Safaricom Unveils Cheapest S.M.S. Text Message Tariffs In The Market

In a move that presents a major boost to its customers, Kenya’s leading telecoms operator Safaricom has unveiled the cheapest SMS tariffs in the market.

Under the new tariff plan dubbed Masaa ya SMS, the listed operator’s 16 million-plus subscribers will be able to send text messages for as low as 20 cents each. This is the lowest charge for a text message in the Kenyan market currently and will be enjoyed by the firm’s PrePay and PostPay customers alike.

The innovative plan, launched under the tagline “Say more for less permanently, on the Better Option,” allows subscribers to send text messages within the expansive Safaricom network at the lowest rates, depending on what SMS bundle one selects.

Subscribers will be able to buy some 20 text messages for Sh10, translating into 50 cents per text message, while the last bundle, for Sh5, will afford one five SMS, meaning a unit price of Sh1 each.

Masaa ya SMS is a permanent tariff and not a promotion.

Commenting on the exciting development, Safaricom CEO Michael Joseph said Masaa ya SMS was a way of thanking the firm’s over 16 million Kenyan subscribers for their loyalty.

“We thank our customers for their continued confidence in us.

"We shall continue creating true value for our subscribers by deliberately listening to them and coming up with products and services that best answer their needs,” said Mr Joseph.

Previous, Safaricom charged a uniform rate of Sh3.50 for SMS.

Kenya gets low-priced smartphone

The quest for control of Kenya’s rapidly growing mobile Internet market has intensified with the launch by Chinese technology firm Huawei of a competitively priced smartphone that runs on Google’s Android operating system.

Retailing at just Sh8,000, the Huawei IDEOS is the cheapest smartphone in the Kenyan market and is expected to deepen the penetration of Internet among the estimated 20 million Kenyan consumers of mobile phone services.

Internet access has become the new battleground for Kenya’s four telecoms operators following the recent plummeting in voice call tariffs and the resulting decline in its importance as a revenue driver.

Kenya has six million Internet users a large portion (four million) of who accesses it through their mobile phones that is considered to be more affordable by most consumers because it cuts down the cost of acquisition to a tiny fraction of the closest competitors.

The smartphones, however, remains dominated by highly-priced models that sell at an average of Sh30,000 placing it above the reach of the majority of consumers.

“The IDEOS is an affordable option, designed to lower barriers to entry and facilitate easy mobile Internet access,” said Kevin Tao, the CEO of Huawei Device. “Ownership of the smartphone is one of the key means of getting people into the ‘golden age of mobile broadband’,” he said.

The IDEOS is a touch-screen phone that comes with bluetooth connectivity, GPS, a 3.2-megapixel camera, up to 16GB of storage and can be transformed into a 3G Wi-Fi hotspot connecting up to eight devices.

Many Kenyans are more familiar with Huawei modems, which they use to connect to the Internet through PCs or lap tops.

The IDEOS is the latest in a string of devices the Chinese firm has rolled out aiming to capture a share of the growing consumer internet market.

Smartphones are expected to account for 37 per cent of the global mobile phone market by 2014, with the Middle East and Africa as the main drivers of the growth.

Mobile Internet access is expected to grow at a compound annual rate of 39 per cent in the next four years. 

In Kenya, mobile Internet use grew by over 180 per cent in past 12 months, according to consumer research firm Synovate.

The IDEOS’ entry into Kenya comes only two months after Huawei teamed up with Safaricom in high profile launch of yet another smartphone U220 that also runs on Google’s Android.

This time around, there is industry speculation that the new phone will be marketed by internet firm Google, which is today launching its big marketing push aimed at boosting its presence in Kenya.

Google’s Android operating system allows users to ride on its Open Source development platform, offers users more than 70,000 applications and a cheap alternative to Google’s Nexus originally developed to compete with Apple’s iPhone. 

Google is expected to unveil the key components of its mobile Internet strategy at the opening of the G-Kenya conference, where the global Internet giant will engage with local software developers, entrepreneurs, and computer science students.

Google is also expected to showcase a range of products aimed at driving innovation in local technology and business circles.

“In alignment with our core mission to organise the entire world’s information and make it universally accessible and useful, we would like to provide training on localised tools that can spur economic development for the people of Kenya,” Google said in a statement.

G-Kenya is expected to bring together over 1,200 software engineers, product managers, entrepreneurs, students and web developers to discuss the future of applications development, and be trained on Google’s products and online business skills.

The forum will feature high profile Google speakers including one of the internet giant’s vice presidents Nelson Mattos, a team of product developers, engineers, the head of marketing for Africa, search specialists, and business marketing gurus.

Mr Mattos is Google’s VP in charge of product and engineering.

Google entered the Kenyan market in 2007, but has mostly played an observer role even as the country deepened its foray into new technologies such as mobile Internet.

The path of internet access growth in Kenya has been largely determined by the lack of fixed PC internet connections that has forced the consumers to rely on their mobile phones.

Industry researcher RNCOS says the number of mobile subscribers in Kenya will grow at a compounded annual growth rate (CAGR) of over 15 per cent between 2010 and 2013 to reach 32 million by the end of 2013, representing a penetration rate of 72 per cent.

Kenya is said to be on the verge of becoming one of the fastest growing broadband markets in the continent, RNCOS says, with research pointing to the number of Internet users and broadband subscribers growing at a rate of nearly 130 per cent in the next two years.

Voice dialling

Available in black, yellow, blue, and purple, the IDEOS supports functions such as voice dialling, voice navigation, and the ability to run applications off the SD card.

