Absolute Numbers 2007-2017: The “Developing” World Now Dominates the Internet

Source: http://tmenguy.free.fr/TechBlog/?p=161

Traditionally, the data on ICT usage across the world tends to be presented proportionally – per capita usage, or penetration in the form of percentage of population. This made sense 10 years ago, when the world had just begun to notice the rapid growth of mobile phone adoption in developing regions. The typical example shown above was extremely popular – many of you will recognize it – Africa was outstripping the world in phone sales, and the prepaid business model had opened the floodgates.

At this time, however, devices were still at the feature phone stage, and Nokia owned the market. Voice and SMS were the real time communication disruptors, and smartphones only just entered the public consciousness. Internet penetration was still in the future.

Recently, however, I came across current data on internet usage presented in absolute numbers – shown above – of people online. The difference is rather stark, when compared to the proportional representation – see below.

Not only are the next two billion online, but the absolute numbers re-order the regions in a very different way. Asia leads the world online, and even Africa ranks higher than North America. Here’s the same data presented, by region, as a pie chart.

The distortion created by proportional or per capita presented skews the true landscape of the actual human beings who are using the internet. Ten years ago, this might have made sense given the passive content consumption nature of much of the early world wide web.

Today, given the dominance of social media, and the frictionless ability for anyone to share their thoughts, their photos, or their music video, its the absolute numbers that actually make a difference. There is more content available in Mandarin than in English, though we may not know it, and there are more Africans talking to each other every morning than there are North Americans.

I’ll be following up with more writing on the implications of this historic decade in human history – between 2007 and 2017, the long awaited next billion not only came online, but began showing us how to disrupt everything from cross border payments, to cryptocurrency adoption. They are my hope for a more peaceful, inclusive, and sustainable future for our grandchildren.

Upward Mobility is Changing Base of the Pyramid Consumer Aspirations

I’d observed earlier that upward mobility wasn’t simply about increasing incomes, but also a change in mindset, world view and values. Aspirational consumer behaviour trickles downward faster, as strivers seek to emulate the status signals sent by those they perceive as “arrived”.

The emerging middle class numbers may indeed be uncertain, as statisticians debate over the inclusion of the ‘floating class’ but regardless of their actual income (which in any case may be volatile, particularly if they’re part of the informal sector of the economy) people’s habits are certainly shifting towards more ‘middle class’ choices.

Kenyan news reveals some interesting trends. More people are using clean energy such as LPG for cooking, in the ‘slums’, than before.

In Mathare slum a few kilometers away, that residents are warming up to cooking gas is evident in the number of shops selling the commodity on the periphery of the informal settlement.

Prices for cooking gas are the lowest they’ve been since 2012, putting the smallest available size – 6kg- within reach of far more than before. LPG is an aspiration for both urban and rural cooks. A farmer’s wife in rural Makueni in eastern Kenya told me about her ambitions to cook with gas even though she was making do with firewood from the farm.

Even more interesting is this report on what the author calls the “reject economy” – the sale of seconds and damaged products. Its not so much that there’s an after market for these seconds, but the reasons for their brisk sale. Here are some selected insights from that fascinating article.

Well, the economy in Kenya’s informal sector has its own rules and the about 22 million people straddling the poverty line are masters at navigating it.

For instance, Ogola buys eggs with cracks or other tiny imperfections — known colloquially as vunjika — at Sh5 each; whole eggs retail at between Sh12 and Sh15 in middle-income neighbourhoods.

Korogocho, like many other slums in Nairobi, is also awash with charred or misshapen loaves of bread, which retail at Sh30 instead of the market price of Sh50.
[…]

“The people in the village buy these products because they are cheaper and they cannot afford mainstream prices. They buy them because, just like other people, they would like to watch the news and have the family gather around the TV,” says Ngala.

The article goes on to quote some salaried professionals offering expert advice to the poor to be cautious about these rejected or secondhand products but I suspect that those with less income have no false impressions about their challenges in life.

“We also deserve the good life just like other people, or what do you think” Ogola asks with a smile.

As the article ends, just because someone may not have 50 shillings for a loaf of fancy bread doesn’t mean he doesn’t wish to have bread with his tea in the morning.

Without something to aspire towards, we would stagnate in our current circumstances, fatalistically accepting our status in life.

