Who will wall their garden?

This has by no stretch of the imagination been an incredible week in the Kenyan Mobile Space. Why? It seems to have grown in leaps and bounds over the past 7 days. Earlier in the week i wrote about how Safaricom needed to focus its own mobile space initiatives around engaging Kenyan Application developers and coming up with a workable revenue model that would enhance the openness of its platform.

Well Safaricom did test run (its down now) its App store but with hundreds if not thousands of Apps presumably from other App markets. This obviously is better than nothing but adds nothing to sentiment that Safaricom is not interested in Kenyan owned mobile solutions …

This sad state of affairs was also exacerbated by reports in mainstream media that M-kesho was allegedly yet another case of stolen ideas.

In my opinion Safaricom’s Walled Garden approach may definately bring huge profits in the short run but for its ecosystem to flourish it needs to adopt more openness (Think Twitter).

I like what i see in Zain…

Earlier in the year i wrote why Bharti is best placed to launch an App store in Kenya largely because of the favourable sentiment emanating from Kenya Techies.

Indeed, rumour has  it that Zain is already working with established Kenyan Developers in the mobile space to guide the development of not only Kenya’s App space but the Sub-Saharan region as well.

More importantly Zain is being very proactive, it yesterday announced a partnership with IBM to roll out a $1.5 billion infrastructure to be based in Kenya which would support among many other things a Music(think iTunes) and App store (Thin Ovi).

This is very important because it means they are looking to scale application development in this region. A good backbone infrastructure means less costs in the future and rapid expansion of the ecosystem.

Zain can score if adopts a 70 developer : 30 Zain revenue split. In fact if it really wanted to control the Apprican market space it should open it up for free for say 2 years and let the best apps rise above the others by being voted up. This is what made M-Pesa such a huge success, it was near free for the first 3 years. Now they are making a killing considering it is now 10% of Safaricom’s yearly revenue.

Governance and Opportunity…

A BIG leap Pic: Courtesy Nation

IBM president Samuel Palmisano,  Bharti chairman Sunil Bharti , Bharti International CEO Manoj Kohli met with President Kibaki signaling a future Public/Private partnership that will not only open up Government through E-Government but also suggest that huge investments are on the way to the country. Presidents of Fortune 500′s don’t just drop by. President Kibaki notably was quick to acknowledge the presence of a lot of talent in the country (Read More).

The arrival of a more open government would mean more access to data. More access to Government data means more access to social problems. More access to problems means more access to needs. More access to needs means more access to opportunity and solutions.  For example back in 2003 Mpesa addressed the problem of having a large percentage of unbanked citizens who could not save and therefore could not invest. Kudos to safaricom for that.

The next range of mobile solutions will solve the problems of health, agriculture, voting and leisure. They are already here! Read about my idea how iphone 4g or equivalent phone could save lives if used by health sector.

Apps like Mkulima, iKatiba(our very own) are the forerunners of what is a fast expanding African ecosystem. This why you see the emergence of Kenyan owned mobile App stores like MobiSoko (by Juliana Rotich of the Ushahidi fame) and M-Labs led by Ken Mwenda.

iKatiba Application by Whive.org

To cap the crazy week, Nokia have just awarded Ken Waibochi (A.K.A. Murags) and Virtual city a venture fund of 1 million dollars for his B2B problem solver application that has already been deployed at East Africa Breweries Limited.

Nokia has also been funding and training other developers (including us) with impressive results. In this regard  Nokia and Kenya’s Telkom companies are more certainly set to do battle for hearts and minds of Kenyan Techies.

So now we say “Ndovu wawili wakipigana, Poacher hucheka hadi Benki “.

AppDate Yourself

I have in the past one year written 3 articles (Article 1, Article 2 & Article 3) arguing why Mobile Operators should have entered the App space a long time ago. This is essentially because Kenya has proved itself to be uniquely innovative in developing mobile applications/solutions that actually work and generate revenue.

So when Zain lowered its call rates to all Kenyan networks it opened the pandora box placing mobile applications and data at the center of competition in the Kenyan Mobile Space.

Join Andrea Bohnstedt and Nyagaka Ongeri in this very insightful dicussion about Mobile Application, Data and Revenue Generation.

I would only add that individuals and companies need to find a way to mesh Mobile Service (like SMS) and Web Applications to allow Content Creation that would ultimately create advertising space on the Kenyan Internet.

That is what we at Whive.com have done.

Have a look at our live applications which all are all partly SMS Based.

• Whive.com for Social Media and Content
• Whive.mobi for Micro Media and Mobilized Content
• facebook.whive.com our Facebook Integration
• iKatiba.com our Mobile App store.

Consensus has been that Safaricom has largely behaved like a big bully “stealing” ideas from Kenyan developers or behaving in a manner that is detrimental to the Kenyan Mobile ecosystem.

Whether the above claim is true or false momentum is clearly on Zain’s  side with almost everyones attention including Developers shifting towards  it.

It may be true that middle aged voice consumers may have in the past been the main revenue source but the shift towards data consumption by Kenya’s youth with drive profits in the future.

