Tag Archive for: Kenya

Kenya’s leading telecom provider Safaricom announced on Tuesday that it was upgrading its mobile money platform M-PESA to a newer version, hoping to make doing financial transactions wirelessly a bit easier.

Safaricom logo

Safaricom set to upgrade their M-PESA platform. (image: biztechafrica.com)

According to the company, the new system “will enable users to make instant payments for corporate services such as insurance.

“The migration, to be done in the next few years, will enable M-Pesa users to instantly pay electricity bills,” the company said.

Other mobile service providers in the country have called on Safaricom to allow them access to the platform, and have repeatedly said they would be willing to pay royalties to the company. Safaricom has thus far refused.

“It will also save customers inconveniences such as disconnections that occur as the current platform reconciles the transactions,” the company continued, adding that the new service will reduce the time it takes to make payments on bills.

“It takes 48 hours for payments made to Kenya Power, for instance, to reflect on the electricity distributor’s systems, while those to the National Hospital Insurance Fund (NHIF) take 76 hours,” the company added.

The new service will also provide users the ability to use the mobile money platform to pay for items online instantly, with a balance being reduced with every purchase, instead of having to be forced to wait until payment clears.

Safaricom also added that in order to reduce costs, part of the M-Pesa servers in Germany will be relocated to Kenya in order to improve “the reliability of the mobile money platform and cut down on overheads”.

Joseph Mayton

Mr. Francis Wangusi, Director General, CCK (Right) and Ms. Erna Kerst, Mission Director USAID Kenya during the signing of an MoU at CCK Centre, Nairobi

Mr. Francis Wangusi, Director General, CCK (Right) and Ms. Erna Kerst, Mission Director USAID Kenya during the signing of an MoU at CCK Centre, Nairobi

According to an agreement signed today between the Communications Commission of Kenya (CCK) and the United States Agency for International Development (USAID), the US Government shall assist CCK in developing strategies to stimulate universal access to ICT services in underserved and un-served areas of the country.
The technical assistance covers the development of a national broadband strategy to underpin the deployment of modern broadband infrastructure to meet the needs of businesses, government and the entire economy. The assistance, which shall be provided through the USAID’s Global Broadband and Innovations (GBI) initiative, will also assist CCK in developing capacity in universal service Fund management, and universal service.

Addressing the media during the signing of the agreement at the CCK Centre, USAID’s Mission Director, Ms. Erna Kerst, said the US Government was happy to partner with Kenya in facilitating enhanced access to ICT services.

She said Kenya was ahead of many sub-Saharan African countries in the level of development of ICTs, particularly in the area of mobile applications.

“Kenya is leading the way in ICT innovations and in the development of applications that are changing the lives of people in Kenya and elsewhere in the World,” she said.

In his address, Ag. CCK Director-General Mr. Francis W. Wangusi said the development of universal access and broadband strategies would invigorate the growth of the ICT sector and thus accelerate the development of other sectors of the economy, including provision of e- and m- government services.

Citing the ICT Access Gaps Study undertaken by CCK last year, Mr. Wangusi said close to 1,120 sub-locations out of the total of 7,149 in the country had no access to basic communication services. This situation, he added, called for urgent regulatory interventions to facilitate the transition of a sizeable number of Kenyans to the digital age.

The Director-General decried the prevailing low penetration of data/internet services in Kenya, saying the country had only 5.2 million Internet subscribers, of which 2.33% were broadband.  He said the strategies to be developed through USAID’s technical assistance would play a key role in improving access to communications services in all parts of the country.

Mr. Francis Wangusi, Director General, CCK (Right) and Ms. Erna Kerst, Mission Director USAID Kenya during the signing of an MoU at CCK Centre, Nairobi

According to an agreement signed today between the Communications Commission of Kenya (CCK) and the United States Agency for International Development (USAID), the US Government shall assist CCK in developing strategies to stimulate universal access to ICT services in underserved and un-served areas of the country.
The technical assistance covers the development of a national broadband strategy to underpin the deployment of modern broadband infrastructure to meet the needs of businesses, government and the entire economy. The assistance, which shall be provided through the USAID’s Global Broadband and Innovations (GBI) initiative, will also assist CCK in developing capacity in universal service Fund management, and universal service.

