Mobile Web East Africa: Day One

The Mobile Web East Africa conference is taking place in Nairobi, Kenya on February 3 and 4 2010

TMS Ruge (twitter @TMSRuge), Co-Founder, Project Diaspora (which engages the Diaspora towards African development) ran all the panels for the day; He started at 8:30 AM with a mention on how he took the bus from Kampala to Nairobi, and everyone on board was using their mobile phone, some even with blackberry’s to check mail.

Paul Kukubo Chief Executive Officer of the Kenya ICT Board (twitter @paulkukubo) gave a synopsis of the Kenyan Government’s approach to driving the expansion of the mobile sector.
- The board was formed in 2007 and has a vision of making Kenya a top ICT hub, and a middle class competitive nation by 2030. It partners with academia and the private sector, facilitates, funds, and endorses initiatives (such as this conference). It also advises the government, builds capacity (by skills, funding), does project management, facilitates investment (e.g. technology parks) and markets Kenya as an ICT destination which has however come under some harsh scrutiny this week.
- The context in Africa convergence of technology, increasing use of mobile penetration (most young people experience the first internet by mobile – only use desktop for downloads, or sending CV), social networking, mobile payments (Mpesa), and the opportunity to develop applications for export.
- The future for Kenya: potential in digitizing government files, and later this year, a grant will be awarded for applications that can be applied in government
- Their approach extend government services (e.g. exam results online and by text message), develop a software standard, research the sector, BPO skills development, incubation, showcase Kenyan success stories

Rick Joubert , Executive Chairman, Yonder Media and Founding Chairman, South African Mobile Marketing Association gave an analysis of investment and performance in mobile advertising as an illustration of the mobile opportunity

- Mobile phones are prevalentWhat you see in South Africa, will happen in Nigeria, and Kenya. The mobile phone is the most ubiquitous (prevalent) technology in SA [70% of adults in 2003 and (82% in 2009)], and has overtaken the FM radio
- The phone is expanding into government, health care and publishing (SA newspapers, radio, TV are all building mobile presence). There are 5 million internets users compared to 10 million mobile web users in SA and (and less than 30% of the population have access to PC web)
Opportunities
- 650 million AdMob (advertising) requests in Africa led by SA followed by Nigeria and Libya
- More apps are being built for mobiles - .mobi or WAP dominant not smart phone
DVD too: DVD player growth is up in Asia and Africa - in Africa, its as exponential as the mobile phone - showing the impact of Nollywood which generates $300 million per annum – via movies made for DVD (not big screen) with an average budget of $30,000 and which sell an average of 50,000 copies for $2 each
- Cheap phones rule: The iPhone number is the No.1 handset in all continents except Africa where 1. is Nokia 3100 and No. 2 is Samsung E250. Understand the reality that the real cash is in simple technologies - (SMD, USSD, voice, WAP), not the fancy applications (pcweb, mobilewebs, mobileapps, smart phones)
Way forward
- continued growth in data usage
- Better quality handsets
- mobile data access charges come down
- need more content
- need more complements – ecommerce mobile wallets, advertising, trading platforms, transactions
- Ad market numbers22 million ads per day; $ 8 billion spent on advertising in Africa with just $50 million spent on mobiles in Africa. And in SA the cell phone is positioned near TV and radio by advertisers (for mass market promos).

Bitange Ndemo the Kenya Government (GoK) Permanent Secretary for Information & Communications made an appearance straight from the AU Summit in Addis Ababa. Before official opening the conference, he spoke about:
- The AU summit theme was ICT – as one of key sectors that Africa must exploit to improve economic growth.
- Kenya is through with infrastructure undersea cables, broadband in rural, 10,000 kilometers of fibre optic around the country
- Next step is o encourage local content (where Nigeria is leader) and GoK has launched digital TV in which 40% content should be local (or Kenyan)
- They also plan to create local innovation centres that have broadband, and one is to open up in upper hill [but Nairobi iHub is already up]
- IT changes in Kenya - 500 laptops sold per day up from 20k a year and laptops which used to cost $1,000 are now $200.
- Nokia and World Bank are going to create mobile laboratories in Kenya