The Mobile Operator which convinces us to share revenue by giving them our Mobile Apps and sharing advertising revenues will win the war.

This is a HUGE opportunity for everyone especially if we let market forces run their own course…

Whive.Mobi Nokia APP

Just from bubbling from being declared yesterdays blog of the day on Business Daily i have decided to be a bit generous with my “brilliant” ideas and help out Zain Africa catch some leg up on the roaring Lion of  Kenya that is Safaricom.

Now that Safaricom has shown us how packaging voice products and adding a sprinkle of Mpesa can churn billions in net profit from what is supposedly a 3rd world country, it is clear that the next and perhaps only frontier of war for the other operators is Data.  Enter Mxit…

Mxit a mobile social network from South Africa is Safaricom’s latest magic trick. Its entry one week ago has kicked up a storm amongst Kenya’s local developers (Storm1, Storm2 and Storm3). One thing is for sure, this is either Safaricom’s waterloo or greatest show ever, it cannot be anything other than those those two options. Why?

Well this move by Safaricom to put it mildly angered many of the country’s developers  (refer to storms above), thinkers and bloggers.  This cannot be good for Safaricom even though it ostensibly has the money and mechanisms to buy back some love from the angered folk and thereby mitigating against any future loss.

Granted that this may be, as I said earlier, the best business decision ever by Safaricom,  it has certainly made key and influential people in Kenya distrust its intentions.  Don’t forget perception is KEY e.g. Andriod of Google is now gaining ground on Apple iPhone because the latter  is perceived to be a closed system with ill intentions.

Why should Safaricom give a hoot?–

Safaricom has 16 million subscribers last time i checked, of which 8 or so million are banking on Mpesa a system that does NOT belong to Safaricom. Therefore any pressure on them would not necessarily lead to the quick and spontaneous action that may be needed for its looming battles.

On the other hand Zain soon to be Bharti has a 45 million or so subscriber base in Africa and even larger one in India. Importantly it already has an App Store with more than 1000 Applications in use in India that probably would not differ too much from the Kenyan or African Use case or Business case. This makes Data a clear entry point for Zain.

So here are some pros and cons for such a move by Zain.

PROS

1. They have a disgruntled set of pretty skilled APP developers in Kenya that they could entice with hugs that smell of Kshs.
2. They have a huge subscriber base in Africa which speaks an indigenous language SWAHILI.
3. They have a burning desire to embarrass Safaricom even if it is just once.
4. They have the experience needed to enter this space at will.
5. They own their own payment platform Zap unlike Safaricom.

CONS

1. They have been upstaged by Safaricom’s magicians time and again.
2. They have failed to understand  Kenya’s “peculiar” habits.
3. They also do not engage Kenyan developers.
4. They have not luffed to the debunk for a very long time.
5. Importantly they do not have the 3G data infrastructure to beat Safaricom.

This last point is what i suppose should be worrying the guys in Zain head office and i have what i think should be a solution. Zain should opt for a Distributed Application Network Space. What i call DANS. Why?

The main advantage is that they would be able to ride on Safaricom’s fantastic(by Kenyan Standards) 3g network thereby saving billions in infrastructure cost. In this case they would give incentives to already existing application stores/platforms in Kenya like Whive.com, Symbiotic Labs and SpaceKenya.com to port products to their subscribers for decent commissions.

Another case is that they would not necessarily need to advertise too much as great APPs will go viral (Remember Makmende.com).

By focusing on Mobile and Web Apps at the same time Zain would win the data race and steam ahead of the competition, giving itself breathing space to build the Data infrastructure it would need to compete with Safaricom the Great.

So as a developer of Mobile Apps including the one in this post I humbly asking the people at Zain to consider this option and give the battered and almost defeated developers in Kenya some hope.

This move could possibly go south because of the insanely huge magical powers of the Safaricom’s Maestro(s) but at least we will say we gave it a shot… and hopefully  someday we will all luff to debunk even if its just my local Mpesa/Mkesho Agent

John Karanja is the founder of Whive.com and was recently a Chairperson of Mobile Web East Africa Conference in Nairobi in January.

Mpesa Transaction

[Download Mobile Revolution article  by Wilfred Mworia]

Kenya has recently been acclaimed world over for the mobile revolution that is MPESA. MPESA for those who don’t know is a payment system which allows Kenyans to transfer money instantly to other Kenyans through their mobile phones. This service is offered by Safaricom which is Kenya’s largest Mobile Network with a reach of 17 or so million subscribers. Safaricom is both a privately and publicly owned company with Vodafone a UK based consortium having 60% shares in the company and the Kenyan government and public owning the rest on a 50:50 basis.

Safaricom MPESA advert

Mpesa on its own transacts about 17 billion shillings monthly and has a market of 6 million users in the country. This will on the surface make MPESA a USD 2.5 billion venture making sending it into the realm of PAYPAL.com which is one of the worlds most prolific virtual money transfer ventures. For this to happen in what is ostensibly a third world nation is what is making the whole world take notice.

World acclaims mpesa Part 1

World acclaims mpesa Part 2

In fact i posit that MPESA will be on its own a major driver of the economic expansion of the Kenyan economy and best of all it will take a bottom up approach because it will empower the mama mboga (woman grocer) by allowing her to manage her finances efficiently.