Addressing the media during the signing of the agreement at the CCK Centre, USAID’s Mission Director, Ms. Erna Kerst, said the US Government was happy to partner with Kenya in facilitating enhanced access to ICT services.

She said Kenya was ahead of many sub-Saharan African countries in the level of development of ICTs, particularly in the area of mobile applications.

“Kenya is leading the way in ICT innovations and in the development of applications that are changing the lives of people in Kenya and elsewhere in the World,” she said.

In his address, Ag. CCK Director-General Mr. Francis W. Wangusi said the development of universal access and broadband strategies would invigorate the growth of the ICT sector and thus accelerate the development of other sectors of the economy, including provision of e- and m- government services.

Citing the ICT Access Gaps Study undertaken by CCK last year, Mr. Wangusi said close to 1,120 sub-locations out of the total of 7,149 in the country had no access to basic communication services. This situation, he added, called for urgent regulatory interventions to facilitate the transition of a sizeable number of Kenyans to the digital age.

The Director-General decried the prevailing low penetration of data/internet services in Kenya, saying the country had only 5.2 million Internet subscribers, of which 2.33% were broadband.  He said the strategies to be developed through USAID’s technical assistance would play a key role in improving access to communications services in all parts of the country.

Africa with connectivity waves

Image credit: computernewsme.com

Data is tough to come by in the African telecommunications market. The options are annual ITU report, demand-side releases (from a government ministry or a regulatory body), telecom operators’ annual reports, expensive market reports from sources like Budde Comm, or the rare demand-side questionnaire carried-out by researchers on the ground.

The ITU statistics lack focus and their perils have been discussed ad nauseam. There are simply too many operator annual reports to sift through. We cover the demand-side questionnaires as they become available. What’s left to cover are reports from the telecoms operators and government ministries.

East African regulators have actively published datasets as of late. Kenya’s CCK and Tanzania’s TCRA both recently released Internet and mobile subscription numbers from Q3 2011. So, with the suggestion of Wayan Vota of ICTWorks in mind, we attempted to discover what information each African telecommunications regulator releases.

Fortunately, most nations have an operational regulator, even if that regulator is not yet independent of the government. And, most regulators are expected to present an annual report to the government and to the market. In most cases, an annual report from 2009 or 2010 was available (and was released the following year). These reports often cover the number of citizens on the internet, a breakdown of how users access the internet (institution/household/individual/cafe), the number of mobile subscribers, type of internet (mobile wireless/fixed wireless/VSAT/cable), and growth over time. Some list a subscriber break down by operator. Most nations, however, do not have such current or robust data. Still, any data is better than no data. The table below lists the most recent public data made available by each national telecom regulator.

Most recent data from African telecoms regulators:

