Monday, November 30, 2015

Safaricom, Bitpesa and Joe Mucheru

Two startups, Lipisha and Bitpesa are suing Safaricom according to the Daily Nation:
The firms blamed Safaricom for compelling Lipisha, through intimidation, to cease offering the services nearly a week ago with Bitpesa or face the risk of terminating their business.
According to Lipisha, Bitpesa is one of their largest customers hence the suspension results to the stoppage of services to Safaricom.
Lipisha claimed that a large amount of its money is being withheld in Safaricom’s account, a situation which exposes it to a risk of being sued by other customers for multiple claims.
The firms through their lawyer, Mr Kiragu Kimani of Hamilton Harrison & Mathews, said:
Bitpesa is at the risk of collapsing... The suspension of the Lipisha services and the demand that Lipisha stops transacting with Bitpesa is unlawful and infringes on the firms’ rights to acquire and own property, fair administration as well as their economic interests
Safaricom definitely has a reputation of being rather brutal to startups that are built on its platform so this doesn't come as a surprise. The company has it's own remittance offerings in 3 of the 4 countries that Bitpesa operates in. Safaricom, through Vodafone, earlier this year announced a partnership with MTN Group that would see their customers able to send each money across borders using their mobile phones. I guess this is just removing the competition.

This is particularly sad for Bitpesa as they had just expanded their offerings to include Nigeria and Uganda earlier this month. I do find it improbably that their business is going to collapse though.

Bitpesa in February this year raised over $1 million in a second round of funding led by San Francisco-based Pantera Capital. Their first round of seed funding was for $440000 according to their profile on Angelist.

According that very same profile, Joe Mucheru, a prolific angel investor best known for his investment in Wezatele that exited in April this year, not only provided them with seed capital but also is currently serving on their board. Things last evening got interesting when Mucheru was placed at the head of the Ministry of ICT in Kenya. Whether this will get people in Safaricom nervous, particularly as the ministry had once tried to classify the tech giant as dominant, and cause them reverse their decision post-haste remains to be seen.

I reached out to the companies involved but they either didn't respond or refused to citing the ongoing court case.

Update(1/12/12): Safaricom told the judge the reason they decided to block Bitpesa is that the company was not complaint with anti-money laundering laws but Bitpesa countered saying bitcoin is not a something that is regulated in Kenya by the Central Bank of Kenya. From the Daily Nation:
“Safaricom has stringent reporting obligations of the Proceeds of Crime and Anti-Money Laundering Act, which it could not fulfil in view of Lipisha’s relationship with Bitpesa,” said Mr Isaac Kibere for Safaricom.

We'll know on 14 December whether the Judge, Joseph Onguto, chooses to lift the suspension while the case goes on. Peace!!!

Friday, September 18, 2015

Shortcomings of the "Kenyan Tech Blog"

Tech blogs in Kenya suck! It's something I've said before in other platforms and fora. I knew it empirically but didn't have the hard data to back me up. I do now.

Let's get into why I'm the right person to be talking about this:
  • I've been reading tech news on an almost daily basis for more than 8 years now
  • I've been following the local tech scene almost as long.
  • I have a degree in Computer Science.
  • I'm a part of the ecosystem.
  • I have the skills to do this analysis
  • I've been thinking about this for a while now, almost a year
While it's entirely possible to analyse more than one blog I decided to do only one as a sample. The blog I choose for this is Kachwanya because:
  • It's been around for a while (since at least 2008)
  • It appears on various lists around the web on the topic
  • The founder of the site, Kachwanya, is the head of the Bloggers Association of Kenya
  • Kachwanya’s operations are based out of the Nailab
  • It's as good an example as any
  • It apparently makes money
I'll now get into how I extracted the data, a bit of how the technical analysis was done, explaining some of the techniques behind this. If you're more interested in what I found skip to the next section.

The Analysis

I worked with the assumption that the titles of the posts would give me insight into the overall content of the site. So I used a service called Kimono to extract all the blog titles for the past two years, to about 2 months ago. This came to about 2300 entries. I also extracted other meta-data, such as the author of the posts and the tags used on them.

The rest of the analysis was done in the R programming language, using RStudio.

Next I did a simple frequency analysis to see which were the most frequently occurring words in the dataset. I had to remove stop words (commonly occurring words such as 'a', 'the', 'it') that would add no value to the analysis. I also made a word-cloud that visually represents these frequencies.

A word cloud of what is on Kachwanya [click image to enlarge]
Finally I wanted to look at the words associated with certain keywords that appear most frequently and visually represent what those words look like.

First, I did something called 'Association Mining'. This measures the correlation (how often certain words appear along side others) between two entities, in this case words. If we take two words like, for example, "Sidney" and "prince" and the association is something like 0.3, it means that every time the word "Sidney" appears, there's a 30% chance that the word "prince" is near it.