Mr Tao said the name “IDEOS” embodies creativity and inspiration: the “ID” represents the industrial design-centric hardware platform, the “OS” represents the operating system as the core software platform, and the “E” symbolises the evolution to mobile Internet.

By Kui Kinyanjui

Cheap internet still a pipe dream

The telecoms market has in the recent past seen call rates drop drastically in a fierce price war, in what has given users a sigh of relief. 

However, one of the world’s most important resources capable of spurring economic growth - the internet, remains a pipe-dream for many Kenyans.

In what might be seen as a conspiracy by players, more than a year after the going live of the first undersea fibre optic cable, things look quiet as users continue to pay heavily.

The over-hyped expectations of the drop in bandwidth prices in Kenya with the going live of Seacom, the East African Marines System (Teams) and EASSy undersea fibre optic cables are now somewhat more “grounded”.

In an interview with Nation last week, Telkom Kenya’s chief executive officer Mr Mickael Ghossein blames persistent cable vandalism for the high costs.

“If this cable cuts menace ceases, we plan for a coup in the data segment. Let them fight for voice, what I know is that voice is dead, data is the thing, and we have the muscle in this,” said Mr Ghossein.

He says that in other countries, cable theft is considered economic sabotage.

“These cuts have become a major problem for the country’s networks, incurring huge losses in downtime and repairs,” he said.

“The reputation of our brands are at stake if we don’t work as an industry to stamp-out the mess. Telkom loses more than Sh2 billion a year in cable vandalism costs,” said Mr Ghossein.

The irony is that a few years ago a megabyte of bandwidth was selling at between Sh320,000 ($4,000) and Sh480,000 ($6,000) a month, but currently for wholesale arrangements the price has been reduced to about Sh32,000 ($400), more than 10 times less.

Although Internet Service Providers (ISPs) currently buy the same capacity at $400, many have not come out openly to reduce end-user tariffs, while those who have done so say it is still costly for many.

The most affected are individual internet consumers and small-and-medium enterprises, who cannot afford $400 per month, the current price for a dedicated one megabyte link per month.

Operators have been accused of behaving like a cartel to fleece Kenyans though they always counter that they need to recoup their investments first. Providers say meaningful price reductions will take some time to be realised.

For mobile phone operators, it is still costly to use modems, as the speeds are terrible and costs still high for the mass market.

At Sh1,000, a week, this is still way high for low end users.

As the voice market nears maturity, mobile phone operators are angling themselves for a fight in the data segment.

This time round it is not in voice calls, but the loose-hanging fruit - the data segment.

Mr Ghossein says he plans to move beyond the wholesale and radically change the way Kenyans access internet and data services at home and in their offices by leveraging the infrastructure it has.

Safaricom, too, wants to dominate this market as profit margins in the voice market come under increasing competitive pressures and regulatory scrutiny. The firm has been on an acquisition spree.

Outgoing chief executive officer, Mr Michael Joseph during the firm’s 2nd AGM last week said that data is their big bet, and M-Pesa, the company’s mobile money transfer platform will help it bridge the gap of revenue lost in voice. 

“This is where we are going to make our money. We are in a position to fight this war but we must keep in mind shareholders’ interest,” he said.

Zain Kenya, which initiated a price war in the mobile voice segment, made its intentions of making inroads into the lucrative data business by courting former Popote Wireless managing director Eric Ndwiga Muthi to its marketing team.

By JEVANS NYABIAGE

E-waste policy to push up prices of electronics

Radios, television sets and computers are set to become more expensive as the environmental agency prepares to implement rules for managing electronic waste in Kenya.

The prices of the appliances and gadgets are expected to rise by five per cent once the guidelines are implemented, giving manufacturers, dealers, consumers and recyclers incentives for reducing e-waste.

The rules establish mechanisms for proper transportation, handling, storage and recycling of TVs, radios, computers and mobile phones.

“We are engaging all stakeholders and these guidelines should be finalised by November and form the basis for a new environmental policy that should be complete in the next 12 to 18 months. It will have a stronger focus on e-waste which has not been adequately addressed in previous legislation,” said Mr Malwa Langwen, the director Compliance and Enforcement at the National Environment Management Authority (NEMA). 

The guidelines provide for up-front fees in addition to regular import duties to be levied on electronic goods entering the country, with dealers saying the fees will be passed on to consumers.

“The fees have not yet been decided. We, however, project small charges of between two to five per cent on retail prices as volumes will be high. We want to be sure that every electronic item entering the country or manufactured locally will be properly handled at the end of its life,” Mr Langwen said.

Largest manufacturer

Nokia, the largest mobile manufacturer and Computer for Schools Kenya, a not-for profit organisation, are some of the few firms engaged in recycling electronic products.

Mr Langwen said investors have expressed interest in setting up facilities to recycle electronic goods but lack of legal backing to guarantee volumes has been a major barrier.

The new rules hope to create a monetary-based incentive structure to speed up recycling and proper e-waste disposal.

Manufacturers and large ICT goods consumers like the government and learning institutions will provide their e-waste to a new organisation that will pay them a price for disposal.

The collection agency, Producer Responsibility Organisation, will then sell the e-waste to recyclers who are expected to make money from the sale of recycled items or valuable components extracted from the goods.

Electronic goods manufacturers will however fund the cost of setting up the collection agency, a move that is set to raise operational costs in the near term. Nevertheless, major players are supporting the regulations.

“Our business is making mobile phones but we are very clear that we have a responsibility in the way we run our business to respect the environment and act ethically. We look across the whole lifecycle of the phone and aim to reduce environmental impacts in all phases,” Mr Kenneth Oyolla, the general manager at Nokia East and Southern Africa said.