Smartphones and the internet across the developing and emerging world

The Pew Research Center has just released a report on my favourite topic – mobile phones in the emerging economies of the developing world – with some surprising results.

And it demonstrates the so called leapfrogging of legacy infrastructure, in this case, the landline.

These numbers demonstrate the emergence of globally connected consumers, regardless of whether they have smartphone access or not. The implications for economic impact, not just e-commerce or conventional retail, are far more than we may perceive at the first instance.

As first noted back in 2006, when your friendly neighbourhood vegetablewallah has a phone in her hand, it changes the rate of speed of information flow, with significant impact on social and economic evolution. Upward mobility now includes aspirational values, not just income related status symbols.

Some earlier thinking on this topic:
Liminal cyberspace: The next billion online Dec 15, 2007
Lowering barriers: Its about access, not the device Dec 15, 2012

Impact of mainstreaming and commodification of cyber cafe services

Around 2007, the urban cyber cafe industry began to display signs of maturing as the market saturated and the services specific to internet access underwent a process of commodification. As it came to be perceived as no different a business than setting up a corner kiosk or hot dog stand, there was a shift in the profile of owner/operators. Many employed professionals such as doctors, teachers, accountants et al purchased going concerns as a means to increase their income streams, considering it no different from owning any other type of shop which could be manned and run by employees during the day. While computer literate, few in this new segment of owners were the computer savvy technical specialists or hobbyists who’d originally set up internet operations as a business nor were their employees for the most part.

Given this context, Mathew, who runs a thriving cyber cafe business spread over three towns a couple of hours north of Nairobi, articulated three reasons why many cybers were seen to have shuttered their business:

1. Gaining a reputation for unreliability – Inexperience and/or lack of knowledge on basics like virus management, maintenance or even not knowing how to make all the equipment work meant that systems were often down or not working properly quickly leading to customers avoiding the shop.

2. Quality and training of staff – There would be a difference in operations if the owner were to check in with the business and dealt with issues as they arose rather than showing up once a week for example. Finding qualified people to manage the cafe in the meantime, ensuring that at least one person with the requisite technical knowledge was at hand or on call was imperative to ensure the smooth running of the operations and gaining customer confidence regarding the quality of services offered.

3. Customer relationship management – Thus, building relationships with customers, ensuring loyalty and repeat returns over the long term was of importance to sustain the business. Mathew himself had a sophisticated customer loyalty program in use across his three cafes – a smart card which could be purchased for differing amounts in advance and printed with the customer’s photograph. He had set up a system by which his staff could monitor and track minutes used by this user base across the three different locations. It ensured loyalty as well as provided an upfront cash payment that is one of the benefits of a prepaid business model.

Perhaps this was why the decline was being seen so obviously in urban locations accustomed to having a cyber at every corner. In Mombasa, one of our interviewees mentioned that it felt like there was one in every building. The urban industry had matured to the point that a cyber was as ubiquitous as an MPesa dealer or Coca Cola kiosk with the subsequent assumption by many that it could be run as easily as any other business. This aspect does not diminish the impact of other market forces such as internet enable mobiles and affordable data plans and modems but does help explain why we kept hearing that business was growing whenever we stepped out of the city.

As technology diffuses outward from the urban metros, the cybers are seen in ever smaller market towns and highway crossroads, that is, the industry is still in its growth phase, though certainly not in its infancy. A short conversation with a small town mobile shop assistant informed us that they were selling an average of 5 broadband modems a month and she herself found it cheaper and more convenient to browse via her phone. Another young man employed by a national operator observed that education was a critical factor as well – not in terms of the basics, as the region he supported had a very high literacy rate, but in terms of locales where more young people were going off to college and university, being exposed to the potential of this new technology then bringing it back home for it to spread further.

What this seems to imply is that its the casual or social browser – the chatting on IM, the Facebooking, the occasional email – who seems to have cut down on their cyber visits, and this is often the largest segment of people going online. The hard core enthusiasts, the business users or anyone who has not yet invested in their own set up but prefers the “comp” to quote one young man, aren’t abandoning their trips.

What is happening however to the industry as a whole is a natural evolution. In the city, its the innovators who are thriving even as the basic shops decline – a case of may the fittest survive. None among the knowledgeable IT savvy owner operators ever even considered the mobile as a threat to their business, perceived or otherwise. The only constant response to the subject was that of the pricing plans mentioned earlier.