Second, using association mining and Network Analysis, not only can we determine which terms appear together frequently, we can visualize how keywords and phrases are connected as a network of terms. This way, we can resolve the number of connections keywords have with one another, and how many connections a specific keyword has with other keywords.

Using network terminology, our keywords are the nodes/dots in the network, which are called vertices. Connections, which denote relationships, are named edges. In general, nodes which are related are shown close together, whereas unrelated nodes are shown further apart. The colour of the node is determined by which cluster the node belongs to.
[click image to enlarge]
It's not surprising that Kenya by far dominates the frequently occurring words, probably something to do with search engine optimisation (SEO), but the next 15 most frequently words do offer more of a story. In there, we have some interesting words: Samsung, Safaricom, Facebook, Nokia, Orange and Airtel. These are the brands or words that aren't generic that appear in the top 15. Anyone who follows this blog and really most other Kenyan ones would not be shocked at this composition. What did surprise me was the fact Nokia still featured so highly given that there haven’t been many posts about them on Kachwanya of late. It's probably a combination of lack of interesting news from them and the fact they stopped doing heavy promotion in the country (free review gadgets).
[click image to enlarge]
Looking at the network graph for Samsung, it's all about their phones. They talk about launches, pricing and units sales in millions. Something that I found deeply amusing is that iPhone features (to the left in red). Kachwanya has gotten the reputation of comparing the high end Samsungs to iPhones, sometimes without even testing the latter device or the phone being released.

The graph for Airtel is also about their services, what I want to point out is the green cluster which groups together Internet-related terms. Right in the centre, there is the word unliminet. This is a recently launched service, which at the time I scraped this data was barely 5 months old. That it features here gives me more confidence my suspicions there were a number of sponsored posts on the topic. I put the Safaricom graph together for comparison.
[click image to enlarge]
[click image to enlarge]

The Interpretation

Finally we come to the meat of the post. What I was looking for when I scraped the data; how reporting on Kenyan startups is done. Below, you have the network graph of the posts tagged “start up”, or mentioning it and its variants.

There were only 80 posts on startups, out of the 2,300 articles found on the blog.For this analysis, I not only relied on the techniques mentioned above, but also went through each and every title, making this analysis both quantitative and qualitative.
[click image to enlarge]

This is what the data revealed:
  • Most of the posts were about some competition or other
  • M-Lab is frequently mentioned..
  • There is only one mention of a Kenyan startup exiting, Weza Tele
  • One mention of a startup raising money, Brck.
  • There's mention of some incubators such as 88mph, but little follow up
  • There's mention of just more than 5 individual startups other than the two I've already pointed out.

If you were to use Kachwanya as a source of information for the Kenyan tech scene, you would likely come to the conclusion that a lot of people have about the ecosystem: there's a lot of fluff. You would come out wondering if there's any money being made/raised in our ecosystem and that we're totally supported by various competitions and hackathons.

What we see with Kachwanya is a lot of lazy writing and no research. It's easy to take a press release and post it as news. It's even okay to do so. But even with all the posts about startup competitions and incubators, I found no follow up on the start-ups or even individual stories written about them. This is particularly egregious with Kachwanya because he's based out of the Nailab and every 6 months a new group of startups come in. Nailab is currently accepting applications for 6th season of incubation, that means about 30 startups so far have gone through incubation yet from this blog, which I’d remind you is run from there, you'd not know which have folded, raised funding or even what they're current status is.

I've heard several excuses, but doing some sort of follow up is not hard. From my position, admittedly privileged, working within the tech ecosystem, I've heard of a couple of acquisitions, valuations, funding rounds, user numbers and engagement, large partnerships and international expansion plans. For a lot of this all I had to do was ask, follow the right feeds and people, and pay attention at various events held around Nairobi. In fact,one start up not only had billboards around town announcing their huge new partnership they even had ads in the paper, I'm yet to see anyone write on it.

I did all this not to take a dig at Kachwanya but to point out something that needs to change and hopefully get a conversation going around it. It's fine to write posts that bring in views, I'm even fine with posts that are sponsored (it would be polite to point it out though), but I would like to have more about the actual ecosystem. You can't have in your title "Kenya Tech News" when there's no actually tech news about Kenya.

I should point out this is not just the problem with Kachwanya alone, but almost all local tech blogs. I'd go as far as saying there's no real exclusively Kenyan tech blog, but if you know one please, please mention it in the comments. I'd love to be proven wrong.

Meanwhile until this changes I will continue, as I told Kachwanya once on Twitter, to use his blog as an example of the failure of the local tech blogs.

All the data and visualisations in this post can be found here if you'd like to explore it and the code can be found on my GitHub repo here. Question, comments and responses are welcome in the comments. Peace!!!

Wednesday, September 2, 2015

Equitel Increases Transfer Fees to M-Pesa by more than 100%!!!