A stronger e-waste policy is expected to formalize the recycling business that has remained in the hands of small players, having little expertise, capital and often working without protective gears, leaving them exposed to dangerous elements embedded in electronic items like lead and mercury.
Increased uptake
The increased uptake of technology, low initial cost, and constant replacement or upgrade of gadgets have been blamed for the fast generation of e-waste in Kenya.
According to the United Nations Environmental Programme (UNEP), the annual generation of e-waste in Kenya stands at 11,400 tonnes from refrigerators, 2,800 tonnes from TVs, 2,500 tonnes from personal computers, 500 tonnes from printers and 150 tonnes from mobile phones.
Disposal of e-waste will be done in specialised land fills identified by Nema and local authorities. 

The environmental body has ruled out incineration of e-waste, citing lack of proper facilities. 

By VICTOR JUMA

Zain Kenya makes another move

NAIROBI, Kenya, Aug 30 - Mobile telephony operator Zain Kenya has introduced Sh5 and Sh10 denomination airtime vouchers as it steps up its efforts to capture the mass market.

The introduction of the new vouchers is seen as a move to make the operator more accessible to the low-end market after a change in strategy following the entry of its new shareholders, Bharti Airtel.

Zain Kenya Managing Director Rene Meza said the move is aimed at complementing its recent 50 percent reduction of call charges.

“We are offering a wide range of scratch card denominations to suit the needs of all individuals. Access to telecommunication services is no longer a luxury but an integral part of each Kenyan’s socio-economic needs,” Mr Meza said.

Zain has made it clear it is out to gain leadership in the mobile market with Mr Meza saying the lowering of its tariffs was only the first ace up its sleeve. He has in the past said that the operator would be able to match any move its competitors make, making operations form them difficult.
Communications Commission of Kenya data show that Zain was closing in on the two million-subscriber mark.
Zain becomes the second operator to introduce the Sh5 and Sh10 vouchers after Safaricom made a similar move in November 2009.

“We would like to enable our subscribers to enjoy our new low calling rates without any hindrance. The low denomination scratch cards that we have introduced in the market underpins our continued commitment to make access to telecommunication services in Kenya more affordable,” Mr Meza said.

Since announcing a renewed focus on the mass-market segment, Zain Kenya has continued to roll out products targeting this sector.

Two weeks ago, the company launched a simplified interactive mobile phone account management menu service, which enables customers to access a wide range of value added services through a single short code free of charge. 

Among the new services incorporated include a unique and innovative airtime advance service, Kopa Credo, airtime-sharing service, Me2U and a call back request service, Please call me.

Mr Meza said Zain Kenya would continue enriching the customer experience through providing affordable and flexible services in line with the changing market needs. 

“We are very happy with the way the Kenyan market has received our new approach to business. We are confident that we will be able to reclaim a significant portion of the market share as we pursue our goal of attaining market leadership,” Mr Meza said.

He disclosed that Zain Kenya has embarked on upgrading her infrastructure to cope up with the growing traffic.

Last month Bharti Airtel announced that it had released Sh24 billion in capital investment into the Kenyan operation following acquisition of the company. 

BY MICHAEL KARANJA

Top e tourism gurus converge in Kenya

NAIROBI, Kenya, Aug 25 - East African tourism industry stakeholders are set to benefit from discourses on e-tourism to be presented at a regional e-tourism conference set for early next week.

The conference, which will feature global online giants such as Trip Advisor and Expedia will focus on how East Africa’s tourism sector can harness the potential of the web, especially following the enormous interest generated in Africa from the 2010 FIFA World Cup.

The conference comes in the wake of increased optimism in the Kenyan tourism sector following a peaceful referendum and an impending promulgation of a new Constitution on Friday August 27. This, coupled with impressive results in tourist arrivals in past half compared to 2007, is set add an impetus to the already stabling growth fuelled by the improved internet connectivity.

Speakers at the event will include Trip Advisor’s Head of Emerging Markets, Helena Egan and leading Internet innovator Jerome Touze - the company’s CEO and one of the Founders of WAYN.com – the world’s leading travel social network, which has over 16 million members, globally.

Mr Touze spoke at last year’s E Tourism Africa Summit in Johannesburg and he has since worked with South Africa Tourism on a social media campaign called the “Face of South Africa”, which has been hugely successful, attracting over five million views and 20,000 applications for the competition.

“We have achieved some amazing results through social media for South Africa Tourism and I am very pleased to be traveling to Nairobi to speak at the E Tourism East Africa Conference. Its great to see much more awareness and understanding from Tourist Boards about the importance of the web and social media as a strong marketing tool,” said Mr Touze.

E tourism Frontiers CEO Damian Cook, who is the convener, said that alongside the international speakers at this year’s summit, there will also be an impressive number of Africa based companies and projects presenting new and innovative ways of promoting and selling Africa online.

“Since our first conferences in Johannesburg and Nairobi in 2008, we have seen major changes in the way African tourism companies and destinations are using the web. We have some amazing projects in our line up this year- including South African company - Wild Earth who stream game drives live to the world via vehicle mounted webcams and provide Twitter updates and interactions with viewers as they go,” said Mr Cook.

The ETF CEO added: “African Travel companies have seen the success of tourist produced online viral videos such as the Battle of Kruger, which has been viewed by over 50 million people, and they are now creating platforms for user generated content, reviews and discussions of their products. The web has really made it easy for small players to use technology, creativity and innovation to make a big connection with global markets. It is critical that tourism companies in across East Africa take advantage of online marketing opportunities. The E Tourism East Africa Conference will show them how”

Also presenting at the summit will be ecologist and author Dr Paula Kahumbu - CEO of Wildlife Direct who have created a blogging platform and social network for conservation projects.  Mr. Kahumbu will also be discussing how Tourism and Conservation can work together online.

