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Switching on: Africa's vast new tech opportunity By Pete Guest (Wired Magazine UK, August 2011)

Switching on: Africa's vast new tech opportunity By Pete Guest (Wired Magazine UK, August 2011)

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Published by Bunmi Oloruntoba
Visitors to Africa looking for war, famine and pestilence have to dig a lot deeper than in the past. At Nairobi’s Jomo
Kenyatta International Airport, hardened missionaries have been replaced by gap-year students clustered around iPads, and on the streets the bad old days have given way to another holy trinity: Premier League football, Toyota Hiace minibuses and cellphones. Africa’s national economies have grown consistently over the last decade. Even in the depths of the financial crisis, GDP growth exceeded three per cent: more than in any other region of the world. Improvements in security, Chinese investments and soaring commodity prices have all played a part in transforming the continent’s prospects.Beyond macroeconomic factors, though, technology is driving profound changes to economies and societies across the continent.

http://www.wired.co.uk/magazine/archive/2011/08/features/switching-on?page=all
Visitors to Africa looking for war, famine and pestilence have to dig a lot deeper than in the past. At Nairobi’s Jomo
Kenyatta International Airport, hardened missionaries have been replaced by gap-year students clustered around iPads, and on the streets the bad old days have given way to another holy trinity: Premier League football, Toyota Hiace minibuses and cellphones. Africa’s national economies have grown consistently over the last decade. Even in the depths of the financial crisis, GDP growth exceeded three per cent: more than in any other region of the world. Improvements in security, Chinese investments and soaring commodity prices have all played a part in transforming the continent’s prospects.Beyond macroeconomic factors, though, technology is driving profound changes to economies and societies across the continent.

http://www.wired.co.uk/magazine/archive/2011/08/features/switching-on?page=all

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n 2011, visitors to Africa looking for war, famine and pestilencehave to dig a lot deeper than in the past. At Nairobi’s JomoKenyatta International Airport, hardened missionaries have beenreplaced by gap-year students clustered around iPads, and on thestreets the bad old days have given way to another holy trinity:Premier League football, Toyota Hiace minibuses and cellphones.Africa’s national economies have grown consistently over thelast decade. Even in the depths of the financial crisis, GDP growthexceeded three per cent: more than in any other region of theworld. Improvements in security, Chineseinvestments and soaring commodity priceshave all played a part in transforming thecontinent’s prospects.Beyond macroeconomic factors, though,technology is driving profound changes toeconomies and societies across the con-tinent. The hundreds of millions of mobilehandsets and billions of airtime minutes onlygo some way to describe the scope of entre-preneurship that underpins Africa’s techno-logical revolution. From mobile paymentsto telemedicine andadvertising, there is acommon pulse of in-novation, driven byan irrepressible com-bination of aspirationand necessity. This isthe new Africa.
25,000
M-PESAAGENTSINKENYA
ow popular are mobile phones in Kenya?
Just ask the hordes of airtime vendors work-ing Nairobi’s gridlocked traffic, selling scratch-cards from garlands around their necks. Thecountry has a population of 40 million. At theturn of the century, the number of mobile-phone users wasaround200,000.Therearenow22million.The devices have supplanted not just the country’s fixed-line telephony industry, but also the manner in which moneyis spent. Companies led by Vodafone’s mobile-payments giantM-PESAhavefilledthevacuumleftbythemoribundlocalbanksin a country in which, according to the World Bank, aroundhalfthepopulationliveunderthe$1.25(77p)-per-daypovertyline.One such company is PesaPal, a web- and mobile-paymentplatform set up by Agosta Liko, 35, that integrates withKenya’smainmobile-payment services.M-PESA (M for mobile; “pesa” is Swahili for money) emergedfrom a joint project between the UK’s Department for Interna-tionalDevelopmentandlocaloperatorSafaricom.Itsmodelwastousetheexistingnetworkofmobile-creditsellersthathadsprung
upinpetrolstations,generalstoresandbarsacrossthecountry.Peoplewerealreadyexchangingairtimeasawayoftransferringmoney.M-PESAformalisedthevalueexchange,turningthousandsof sales agents into micro bank branches and millions of mobilephones into wire-transfer services. Users can store up to 50,000shillings(£350)intheiraccount,withSafaricomtak-ingatransactionfeeofbetween30and150shillingswheneverausersendsmoney.In2010therewere9.5millionM-PESAaccounts,comparedto8milliontra-ditionalbankaccountsinKenya.A 2010 Massachusetts Institute of Technologyreport said that 75 per cent of all households withan M-PESA account used the service to store money. Its successhas opened the door to an economy that is no longer entirelycash-based,sparkingawaveofinnovationfromlocaltechnologyentrepreneurssuchasAgostaLiko.When M-PESA was emerging, Liko was in the US, work-ing on payments, wire transfers, fraud management and loansprocessingasasystemsengineeratFirstCitizens’BankinRaleigh,NorthCarolina.In2007hetookthisexperiencehometoKenyatofound Verviant, a software-services business. Here he saw thattheemergentmobile-paymentsindustrychainwasmissingalink.“Mobilepaymentsarefortransferringmoneytoyourgrandmotheror your children,” he says. “There was no world-classpaymentsystemtargetedatconsumers.Thereare two million Visa-card accounts versus morethan16millionmobile-moneyaccounts,sowebuiltasolutionthatwouldallowanyKenyantopayusingmobilemoneyandalsoallowKenyanbusinessestoacceptVisapaymentsfromabroad.PesaPal aims to bridge the gap between mobile accounts andcompanybankaccounts,intheprocessbreakingdownamajorbar-rierinthedevelopmentofecommerce.ItisalreadypartneringwithZuku(
see next page
),thefastest-growingISPinKenya,aswellastheNairobiStockExchange,wherethepubliccanbuystockinfor-mationusingmobilecredit,and,hehopes,tradestocksdirectly.“Right now, Kenyans pay to pay, or pay to make payments.Wewanttodoawaywiththis.
 
