, Jumia has expanded into a further 10 countries.

As Jumia flourished, AIG bought up and invested in other African companies that tapped into the demand for greater services in retail and leisure. The AIG portfolio includes the likes of Hellofood, an app for food delivery and Easy Taxi, which is essentially an African Uber.

AIG now controls 71 companies across 26 nations in Africa, with 10 of these companies involved in the e-commerce sector. The growth in the e-commerce market has been “double-digit…month after month” according to CEO, Jérémy Hodara.

The keys to success

Whenever a company realizes the level of growth that AIG has experienced, it is pertinent to ask: just what did they do to achieve such huge and rapid success? In the case of AIG, there are a number of factors that have allowed the company to do something unprecedented in Africa, with two in particular standing out.

The first of these was the focus on understanding and meeting the wishes of local markets. In an interview with Forbes magazine, Hodara explained that many African consumers were unsure about online shopping and trust had to be carefully fostered. This was done by offering not only exceptional service but by giving options that would be unusual in a market like America. One example of such options was cash on delivery, as Hodara said, “That way, people have assurance they can pay when the product arrives.”

The second major differential, that marks AIG’s group of e-commerce sites apart, has been their vertical integration. While most retailers in the US or Europe would outsource delivery to an existing company, this would simply not provide the level of customer service AIG wanted in Africa. Therefore, they use their own fleet of drivers, which Hodara explains is “larger than UPS, Fedex and DHL in Nigeria.”

AIG also employs its own online marketing and IT teams, which, aside from ensuring quality control, also reduces costs. Hodara says, “We believe we need to control the value chain from A-Z.”

Online retail is an area that Hodara believes will eclipse “bricks and mortar retail” within Africa. With that in mind, it has been a huge boon to AIG to have struck deals with the continent’s largest telecommunications companies, Rocket Internet, Milicom International Cellular and MTN.

Even more tantalizingly, McKinsey Consultants predict that within 9 years’ time, Internet penetration in Africa will have hit 50%. The opportunity for even greater expansion is evidently within AIG’s grasp.

A few years ago, an African “unicorn” might have seemed a proposition almost as unbelievable as its namesake, but AIG has not just become a first, they have potentially changed forever how investors view African startups.

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eTobb brings a medical Q&A service to the Middle East

25 April 2016 Comments (0) Business, Featured, Middle East

etobb

The eTobb startup looks to democratize medical advice for people across the Middle East, with its Q&A online service.

Startup companies in the Middle East are not anything like as common as they are in other parts of the world, and so finding a niche would appear to be more straightforward. However, finding a niche that truly offers something original and has the potential to positively change people’s lives is a far greater task.

Lebanese startup eTobb appears to be just this sort of company. Launched in January 2013, eTobb is an online Q&A platform for medical problems. Dubbed a “medical Quora” in some quarters, eTobb works in a similar format to the popular aforementioned general Q&A website, but with a key difference. That difference is that any medical query or concern that a member posts can only be answered by a registered doctor. Therefore, customers can be assured that the answers they receive are reliable. Within 2 weeks of launching, eTobb had 50 qualified physicians onboard; after 1 year that number had risen to over 700.

Providing a much-needed service

Perhaps the most obvious reason for eTobb’s rapid growth is that it has provided a service that the region was in need of, as opposed to simply trying to create a demand for something new. While social media platforms have had to create a yearning for their product, access to medical expertise and advice is something that people across every continent, in every era, have desired.

eTobb was founded by 4 people, Paul Saber, Sara Helou, Nader Dagher and Jad Joubran. None of the team had a medical background, but all of them saw the importance of democratizing the access to healthcare information in Lebanon and the wider Middle East.

Co-founder Paul Saber

One of these founders, Paul Saber, explains, “The idea emerged from a need…the lack of information out there, let alone the inaccuracy of this information is a huge dilemma.” In a region like the Middle East, this problem is exacerbated by common cultural and socio-economic issues. In cultural terms, it can be considered taboo for many in the Arab world to discuss personal issues surrounding sexually transmitted diseases, pregnancy and women’s health. This was an area that another of the co-founders, Sarah Helou, identified while discussing the importance of an informative blog that eTobb has added to their site, saying, “The blog compliments our services. It’s to raise awareness about different topics and issues.”

The other widespread issue within the region is the cost of healthcare. In an area in which a lot of people struggle with poverty, it is simply not viable for people to travel to an emergency room (which is often the only option) in order to receive medical advice.

As Paul Saber said, “The service provided by eTobb allows users to access reliable medical information, from…experts for free.”