Key sponsors of the conference include Kenya Commercial Bank, Safaricom and Crowne Plaza Hotel.

Kenya mobile phone operators in tiff

NAIROBI, Kenya, Aug 19 - A bitter competition war is unfolding between Kenya’s two largest mobile phone companies - Zain and Safaricom - over the handling of traffic across the two networks.

The dispute started with accusations from Zain that Safaricom was sabotaging its new price deal, by offering limited capacity for cross-network calls coming from the Zain network.

Barely a day after launching the country’s lowest cross network tariff at Sh3 a minute, Zain pointed an accusing finger to Safaricom saying it was ‘abusing dominance’ by not increasing its capacity to receive calls from the Zain network.

Zain even went a step further to write to industry regulator, the Communications Commission of Kenya (CCK) to step in and investigate the matter.

“Our customers are experiencing congestion and call set up issues when they call Safaricom and not when calling Zain. This is purely for the simple reason that our main competitor has been delaying the capacity increase request from our side to accommodate the incremental traffic coming from us after we launched our new offer in the market,” Zain Kenya Managing Director Rene Meza charged in a statement.

Mr Meza said despite having made requests to Safaricom, their competitor had remained uncooperative.

“We simply requested for a swap out of some circuits from the Safaricom to Zain link to the Zain to Safaricom link. In our experience, such a request can be accommodated in a matter of minutes and at no cost. Much to our surprise, we could not get a commitment from Safaricom as to when the configuration would take place,” he said. 

But in quick response, Safaricom faulted Zain for lack of proper planning as it only sent a formal request late on Wednesday.

“We must admit that we are quite surprised by the claims made by Zain that we are trying to stifle the delivery of their traffic to our network. These claims are quite insincere considering that Zain is fully aware of the procedures that all operators must adhere to when seeking to increase their inter-connect traffic capacity,” Safaricom Chief Executive Officer Michael Joseph said.

“Safaricom has now and in the past continued to adhere to the terms of the inter-connect agreements signed with all operators and wishes to urge other operators to do the same. We have always been ethical in the way we conduct our business and our integrity is the greatest pillar of our success in Kenya. We will however not take responsibility for the consequences of poor planning by other operators,” Mr Joseph added.

Safaricom has said it would continue with its “unflinching commitment to integrity” in all its operations including honouring the terms of agreements between it and its competitors.

“We have always been courteous to Zain, even to the extent of accommodating them when they were unable to clear the significant debt that they owed us. This notwithstanding, we shall continue to cooperate with them as guided by the inter-connect agreement and other industry rules. We invite them to engage us within those parameters,” Mr Joseph said.

The Communications Commission of Kenya has lowered interconnection rates from Sh4.42 to Sh2.21, effective September 1st. Zain became the first operator to take advantage of the new rates in an effort of driving up its subscriber base.

Bharti Airtel, the new owners of Zain, have not hidden their desire to clinch market leadership with the International Chief Executive Manoj Kohli even saying, “Bharti Airtel is about leadership. Whichever market we enter, we enter with a clear vision for leadership.”

Bharti aims to flex its muscle in the market with a well spelt out strategy with major focus on the lower-end of the market investing as much as Sh24 billion to upgrade its network.

BY MICHAEL KARANJA

Zain Kenya lowers call rates

NAIROBI, Kenya, Aug 18 – The Kenyan mobile telecommunications market has started witnessing the Indian business model of low margins and high volume, as Bharti Airtel announced drastic price cuts for subscribers on the Zain network.

Wednesday’s launch of a Sh3 flat call rate from Zain to all other networks is a clear testimony that the Indian mobile communications giant was aggressively targeting to recruit more subscribers to its network.

Zain Kenya Managing Director Rene Meza said the move forms part of the operator’s new business model targeting the mass market as well as making mobile services more accessible to subscribers.

“As we move forward with Airtel Kenya we are going to lead from the front by investing in all fronts in order to have one single focus as part of our business model - and that is our customers,” Mr Meza said.

Bharti has already curved a name for itself in India where it operates a mass-market model that is expected to be replicated in Kenya.

Mr Meza said part of the operator’s new strategy is to boost its volumes while leveraging on the strength of Bharti to make it the market leader in the telecommunications sector.

“At the moment our focus is our growth in revenues and subscribers. Margins and profits will come as we increase our customer base and leverage on the economies of scale in reducing our call structure as we go forward,” he said.

Zain becomes the first mobile operator to take advantage of the revised interconnection rates expected to take effect from September.

The Communications Commission of Kenya has lowered the rates from the current Sh4.42 to Sh2.21. The reduction of the tariffs is likely to lead to vicious price wars in the market as operators look to position themselves but Mr Meza believes it will also give smaller operators room to grow.

Safaricom, with 78 percent of the 20 million subscribers in Kenya, has come under pressure from other operators due to the high interconnection rates that have made it costly to call across networks.

In response to Zain’s latest move Safaricom Chief Executive Officer Michael Joseph said they would be reviewing their own call structure in due course.

Mr Joseph was however quick to point out that it was important to price services in a way that guarantees returns. He is of the opinion that an operator cannot price services at below cost to make margins.

“What Bharti have said and proved is that they believe you can lower your price and you will get huge volume that will give you the high revenue and profit that you need. I however, am of the opinion that there is not that much huge volume per subscriber in terms of minutes but we will see. We each have our own strategies and we will play it out,” Mr Joseph said.