So I recently came across this InfoTaKe.
Users transferring money from Equity Bank’s Equitel Mobile Money platform have been hit by a more than 100% increase in the cost of transferring money from the platform to Safaricom’s M-Pesa. 
The new charges appear to have been implemented at the start of August, just as Equitel officially announced it’s transition from a pilot phase. No official communication on the new charges was relayed to Equitel users.

This doesn't surprise me, but the timing is rather unfortunate given that Safaricom has been battling not to be declared the dominant player in the mobile industry.

It has been suggested that this may be the beginning of the end for Equitel, but given what I've heard of Equity Bank's CEO, James Mwangi, the war is just beginning.

Probably to make it seem less discriminatory they've since announced this will affect all banks. Peace.

Friday, August 28, 2015

Could Airtel Kenya be Up for Sale?

Some interesting news lately from the Business Daily:
Airtel Kenya is operating under the licence previously held by Essar, which it bought out last year, as its permit which expired in February is yet to be renewed.
The Communications Authority of Kenya (CA) yesterday said it was still considering “a number of issues” before renewing Airtel’s licence.
Why would Airtel not renew their license? I wonder what the CA means by issues? Perhaps they're considering the imminent sale of Airtel Kenya to Tigo as posited by NairobiTech:
...Airtel Group is selling four more African units to operator Tigo. These include Uganda, Niger and Gabon as Bharti Airtel looks to cut its losses on the African continent. 
Speculation is now rife that Tigo could also end up taking over the Kenyan unit with pundits predicting a total Airtel exit by February next year.  
The current MD of Airtel Kenya, Adel Youseffi, was previously heading the Tigo Ghana operation.
I'd like to point out that I can't find any official sources to corroborate NairobiTech's post but s/he has proven to be rather reliable in the past. Also my own sources seem to point to the same thing but took pains to point out that it's still possible the deal may fall through. We'll see. Peace!!

Sunday, August 9, 2015

Is Data Safaricom's Future?

Once again, I'm back writing something about Safaricom. While most of the country, and the world, concentrates on M-PESA, I'd like to focus on something else, data.

From the figures below, we not only see that data revenues have not only exploded, but according to my back of the envelope calculations, they are set to approach those of M-PESA by the year 2020, and combined, will dwarf voice revenue by almost 100%; that's less than 5 years from now

For FY11 to FY15
This is incredible, and something I think we and the industry needs to pay attention to. And it seems I'm not the only one who noticed this! In announcing their full year results this year, Bob Collymore heavily highlighted that this would be an area of focus for them going forward:
Mobile data is one of the key drivers of future growth. Today we are announcing the launch of Safaricom’s home broadband solution, which is a set-top box that brings the 3G and 4G network into the home, and distributes the superfast connectivity via Wi-Fi to any existing Wi-Fi enabled devices.(FY 2014 press commentary)
Data is probably going to be the biggest money earner for Safaricom soon, but it's not a given that it'll stay that way forever. As I highlighted in my 'Zuku vs. theBIGBox' post: there's a real threat from wired unlimited connections. More than that, there's also a real chance that Safaricom falls into the same trap that has befallen a lot of their counterparts in the West: they become a pipe for internet companies (local I hope) that are far more profitable than them

I want to talk a little about the potential strategies going forward that they could use to avoid this, while growing their data revenues and potentially getting into even more profitable businesses. 

Revenue streams as percentages(note the decline of voice revenue)

Kenyans have proven that they are willing to spend money to get online. We have a couple of million of us on Facebook and just shy of 1 million on twitter (source). Other social networks like Instagram and Snapchat continue to grow in popularity locally. But this will not be enough to ensure the continued growth of data use, and therefore revenue. Most of the data that is generated on the most popular networks, Facebook and Twitter, is text and pictures. There's need for something more; that more is video.

Currently, looking at their most recent subscriber and revenue numbers, I'd estimate that each subscriber on average used approximately about KES 1350, last financial year. Yup, that's considering the fact that data revenue grew by an impressive 59% year on year. (Side note: I spend about that much per month).
When you look at the consumption patterns in more developed markets, most of the traffic is video. In fact, it can be said that two companies dominate in that regard: YouTube and Netflix. During peak hours, they account for about 50% of traffic on the network (predicted to go up to 80% in 4 years). I'd bet my entire salary next month that Safaricom is not seeing those types of numbers yet. But they will, eventually and I think they should be doing everything in their power to help get them there.

Youtube will definitely help them get there but it suffers from a couple of problems: one is a general problem with the platform; the other is local. 

Youtube as a platform has a real discoverability problem, it's extremely difficult to casually stumble upon good content, hell it's difficult even if you're actively looking for it. It's something that companies continue to struggle with despite their best efforts. The local problem is obvious if you take sometime to think about it; there's just not enough local content on it. The most active local channels are stations like KTN and Citizen but there are no videos that are truly viral and local. We currently don't have enough people using the platform to tell their stories or upload their video, we have a few people who are trying and I try to follow as many as I find but it's proven difficult, and it's not consistent.