Country Regulator Most Recent Data Site Last Updated/Notes
Algeria Autorite de Regulation des Postes et Telecommunications (ARPT) 2009 jan 2012, modern site
Angola Institut Angolias des Communications (INACOM) 2009 (partial data) oct 2010
Benin Transitory Authority for the Regulation of Posts and Telecommunications (ATRPT) 2009 2012
Botswana Botswana Telecommunications Authority (BTA) 2010 may 2010
Burkina Faso Autorite Nationale de Regulation des Telecommunications (ARTEL) 2009 feb 2012, new cyber security section
Burundi Agence de Régulation et de Contrôle des Télécommunications (ARCT) 2008 under construction, data from TeleGeography link
Cameroon Agence de Regulation des Telecommunications (ART) 2006 jan 2012
Cape Verde National Communications Agency (ANAC) 2008 (partial) feb 2012
Central African Republic Agence chargée de la Régulation des Télécommunications (ART) no site
Chad Office Tchadien de Regulation des Telecoms (OTRT) 2002 2005
Comoros Autorité Nationale de Régulation des Tics (ANRTIC) dec 2011, some tech issues
Congo L’Agence de Régulation des Postes et Communications Electroniques (ARPCE) 2011 (partial) 2012, founded 2009, very modern, Facebook
Cote D’Ivoire Agence des Telecommunications de Cote d’Ivoire (ATCI) 2011 (video) oct 2011, under construction
Dem. Rep. of Congo Autorite de Regulation de la Poste et des Telecommunications du Congo (ARPTC) not found
Djibouti Ministere de la Communication et de la Culture, chargé des Postes et Télécommincations, Porte-Parole du Gouvernement (MCC-PT) 2011 dec 2011, monthly data!
Egypt National Telecom Regulatory Authority (NTRA) 2009 feb 2012
Equatorial Guinea Órgano Regulador de las Telecomunicaciones (ORTEL) 2011 (partial) jan 2011
Eritrea Communications Department no site
Ethiopia Ethiopian Telecommunications Agency (ETA) 2009
Gabon Agence de Regulation des Telecommunications (ARTEL) won’t connect
Gambia Gambian Public Utilities Regulatory Authority (PURA) 2011
Ghana National Communications Authority (NCA) 2008 2010
Guinea Regulatory Auhtority for Posts and Telecommunications (ARPT) 2010 feb 2012
Guinea-Bissau Ministry of Telecommunications no site
Kenya CCK – Communications Commission of Kenya Q3 2011 feb 2012, good data, Facebook
Lesotho Lesotho Communications Authority (LCA) 2010 2011
Liberia Liberia Telecommunications Authority (LTA) 2010 feb 2012
Libya n/a n/a n/a
Madagascar Office Malagasy d’etudes et de Regulation des Telecommunications (OMERT) 2008 mar 2009
Malawi Communications Regulatory Authority (MACRA) 2010 jan 2012
Mali Comité de régulation des télécommnunications du Mali (CRT) 2010 oct 2011
Mauritania Autorite de Regulation (AR) 2010 jan 2012
Mauritius Information and Communication Technologies Authority (ICTA) 2009 feb 2012
Mayotte ARCEP (France)
Morocco Agence Nationale de Réglementation des Télécommunications (ANRT) 2010 2012
Mozambique Instituto Nacional das Communicacoes de Mozambique 2007 feb 2012
Namibia Communications Regulatory Authority of Namibia (CRAN) 2010 feb 2012, Facebook
Niger L’Autorite de Regulation Multisectorielle (ARM) 2006 jul 2011
Nigeria Nigerian Communications Commission (NCC) 2011 2012, Facebook, good data
Reunion ARCEP (France)
Rwanda Regulatory Agency for Public Utility Services of Rwanda (RURA) 2011 2012
Sao Tome And Principe ARCEP (France)
Senegal Agence de Régulation des Télécommunications et des Postes (ARTP) 2009 oct 2011
Seychelles n/a n/a n/a
Sierra Leone National Telecommunications Commission (NATCOM) late 2011
Somalia n/a n/a n/a
South Africa Independent Communications Authority of South Africa (ICASA) 2011 2012
St.Helena Ofcom (UK)?
South Sudan Ministry of Telecommunications & Postal Services 2009
Sudan National Telecommunications Corporation (NTC) 2011 nov 2011
Swaziland Swaziland Posts & Telecommunications Corporation (SPTC) 2011 2011
Tanzania Tanzania Communications Regulatory Authority (TCRA) 2012 2012, good data
Togo Autorite de Reglementation des Secteurs de Postes et Telecommunications (ART&P) 2010 2012
Tunisia l’Instance Nationale des Télécommunications de Tunisie (INTT) 2010 feb 2012, Twitter
Uganda Uganda Communications Commission (UCC) 2011 2012
Western Sahara n/a n/a n/a
Zambia Zambia Information and Communications Technology Authority (ZICTA) 2012 feb 2012, Twitter
Zimbabwe Postal & Telecommunications Regulatory Authority (POTRAZ) Q3 2011* 2011, official stats from TechZim post

