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