Bharti has been seen to be taking the fight to Safaricom with plans to invest Sh12 billion to grow its network and distribution system to give it presence in the country. This has since been revised upwards to Sh24 billion to cover expansion as well 3G roll out.

“Bharti is fully aware that today the level of profit is not on the positive side but at the same time they also understand that if you don’t invest in what is required of the business the net profits will not get any better either,” Mr Meza said adding the journey to the top will be long and challenging.

BY MICHAEL KARANJA

Reach for Kenya mobile TV to expand

NAIROBI, Kenya, Aug 13 - DSTV Mobile plans to expand its network to cover Kisumu, Nakuru and Eldoret by next year.

The service which offers satellite television on mobile handsets currently covers Nairobi and Mombasa only.

Digital Mobile Television (DMTV) - a subsidiary of MultiChoice - which runs the service, says it is conducting consumer research to establish what content and pricing module would be most suitable

 “We are targeting the mass market and it will be important for us to find out how customers have taken to it so far,” DMTV General Manager Felix Kyengo said on Friday.

He added that with the changes in technology consumption of television was becoming increasingly personal with consumer convenience playing a central role.

This has seen broadcasters go out of their way to find new ways through which consumers can access their preferred content on the move.

DSTV Mobile currently offers 14 channels on its bouquets including Channel O, SuperSport7, SuperSport3, Cartoon Network, Africa Magic, BBC, CNN and the current Big Brother Show.

Mr Kyengo said the 2010 FIFA World Cup played a major role in pushing up its customer numbers, but was not at liberty to disclose the actual number of subscribers.

“During the World Cup we had a major breakthrough with many people coming on board and we expect with the start of the English Premier League that our numbers will go even higher,” he said.

DSTV Mobile is currently available on selected Nokia and ZTE handsets but Mr Kyengo expects this to change in the coming months.

“As the concept catches on in Kenya you will get more mobile manufactures coming up with compatible phones,” he said.

He was speaking during the signing of an agreement with mobile network Yu to make its content accessible to Yu subscribers.

The network becomes fourth operator to offer mobile DSTV content, a move Essar Telecom Country Manager Atul Chaturvedi believes will help it grow in the Kenyan market.

“This is a competitive market and a partnership with relevant industry players is a key aspect for us to be able to provide innovative services to our subscribers.  We will relentlessly continue to pursue ways of stretching our reach to more and more customers by providing new and exciting packages targeting various market segments,” Mr Chaturvedi said.

BY MICHAEL KARANJA

Growth in Kenya mobile money transfers

NAIROBI, Kenya Aug 16 - Essar Telecom Kenya is reporting successful progress of its money transfer service YuCash seven months after it was launched.

Essar Telecom Country Manager Atul Chaturvedi says in less than a year, more than 350,000 customers have already subscribed to the service in more than 900 towns across the country.

Mr Chaturvedi said the response in the market has been ‘healthy’ and is pleased with the uptake of the service.

He said the company, which has close to 1.7 million subscribers, expects to have more than half of its subscribers signed on to the money transfer service.

“With the ongoing SIM registration we expect this number to go higher by the time it is over,” Mr Chaturvedi said.

Yu has 5,000 agents across the country and is currently advertising for more agents to boost its presence.

Mobile commerce has become a new fighting ground for mobile operators as they look to use it to lure in subscribers.

Safaricom revolutionised mobile money transfer when it introduced M-PESA in 2007. Latest statistics from the operator indicate that it has so far registered 11.8 million customers and transferred a staggering Sh523.8 billion.

Bharti Airtel, the new owners of Zain Kenya, intends to take the fight to Safaricom in the mobile commerce segment with plans to invest Sh350 million on its Zap money transfer service.

The investment will go towards increasing its Zap agents from the current 1,700 to 10,000 by the end of the year to give it better visibility among customers.

However, both Yu and Zain are reluctant to give official figures of how much they have been able to transfer arguing it was ‘sensitive information’. They however say they are pleased with the progress of the money transfer systems.

BY MICHAEL KARANJA

New media tracking launched in Kenya

NAIROBI, Kenya, Aug 12 – Synovate Research has launched a new tracking system for radio and television audiences in the country.

Synovate MD George Waititu said on Thursday that the Portable People Meter (PPM) will be rolled out in Nairobi on a pilot basis on Monday.

It will automatically detect and register radio and TV stations within a handler’s vicinity.

“We expect we will go full pilot the coming week, and that will run up to the end of the year. We will be testing the efficacy of this technology after successful encoding of all the broadcast signals within Nairobi,” he said.

The gadget, which looks like a pager is designed to detect radio and TV signals in homes, offices as well as in vehicles.

An encoding device will be installed at the transmission end of every broadcasting media house as that is the signal that will be detected by the PPM.

“The media owners have supported this initiative very well for us to successfully install those gadgets into the broadcast studios,” he said.

Advertisers and media houses will be the main beneficiaries of the new system as it will provide more accurate ratings than the old handwritten logs.

Mr Waititu said the meter will offer quality information on how and when consumers listen and watch TV and also provide advertisers with updated information while at the same time monitoring their advertisements on electronic media.

“It records data minute-by-minute, that means it will deliver to us minute-by-minute ratings as opposed to what we have currently which is 15 minutes by 15 minutes ratings,” he explained.

According to Synovate Pan-Africa Research Director Vivien Marles, Kenya becomes the first country in Africa to deploy the new technology.

She said use of the PPM will give advertising companies accurate and timely information to check on the progress of their services and products as well as make choices of where and when to advertise with particular broadcast stations.

BY JUDIE KABERIA

AccessKenya profit dips

NAIROBI, Kenya, Aug 18 - AccessKenya Group has announced a 59.3 percent dip in its profit after tax to Sh30.6 million for the six months ended June 30.