 

Noteworthy insights:

  • No telecoms regulator: Libya, Seychelles, Somalia, Western Sahara
  • No regulatory website found: Central African Republic, DRC, Eritrea, Guinea-Bissau
  • No data found: Comoros, Ethiopia, Gambia, Sierra Leone, South Sudan
  • 2011 data is available from regulators in: Congo, Ivory Coast, Equatorial Guinea, Kenya, Nigeria, Rwanda, South Africa, Sudan, Swaziland, Tanzania, Uganda, Zambia, Zimbabwe
  • Social media presence: Zambia, Tunisia, Nigeria, Namibia, Kenya, Congo
  • The most outdated data: Cameroon (2006), Chad (2002), Niger (2006)
  • Burkina Faso’s ARTEL has recently added a section of the site devoted to cyber security efforts.
  • Djibouti’s MCC-PT surprisingly has monthly Internet user data through October 2011.
  • The majority of regulator websites (37 of the 49 that exist) have been updated in the past year.

Even if insights exist at the top, they are usually delayed by a full year – tough considering the extreme growth rate of Internet services. Data on the use of ICTs by individuals will be limited for years to come. Although more countries are conducting their own surveys of individual ICT trends, resources are still limited.

In the meantime, we plan on searching individual communications ministry websites for additional telecoms data. Most African nations have at least one government ministry dedicated to communications. The question is whether the ministries source their own data or if they adapt annual reports from regulators and operators.

The list of regulators and their URLs can be found at Africa & Middle East Telecom Week.

M-Pesa Money Transfer

Photo Credit: Tony Karumba/AFP/Getty Images

Recently there have been more reports of digital theft within the M-Pesa mobile money transfer service. In Embu, a M-Pesa agent was tricked into sending Sh50,000 (~$600) to an unknown account.  It occurred when an individual received a message that he received an incorrect transfer and then he went to the agent in order to have the mistake corrected. Other examples include thieves posing as customers or Safaricom staff and calls or SMSs from unknown numbers informing the individual that they won a prize. With the large amount of money being transferred on a daily basis, it is easy to see why M-Pesa has been the target of fraud. From July to September in 2011, $683 million was transferred over mobile phones in Kenya.

The interesting aspect to this fraud is that mobile money is shown to be a safer alternative to traditional money transfer services. But as the number of fraud cases increases, it could start to be perceived (true or not) as an unsafe way to both transfer and store money. This could diminish adoption rates, especially at the bottom of the pyramid as they tend to be more risk adverse. Since their account totals are much lower, one fraudulent transfer could wipe out their entire account. Fraud could also cause the telecom providers to be further regulated by governments. Since they are not banks, they are not regulated under the same rules as banks. This includes the Know Your Customer (KYC) laws. After 9/11, there was a great push by the United States for banks globally to gather more information about their clients and further verify their identity. But since the mobile money services provided by telecoms (when not partnering with banks) are not classified as banking services, the telecoms are not required by law to follow the KYC laws.  As shown in the examples above, once the money had been transferred, there was no way to get it back.  The reason for this is that many mobile accounts are unregistered. Because an individual can simply purchase a SIM card at a local store, there is no way for mobile providers to track who received a fraudulent transfer. But some governments have started to require citizens to register their SIM cards. In Ghana, the National Communication Authority (NCA) has made this requirement mandatory by March 3rd. If a SIM card is unregistered by then, the account could be deactivated.  This means that roughly 7.5 million users could have their phone cut off. This is an extreme example of how to further regulate the mobile market. But is it the right answer?