The first of course is up to YouTube to solve, the second; well it'll solve itself as more Kenyans get online and realise the potential of the platform. But there's a little Safaricom can do to encourage it, including: highlighting, training and sponsoring some of the content online, and perhaps running campaigns to encourage people to upload their stuff.

But this only gets them half the way there. Next, and I hesitate to write this because I've been thinking of launching something around this myself, Safaricom could launch the their own Netflix competitor. Work on getting a local content both from independent studios and film makers, and from the TV stations; stations are a great source because they have a large back catalogue and their titles are instantly recognisable by most of the population.

The great thing about a Netflix type of service is that it could work as another revenue stream (Netflix is a 50 billion dollar company), they can harp about how they're creating value in the local entertainment industry and it'll be able to work across all networks (and worldwide). All this while giving people a reason to use more data. I've written about this before when I analysed the threat that theBIGbox represents for the big 3 TV stations, which I hear has been recalled because it was having technical issues.

Great thing is that all this is pretty much inevitable, it's estimated that mobile data use will grow tenfold around the world and in Africa by 2018. The real question is whether Safaricom will benefit from it in other ways than just providing the pipe. My bet is yes. Peace!!!

PS:I've been researching and writing this post every since my last post about Safaricom. Since then it's been reported that Safaricom applied for a broadcasting licence for both a FTA channel and an IP channel. I think they're going the route I highlighted above. Also seems some financial analysts agree with me that data is Safaricom's future.

Friday, July 10, 2015

Zuku vs. theBIGbox

Recently, there's been a lot of talk about Safaricom's 4G efforts. Well, not exactly their 4G efforts, but their set top box, 'creatively' called theBIGbox (in case it wasn't clear, that's sarcasm). In this post, I want to compare their offering to one of their competitors that always comes up every time anyone talks about Internet in Kenya, Zuku.

More often than not, when the two are compared, the better offering seems to be Zuku. But what everyone forgets in these comparisons is that Safaricom doesn't have to compete with Zuku; at least not yet.

Zuku, through the Wananchi Group, has pursued a strategy of building out their fibre network over time, slowly but surely expanding their network all over Nairobi and into parts of Mombasa. You can see the areas that they cover in the image below taken from their website:

Zuku coverage, Nairobi

Given the wide area they cover in Nairobi, I understand why everyone compares the two services. Further adding to this comparison is the fact that Safaricom has deployed 4G in only two cities: Nairobi and Mombasa (see maps below); the same regions as Zuku’s current coverage.
4G coverage, Nairobi(

To be clear, when I say they don't have to compete, I don't mean that they're not trying to address the same markets. Zuku and Safaricom's theBIGbox are both trying to capture what I believe is the most valuable data market for Safaricom going forward: the home.
3G and 4G coverage country wide(

Whenever Safaricom's home efforts are mentioned, in the context of theBIGbox at least, there's a tendency to mention that Safaricom needs to offer an unlimited data option. However, for the foreseeable future, there's no need for that.

Safaricom only needs to be the fastest and most reliable option in the areas outside Nairobi and Mombasa, i.e. in the rest of the markets they'll be expanding to. I didn't mention the price in that statement, not because it's not important (it is), but because it's more complicated than just being the cheapest.

theBIGbox doesn't need to have an unlimited option in the beginning because there's no one competing with them in the home market outside Nairobi and Mombasa that's offering the same home service, and the speeds that come with 4G will not be matched by other MNOs for sometime given, that none of the mobile operators have been issued licenses, and because they lack capital and, frankly, the strategic thinking and planning to compete with Safaricom.

Safaricom will be expanding 4G to 13 more cities in this financial year, which means in 13 cities there's not going to be any Zuku, or Zuku like service, to compare and compete with. In those cities, they don't have to go unlimited and can continue to apply data caps (limits) to the internet connection to ensure they get the maximum profit while the competition is low.

“Our 4G network is now available in Nairobi and Mombasa, and we will roll out to another 13 towns and cities by year end. This is a first for Kenya and will enable our customers to experience superfast home broadband and mobile data offerings.” Bobby Collymore(FY 2014 press commentary)

This doesn't mean Safaricom gets a free pass, I think they still need to put some thought into how it's marketed and how it's priced.

Initial signals on marketing seem to be right, though there's something to be said about pushing the value proposition of theBIGbox, but the pricing has been, in my opinion, so far completely bungled.

First, the pricing for theBIGbox has been all wrong. I don't understand why they introduced it at KES 10,000. Safaricom is a billion dollar company with profits in the $100s of millions, they can afford to subsidise the cost of getting this device into every home with a TV. Further, they introduced it when every pay TV provider had begun to heavily discount their set top boxes and the free to air (FTA) decoders all maxed out at KES 4,000. Selling something like theBIGbox for KES 10,000 when the value is not clear and hardly worth it in the market it’s targeting was a mistake.