In order to bring the MPESA issue into perspective i would like to share some videos of the progress made by various small, medium and large scale enterprises with regards to adoption of this service. However before i do that here are some steps the government and mobile phone players should take to increase the earnings and effectiveness of virtual payment systems such as MPESA and achieve their full potential.

MPESA needs to move from a payment system to a payment gateway: Safaricom should develop MPESA into a platform where other software developers can build applications on top of the platform an thereby increase utility and reach of this technology. The legal foundations are already in place with adoption of the ICT bill late last year. Limits of MPESA have already become apparent.

A good example is the Easy Hisa share trading system developed by Symbiotic Media Consortium and launched recently by Standard Investment Bank which allows for semi automated buying and selling of shares was allowed to sit on top of the MPESA Platform it would allow for fully automated real time trading which would have meant less operational costs for the bank and more control for the end user in this case the trader.

In fact Standard Investment bank could fully outsource the trading aspect of its business to software and concentrate on core activities such as share transfers and management and international banking and trading without having to worry about its own internal risk factors. This would allow for their easy expansion across the East African and International markets because all they would have to do is add new currency codes and open up their access NSE to anyone with a mobile phone or debit card. Nevertheless introduction of EASY HISA is a step in the right direction. Watch launch below.

Standard Investment Bank launches Mobile application

The second issue that is crucial is the development of a address system that is based on housing as opposed to postal boxes. This is crucial to support E-Commerce and the delivery of goods and services. If the government succeeded in creating such a postal system then i believe it would increase the G.D.P dramatically because it would open up more markets and reduce strain on transportation and security costs.

It would also open up new industries whereby e-commerce  enterprises such as MamaMikes.com would have incentives to enter the warehousing and distribution industries. Together with Mobile banking such postal systems would mean the expansion of the Kenyan economy within a very short time. Similarly efforts of giving squatters title deeds would also automatically increase earnings because these individuals could access Bank loans as well as other finance sources.

Lastly there has to be support for the country’s budding webprenuers. They are the ones who will innovate and create solutions that utilize these platforms once they exist they are already a few which i have already featured and here are some links and videos. The support so far has come through a number of initaitives being led by Kenya’s top university Strathmore University through its mobile technology seminars and the ICT board and Ministry of Information and Technology led Permanent secretary Bitange Ndemo. However much more needs to be done to encourage these innovators to pool together and acquire required skills to establish viable business ventures that solve local problems.

We at JohnKaranja.com will continue to support these individuals by sourcing funding information and providing start up guides.

MOBILE INNOVATIONS

Here are some of Kenyan mobile innovations developed lately.

Tulipe.co.ke: Will allow for online management of Mpesa transactions. [Read More]

Whive.mobi: Will allow for social interaction and sharing of information in African languages. [Read More]

Car track mobile application

Home management system

Wilfred Mworia has kindly provided some guidelines for mobile application development.

http://www.slideshare.net/wmworia/mobile-bootcamp-presentation-mobile-application-development-platforms

http://www.slideshare.net/wmworia/the-convergence-of-mobile-social-and-location-based-applications

Are you a Webprenuer or do you have a project you would like to tell us about? Post it the comments section and we will get back to you.

Kenneth Ngetha

I rarely excited about start ups in Kenya because like many of mine they dont seem to get enough support from industry players and government. However just when you think innovation is dead someone somewhere unleashes a stunning and brilliant idea. This someone is Kenneth Ngetha 22, a 4th year student at the prestigious Strathmore University(i went there too!!!) in Nairobi, who has come up with an online gateway for making payment transfers to Kenya.

The system suitably named TULIPE solves the basic problem which is that in East Africa, (and Africa in general); E-Commerce Payments on the web are not well developed because of a low penetration of banking services (which means credit cards are not sufficient). However, there have been developments in the Mobile Money sphere and it serves the long tail of the unbanked. Tulipe aims to use this Mobile Money & Existing Bank accounts for online payments, as is the case with credit cards.

This brilliant idea is modelled on the US based PAYPAL.com which currently transacts billions of dollars every year in this way. Tulipe still on beta release has caught the eye of Kenyan investors who see in Tulipe a business model and solution that will help reduce the cost of transfering money to and from Kenya. This cost mostly brought about by thefts, delays and official corruption have been a major obstacle to doing business in Kenya.

Mpesa Banking

Watch Mark Shuttleworth, President of the Ubuntu Foundation,and June Arunga, Open Quest Media, speak about opportunities and challenges business and individuals face in developing parts of the world.This a lovely talk of African Prospects with historical occurences being put into context. June Arunga has travelled Africa from Cairo to Capetown and is an expert in the Mobile Phone revolution in Kenya. Kenyans are using mobile phones to expand their economic space and conduct business. She argues that the country needs to develop address systems to allow people to conduct business in a transparent manner. I also remember reading that issuing of title deeds to squatters would be an efficient way of distributing capital and wealth. Anyway here are the videos.

DLD Internet and Mobile Entreprenuership Conference

Watch Video [Click Here]