Or can technology provide the answer? Further regulation is probably needed to slow down the amount of fraud, but there is a fine line between being too invasive on the end user and providing greater protection. One of the benefits of mobile money is that the lack of registration required which allows those who do not have a bank account or proper documentation to receive financial services. This is especially true of those that live in rural regions. But along with regulation, how can technology be used to solve the problem? Extra security steps can be taken to verify the validity of the transfer. But, again, it cannot be too intrusive as it could cause a decrease in usage by customers. While regulation and technology could possibly help, one of the main problems is the social knowledge of the end-user. Especially in the “You Have Won” messages, the cons are banking on the end-user lacking knowledge about these types of frauds. As shown in the articles, individuals are starting to catch on as are the authorities. The police have been trying to inform citizens that they need to avoid these messages and take extra steps to confirm the transfer. There is no clear and easy answer to solve this problem, but it must be on the front of the minds of MNOs and government regulators. Mobile money is too strong of a tool to let security issues slow the expansion of financial services to those who never had access to them before.

This is a guest post from Jamie Lundine, who has been collaborating with Plan Kenya to support digital mapping and governance programming in Kwale and Mathare. The original was published on Jamie’s blog, titled Information with an Impact. See part 1 of this series here: Digital Mapping and Governance: the Stories behind the Maps.

Mapping a school near Ukunda, Kwale County

Creating information is easy. Through mobile phones, GPS devices, computers (and countless other gadgets) we are all leaving our digital footprints on the world (and the World Wide Web). Through the open data movement, we can begin to access more and more information on the health and wellbeing of the societies in which we live. We can create a myriad of information and display it using open source software such as Ushahidi, OpenStreetMap, WordPress, and countless other online platforms. But what is the value of this digital information? And what impact can it have on the world?

Youth Empowerment Through Arts and Media (YETAM) is project of Plan International which aims to create information that encourages positive transformation in communities. The project recognizes young people as important change agents who, despite their energy and ability to learn, are often marginalized and denied opportunities.  Within the YETAM project, Plan Kenya works with young people in Kwale County (on the Coast of Kenya) to inspire constructive action through arts and media – two important channels for engaging and motivating young people.

Information in Kwale County

Kwale County is considered by Plan International to be a “hardship” area. Despite the presence of 5-star resorts, a private airport and high-end tourist destinations on Diani beach, the local communities in Kwale County lack access to basic services such as schools, health facilities and economic opportunities. Young people in the area are taking initiative and investigating the uneven distribution of resources and the inequities apparent within the public and private systems in Kwale County.

As one component of their work in Kwale, Plan Kenya is working with the three youth-led organizations to create space for young people to participate in their communities in a meaningful, productive way. There are different types of participation in local governance – often times government or other agencies invites youth to participate (“invited space”) as “youth representatives” but they are simply acting to fill a required place and are not considered  within the wider governance and community structures.

Youth representation can also be misleading as the Kwale Youth and Governance Coalition (KYGC) reports that “youth representatives” aren’t necessarily youth themselves – government legislation simply stipulates that there must be someone representing the youth – but there is no regulation that states that this person must be a youth themselves (they must only act on behalf of the youth). This leaves the system open to abuse (the same holds true for “women’s representative” – you can find a man acting on behalf of women in the position of women’s representative).  Plan Kenya and the young people we met are instead working to “create space” (as opposed to “a place”) for young people in community activism in Kwale County.

The 5 weeks we spent in Kwale were,the beginning of a process to support this on-going work in the broad area of “accountability” – this encompasses child rights, social accountability and eco-tourism. The process that began during the 5 weeks was the integration of digital mapping and social media to amplify voices of young people working on pressing concerns in the region.

To create the relevant stakeholders and solicit valuable feedback during the process of the YETAM work on digital mapping and new media, our last 3 days in Kwale were spent reviewing the work with the teams. On Thursday November 10th, we invited advisors from Plan Kwale, Plan Kenya Country Office, the Ministry of Youth Affairs and officers from the Constituency Development Fund to participate in a half-day of presentations and feedback on the work the young people had undertaken.