Second, the benefits and advantages of an internet connected device like theBIGbox where not developed before launch. I've talked about these capabilities from a media perspective in a previous post, but just launching with free YouTube for a couple of months was not enough.
Finally, and most importantly, they haven't done enough to highlight the cheaper bundle options on theBIGbox, and perhaps the discounts compared to the normal data bundles don't go far enough, though 4k for 50GB is quite a discount on the Safaricom network. In fact, I only found out about the cheaper bundles for theBIGbox when doing research for this post.

Safaricom doesn't have to compete with Zuku because the potential addressable market outside the areas Zuku operates is still potentially lucrative for the foreseeable future. In fact, they don't have to have to cover that much of the land mass to cover most of the population for 3G coverage. The performance highlights from their 2014 sustainability report show that covering 25% of land mass is equivalent to covering 58% of the population(see image).
 Safaricom’s 2014 sustainability report page 10

“We have increased the population coverage of our 3G network to 69%, completed the modernization of our 2G network which covers 92% of the population and have connected 30% of our base stations to our fibre.” Bob Collymore(FY 2014 press commentary)

This doesn't mean that Safaricom can rest on its laurels. Zuku has proven that it knows how to deploy great fixed internet services and it has an advantage over Safaricom, and its other revivals: an exclusive partnership with Kenya Power to use their infrastructure, the poles mostly, to deploy their fibre. This makes it cheaper and faster for them to do so. In an in interview with CNBC Africa (worth watching for more than just context to this post), Wananchi group's vice chairman, Richard Bell, naturally dismissive of 4G and Safaricom's effort, did mention two particular cities: Nakuru and Kisumu. So they could be following Safaricom into the 13 cities sooner than we think. Peace!!!

Wednesday, May 6, 2015

The Box is Coming

 Safaricom is launching their digital set-top box this Friday, 8th May, dubbed 'The Box'. When they first announced it I was ultra excited for what it might mean for the current media landscape in Kenya. But before I get into that let's see what features 'The Box' will have: powered by Android, in addition to being a television set top box, it'll offer video on demand to also provide internet access to users through a 4G SIM and wireless hotspot capabilities and other services like gaming.

There's much to unpack just from those few details, but what I wanted to focus on was two things that could be potentially related to each other: The Box will have an internet connection and will offer video on demand.

The current media landscape in Kenya is dominated by what some people call the Big 3: Citizen, NTV and KTN. These 3 command the lions share of the viewership something like 70%, new numbers are yet to be released since we went all digital. Nonetheless, I suspect that we're yet to see any changes to these numbers.

One problem that the incumbents suffer from is that they all offer similar programs in a similar fashion. *What comes next is a broad generalisation to make a point* Morning shows from 6 until about 9. Nigerian movie/soaps until 1. News between 1 and 2. Back to soaps until 4. News for 15 min. Children's programming till 5. 5 to 6 music time. Soaps again. 7 news in Kiswahili . Local programming of some sort. 9 news in English. Soaps/more local programming. 11 onwards CNN/Al-Jezeera/BBC until 6. Rinse repeat.

While each station has shows that set them apart from the others there really hasn't been any of them that has been able to set themselves drastically apart from the others programming-wise. (To be fair Citizen did, then the others, foolishly I should say, copied them)

This lack of differentiation is yet to hurt them financially as they still command the largest audiences meaning that advertisers who want to reach the largest audiences have to go through them. The real problem with this model is the lack of targeting.

In the analogue age, broadcasters commissioned content for a broad mass of people who watched just a few shows on just five channels. In lieu of further media choice, broadcasters had to focus their efforts just on the single dimension: primetime slots. And, while the 7:30pm slot is great, from an advertising perspective it means that much spend is wasted. The vast majority of buyers would prefer to reach tightly-defined, target consumer groups. By telling advertisers what viewers are watching, the AdSmart set-top box technology lets both national and local advertisers serve much more relevant advertising to particular categories of viewers.
In that paragraph you could replace "AdSmart" for "The Box". Digital migration has given us so much more choice when it comes to viewing, but what The Box has the potential to bring is very targeted advertising and justification of advertising spend.

Given Safaricom's broad network reach, they'll be able to collect highly specific data on what everyone is viewing. Far more specific than the generalisation given from statistically relevant, but small, samples we usually get. Combine this with the data that Safaricom already has on each user of its network and you're looking at a treasure trove of data for advertising.

Want to advertise specifically to 20 year olds or young children (4 to 10), when they give their full attention to the TV? It's not hard to build a profile of this kind of households: before 9 the TV is mostly set to children's channels. So you want to put advertising on those channels or on the channels and programmes they watch when the kids have gone to bed.