Eric Cantor, Director, of AppLab Uganda, talked about challenges in delivering critical information to those who need it most and developing mobile-based services that allow people to access information in critical sectors
- Applab, a joint venture between MTN Uganda and the Grameen Foundation, is trying to reach the 95% who don’t have i-phones and blackberrys
- Use partnerships – Google, MTN, and local NGO’s (which understand community has networks that can do tests). Along with two other centres in Indonesia and Ghana (focus on health) they aim to have phones improve lives by focusing on the poor
- using Google, found that people are interested in Health, agriculture, markets – so they now have Community knowledge workers (CkW) to help small holder farmers, do surveys, collect information to improve crop yields and improve markets [funded by a Gates Foundation grant]
Challenges
- a lot of hype around mobile (outpaces reality)
- too many pilot projects (everything wants to be tested, poor chance of going to scale)

Fix this by
- Better Technology. Working with SMS is very challenging and very expensive - its ,better to work with voice which is more comfortable while e-mail not good in places where illiteracy is high. Popular phones are the Nokia 1100 ($29) and 1680 ($60) but there needs to be a $40 smart phone, with GIS capabilities (cheapest is currently $250) – Nick Negroponte brought down laptop prices 80% and the same needs to happen in smartphones
- Get back to the 4P marketing of mobiles; is should be serious but fun, products have to be distributed (MTN road shows to sell phones), know your customer etc.
- Better operations - NGO’s believe they can do it all by themselves – instead they need to form partnerships and leverage e.g. on private sector mobile or drug companies who can bring things to scale. Also they should operate more like businesses - drive a hard bargain and don’t give things away

Looking ahead
- Bandwidth price is dropping
- Handset innovation has to be near (local?)
- Be flexible and patient
- Measure it to manage it. Not just pilot projects - if pay out is improvement in peoples lives, you have to prove it

Q&A Featured Rick Joubert, Eric Cantor
- When is the end of SMS and USSD when? Probably will be prevalent for another 3 to 5 years. The economics will change as data as this gets more sophisticated and the $20 phone has internet and there is still an opportunity in java, J2Me e.g. Mixit in South Africa
- When will i-phone be dominant phone in region? Even if we can get smart phones recycled, it will be a while before iPhone is dominant. Note that MTN has 90% internet coverage in Uganda but there is very little traffic on the network now
- What are barriers between local developers to rolling out applications in the marketplace? Joubert – On the business side Vodacom is doing the same at apple app-store, Safaricom can also be a part of that (a Safaricom app-store?). Cantor - (i) lack of locally relevant content (ii) handsets not ready (iii) sustainability – can it pay for itself? (iv) Ad agencies in Africa are not ready
- Nokia Rep says you can create an app, and sell it through an Ovi store

Peter Arina Chief Operations Officer at Safaricom spoke about the operator perspective and what is being done to drive mobile internet usage to make it more mainstream while, he said, trying to avoid giving information that competitors can use
- Kenya has 19 million subscribers (15 million on Safaricom).
- Majority of subscribers are not users of data; 70% use less than kshs 20 on data – and 50% live below the poverty line
Main challenge is the cost of data – why? .
- Cost of hardware - Modems cost 2,000 shillings; cost of laptops is coming down. But for the mass market they expect them to go by phone - the cheapest phone is the LG KP 105 2,000 ($27) , while on Safaricom it’s the Nokia 1680 at 3,000 ($40) ; the cheapest EDGE phone is the Nokia 2330 at 4,500 ($61) and the cheapest 3G phone is the Nokia 3120
- Cost of infrastructure – cost if providing internet to the mass market is high
- Low local content - Most popular site on their networks are Facebook and Youtube. But local opportunities are there e.g. car sales, apartment sales, news media & entertainment sites
- Low literacy on internet use

Solutions
- Operators are engaging with device manufacturers to lower costs so that the mass market can afford them (Acer, HP, Nokia)
- Easier financing; Safaricom partnered use Equity Bank now, soon KCB and Barclays to finance equipment costs
- Developers come up with local content that is relevant at affordable costs.
- Create daily usage habits. Their current offering is Kshs 1,000 for ($13) unlimited internet over 7 days – admits its creates constraints but goal is to create habits
- Engage CCK (Kenya regulator) to lower frequency costs and the Government (GoK) to remove VAT on modems
Q&A
- Why is Safaricom still the most expensive network to use especially 3G? Plan to reduce that like they did with voice. It’s a competitive field and they believe they provide value for money and their goal for data is the mass market
-can there be better revenue share in value added services from 90% to operator and 10% to e.g. more towards Japan where vendor gets 70% and a better environment from one where vendors fear offending Safaricom? Three years ago revenue share was in favour of operators, but not anymore. When you start off, the revenue share is in Safaricom's favour, as you get more successful, it getter better for the vendor and one licensee vendor now gets 80%