By far the work that generated the most debate in the room was the governance tracking by the KYGC. The team presented the Nuru ya Kwale blog which showcased 28 of the 100 + projects the youth had mapped during the field work. They classified the 28 projects according to various indicators – and for example documented that 23 of the projects had been completed, 1 was “in bad progress”, 2 were “in good progress” and 1 “stalled.”

The CDF officers (the Chairman, Secretary and Treasurer of the Matuga CDF committee in Kwale County) were concerned with the findings and questioned the methodology and outcome of the work.  They scrutinized some of the reports on the Nuru ya Kwale site and questioned for example, why Mkongani Secondary School was reported as a “bad” quality project. The officials wanted to know the methodology and indicators the team had used to reach their conclusions because according to the representatives of the CDF committee, the auditors gave the Mkongani Secondary School project a clean bill of health.

One important message for the youth based on feedback on their work was the need to clearly communicate the methodology used to undertake the documentation of projects (i.e. what are the indicators of a project in “bad” progress? how many people did you interview? Whose views did they represent?).

There is significant value in presenting balanced feedback that challenges the internal government (or NGO) audits – for example the data on Kenya Open Data documents that 100% of CDF money has been spent on the Jorori Water Project mentioned above, but a field visit, documented through photos and interviews with community members reveals that the project is stalled and left in disrepair. This is an important finding – the youth have now presented this to the relevant CDF committee. The committee members were responsive to the feedback and, despite turning the youth away from their offices the previous month, invited them to the CDF to get the relevant files to supplement some of the unknown or missing information (i.e. information that people on the ground at the project did not have access to, such as for example, who was the contractor on a specific project, and what was the project period).

Kwale youth with staff from Plan Kenya, officers from the CDFC and the local Youth Officer

Samuel Musyoki, Strategic Director of Plan Kenya who joined the presentations and reflections on November 10th and 11th, reported that:

“The good thing about this engagement is that it opened doors for the youth to get additional data which they needed to fill gaps in their entries. Interestingly, they had experienced challenges getting such data from the CDF. I sought to know form the CDFC and the County Youth Officer if they saw value in the data the youth were collecting and how they could use it.

The County Youth Officer was the most excited and has invited the youth to submit a business proposal to map Youth Groups in the entire county. The mapping would include capturing groups that have received the Youth Enterprise Fund; their location; how much they have received; enterprises they are engaged in; how much they have repaid; groups that have not paid back; etc. He said it will be an important tool to ensure accountability through naming and shaming defaulters.

The 5 weeks were of great value — talking to quite a number of the youth I could tell — they really appreciate the skill sets they have received-GIS mapping; blogging; video making and using the data to engage in evidence based advocacy. As I leave this morning they are developing action plans to move the work forward. I sought assurance from them that this will not end after the workshop. They had very clear vision and drive where they want to go and how they will work towards ensuring sustained engagement beyond the workshop.”

The impact of digital mapping and new media on social accountability is still an open question. Whether the social accountability work would have provoked similar feedback from duty bearers if presented in an offline platform (for example in a power point presentation) instead of as a dynamic-online platform is unknown.

The Matuga CDF officers were rather alarmed that the data were already online and exposed their work in an unfavourable light (in fairness, there were some well-executed projects as well). There is a definite need to question the use of new technology in governance work, and develop innovative methods for teasing out impact of open, online information channels in decision-making processes and how this is or isn’t amplifying existing accountability work.  There is definite potential in the work the young people are undertaking and the government officers consulted, from the Ministry of Youth Affairs and local CDF Committee (CDFC) stated that they were “impressed by the work of the youth”.

Within the community development systems and particularly the structure of devolved funding, there is a gap in terms of monitoring and evaluation (M&E) that the CDF committee to date has not been able to play effectively. As Samuel Musyoki stated the youth “could watch to ensure that public resources are well utilized to benefit the communities.” The Youth Officer even invited the youth to submit proposals for assistance in buying GPS gadgets and computers to strengthen this work.