While the answer to the question of whether its mobiles that are pushing the cyber cafes out of business seems to increasingly be a No, our exploration of market forces acting on the industry is still throwing up factors that we had not taken into consideration when we began.

The role of the cyber cafe: Assisted entry ramp onto the information superhighway to use a cliche

Monica’s cyber in the small town of Maai Mahiu, a market for a primarily rural area, is now the only such facility available. There was another cyber on the other side of the main highway, she said, but it closed within its first year of operation. Internet access in this locale is available only through 3G and its a poor signal with spotty data performance. JamFram Cyber Cafe offers the town its only source of business support services – photocopy, lamination, binding, secretarial services as well as 6 desktop computers networked on a 3G router. When we were there, the electricity was out across the town and she was happy to talk while waiting for the lights to come back. In the half hour we were there, only two customers walked in – one asking for a photocopy, the other to check on his documents given for typing. The cyber business was slow though she’d noted that mobile requests were increasing – the local phone dealer sending new owners of data enabled phones down to her to help them set up an email account and a Facebook page as well as the settings to permit browsing.

So why would the townspeople call her when she took a slightly longer Christmas holiday earlier this year, making her cut short her intended holiday until the middle of January and return to open shop by the 3rd? Why were they concerned that she might have decided to shut shop like the other cyber which gave up after 5 or 6 months? We were left with the impression that the townspeople would support her business bureau’s continued existence than lose access to her range of services.
We found that the cyber cafe has a role to play in the local community beyond the simple service of walk in to browse the internet.

Broadly the roles can be clustered under these main categories:

The cyber as intermediary across the digital divide (ICT)

In people’s minds, ‘Internet’ was associated with the cyber cafe. We heard this over and over from cyber cafe staff that various telco dealers would send across customers facing challenges with the setup of their data enabled phone over to the cyber for help. Or after making the purchase of an internet enabled phone, people would come over to the cyber first – since you cannot set up an email account then make a Facebook page without a computer. Even someone like Jacqueline in Kagumo who was working at the local phone dealer and was saving up for her own laptop and browsed primarily through her phone had to visit the cyber first.

In Malindi, a significant proportion of Salmatech’s customers were the beachboys whom market forces (their international tourist clientele) were forcing onto the internet via email, Skype and Facebook. Necessity drove them to learn how to use the basics of the computer enough so that they could respond to inquiries, communicate and make bookings in advance of the high season – this was critical enough that they would often trade off topping up airtime minutes on their mobiles in order to have money for the cyber’s minutes of use. Here, the cyber was the go to place, even if some of them already owned laptops gifted by tourist friends, to learn and be informed about the hardware, the software and critically, the utility of the internet.

Most cybers offered customers the Kenyan Revenue Authority (KRA) online services for a fee – the facility to get PINs and submit VAT returns online being one of the first egovernment services rolled out nationally. Other such services offered were US Greencard lottery applications, visa application services, registrations for national examinations, even bus ticket bookings when offered online.
But the mediation was not simply between the customer and the internet. Cyber cafes whose operators had a technical background also tended to be full of spare parts and supplies, many offering maintenance and support for hardware in addition to basic services like virus removal, software updates and configuration.

We also found some cybers, particularly those with fixed unlimited access (such via WiMax or DSL), acting as micro ISPs – running cables out to their neighbours for a fixed monthly rate (usually much lower than what the service cost) in order to mitigate the risk of being unable to cover the cost since incomes were otherwise irregular and often unpredictable. But this behaviour, imho, has less to do with their role as an intermediary – though in fact that is what it could said to be – and more to do with coping mechanisms to help manage expenses on volatile cash flows.

The cyber as a training ground

Whether its formal classes offered in basics of computer use or simply the help received from a friendly generous cyber cafe staff or owner, the cyber is most often where learning and practice both online and on the computer takes place.

The cyber as a social place

Primarily seen in locations where there were many young college students, the cyber seems to have become the local hangout. Boy and girls were seen waiting outside for their turn at email or Facebook, chatting with friends, relaxing and mingling with no hurry to get anywhere or do anything in particular. One newish cyber in Kilifi even had an ice cream parlour with cozy tables and chairs in the front half of the spacious store, all decorated in bright colours and visuals.