Jose Henriques Executive Head, Internet Services, Vodacom talk on Mobile Web evolution in South Africa, how is the leading Operator positioning itself to push usage and increase revenues?
- 6% of Africa have PC internet and the top 10 countries represent 85% of Africa users. By comparison, of the top 10 countries that use mobile internet (measured by opera mini); only 4 are in the top 10 of PC internet. For mobile in the last year, page views increased 374%, unique users by 177%, and data consumed by 183%. Kenya is No. 3, Ivory Coast -7 and Ghana is ranked 8.
- In last 10 years the percentage of Africans with mobile phone access has gone from 2% to 33%. Facebook is overtaking Google in data consumption.

Get It
To make mobile internet access to everyone in Africa
- you need data networks
- you need phone settings (over the air or pre-loaded on handset)\
- content (network based or client based) for bottom pyramid, network based is better as they can make it available for low cost
- data pricing
- Unlimited bandwidth models don’t work in the long run for operators. European operators are going back to pre-paid bundles

Way Forward
- There are 5.3 million PC internet users in SA, and there are 11 million access by mobile -and expected to be 17million by 2013
- Smart phone sales growing 400% year to year, while mobile hones are declining 6% year to year. There will be serious smart phone competition Nokia, Samsung LG will compete, prices will go down and. HTC will be hurt because they enjoy high margins.
- In SA the bottom of the pyramid is no longer the largest demographic group - its tier 3 who earn R20 to R140 per day in 2008
- Vodafone live biggest portal on market 3.6 million grows 1 m year to year. There were 49 million banner ad impression per year
- Normal internet use consumer 5 MB per month while opera mini user 25MB per month
- Sites JIL is their developer website while at betavine people can post problems for developers to volunteer fixes and solutions

Q&A Featured Jose Henriques, Isaac Nsereko, Chief Marketing Officer, MTN Uganda and Wadzanai Chiota (Head of Value Added Services) at Safaricom
- What is a smart phone? Majority of their consumes are buying their cheap data phones so to Safaricom, that is a smart phone
- Why won’t Safaricom share their API? Safaricom has done that on voice, data and recently USSD, they are looking at exposing this to developers. They are hungry for applications, but have not got many offers. They have the Safaricom portal (with music, news ) and the developer environment in JIL . For now the USSD is open only to banks
- Why does Safaricom hold SME money? – is it to kill small business to hire their techies? In JIL principle, Safaricom not allowed to hold partners money
- Can there cheaper money transfer cost for the $40 remittances to Africa? Safaricom now enable remittance fro m UK
- Can operators share data with developers e.g. which is the most popular handset to that developer can see this and mitigate risk? Networks don’t share reports – developer should check opera mini aGFK reports as there are also customer confidentiality issues
- What local content are people willing to pay for? and if you give it away for free how can you monetize that? People will pay for access to content, and it has to be superior to international content to be worth accessing. Safaricom answer was that people are not willing to pay for local content when they have free options like getjar, waptrick. While Vodacom was that they make access free (a SA Govt initiative) where customers pay for content but they don’t fully understand this. MTN was that people will pay for things they value – agriculture information - farmers info, latest ring tones.
- With $500 million spent on ad content in south Africa – people pay for relevant value local content
- Do operators take social media seriously? Vodacom has new portal, in SA and in two other countries. It grows virally,
- When will we have one money system in Kenya? MTN (Uganda) mobile money is available across all networks, while in Kenya Safaricom system is capable of doing that but does not allow currently
- Impact of proliferation of Chinese (not) 'smart' phones? In SA it’s minimal since every device that goes to market is certified by operators.