The ICT firm attributed the drop to the weakening of the shilling during the period which saw its long term dollar loan impacted.

“The business suffered a foreign exchange loss as a result of the marked depreciation of the Kenya Shilling in the last couple of months (which) impacted on our dollar liabilities,” said Managing Director Jonathan Somen.

Gross profit for the business however rose from Sh470 million in June last year to Sh598 million while the operating expenses increased marginally by 13 percent due to what Mr Somen termed as ‘careful cost management’.

“The group has delivered on improved margins Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) reflecting the beneficial impact of the investments that we have made and continued to make,” said the MD.

The balance sheet of AccessKenya, which is the only listed ICT firm at the Nairobi Stock Exchange, also remains strong with total assets of Sh1.86billion.

Although there was a reduction in internet prices during the period, Mr Somen said its revenues were not impacted negatively as it was able to significantly grow its corporate and residential customer base.

Despite the slump, the firm remains optimistic about the future and has planned the roll out of its networks in areas of its customer demands.

Already, Mr Somen said with the appreciation of the local currency over the last few weeks, they have been able to reverse some of the losses experienced in their business and that the trading outlook is positive.

BY EVELYN NJOROGE

Train top managers in ICT to nurture innovation

Kenya has in the recent past been in the spotlight as a hot bed of innovation and Nairobi has been touted as the next Silicon Valley in Africa.

The attention has been spawned by unique initiatives some of which have gone global such as the open source crisis management platform Ushahidi and the mobile money transfer sensation M-pesa.

The local tech scene is choking with talent waiting to be tapped and hopefully result into more world-class successes or case studies that will make Kenya a true innovation hub. 
Why then are we not seeing showcases that will speak of the talent that is rife?
There is a severe knowledge gap within Kenya’s top management.
I’m talking about chief executives, marketing managers, brand managers, permanent secretaries, government ministers and the list could go on…yes, I called them out, and for a reason.
Although the mobile industry in Kenya is only 10 years young and dripping with opportunity and talent, we are yet to witness the next logical step where the influencers who represent big brands and government harness this talent. 
While acknowledging what Information PS Bitange Ndemo and his team have done to improve the country’s infrastructure as pertains to connectivity to the world, the task ahead is still daunting and it cannot be left to one team.
I am yet to come across an executive course that offers key learning on the mobile space, which has become an integral part of business and social life.
The approach I would advocate is the training of knowledge champions in organisations, who will be well versed in the entire mobile ecosystem and understand the various players and value propositions available to them.
This understanding will plant the seeds of innovation with organisations having the ability to generate ideas from within, thus creating ownership.
I guarantee the implementation of these ideas will not be a problem since we are not short of talent.
If we can bridge the knowledge gap between brand owners, managers and innovators, the benefits will be three fold: innovative product and service ideas stemming from a knowledge position, engagement of the talented yet underused resource base leading to improved skill sets and we may just cement ourselves as the Silicon Valley in Africa.
After all, we have it all going for us. 

BY Mbugua Njihia

Internet data exchange point launched in Coast

The Telecommunications Service Providers Association of Kenya (TESPOK) has launched an Internet Exchange Point in Mombasa to improve efficiency and cut connection costs.

The second IXP in the country, will ensure that all the region’s traffic is exchanged locally, which will improve Internet performance for end users, save operators the expense of passing regional traffic via Nairobi, and reduce the costs associated with traffic exchange between Internet Service Providers (ISPs), TESPOK chief Fiona Asonga said.

In early 2000, undertook the initiative to implement and operate a neutral, non-profit IXP for its then 6 members.

The IXP has experienced phenomenal growth with an average traffic growth rate of 150 per cent annually, according to Ms Asonga.

The new IXP will be hosted by SEACOM for the next three years and is targeting 12 ISP providers in Mombasa and other global firms who have also expressed interest in it.

“Mombasa is the landing point for all undersea fibre cables to Kenya and other landlocked countries in East Africa, making it an attractive location for international carriers to interconnect with the region,” Asango said, adding that Google has already expressed interest in using the IXP.

By enabling more efficient and cost-effective Internet traffic flow, it is expected that the IXP will help stimulate the region’s ICT sector.

“The establishment of the IXP was facilitated in part by the Internet Society’s African Interconnection and IXP Programme, an initiative to promote more robust Internet connections within, and between countries in Africa,” Asonga said. 

Before TESPOK established Kenya Internet Exchange Point in Nairobi, all Internet traffic was exchanged internationally.

According to Seacom president Brian Healthy, the upstream traffic for the domestic destination is between 30-40 per cent.

During the first two weeks of KIXP’s operation, measurements indicated that latency was reduced from an average of 1200-2000 milliseconds (via satellite) to 60-80 milliseconds via KIXP. 

By GITHUA KIHARA

Online shopping keeps consumers out of KRA reach

Increasing purchase of books and entertainment products through the internet is denying the Kenya Revenue Authority consumption tax.

A recent survey of 1,700 people by TNS Research International and the Kenya ICT Board found that 18 per cent and 24 per cent of the respondents buy music/movies and electronic books online, signalling the growth of online shopping.

The Kenya Revenue Authority collects taxes, including VAT or consumption tax on goods and services delivered physically to consumers.

But online-based transactions where consumers pay for and receive music, movies and electronic books among a range of other virtual goods from foreign vendors are a new model that leaves consumers out of the VAT tax bracket.