Finally given the connected nature perhaps they'll be able to overlay their own ads in programming for the free to air channels. This will probably get annoying quick unless done in a clever way but if you get something in return for it, such as access to certain channels or services for free I can see how people would bare with them.

All this data, who is viewing what and at what times will be available to Safaricom - and their various partners, I assume - in real time and this will help them out in the second, potentially bigger threat, to the big 3 and every other channel in the country really. Video on demand.

Given what they'll know about your viewing habits from watching other stations, this information could be used to make highly targeted suggestions on the VOD services. At least in the beginning, as they make the value proposition to customers. It'll be almost trivial to do so and not to mention potentially lucrative.

Something that I'll be looking forward to hearing during the launch of this VOD service is who they'll be partnering with for the initial launch. I don't imagine they'll be giving this to platforms that already exist, such as Netflix or Iroko TV, I suspect that they'll be launching their own distribution network, perhaps Saf TV, that will carry content from their partners.

I'd be surprised if BuniTV with their multitude of documentaries, movies and shows particularly the hit series XYZ show, isn't among the launch partners.

This VOD platform will also be a potential game changer for local production of video. Finally there'll be a viable option to distributing and monetising, via Mpesa, content that is produced in the country. I've argued for the longest time that piracy is not the real problem that creatives in this country face, it is but a symptom of a much bigger problem: poor and lacking distribution systems.

So what are the big 3 to do? Well first I'd be looking to partner with Safaricom on the video on demand platform. They all have local series produced for them that they no longer show, and back episodes of the ones they do. I'd put all of that on the service to make revenue but also to collect data on what viewers like. Finally they need to work at differentiating themselves further from each other, instead of targeting everyone, target one specific,  but large, group. This is easier said than done though.

Let's see what Safaricom announces on Friday. Meanwhile if you have any other thoughts or comments use the box below to leave them here. Peace!!!

Monday, May 4, 2015

What You Didn't Know about the National Music Policy

A lot of musicians in the the country have been complaining about their inability to make money from their art. The reason they give for this, well the one that comes out loudest, is piracy.

I have a different view from that but this is not the time for it.

Recently stakeholders from the music industry released the final version of the music policy document that they hope may become law or inform it in some way or form.

I took the time to go through it because I was worried about what the implications may be for technology.

I like what I've read, particularly on getting schools and institutions to take music more seriously than they currently do, where people consider music a "soft" subject. Getting people to appreciate the beauty of local music is something I can get behind. 

This doesn't mean however that I don't have concerns.

Let's start in Chapter 2 Section 10, Music Technology, Policy Statements

This phrase was originally in Section 11 phrased "The government will work with ISPs to ensure that illegitimate sites are less readily available than legitimate sites." Now it reads:
The Government will work with Internet service providers(ISPs) to ensure that on-line piracy is minimized.
The vagueness, language softened to seem less aggressive than the original, of this phrase is extremely worrying but even more than that I worry about how a law with phrasing like this may be used to suppress free speech. Further, who decides what is piracy and how to combat it? Around the world we've seen that the creative industry prefers to over reach than carefully consider each case.

Next we have this: 
The Government shall take measures to ensure an efficient digital copyright licensing system including supporting the administration of the private copying levy within the existing, new and emerging technology advancements.
This is a new addition from the original version released earlier in the year. Before I get into why this is problem for me, let's define what a private copying levy is. From Wikipedia:
Also known as blank media tax or levy, it is a government-mandated scheme in which a special tax or levy (additional to any general sales tax) is charged on purchases of recordable media.
What recordable media means that everything from cassettes all the way to flash drives and hard disks(or contains them) i.e anything that can store media/music. What this means is that all these thing are set to become more expensive. What this means for a country in which most of the population can't afford these things and is trying to jump head first into the information age I leave to the readers imagination. The worst thing about this law is that it assumes that every single one of these devices is used for copyright infringement and we need to compensate artists before even proving that. It's not fair to consumers.

Meanwhile the European Union's highest court, the Court of Justice of the European Union (CJEU) has issued a ruling say that such levies are a complex, unworkable mess, and should be abolished completely across the whole of Europe. Which I would point out some EU states have already started to do.

Let's move on to Chapter 2 Section 11, Copyright and Related Rights, Policy Statements

Let's begin with this:
The Government shall take measures to put structures in place for effective investigation, regulation and prosecution of offenders involved in piracy and other copyright infringement
There's nothing inherently wrong with this part per se, I'm just slightly concerned about how it'll be implemented and the punishment of small scale infringers. I've read of cases around the world of overzealous prosecution perhaps best illustrated with the case of Arron Swartz, who killed himself after the US government came after him for hacking after downloading thousands of publicly available documents using MIT's network.