The cyber as a business bureau

The majority of cybers tend to offer at minimum printing services along with scanning and photocopying depending on their choice of equipment. Most however offer lamination, binding, a variety of typing and basic typesetting services as well. Photo printing, passport photos and mPesa or airtime sales can also be added to increase sources of income but the basic concept of support services tend to default to the local cyber. This role perhaps explains why Monica’s clients were concerned enough to encourage her return to work even if browsing the internet may not have always been their choice of service.

Typesetting or typing services have expanded to include helping students with their research online in some cases, and in places where the internet was not a popular enough service, this facility offered the opportunity to develop a regular clientele of small businesses, local government offices and students to sustain the business.

Priorities for an internet on the mobile platform for Africa’s prepaid economy

Something that Gustav Praekelt said in the news about access to no-cost information being a basic human right at the Mobile Web Africa caught my attention. There is still a gaping void in services accessible to and customized for the needs of the mass majority of mobile phone owners in the world. The next billion has come online but there’s potential for a few billion more. Five years ago I said,

Imho, we’re in a transitional phase here when it comes to this next generation world wide web of humanity, on many levels, as the ways and means of access online adapts and reshapes itself to the shifts taking place globally –

1. Technological – from PC boxes to handheld devices – the other billion will demonstrably be requiring entirely different solutions and platforms for access due to environmental, infrastructural and other conditions

2. Social – from ‘people like us’ to ‘whole wide world’ – from those who were computer literate, educated and had resources to buy a computer and connection to virtually anyone who can make a phone call

3. Economic – from ‘models for consumption’ to ‘models for production’ – business models are already changing as the original models based on consumption of infotainment and bandwidth are better suited for those with purchasing power, its a given that the next billion’s patterns of purchase will differ significantly from the first billion’s.

Marketing of data services is the next holy grail for Sub Saharan Africa’s telcom providers. As undersea cables increase bandwidth and lower the cost of access, there’s a huge opportunity for laying down the foundation of a mobile web, particularly for the African market.

What distinguishes this market distinctly is that its primarily prepaid or pay as you go transaction models, that is, anywhere from 90% to 96% of the mobile subscriber base is not on a contract of any kind.

The data based business models for mobile operators have evolved in the cutting edge of Western Europe’s old, established and vibrant GSM market. Its fitting that today, 3rd December 2012 is the 20th anniversary of the very first SMS sent, and I notice why it took so long for text messaging to get a foothold:

One factor in the slow takeup of SMS was that operators were slow to set up charging systems, especially for prepaid subscribers,

Given that 5 years on, its Google, a search engine website on the original internet, that’s seeking to lower the barriers to access for the next few billions with albeit in conjunction with an operator:

Google has reportedly launched a service in the Philippines that lets people there access certain websites on their phones without having to pay their operator for mobile data.

The service, named Free Zone, provides free access to any site that the user visits via Google Search, as well as various services from the company such as Gmail, Google+ and, of course, Search. The Philippines is only the first of several territories in which Google intends to launch the service.

According to Reuters, the service was launched in conjunction with local operator Globe Telecom, and targets those who have ‘featurephones’ rather than smartphones. Featurephones usually have cut-down browsers these days, although their functionality is more geared towards basic voice and text.

“It’s aimed at the next billion users of the internet, many of whom will be in emerging markets and encounter the internet first on a mobile phone, without ever owning a PC,” Google product manager AbdelKarim Mardini was quoted as saying.

Their experience will show whether cost of access alone is the only hurdle to be crossed. Not only will things change from country to country, since telco’s all have their own business models such as in the Phillippines where your credit for text and voice expires in 24 hours at the lowest price points.

Its a known fact that the vast majority of the n00bs online are arriving via their very first ICT device, a mobile phone but there’s a paucity of relevant content, hence the popularity of social networks. User generated content that’s relevant is provided by their choices on Twitter or friends and family on Facebook. Its simply another way to communicate and share information and conduct commerce.

Similarly, while donor funded programs attempt a variety of ICT4D initiatives that remain stuck at pilot stage unable to scale, unknown startups can and do become popular in unexpected locations.