“If one buys a music CD in town, he pays a tax on the commodity the same way he would if he orders it online but have it physically delivered from the supplier. But if the person buys and downloads the music online from a foreign vendor, no consumption tax applies,” said Mr Rajesh Shah, a tax partner at PriceWaterHouseCoopers (PwC).

“The major problem is that tax laws have not kept pace with the development of electronic commerce. Consumers have no obligation to pay for things they buy online,” he added.

Analysts reckon that the trend where middle and upper class consumers pay to download software, books, music, videos, and electronic version of books from vendors like Amazon will grow in the coming years on the back of rising incomes and a more reliable internet infrastructure.
A new report by PwC projects the value of consumer spend on digital entertainment and media products in Africa and Middle East to grow at a compound annual rate of 4.6 per cent to reach Sh46.5 trillion in 2014.
In Kenya, professionals and companies are already taking up smart phones and new communication devices like the iPad, a computer tablet, that allows users to buy a host of applications from centralised virtual stores developed by companies in the developed world.
Kenya is among the fastest and most sophisticated adopters of technology in Africa and a rapid growth of global e-commerce means millions of shillings spent by consumers will go untaxed.
Analysts propose several solutions that could bring the new shopping styles under the tax bracket.
The easiest solution is to have the foreign vendors set up local subsidiaries or team up with local agents so the consumption tax is collected by their local representatives. 
This is the model applied by pay TV provider Multichoice which broadcasts to a regional audience but viewers in each jurisdiction pays consumption tax to the conglomerate’s local operatives for onward remittance to tax authorities.
Other solutions involve international trade co-operation and changes in tax laws.
Foreign companies, for instance, can collect consumption tax based on the specific rates levied by the country where their consumers come from and then remit the same to local tax authorities.
“The tax laws can be amended and technological infrastructure set up to put the obligation on consumers to pay taxes on the value of their spend on intangible goods in a reverse, self-assessment system,” Shah said.
The internet has created a border-less environment, knocking down national boundaries that governments depend on to tax residents and nationals, leading to a raging debate on whether or not to tax e-commerce.
Some analysts say the value of tax from e-commerce transactions is still small but will rise in the coming years, adding that failure to tax e-commerce will leave governments with a smaller tax base.
In such a case, States are likely to increase direct taxes to fund public projects, a move that will hurt trade and investments.
In addition, raising taxes is seen as a way of entrenching equity in global trade.
“What is important is to correct the competitive imbalance and to establish an equitable taxation structure that addresses e-commerce in a fair and realistic manner,” the European Commission said when it introduced taxes on e-commerce in Europe.
But others argue that levying tax on e-commerce will hinder its growth.

By VICTOR JUMA 

New deal to provide teachers with e-syllabuses

Teachers in public schools can now buy laptops loaded with the current syllabus and training material following a public/private partnership initiative which aims at integrating e-learning in the education system.

The partnership is between Safaricom, Equity bank, Microsoft, Intel, Kenya Literature Bureau (KLB) and Kenya Institute of Education (KIE) and the Teachers Service Commission targeting about 240,000 teachers.

The bank will provide loans for the laptops bundled with internet usage through Safaricom centres after which the devices will be loaded with KIE syllabuses for both primary and secondary education provided by Microsoft.

“Cost has been a major challenge in fully adopting use of ICT. With the fibre optic cable the inaccessible cost of internet has been addressed and this partnerships will address the cost of accessing the devices necessary for promoting use of ICT in education,” said Mr Michael Joseph, the Safaricom chief executive officer.

According to Dr James Mwangi, Equity Bank CEO, the institution has set aside Sh13 billion to be advanced to teachers for the purpose.

Kenya:ICT sector registers remarkable growth-Economic Survey 2010

The ICT sector in Kenya has kept growing with almost half of Kenya’s population now having access to telecommunication services.

Mobile telephony has grown by 34.2 percent, from 12.9million subscribers in 2008 to 17.4million subscribers in 2009 according to the just released economic survey 2010.Currently it is estimated the number of subscribers has surpassed the 20million mark. The mobile telephony capacity has also increased from 26.0million in 2008 to 29.0million in 2009.

However the demand for fixed line connection dropped by 72.4 per cent to 2,259 in 2009 reflection the shift to the use of mobile phones.The number of the once famous telephone booths dropped from 6,000 in 2008 to 5,000 last year.There were also major developments in the mobile telephony sector as competition among the four operators (YU, Orange, Zain and Safaricom) increased leading to lower call charges.

The report notes there was intensified provision of financial services via mobile phones by most operators, enabling subscribers to transfer money without need of holding bank accounts.

SMS popularity

Text messaging is becoming more and more popular among Kenyans. The volume of short messaging Service increased to 3,284.7million from 361 million in 2008.
Expanded penetration of mobile phones and portable Internet modems has also seen more Kenyans connected to the Internet.

Internet users increased from 3,4million in June 2008 to 3.6million in June 2009.

The number of active Internet Service Providers however fell from 56 in 2008 to 52 last year.

The year 2009 also saw the Government launch of Digital TV broadcasting which is expected to improve the quality of content produced.

The year saw 28 FM new frequencies assigned to broadcasters compared to 30 FM frequencies assigned in 2008. Parliament got 22 frequencies, KBC (2) and private broadcasters (4).

It was also the year when Parliament enacted the Kenya Communications Amendment Act, 2009 which expanded mandate of Communication Commission of Kenya to include regulating broadcasting and electronic transactions.
Penalties were also introduced for cyber related crimes, a move that would boost e-commerce.

Submarine cables

The submarine cableswill enhance affordability for users and improved international connectivity between Kenya and the rest of the world. The ongoing construction of fibre optic connecting all district headquarters in the country will boost the national transmission infrastructure in the country,” reads the survey report in part.