Finally there's this:
Government will ensure laws on internet use are in line with emerging technological trends as regards to copyright and intellectual property
What are these trends? Would they care to spell them out clearly? It's not that I don't have strong suspicions on what they mean but I don't what to make my assumptions public until I know more.

As I said before I like the rest of the policy a lot but these four phrases give me pause from wholly endorsing it. What do you think? Let me know in the comments. Peace!!!

Updated September 4th to reflect the final policy document released in August 2015; adding information about Chapter 2 section 10

Saturday, April 18, 2015

M-PESA's Homecoming

This weekend, Safaricom is moving their servers, which were in Germany, to Kenya. They've been harping this on their social channels as #mpesacomeshome. From their press release:
Early last year, we announced plans to migrate the M-PESA platform to Kenya. We can now confirm that faster transactions, improved stability and added functionality on M-PESA is a dream coming to life: M-PESA is coming home!
Here is what you will enjoy from the new M-PESA system:
  • Enhanced system stability due to reduced points of failure
  • Ability to enjoy more products and services on the platform
  • Faster resolution of system outages due to local support
  • Higher transaction processing capability
  • Easier integration into M-PESA for third parties
  • Leverages global best practice in technology security, business continuity and redundancy
  • Instant monitoring of systems
  • Enhanced stability translates to reduced downtimes for subscribers
We are on track to bring the system home by this weekend...
I don't know how this benefits anyone other than Safaricom. They claim that it will increase transaction times but I think it'll just be shaving a couple of milliseconds of the time. There's not been a complaint on that front as far as I know.

There has been a quiet hope amongst developers that this may lead to the much fabled M-PESA API allowing simpler  monetisation of apps built for the local market but Safaricom has been playing coy with timelines so I'm not holding my breath on that.

Speaking of monetisation using mobile money, there's one cool solution, a work around really, called chowder. More on that in a future post. Peace!!!

Monday, April 13, 2015

Universal Service Fund

The Universal Service Fund, created by The Kenya Information Communications Amendment Act 2009 (KICA 2009) and the Kenya Information and Communications Regulations 2010 (KICR US&A 2010), was to create a fund that would compliment the commercial roll-out of communications infrastructure.

The objectives of the Universal Service Fund as provided in the Kenya Information and Communications Regulations 2010, Universal Access and Service include:
  1. Promote communications infrastructure and services rollout in rural, remote and under-served areas 
  2. Ensure availability of communication services to Persons with Disabilities, women and other vulnerable groups.
  3. Support the development of capacity building in ICTs and technological
  4. Support expansion of communication services to schools, health facilities
    and other organizations serving public needs and
  5. Facilitate development of and access to a wide range of local and relevant
The Universal Service Fund is primarily financed by mandatory contributions from licensed operators which provide services in the various communications market segments, with provisions for complementary financing from other sources.
The fund now has apparently has 3.4 billion shillings contributed to it by telecommunications firms and now those firms want the fund audited and represention on the  Universal Service Advisory Council, which manages the fund. From the Nation:
The money has, however, not been put to use and some of the contentious issues they had raised with CA are yet to be addressed.
“We have not yet been updated on the issue of having private auditors for this fund including the status of a new access gap study,” Tespok Chief Executive Officer Fiona Asonga said in a statement to the Nation yesterday.
I think it's fair that they want to audits on the fund, something that their own framework says should happen. From section 3.2 and 3.3:
The Commission shall ensure that utilization of the Fund is transparent to the public, and subject to independent audit.
The Commission shall have custody of the account books, cheque books, securities, investment instruments and other documents and papers pertaining to the Fund and the Fund Account. The books of accounts of the Fund shall be always open for inspection by the members of the Universal Service Advisory Council and the Licensees.
The Licensees here are the telecommunications firms mentioned in the article. The Communications Authourity should give them access to all the books and accounts so they can audit them. As for the representation on the USAC, I would suggest the CA gives them two seats on the board, which currently consists of a mix of technologist and non technical people which I think is a good balance. Peace!!

Friday, March 27, 2015

Will Collymore's Contract be Renewed.

Bob Collymore's contract is up for renewal in 4 months, and he's yet to hear from the board, of which he's a part of, whether he's coming back. From the Business Daily:
Safaricom chief executive Bob Collymore has not heard from the company’s board of directors about the renewal of his employment contract, which expires in four months’ time. 
Mr Collymore’s contract ends in August, having been extended for two years in 2013. There is a strong expectation it will be renewed again in the absence of any overt succession planning.
I wonder what the board is waiting for on this. Everyone agrees that since Collymore took over, the company has only moved from strength to strength, particularly in non-voice/sms revenue.