While the benefits to users are obvious, it is also an opportunity for doctors to build up a reputation with potential customers and indirectly advertise themselves to a wider market.

Developing and broadening services

Alongside the launch of the eTobb blog (that covers issues from staying healthy during Ramadan to warning signs for breast cancer), the company has also launched a web app for smartphone users.

As more doctors register to provide their services, the platform continues to grow and provide expert, free advice to not just Lebanese citizens but people all over the Middle East. Corporate support has also arrived, in the form of sponsorship, from Banker’s Assurance, one of Lebanon’s largest insurance companies.

By 2014, there were over 15,000 Arabic speakers signed up to a waiting list for an Arabic version of eTobb to be launched. The company successfully launched this option within the same year, opening up their services to an even greater number of people, across an even wider region.

Customers can also have face-to-face video consultations with an available doctor if they require more detailed discussion or simply desire the more personal experience that this can offer. The feedback from users has been hugely positive and Saber says, that people, “from all over the Arab world and beyond” have signed up and messaged eTobb to say how much it has made their lives easier.

With sponsorship, glowing feedback from consumers and an ever growing list of medical professionals signing up, the future for eTobb looks very healthy.

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HeroTel wants to consolidate Wi-Fi service in South Africa

28 January 2016 Comments (0) Africa, Business, Featured

Alan-Knott-Craig-Jnr

The startup, with $4.75 million in capital, believes a single network will benefit consumers with more consistent service at lower costs.

Hundreds of small wireless providers are competing to connect Internet users in South Africa, but a new player has a different vision.

Instead of starting one more competing company, HeroTel founder Alan Knott-Craig Jr. wants to connect as many existing Internet providers as possible to form a national wireless network.

HeroTel hopes to consolidate the fragmented landscape of wireless Internet providers under a single brand. Knott-Craig said this would enable more consistent service for consumers at lower costs and aid expansion of service to areas that currently do not have broadband access.

HeroTel, launched in August 2015, has raised $4.75 million in investment capital and hopes to have a national footprint by April. Knott-Craig said he hoped the company would become the “Capitec of telecoms,” referring the South African banking network.

Knott-Craig, 38, is a South African entrepreneur and former CEO of the social network Mxit. He also founded Project Isizwe, a nonprofit that wants to put free Wi-Fi within walking distance of every South African.

Over the course of two years, the Isizwe Project has successfully turned the South African city of Tshwane (Pretoria), population 2.9 million, into the continent’s largest free public Wi-Fi network.

The network has 750 sites and more than 20 percent of the buildings in Tshwane are within walking distance of Wi-Fi, Knott-Craig said. One million people were to be connected by the end of 2015 with the entire population within walking distance of free Wi-Fi by 2017.

Knott-Craig believes that municipal governments should take responsibility for providing Wi-Fi to their citizens just as the governments provide electricity, sanitation and roads.

South-Africa Wi-Fi

South-Africa Wi-Fi

 

200 wireless providers operate in South Africa

In the private sector, he said there are about 200 wireless service providers operating in South Africa and the business is profitable. Revenues total about $53 million a year with profit margins of approximately 30 percent.

The problem, Knott-Craig said, is that consumers will demand greater wireless speeds at lower prices so a network makes more economic sense than a fragmented marketplace of providers.

Currently, Knott-Craig said, Wi-Fi speeds are doubling. But the cost to the consumer stays the same when it should be decreasing, he contends.

“People want fast reliable, affordable broadband, that’s all they want, and they don’t want you to feel like you’re doing them a favor by arriving to fix it,” he said.

Knott-Craig said South consumers now pay about 600 rand ($35) a month for 10 megabytes per second. He projected they will pay the same amount for 100 megabytes by 2017.

Five million households lack broadband access

He said HeroTel would use unlicensed spectrum, which is the same as the spectrum home and office consumers use for Wi-Fi.

In addition to improving service for existing customers, Knott-Craig believes pooling the resources of existing providers will enable the network to bring Internet access into about five million households that do not have broadband. Only about 400,000 of these are reachable by fiber-optic broadband, he said.

For the rest, he said, unlicensed spectrum Wi-Fi is the obvious answer because it is inexpensive, he said. “That’s why the HeroTel strategy makes sense.”

According to the Internet Architecture Board, South Africa has approximately 33.5 million Internet users, representing 61 percent of the population as of December 31, 2014.

Getting more people connected to the Internet will be good for all of South Africa, Knott-Craig said. “The more people in South Africa that are on the grid, whether it is the poor or the rich, the faster our economy can grow,” he said.

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