This is not to say there has not been progress in the past 5 years towards a mobile web for the BoP, or rather, for prepaid customers who might be rural – the vast majority of the new mobile phone users in this same period. Growth has come from somewhere, as Airtel will inform you.

But given the rapid pace of device and service adoption at the basic level of voice and sms in these 5 years, the concurrent development of a platform for exchange of value – information, goods, commodities, services, barter, trade et al – similar to but not the same as our existing internet usage – has yet to materialize.

If it did, it could be one way to bridge the gap between the formal and the informal, just the way the mobile phone business models themselves are, under the aegis of the operators.

Design for the next billion 2012: What’s missing?

An upcoming project’s requirements led to the realization that there is a huge gap in design for the next billion (and more). The subsequent domino effect has left a lack in tools, methods, frameworks and thus, disciplines themselves, from the perspective of addressing the challenge of serving the bottom of the pyramid (BoP) population segment. Here I will simply attempt to capture the questions raised in these four areas I’ve noticed:

1. Tools for the BoP Market

It all started yesterday when I was looking for a means to manage customer relationships with lower income customers in rural Kenya. Where were the CRM tools that could be effectively, affordably and easily used by a social enterprise or business whose primary target audience were the BoP? Examples of Customer Relationship Management apps proffered to me in response to this question in Twitter led to a series of design constraints coming to light as I attempted to explain why such and such or that and the other would not do for the operating environment in which it must work. It made me realize how few tools (if any at all) existed for the BoP market, that companies could utilize in order to build relationships and loyalty with their customers and offer them a well design user experience.

Why was there this gap when there was a plethora of such tools and applications for even the smallest startup to use in the developed world? Furthermore, given the years of investment by a vast variety of firms, large and small, attempting to improve the quality of life for the BoP yet still only partially succeeding in reaching out to these new customers and creating markets and demand, wouldn’t there be a crying need for appropriate technology and cutting edge marketing and communication tools to help improve the success rate?

This thought led to the consideration that in order for such relevant and appropriate tools to be created, there needed to be appropriate and relevant methods for design and development in the first place.

2. Design methods for the BoP

So when Victor Lombardi posed a question to me during a recent skype conversation:

How do you visualize the long term experience of the BoP customer?

I realized I hadn’t thought about it in quite that way before, and as Victor said, he’d not seen anything on this either. Whereas, these concepts and methods had emerged in response to the way increasingly sophisticated companies were engaging with their customer base. My attempts to grapple with this question uncovered such concepts as Customer Experience (and thus, customer experience design), User Experience and its design, and whole slew of information waiting out there among young and new design disciplines.

While their roots are in technology and the internet, their philosophy can be summed up as a holistic human centered strategy for sustainable customer engagement.

How different is it for those of us seeking to engage with the underserved and overlooked lower income customer base in the developing world? And due to the lack of market development and available information, was it not more critical that each actor focusing on the BoP market consider every single element of their business strategy rigorously in order to establish and maintain their enterprise sustainably? There are no specialized firms nor fragmentation of disciplines for BoP oriented enterprises, they must be the jack of all trades from inventor of new products and services and business models to figuring out how to reach these demanding customers who live in challenging environments.

Yet, all the conversations on “Design for the next billion/other 90%/social impact/poverty alleviation/BoP” revolves around the long established methods and approaches from traditional product design, development and engineering. There is a gap here that must be seriously considered if the tools and apps for reaching these customers, as mentioned in the first point above, are ever to be successfully developed for our use.

3. Frameworks for the BoP Market

And so, we need new frames of reference and ways of grasping the operating environment in order to create strategies and thus action points for this wholly different and new frontier market opportunity. Where is the Customer Experience lifecycle as it applies to a BoP customer, to go back to Victor’s original question? And critically, can the existing frameworks and disciplines deal with the challenge of bridging the socio economic and infrastructural chasm as well as the attendant underlying assumptions? Obviously not, since those are the tools and methods and frames of reference which we’ve all been struggling to apply with little degree of success in the BoP context.

Or, as I said to Victor in response to his question, how can we assume that the long term experience of the BoP customer will follow the same path as that diagrammed or framed for the ToP customers?