Brett StClair, Country Manager – South Africa, AdMob talked on how global advertisers and local agencies can utilize the mobile device to the East African user to reach their promotional goals
AdMob places ads on web page optimized for mobile handsets as well as on smart phone . They 20,000 mobile publishers
AdMob has grown quickly because
- Scalable –small publisher can be up in a few hours
- No gambling, cigarettes and other prohibited good ads so they are in many markets

Mobil ad market
- Mobile internet is not a fad: 11 million ads worldwide, 750 million in Africa. 90% comes from services
- of 750 million ads in Africa, 275 million in SA, Nigeria 105m, Libya 77m, Egypt 52m, Kenya 47m. SA most competitive in the world.
- Most ads are for low end phones in SA like Samsung E250. Kenya was 3rd, but operators struggling with growth factor.
- Data prices have an impact on mobile usage – and (i) 3G is key (ii) Cheap data prices (iii) GPRS handsets
- Africa is a low handset market. Most popular device Nokia 3110c, Samsung E250, then Nokia N70 There is also space for applications for smart phone market. Leading smart phone Nokia N70, then Nokia 6300, then apple iPhone

Is Africa next?
- 99% of Africa ads bought come from foreign countries
- Cheapest inventory global $0.01 across Africa $0.03 per country
- Top publishers are: communities, portals, downloads
- Top advertising categories: music, religion (15%) , games, brands

Opportunities
- Local brands can now reach the masses digitally
- Businesses can launch m-commerce
- Local service drive economies; what internet did for western world. Mobil is the technology of reach
- AdMob offers 60% payout to their publishers (60:40),
- Key market is spender 18 – 49, men (female more),
- With AdMob you can target a particular country, a particular operator, particular handset, (18 million iphone impressions in Africa) and they can give comprehensive reports to publishers

Moses Kemibaro (Twitter @moseskemibaro), Business Development Director, DotSavvy on a of a leading Digital Agency with regard to how they are preparing for the expansion of mobile, and why

- How do people market? Print, radio, television, internet, outdoor/indoor ads, direct mail
Are they working? Not interactive expensive – 1 day newspaper equals a month of internet, no metrics or ROI. Mobile ads are 24/7/365, one to one, proactive, personalized, measurable,
- Every phone has SMS, more are MMS; handset prices are falling while features are rising. 3 in 10 Africans have one phone, and in Africa, the mobile phone also does SMS/text, e-mail, internet, the bank, entertainment, a camera, socializing
- Kenya 20 million subscribers, and 2 million mobile internet subscribers
- according to opera mini, Kenya has one of the highest numbers with 525 page views per user in a month. This was a 615% growth in one year, while unique users grew 246% in one year and most popular sites are Facebook, Wahoo Wikipedia, BBC, Youtube, Gmail, Live, Hotmail, Twitter
- there are opportunities in Mobi web site, SMS txt, mobile video, mobile applications (game), location based advertising
- few mobi optimized sites in Kenya ; Dotsavvy.mobi, CFC Stanbic (only bank in Kenya with mobi site), Kenya Airways (flight schedules, cargo) Yellow Pages Kenya, Daily Nation – there are very few website with optimized design for mobiles
- Advertisers like AdMob, inmobi (India), buzzcity are active in Kenya
- local companies include Smart ads with 50,000 members and Jumuika works
- for a good mobile strategy, less is more in execution, needs constant updates and manage content regularly, and a focus on the lowest common denominator (most common phone)
- its early days in Kenya – compared to south Africa . DotSavvy has, after 7 years website of website development, now doing mobile sites and has hired new people. Mobile advertising will It will enhance traditional marketing, not replace it and can deliver a massive market at low cost

Q&A with Brett StClair, Judy Kiruri, Managing Director, BrandKey Marketing , Moses Kemibaro
How can you advertise though a low cost phone with no graphics? AdMob serves up banner and text and can detect what phone and setting are activated
- See trends - There will be more mobile internet traffic than internet traffic by 2013
By 2011 there will be more smart phones shipped than PC’s and laptops
- How does AdMob pay? primarily by pay pal – do internal wit transfer, use credit card or paypal like Google adwords

Challenges of doing developing mobile sites? Convincing companies that mobile sites are the next level of advertising. However ad agencies will listen to good initiatives
Publishers get no revenue? It’s a misnomer that if you build a good site, people will come. Advertise it. Even yahoo and Google advertise
How do you work with the operators? Mobile ads can work without interrupting the operator who have other proprieties
Are people in Africa clicking on these ads? 100 page impressions 1% 1 clink. On internet its 0.02%, on mobile 0.7% its better performance. In Africa CTR is 1.5% to 2% however these and these will come down over time.
Do small companies have the capacity to measure mobile ads? This was a problem with PC ads; - a good campaign should have measurable metrics. There is opportunity for developers to serve this – with mobile it’s probably easier than with a TV ad. Note that Google analytics and AdMob have free tools for this.

