13 June 2017
Digitally Disenfranchised Africa Embraces Home-grown Innovation
While, overall, Africa remains the least digitally connected continent, there are clear signs that local online entrepreneurship is now paving the way to bringing the internet to some of the region's most inaccessible communities.
While internet penetration in Africa is growing steadily, the gap between the urban connected and the digitally disenfranchised rural populations is a growing cause for concern. Indeed, it was that particular issue that pretty much dominated proceedings at the recent AfricaCom expo, the continent's largest b2b high-tech event.
It was also felt that while mobile telephony had played a huge part in bringing connectivity to half the world, it wasn't necessarily suited to the particular challenges facing Africa. Summarising the difficulties as he saw them, Frank McCosker, the General Manager of Microsoft's 4Afrika Initiative, said: "The economics are different in Africa – there are lower population densities and higher operating costs for mobile networks."
With only 20% of its population having internet access, Africa is still the least digitally connected continent, with McCosker believing this is unlikely to change until certain cost issues are addressed. Expanding on this, he said: "A more economically viable strategy is needed to connect those areas where there is no internet access. To this end, the 4Afrika Initiative has created a new operating model that would provide affordable access to smart devices for Africans and free access to web services for African SMEs through financing partnerships and smart sourcing."
For others at the event, the solution lies more in the increased adoption of satellite technology. Addressing this, Elizabeth Migwalla, a Director of Qualcomm, a California-based wireless communications specialist, said: "While Africa is the most unconnected continent, it has a high level of available satellite spectrum, which could be used to connect many more people. In particular, this spectrum is being underutilised in rural areas. There is no reason why it shouldn't be exploited to close the digital divide in Africa."
While the potential gains to be had by fully integrating Africa into the global digital economy were widely acknowledged, so too were the many barriers that still need to be overcome. For her part, Miriam Altman, a Commissioner with the South African National Planning Commission, believes not enough is being done at the government level. She said: "Africa's lack of a comprehensive information and communication technology (ICT) infrastructure is the major problem and there is a continuing failure at the policy level to address this.
"Governments in Africa don't know what they want to do with the digital economy. Unlike the provision of water, roads or housing, there is no plan when it comes to digital technology. In truth, African governments need to plan the rollout of digital infrastructure in the same way they plan the introduction of other essential services."
Despite the challenges, it was also clear that some progress was being made on several different fronts. It was widely noted, for instance, that there has been considerable growth in the number of tech start-ups and innovation hubs in several countries across Africa, including Nigeria, Kenya and South Africa. It was also felt that many of these firms are, in fact, developing home-grown solutions that could meet the daily needs of African consumers and businesses.
In terms of other positive trends, Jean-Claude Geha, President of the sub-Saharan Africa region for Ericsson, the Swedish telecoms giant, was bullish about the potential of technological developments in Africa, saying: "Digital transformation in Africa is a fact and it is on-going, with the encouraging trends in terms of accelerated mobile subscription rates clearly testifying to this. Leading the charge in 2016 was Nigeria, closely followed by Ethiopia and South Africa.
"Overall, there are three principal drivers of this growth. Firstly, there is the growing demand for smartphones, which is being met by more affordable handsets. Secondly, the typical African user profile – largely young and urban – is boosting mobile broadband uptake. Thirdly, the Internet of Things (IoT) is being seen as likely to play a key role in resolving Africa's socio-economic problems."
The Internet of Things
It was widely accepted that the Internet of Things will play a crucial role in the continent's emerging connected economy, with Babak Fouladi, Chief Technology Innovation Officer for MTN, a Johannesburg-headquartered mobile-communications company, going as far as to say: "We believe the next explosion in Africa's digital economy will reflect the impact of IoT."
According to Ericsson's recently-published Mobility Report, Sub-Saharan Africa 2016, South Africa and Nigeria have the highest number of connected devices in the region, while IoT also starting to make a real impact in East Africa. Between 2016 and 2022, the total number of IoT connections is expected to grow by about 38% a year.
One particular area where IoT is already said to be having a positive impact on the lives of millions across Africa is with regard to technology-enabled smart cities. Indeed, many of Africa's fast-growing cities have been increasingly able to harness the benefits of automation and IT in order to increase efficiency and drive sustainability.
Several major cities in South Africa, Kenya, Ghana, as well as in a number of other countries across the region, have successfully adopted a technology-driven approach to help reduce water loss through leak detection in the supply infrastructure. Similarly, they have also incorporated systems that enhance efficiencies in public-transport systems and public-sector services, while looking to conserve energy through the introduction of smart electricity meters.
Other areas where IoT services are said to be coming into their own include localised solar-electricity generation, the construction of intelligent residential complexes, healthcare, predictive agriculture and several safety applications within the mining sector. There is also a sound business case for facilitating IoT connections across cellular networks in sub-Saharan Africa. This, after all, is a region with an acute deficit in fixed-line infrastructure, but that is well served by mobile networks. This has seen a SIM card system adopted for connecting a wide variety of IoT devices.
The past few years have seen African consumers embrace digital entertainment. This has largely been driven by streamlined access to mobile content – particularly video-on-demand (VoD), most notably in Nigeria and South Africa, two of the continent's most sophisticated markets.
As has been the case elsewhere in the world, internet-based video content has truly taken off in Africa, competing with broadcast TV for consumer attention and spend. Netflix's 2016 launch in South Africa, as part of its global rollout, has also played a part in stimulating the VoD industry across the continent. Looking to head off the competition, Naspers, the South African media business – which has a 34% share in Tencent, the Shenzhen-based internet giant – launched Showmax, its own VoD service, back in 2015.
Netflix's global reach, however, has not seen content becoming globally homogeneous. The reality, as widely noted at AfricaCom, is that while service providers are becoming more international in their reach and ambition, content preferences remain steadfastly local. This is especially true in Africa.
In large part, the growing popularity of digital entertainment among African consumers can be attributed to better network coverage and the wider availability of affordable smartphones. According to PwC Southern Africa, there is also a clear correlation between the disproportionate size of the under-35 population across the continent and the uptake of digital entertainment services. Similarly, Africa's digital-music market has also enjoyed energetic growth, with the sector dominated largely by local artists.
Overall, African consumers increasing want to create their own viewing/listening mix when it comes to digital entertainment. Indeed, this appetite for design and curating a bespoke media diet is now one of the industry's defining trends. In line with this, there is now a renewed emphasis on using data analytics to more accurately track consumer interests and behaviour.
Acknowledging this, Vicki Myburgh, Entertainment & Media Industry Leader for PwC Southern Africa, said: "In spite of widespread disruption in the entertainment and media industry, as well as intense competition for consumer attention, there are growth opportunities aplenty for companies looking to capitalise on the new media landscape."
AfricaCom was held at the Cape Town International Convention Centre in South Africa.
Mark Ronan, Special Correspondent, Cape Town