After all, when the fundamental mission of a social enterprise is to alleviate poverty or improve quality of life, then the ideal long term outcome for a BoP customer is that he or she moves up and out of the equation. That is, the idea is not that they come back for the “BoP” focused product or service meant for the economically challenged but that their life has improved to the extent that their upward mobility implies more expensive product or a different value proposition all together.

This is diametrically opposite the fundamental assumption in conventional frameworks where the goal is to create customer loyalty and long term engagement. On the other hand, one could create great user experiences and loyalty that leads to word of mouth referrals and advocacy even as the successful customer upgrades to the next level.

4. Design disciplines oriented for BoP customer context and needs

This is an open ended question. Is it enough that the existing fields of design, particularly the nascent and emerging ones – like UX strategy for example – simply be focused on the challenges and constraints of the BoP customers environment, infrastructure and cash flow, or, is it that there is a space for an entirely new design discipline that holistically covers all elements of the user experience – whether a product like a cookstove or a user interface for a mobile app or service – and takes all these fundamental differences between the BoP customer and the first world one into account?

For the tools, the methods and frameworks themselves might need to be redesigned in order to be successfully applied for this customer base. From Brandon Schauer’s writing:

UX managers are in a rare position where they can see both the business needs and user needs, and can find where they align to produce revenues from positive relationships, not from goading, entrapment, or annoyances.

Perhaps what is required is a new way to frame the problem solving approach, say for example, UX for the BoP and not simply use the term design as it is currently meant in the narrowest sense.

In conclusion: Lessons from The Village Telco project in Kenya

We’ve finally reached the point in our work for Village Telco where there’s been enough time for some reflection after the intense weeks of travel and observations across Kenya. I can cluster our learning into three broad areas: our approach, methodology and team work; Kenya’s people and the informal economy; and finally, the role of the mobile phone and the internet across the country.

Facebook
Top of mind, what I would really like to do is take a deeper look at all the factors Why a social networking site like Facebook has become so popular – is it like Mxit, a far more affordable and convenient way to stay in touch with extended social networks or are there reasons beyond the obvious? Given the variance in socio economic backgrounds and education among all those who were active on this platform, I wonder whether there are learnings of value for the larger goals of what ICT can do to enable social and economic development. Instinctively I feel its not Facebook per se that is the critical factor, like a Mxit in South Africa or an Orkut in Brazil, it simply happened to be there. However, given my approach to increasing understanding of a particular demographic or validating a hypothesis, my first principle is to question my own instinct and subsequent assumptions.

Mobile Phones and the Internet
Our assumptions and inferences from the surplus of information and data available on mobile phone use in Kenya, for both online use as well as regular use, were seriously jolted. You could say we had the veil torn from our eyes. A future post that has been percolating is one that turns my entire thinking about the Mobile and the BoP upside down, from the point of view of “the mobile as a platform for social and economic development” for the individual.

A big realization was that it was technically impossible for people to go online – if it wasn’t just the initial peek at Google or Yahoo or what have you – from their mobile device without visiting a cyber cafe (or using a computer) first. If you are a first time internet user and plan to use the mobile as your primary device to check your email and update your status in Facebook, you are unable – at this moment in time – to create your email account, and subsequently your Facebook page, without the use of the personal computer.

The second was that very few of these new internet users were cognizant of the way mobile operators structure the cost of browsing and data bundles. Safaricom, the country’s largest operator, had at least 3 different prices that I’d seen on their billboards and posters – Ksh 4 per minute if you simply went online, Ksh 2 per minute if you sent an sms for data conversion and finally, purchasing a data bundle or browsing package (unlimited by the day or bundle) which brought the cost down further. Thus many reverted back to browsing at cyber cafes where at least one knew what one’s cost would be or could estimate it in advance. Consumer education will be more critical for the uptake of the mobile internet since it is currently not to the benefit of either the operators or the cyber cafes to inform users about their cheaper options.

Kenya is different
We sensed this, we discussed it with Steve Song and we also heard it from others with years of experience of doing business in Sub Sahara. Kenya, as a representative sample of Sub Sahara or even East Africa, is a very different kettle of fish, all in a good way. It wasn’t just luck that most of the cyber cafe owners we met around the country were enterprising, articulate and opportunistic. Neither was it chance that very rarely was I unable to communicate – at least the basics – in English, no matter where we went.

