Internet Opportunities in Africa
-- or some of the many places I’d recommend people put
money and time if they want to take advantage of the
coming growth
Andrew Mack
Principal
AMGlobal Consulting
iWeek, September 2012
1
Increased Access a fact, but not enough
• Bandwidth exploding with the landing
of major undersea cables
• Costs going down across the board –
and more is expected – especially in
smaller markets, but Nigeria +
$600M/year
• Better service and connectivity,
wireless is the vector – but… everything
needs to be taken to scale
2
Internet Penetration
Can you be in the modern economy without internet?
3
New technologies are increasing access and
the reach of the web
• Making it easier to get higher bandwidth in remoter areas
(WiMax, lower cost satellite, others)
• Permitting things like true telemedicine, e-gov, post
conflict; Q: is a real partnership with government possible?
• Traditional infrastructure – especially electricity – remains
a really significant limiting factor
– Is there a role for localized energy like small solar?
– How can low-power computing factor in?
4
The World in 2011 — ICT Facts and Figu
Bandwidth, up and up – but not keeping up
Growth in bandwidth
facilitates broadband uptake
International Internet bandwidth, GBit/s
90’000
80’000
World
World
70’000
Developed
Developed
60’000
Developing
Developing
50’000
40’000
30’000
20’000
10’000
0
2001
2002
2003
2004
2005
Note: * Estimate
Source: ITU World Telecommunication/ICT Indicators database
5
2006
2007
2008
2009
2010
2011*
Broadband here and there
6
More Broadband
40
Active mobile-broadband subscriptions per 100 inhabitants, 2011
36.50
35
31.33
29.70
30
25
20
15.68
15
11.73
10.75
10
3.26
5
0
Europe
CIS*
The Americas
World
Arab States
*Commonwealth of Independent States
Regions are based on the ITU BDT Regions, see: http://www.itu.int/ITU-D/ict/definitions/regions/index.html
Source: ITU World Telecommunication /ICT Indicators database
7
Asia & Pacific
Africa
Growth opportunities that need addressing
• Still very focused on the major cities – how to reach the secondary
markets, and with what model?
• Still very focused on the office (few people connected at home)
• Still limited culture of email, e-gov – though this is changing
• Broadband still very limited, too limited given opportunities
• Still unclear how the mobile web will play out
• Internet still an elite phenomenon in most places…
8
Internet – there’s no place like home
And why internet at home is crucial
9
Demand is picking up from all sides
• As workers and employers – investment in ICT is a part of
nearly every company, CSR and development project – seen
as the key leverage point, the key multiplier
• As consumers – estimated nearly 70% of cellphones in Africa
will be web-enabled by 2014 – people are moving in the
direction of mobile web
• As citizens – anecdotal evidence suggests people like using egov, as it saves time and is more transparent, fits a changing
dynamic across the continent of service ethic in government
– part of wave of good governance and democracy
10
Q: Are Africans in large numbers making
money off the internet?
A: Obviously it varies, with hubs in places like Kenya and Ghana
and SA, but
• in terms of creating the software industries that nearly every
government says it wants, not there yet
• In e-commerce, Africa is less than one percent of global totals
• In banking, outsourcing, call centers some progress but in
terms of jobs, nothing like what is hoped for
11
Where is Africa – in terms of access?
• African governments and companies are working together to a
meaningful extent to provide service. Some real impressive levels of
cooperation between biz and government in countries like Kenya.
• Financing to improve access still appears to be largely coming from
outside the continent.
• Legacy PTTs still an issue. Basic infrastructure still a big issue.
Opportunities here – but will African be participants or just takers?
Hard to say.
• Q: Can we create – and maintain – the necessary national coalitions
around access?
12
Where is Africa – in terms of training?
• A lot of talk, but very few of the programs we see in nearly every
country reach anything like scale. Aid and government-based
programs have generally failed.
• Real concerns about the newness of netizens around the continent and
their vulnerability to scams, abuse – and the impact on the broader
internet ecosystem – there is danger for new users!
• Especially since there are few if any programs aimed at teaching for a
mobile web audience.
• Q: Can we create new business model here that get us to scale
13
Where is Africa – in terms of content?
•Africa’s presence on the web very limited – globally 94 domains/10,000
people but in Africa only 1/10,000 people!
•Precious little African content on the web. The numbers are shocking.
One seventh of humanity has less than 1% of total internet content based
on estimates we’ve seen.
•True for content from Africans for Africans. Also true from Africans for
the to the broader world – and often (as in the case of Amharic content),
the bulk of content is actually coming from the diaspora.
•Q: Assuming there’s a much broader audience, how to reach it?
14
What will the tipping points/opportunities be?
• Invest in payment options – we need desperately to enable
more business on and through the web – need to make more
business online business – this is a business opportunity that
needs to go to scale… creating true cross border model
• Invest in increasing access to low cost laptops and tablets –
since there’s only so much you can do with a phone-sized
keyboard – the vast majority of Africans don’t have access to
computers – the cheap computer is a friend to business and
builds familiarity, capacity – the chance to tinker…
15
What will the tipping points/opportunities be?
• Invest in entrepreneurship platforms
• The culture of business and provide investment opportunities -incubators and programs aimed at young entrepreneurs
• Including legislation around the continent that makes it easier to start
businesses and raise small capital, including across borders
• Desperately need to establish a regional VC culture that promotes fastgrowing businesses and “positive, entrepreneurial tech-recklessness”
• Invest in infrastructure, especially light infrastructure
• WiMax, broadband and distributed power
• Need to create models to bring franchised access to smaller areas – find a
way to enable local players to more effectively be partners, share risk
16
What will the tipping points/opportunities be?
• Invest in smart IP protection
• Perhaps less of an investment than a partnership between government,
legal establishments across borders and the investing community
• Demand regional thinking and pro-growth policies, and support the legal
infrastructure to make business viable longer term
• Invest in African content and market it worldwide
• For the outside world, Graceland isn’t a fluke – African content is
interesting to a world audience
• The Diaspora is real – be there
• MOST IMPORTANT – Africans are still largely takers of outside content
• Africa as the small apps continent?
17
South Africa can play a special role…
• You have the technical capacity and
organization which is crucial
• You have good rights and IP infrastructure
• You have a largely functional businessgovernment relationship, which can be a model
for other countries
18
South Africa can play a special role…
• The rest of Africa may be ready, after flirtations
with China and others to see SA as partners… if
you’re ready to partner
• Given the size of the market and its diversity, it
still makes sense for outside players to partner to
reach Africa
19
Go for it!
20