Perhaps it has something to do with this:
Telecoms operator Safaricom cancelled a multi-million dollar tender it had awarded to Mobinets SAL Limited after it found out that the Lebanese firm bribed its employees to secure the lucrative contract, a Nairobi court has been told.
Safaricom says in papers filed at the Milimani Law Courts that Mobinets colluded with its employees to ensure the tender went to the Lebanese firm.
Mobinets, which went to court to get Safaricom to honour the contract, apparently has already poured about a billion shillings in honouring the contract:
Mobinets has completed the functional specifications that Safaricom approved, purchased and shipped equipment worth $6.2 million (Sh558 million), and entered into contractual agreements with external hardware and software solution partners valued at $5 million (Sh450 million)
I fall squarely on the side of Safaricom here. Though questions arise about which employees are these that Mobinets bribed, and does it have anything to do with the recent exit of twofour executives.

Meanwhile, I imagine that the board has some very difficult questions for Collymore on just how these oversights happened on his watch and perhaps this is what's holding up the the renewal of his contract. I'll be keeping my eye on this. Peace!!!

Thursday, March 26, 2015

Focus on Safaricom (The Executives who Left)

I want to try something new guys, I want to try writing about one topic: Safaricom. Why? Because I'm interested in the company, it being the chief tech company in the country and the one with the largest market cap of 640 billion shillings.

This will be in the same vein as John Gruber who primarily writes about Apple as a company: giving insights, thought pieces, and theories on the company. So that's what I want to try do too. Unlike him, though, I currently don't have sources in Safaricom of any kind but if I keep at this, maybe, I'll get some.

So what makes me qualified to even write about Safaricom? For starters, I'm Kenyan and I use their products. Secondly, I read a lot about them and may be able to make connections that other people may miss, or not want to say. Third, I'm a techie and therefore able to look at things from that view. Time will tell whether I'm any good at it.

So for the first thing I want to talk about is the two executives who left the company recently. From the Business Daily:
“These changes have been necessitated by an appreciation that we as a business have become disconnected from our customers’ needs at various levels,” Mr Collymore said in an internal communication to the staff.
“These changes are necessary for us to be truly reflective of the demands of our customers and to prepare ourselves for the heightened competitive environment in which we are operating,” 
These changes are probably due to the fall out from the current bundles faux pas and also the competitions issues the company has had which led to all competitions the company runs to be called into contention. While there are probably other issues that led to them leaving, I suspect that these two issues brought things to a head and the two executives chose to leave. That's just my two cents. Peace!!!

Update[26-03]: Two more executives have exited:
The telecommunications firm on Wednesday confirmed the resignations of Moris Maina, head of content and internet and Timothy Nderi, the head of contact centre.
Given this I'm adding that this may have something to do with this multi-billion shilling tender here. It claims that senior employees were bribed to favour one company. More on this in a later post.

Friday, February 6, 2015

While in Nigeria

Those of you who follow me on Twitter and Instagram would have noticed that I've been in Nigeria for the last couple of weeks. I'm here on a work, helping capacity building and providing technical support for a project that is looking to replicate our, iHub's, Umati methodology for monitoring dangerous speech online.

My friend and editor told me that he was expecting a blog post when I got back but I've been thinking about it and it sounds like too much of a chore to try writing a post on a whole month, so I'd rather write a series of shorter posts that capture some of the things I have to say.

This post will talk about a couple of things. First is the weather, it's hot and dry. It was the very first thing that I noticed when I arrived. I left Kenya really early in the morning, like at 4 am, so that means I was at the airport at 2am and Nairobi nights are always cold.

I had a two hour stop in Addis, Ethiopia and just something to mention about the airport there is the lack of WiFi. What's with that? Also what's with airports charging for WiFi? People already pay a shitload for tickets and it's unlikely that anyone is going to come to the airport to mulch off the free WiFi given all the security measures there. Any way it wasn't warm enough for me to chuck my jacket and airplane cabins are really cool but arriving in Abuja it wasn't 5 minutes and I was uncomfortably warm.

I've been asked to describe what the weather has been like and it took me a while to get it right, because I can't really say it's hotter than Kenya because you wouldn't want to be out walking in the middle of the day there either, but somehow this felt different and it was the dryness of it. It's almost total. It's weird, and Kano State, where I am now is even drier.

Second is how they drive, no not the traffic which they are apparently famous for I've not gotten in any jam I felt was particularly bad, maybe they only exist in Lagos? Just the way they drive. They drive on the wrong side of the road, the right. It's been giving me a headache these past two weeks, I just can't get used to it. They need to start driving on the right side of the road, the left.

Finally something you'll notice almost immediately is how they like to hoot at each other. I'm over taking you, hoot. You're over taking me? Hoot!!! You've stopped to take a turn? Hoot!!! I want to stop to take a turn? Hoot!!! I'm at your gate. Hoot!!! Someone is crossing the road two kilometers up the road? Hoot!! It's really annoying, it grates on your nerves but I'm finding that it begins to fade in background. I'm almost used to it. Almost.

That's it, for now. Peace!!!