Internet costs, mobile data and voice costs are significantly lower than in most countries and this factor, taken together with the maturity of the urban cyber cafe market and penetration of computing devices – laptops and desktops – meant that this was a very sophisticated market regionally. One cannot generalize our findings for other countries, in fact one would hesitate to do so. Rather, as we discussed with Steve, we’ll take Kenya as a leading indicator of shifts to come in the near future for the rest of the region. For example, VoIP as a service has atrophied into two or three neighbourhoods ever since international calling rates have stabilized at around Ksh 3 a minute (USD 3 cents or thereabouts) on the other hand, wifi is slowly demonstrating its future ubiquity.

However, some other factors would also play a part in this – literacy is at 85% here; what kind of difference does that make when it comes to uptake and popularity of text based communication mechanisms such Facebook, email and of course, the SMS. Education makes a difference, since most of the time, even when passing by some of the technically most impoverished parts of the country, I kept feeling that it was in far better shape relative to similar locales in India. This is all good and bodes well for the future of the nation and the region – if I had to launch a wholly new product for the Sub Saharan market, I’d select Kenya for an environment with the lowest barriers to the adoption of innovation. The BoP market is sophisticated and mature while still demonstrating the core values and buyer behaviour seen everywhere else I’ve been.

In conclusion
We now have an innate sense of the Kenyan landscape when it comes to ICT: the technology, the internet and the phone. A gut feel for the where and how and why the diffusion is taking place, outward from the urban metro that is Nairobi and an instinct for the pulse of the country’s progress. The critical role of the cyber cafe was made apparent by the focus of this project and our philosophy and methodology in approaching this problem to be solved – answering Steve’s questions – has been validated and refined. For example, we found that the figure for our estimate for proportional penetration of internet between two regions differed from the Kenya ICT Board’s Access Gap Analysis data only by 0.2

We learnt that no two projects will ever be alike and the only certainty is uncertainty. There are no prepackaged ready made solutions or processes for the challenges we’ll face in our chosen line of work, however we’re on the right path for discovering the ways and means to use the tools available at our disposal in order to best address them.

Today, we’re confident enough to put it in writing that if you’re seeking answers to the unknown, in untapped or overlooked markets and when none of the regular methods and frameworks for addressing your marketing, strategy or design needs seem to work – give us a call or drop us a line. I believe we can help you.

The role of the cyber cafe

The only place in town, Maai Mahiu, 24th October 2011

Monica’s cyber in the small town of Maai Mahiu, a market for a primarily rural area, is now the only such facility available. There was another cyber on the other side of the main highway, she said, but it closed within its first year of operation. Internet access in this locale is available only through 3G and its a poor signal with spotty data performance. JamFram Cyber Cafe offers the town its only source of business support services – photocopy, lamination, binding, secretarial services as well as 6 desktop computers networked on a 3G router. When we were there, the electricity was out across the town and she was happy to talk while waiting for the lights to come back. In the half hour we were there, only two customers walked in – one asking for a photocopy, the other to check on his documents given for typing. The cyber business was slow though she’d noted that mobile requests were increasing – the local phone dealer sending new owners of data enabled phones down to her to help them set up an email account and a Facebook page as well as the settings to permit browsing.

So why would the townspeople call her when she took a slightly longer Christmas holiday earlier this year, making her cut short her intended holiday until the middle of January and return to open shop by the 3rd? Why were they concerned that she might have decided to shut shop like the other cyber which gave up after 5 or 6 months? We were left with the impression that the townspeople would support her business bureau’s continued existence than lose access to her range of services.

We found that the cyber cafe has a role to play in the local community beyond the simple service of walk in to browse the internet. Broadly the roles can be clustered under these main categories:

The cyber as intermediary across the digital divide (ICT)

In people’s minds, ‘Internet’ was associated with the cyber cafe. We heard this over and over from cyber cafe staff that various telco dealers would send across customers facing challenges with the setup of their data enabled phone over to the cyber for help. Or after making the purchase of an internet enabled phone, people would come over to the cyber first – since you cannot set up an email account then make a Facebook page without a computer. Even someone like Jacqueline in Kagumo who was working at the local phone dealer and was saving up for her own laptop and browsed primarily through her phone had to visit the cyber first.