According to the survey, postal services continue to be overtaken by emerging private courier services.

Six post offices were closed in 2009 reducing the number to 701 down from 207 post offices in 2008. There was reduced number of reduced number of installed private letter-boxes by 2.2 per cent from 414,000 to 405,000 in 2009.The number of post offices has reduced from 834 in 2004 with private courier operator outlets increasing from 437 in 2005 t0 606 in 2008 and to 622 last year.

The number of licensed courier has also increased from 148 in 2008 to 180 last year marking a 21.6 per cent growth. Between 2008 and 2009 private courier operator outlets grew by 2.6 per cent.

Kenya: Receiving landline calls while on the move

It is now possible to receive calls directed to a fixed line via the mobile phone.This means one must not stay in the office to receive and reply to land line and faxes.

UUNET Kenya, a leading business communication solutions provider has launched the new solution, which directs communication from a fixed phone to a mobile phone or vice versa.
This technology is especially beneficial to professionals who tarvel alot but who must handle office matters.

For journalists, this is a ’saviour’ technology as it will ensure one does not miss a call from a source.

Mr. Omariba said UUNET Kenya is already in discussions with their principal partner MTN Business, even as the firm’s engineers are already testing the requisite equipment to facilitate the service.

The convergence will enable UUNET Kenya customers to do virtually anything that can be done in the office while on move, including handling of faxes and even telephone calls.
However, the solution will require UUNET Kenya to work with a GSM povider that has a 3G license, or expand their Beyond Broadband WiMAX solution which is currently available in Nairobi, Mombasa, Kisumu and other key towns countrywide.

BY JAMES RATEMO IN NAIROBI

Kenyan Video made from Free and Open Source Software- testimony of what FOSS can do

Software is the engine of technology and if properly implemented can grow economies in leaps. But at what cost? For ages now poor penetration and high cost of technology has seen Africa lag behind in implementing emerging profitable technologies. However hope lies in the horizon in Free and Open Source software which is already changing fortunes for poor masses around the globe. The debate on whether Africa should make better use of Free and Open Source Software (FOSS) or not is quickly coming to a close. FOSS is winning fast and more and more technology professionals are dropping the more expensive proprietary software for this new platform. In early 2009, Kenya

Courts adopt technology to fight backlog of cases

Court of Appeal Judges will no longer need to crisscross the country to handle appeals cases as this can be now done online.The tele-presence technology spearheaded by Cisco Systems, an international technology solutions firm, has interconnected the Nairobi and Mombasa courts of appeal.

This is part of the ongoing automation and online interconnection process within the Government.This essentially means that backlog of cases and the need for judges to roam the country to listen to lawyers will be a thing of the past.The Court of Appeal is situated in Nairobi, but it periodically holds its sessions in Mombasa, Kisumu, Nakuru, Nyeri and Eldoret. It’s estimated that the sessions, commonly known as circuits, cost millions of shillings annually but this is bound to change.

Dr Bitange Ndemo, whose Ministry of Information is spearheading the changes in conjunction with Cisco, revealed that there are plans to extend use of the technology to lower courts to avoid the inconvenience of moving prisoners to magistrates’ courts just for mention of their cases.

"Prisoners have to be driven from prisons to courts even if it is just for a mention of their cases...with the tele-presence technology, magistrates will communicate with the accused via networked screens where the two (magistrate and prisoner) can see each other without shifting location," explained Ndemo.

Efficiency in Government

"This will save the Government in terms of cost of transporting prisoners, congestion in courts, and eradicate backlog of cases," added Ndemo.

Nokia launches new C3, C6 and E5 smartphones.

Nokia  today has launched the Nokia C3, Nokia C6 and Nokia E5 smartphones which have been specifically designed to put better messaging and social networking tools in the hands of more people around the world, at affordable prices. These new handsets feature full QWERTY keyboards, and enable access to a range of different email accounts, IM communities and social networks.Kindle Wireless Reading Device, Free 3G + Wi-Fi, 6" Display, Graphite, 3G Works Globally - Latest Generation

“Our messaging device range is very successful,” said Anssi Vanjoki, Nokia’s Head of Markets. “Services that provide easy access to the world’s consumer and corporate email and instant messaging are really popular on our QWERTY smartphones such as the Nokia E71 and Nokia E63. People want the best messaging and social networking experience on an affordable device, whether it’s sending a simple text or instant message, an email, or a direct message from their Twitter account. The Nokia C3, Nokia C6 and Nokia E5 are made for just that.”

IIEC launches electronic voter registration (EVR) pilot in Kenya.

In the latest amazing news from ILEC as of the 12th of April 2010 to the 21st may 2010, Kenya’s Interim Independent Electoral Commission (IIEC)  will register voters electronically for the first time ever in 18 selected constituencies. The pilot will cover the 18 constituencies of Kamkunji, Langata, Mvita, Malindi, Dujis, Wajira East, Isiolo South, Imenti Central, Mbooni, Nyeri Town, Kikuyu, Eldoret North, Nakuru Town, Ainamoi, Ikolomani, Webuye, Kisumu Town West and Bonchari. The Electronic Voter Registration (EVR) process will also cover over 1,400 registration centers and approximately 1.8 million voters details will be captured.

EVR uses biometrics for both face recognition and fingerprint using a special camera and a thumb print reader. Therefore, EVR is able to accurately identify registered voters which will be key in eliminating cases of voter fraud during elections. Apart from being highly accurate, the EVR system is faster and more efficient than the current manual voter registration process in place. However, the requirements for EVR remain the same as the manual process meaning that a valid ID card or Passport are still needed.