Mbugua NjihiaChief Executive Officer, Symbiotic Media Consortium on a Kenyan entrepreneur’s perspective on the opportunities and strategies that exist in mobile web and applications in the region

Some of their products
- Tuma SMS a SMS sending service. Corporate can send SMS from internet e.g. Transparency International used it during Kenya referendum that was translate to Kisii, Luo
- Chulaimbo – remind HIV patients by SMS to take their ARV drugs
- Tarazaki a sync service even family channel or public channel – a birthday message is sent to many phones
- ManenoAds ad platform for mobile, web, mobile apps
- SMSoko
- Esplanade social platform (Easy Hisa – standard bank mobile, diplomat alert, credit card alert system)
- Payment bridge for automation of payments
- Kelelemobile

- They are more than a mobile social network for east Africa – send SMS from sembuse to sembuse for 50 cents. Its multi-lingual English French German Swahili Chinese
- Content channels bring stick-ability – gossip channel, rave (Friday parties for students, offers at various night clubs) and also companies can place their ads across different platforms
- Have a platform for the world cup, and an upcoming partnership with the Capital Group & DJ CK

Way forward for brands
- your customers are on mobile
- adopt technology that delivers
- ad agencies can use this existing platform
- but also look forward to accessing location based services from operators

Vincent Maher, Portfolio Manager, Social Media, at Vodacom talked about South Africa’s leading solely mobile focused social network which is about 18 months old
- The Grid is a mashup of instant messaging, content sharing, location based services
- SA dominated by Mixit. Java seemed to be best to give a rich application for users, and they tried to build a java site over 5 months (nightmarish experience) – rolled out 14 different platforms,
- for Any social service to be successful should have an open API theirs is open grid
- They target ads by location gender age time of day. also they use location based adverts. To use LBA one needs user location, ad server that support this (Google does) and application that adds location. this is good for very small businesses e.g. hairdresser, plumbers, and they can expect to see low volume of impression but a high click though rate
- users don’t need to have GPS to use the service
- they Use aerial photographs and their own maps (not Google maps)
- of their 1.2 million - 80% use java, 10% use mobi site 10% (api web desktop other)
- The Grid has also had rapid growth in Nigeria and Tanzania, though 90% are pre-paid data customers. In Nigeria and South Africa they have 9 million page impressions a month
- Initially used AdMob and had great growth then went back to Google when AdMob got too expensive
ion to ad requests

What is coming next?
- Ambient (mood based advertising)
- Desire line anticipation (plot where you will be and advertise you to prompt you to buy later)

Q&A featuring Vincent Maher, Mbugua Njihia, and Kennedy Kachwanya, Operation Manager, Maduqa.com

- How is grid in Tanzania? Tanzania does not have location system. Compared to Nigeria, there is less activity in Tanzania. They have done different marketing than SA. Tanzania do outdoor advertising, but SA does mobile advertising
- How open is The Grid API? Have any users done really innovative stuff? You can build entire grid using API. Some manufacturers are building grid phones
- Any issues on invasion of privacy? Advertiser will never get users contacts until they engage. It’s voluntary; if you don’t want to be tracked, turn of the grid – and it’s actually quite easy to track people without the grid
- Will people pay for back-up services? Sembuse will back that up for you for 10 shilling per month (Africa’s version of apple MobiMe)
- Grid to Kenya? Crazy market, but it could happen (six months)
- What was the growth pattern of the grid? Grew slowly for 6 months doing print, radio TV campus – then turned mobile ads and got 45% growth, before that also got too expensive. Now 1.2 million users. Note there is no viral growth on mobile unlike in web because SMS is expensive and intrusive

TMS Ruge ended at 6 PM noting that Safaricom has taken a bashing, but he hoped they would listen to their customers and developers and bring changes within a shorter time than the a year which they stated. He noted that that there were opportunities in the mobile space in all the 53 African countries, and with 1 billion people with a demand for mobile products at appropriate prices