In Malindi, a significant proportion of Salmatech’s customers were the beachboys whom market forces (their international tourist clientele) were forcing onto the internet via email, Skype and Facebook. Necessity drove them to learn how to use the basics of the computer enough so that they could respond to inquiries, communicate and make bookings in advance of the high season – this was critical enough that they would often trade off topping up airtime minutes on their mobiles in order to have money for the cyber’s minutes of use. Here, the cyber was the go to place, even if some of them already owned laptops gifted by tourist friends, to learn and be informed about the hardware, the software and critically, the utility of the internet.

Most cybers offered customers the Kenyan Revenue Authority (KRA) online services for a fee – the facility to get PINs and submit VAT returns online being one of the first egovernment services rolled out nationally. Other such services offered were US Greencard lottery applications, visa application services, registrations for national examinations, even bus ticket bookings when offered online.

But the mediation was not simply between the customer and the internet. Cyber cafes whose operators had a technical background also tended to be full of spare parts and supplies, many offering maintenance and support for hardware in addition to basic services like virus removal, software updates and configuration.

We also found some cybers, particularly those with fixed unlimited access (such via WiMax or DSL), acting as micro ISPs – running cables out to their neighbours for a fixed monthly rate (usually much lower than what the service cost) in order to mitigate the risk of being unable to cover the cost since incomes were otherwise irregular and often unpredictable. But this behaviour, imho, has less to do with their role as an intermediary – though in fact that is what it could said to be – and more to do with coping mechanisms to help manage expenses on volatile cash flows.

The cyber as a training ground

Whether its formal classes offered in basics of computer use or simply the help received from a friendly generous cyber cafe staff or owner, the cyber is most often where learning and practice both online and on the computer takes place.

The cyber as a social place

Primarily seen in locations where there were many young college students, the cyber seems to have become the local hangout. Boy and girls were seen waiting outside for their turn at email or Facebook, chatting with friends, relaxing and mingling with no hurry to get anywhere or do anything in particular. One newish cyber in Kilifi even had an ice cream parlour with cozy tables and chairs in the front half of the spacious store, all decorated in bright colours and visuals.

The cyber as a business bureau

The majority of cybers tend to offer at minimum printing services along with scanning and photocopying depending on their choice of equipment. Most however offer lamination, binding, a variety of typing and basic typesetting services as well. Photo printing, passport photos and mPesa or airtime sales can also be added to increase sources of income but the basic concept of support services tend to default to the local cyber. This role perhaps explains why Monica’s clients were concerned enough to encourage her return to work even if browsing the internet may not have always been their choice of service.

Typesetting or typing services have expanded to include helping students with their research online in some cases, and in places where the internet was not a popular enough service, this facility offered the opportunity to develop a regular clientele of small businesses, local government offices and students to sustain the business.

Leveraging ignorance vs enabling knowledge

If someone were to purchase a mobile broadband modem but was unaware of data bundles, how quickly would 500 shillings worth of airtime disappear into cyberspace? I’ve been there – not knowing what ‘converting to data’ meant – and going through euros worth of airtime while surfing in Helsinki until the shop assistant gave me a printout of texts to send after uploading in order to enable the unlimited monthly deal for just e 20.

Customers who’d done the same in their ignorance came back to the cyber to surf and I had to bite my tongue not to ask the owner why he hadn’t informed them about data bundles? Why should he lose his captive audience and his regular income stream? Whose responsibility was it to educate new customers of broadband modems about the best way to access the internet or to help set up their phones for browsing?

Was it any surprise that cyber operators were beginning to charge customers for helping them open an email account or set up their Facebook page, since this initialization still required a computer and could not be done through the mobile phone. One such enterprising individual charges 300 shillings to help you browse using your phone if its not genuine. Even the IDEOS – which apparently sold like hotcakes in Nakuru when it was first launched quickly gained a reputation for gobbling airtime and battery power with its always on services coupled with the lack of awareness among owners on the difference between voice and data airtime rates.

So while awareness of the internet and the knowledge it is able to bring to your fingertips is increasing exponentially particularly where educational facilities are sprouting and the student population grows, the so called mobile phone internet revolution is stumbling around in ignorance while the cyber cafe industry enjoys the boom.

In the meantime, I wonder if this might have anything to do with the fact that as operators see their data sales increase, their ARPUs are still dropping?