Above 
: Agosta Liko, Nairobi
1 1 3
 
f anyone qualifies as a grandee of 
Kenya’sonlineecosystemitisJoeMucheru.Like many of his generation of entrepre-neurs,Mucheru,42,returnedtohishome-land after a stint working abroad – in hiscase, the UK – attracted by the untappedpotentialoftheinternetineastAfrica.“When I got my first installation of Netscape [in 1997] it came on a floppy disk with Netscape 1.0.It cost $1,000 [£620] for the installation, and the installer thenwent o with the floppy disk,” says Mucheru, now regional leadforsub-SaharanAfricaatGoogleandoceleadforEastAfricaatGoogleKenya.Therewasgovernmentresistance,too.Muchoftheindustrywasstillnation-alised and there was unease over the proliferationof communication technology. “The president hadbannedfaxmachines;therewasthiswholeideathatinformationbeingspreadbyfaxeswasdangerous,Mucherusays.“[PresidentDanielarap]Moihadputoutadecreethattherewasnoemailingovernment.”In 1998 a new telecommunications act broke up the statemonopolyoverthesectorandaninfrastructurestartedtodevelop.The state-owned internet service provider Jambonet began toexpand its coverage and lowered prices. “But sometimes therewere seven-day timeouts when Jambonet was down,” Mucherusays.“Thewholecountryhadtowaitfortheinternet.”
Below 
: Joe Muchero, Google Kenya Nairobi office
Mucheru, together with Njeri Rionge, launched Wananchi,which means “citizen” in Swahili. An internet service pro-vider, the company pioneered “triple play” – TV, internet andtelephoneservices–inKenya.Businessgrewasthetelecomssec-tor began signing distribution deals with international broad-casters to feed the local appetite for European football. (LastAugust the group signed a merger deal with Mitsumi CableVisionandrebrandedasZuku.)InJune2007MucherujoinedGoogleasheadofitsnewAfricaoperation. At the time, the company was unsure of its strategy;it just knew that there was potential in the huge concentrationof local 15- to 25-year-olds with anappetiteforinformation.WithGoogle’smuscle behind him, Mucheru is work-ingtoremovetheremainingconstraintsto the sector’s development – accessand content. Bandwidth prices mayhavefalleninAfrica, butthecost totheconsumer has not fallen in step asoperatorshavebeenslowtoupdatepricingstructuresorrolloutwirelessnetworksand3Gservices.MucheruhopesAfricanbusinessesandindividualscanbecomecontentcreators.To“seedthemarket”forcontentgrowth,GooglelaunchedclassifiedplatformGoogleTraderontothewebin2009.“You have to have sufficient content that people can actuallymonetiseitandbeabletodotheadvertisingandsoon,”hesays.“Right now the world average is one domain for 90 people. InAfricait’sonedomainfor10,000people.”
 
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Tripoli,
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Cacuaco, Angola
Pointe Noir, CongoMuanda, DRC
Luanda,Angola
Sao Tome,and Principe
Altavista,
Canary Islands
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Tripoli,
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MonacoTripoli,LebanonSuez,EgyptCairo,EgyptAlexandria,EgyptMumbai,IndiaDjiboutiPort Sudan,Saudi ArabiaSudanFujairah,United ArabEmiratesKochi,IndiaMassawa,EritreaKarachi,PakistanColombo,Sri LankaChennai,IndiaOmanJeddah,
In2001,asinglefibre-opticcableranthelengthoftheAfricancoastline,connectingSouthAfricatoEuropeviathecontinent’swestcoast.Africahassincelaidanothernineunderseacables,withmoretocome.In2009,whenthreecablefirmsEASSy,SeacomandTEAMSracedtomakelandfallinKenya(
 see
WIRED
07.09
).Therewereconcernsthattheywouldcannibaliseeachotherinanoversaturatedmarket.Allthreearestillinrudehealth.Africa’sappetiteformobiletelephonyanddatacreatedademandthathasconsistentlyoutstrippedthesupplyofbandwidthandtheexpectationsoftheglobalmarket.
 WEST COASTMEDITERRANEANUNDERSEA CABLESEAST COAST
SAT3/SAFEMaIN OnEGLO-1WACSACESAexSEASTEAMsSeacomLion2LionEASSyAtlas OffshoreSEA-ME-WE-4I-ME-WEEIG
ActiveActiveActiveQ2 2011Q3 2012Q3 2012Q2 2012ActiveActiveActiveActiveActiveActiveActiveActiveQ2 2013
340 Gbps320 Gbps320 Gbps1,920 Gbps1,280 Gbps1,280 Gbps1,280 Gbps1,280 Gbps1,300 Gbps2,500 Gbps5,120 Gbps5,120 Gbps4,720 Gbps3,840 Gbps3,840 Gbps12,800 Gbps
NB Several smaller Mediterranean cables not shown

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