Continuing the on and offline integration

As discussed, the work in Kwale on various issues is dynamic and evolving. The 5 weeks we spent with the teams were meant to provide initial trainings and support and to catalyse action that would be continued by the youth in the area, with support from Plan Kenya. Not only did we provide training to the young people, but Plan Kwale staff were also involved in the process and started documenting their work through the tools and techniques introduced by our team. With these skills, the Plan Kwale staff will support the on-going field mapping and new media work. We are also available to provide remote assistance with questions about strategies and technical challenges.

Some of the future activities include:

  • Holding a “leaders forum” during which the youth interact with a wider cross-section of stakeholders and share their work.
  • Continuing work on their various websites – updating the sites with results from social auditing work to be carried out throughout the last weeks of November, as well as digitizing previous information collected during historical social auditing.
  • Validating the data by revisiting some project sites and documenting projects that haven’t been done yet, gathering stories from some of the Project Management Committees, taking more photos, and potentially conducting surveys within the communities to get more representative views on project evaluations.
  • Each group also needs to develop a more structured advocacy strategy to direct their activities in these areas.
  • All teams expressed interest in developing proposals to submit to the Ministry of Youth Affairs, through the Youth Enterprise Fund and CDF Committee, based on the suggestion of potential funding for this process. Plan Kwale staff, as well as some of the Country Office advisers offered to support the youth in developing these proposals.
  • Most importantly, the teams want to consult the wider community in their respective areas to demonstrate the relevance of YETAM, including the skills they have gained, to the community stakeholders (beyond the relevant government authorities

The potential of new technologies, including digital mapping to promote accountability, is only as powerful as the offline systems into which it is integrated. Without offline engagement, existing community systems of trust and recognition will be threatened and thus undermine any online work. The youth must remain grounded within their existing work and use new technology to amplify their voices, build their network, share their stories and lessons and learn from and engage with others.

The Lower Indian Ocean Network (LION2), Kenya’s fourth submarine cable, will become fully operational in April this year, the local telecommunications ministry revealed on Thursday.

Map outlying the LION2 undersea cable

The LION2 cable is a 3000 km line extending from Nyali, via the island of Mayotte, located in the northern Mozambique Channel from Mauritius and is set to significantly boost the nation’s bandwidth. Kenya already enjoys connectivity through The East African Marine System (TEAMS), the Eastern Africa Submarine Cable System (EASSy) and SEACOM.

Orange Kenya, involved with laying cables via its parent company, France Telecom, confirmed the schedule, adding that the cable arrived in Mombasa in December last year and is awaiting connection. Work continues to finish the cable’s connection at the Mombasa landing station, the company said.

Angela Ng’ang’a-Mumo, Orange Kenya’s Chief Corporate Communications Officer, told reporters that progress on LION 2 “is on target”. Orange said the construction of the 1.28 Tbps cable “is expected to cost approximately KES 6.2 billion.”

According to reports, the cable is part of a bigger project by France Telecom and 12 members of the Lower Indian Ocean Network to build a submarine cable linking Madagascar to the rest of the world via Reunion Island and Mauritius.

Samuel Poghisio, Kenyan Information Mini­ster, said he was confident that “once it is switched on, LION2 will intensify competition in the industry and help further lower Internet connectivity charges”.

Joseph Mayton

Group of Women in Kenya

Photo Credit: Nin Andrews

As reported in the working paper “Mobile Money Services and Poverty Reduction: A Study of Women’s Groups in Rural Eastern Kenya,” women’s groups in Eastern Kenya are using M-PESA as a part of an informal savings product. Through the Vinya wa Aka Group (VwAG), along with support from the New Partnership for African Development (NEPAD), 21 women’s groups were provided with financial literacy training which included investment, savings, money services, and management. After their initial training, Dr. Ndunge Kiiti of Houghton College and Dr. Jane Mutinda of Kenyatta University stated that the goal of the research was to see how mobile money services could be used as a tool in the women’s groups to reduce poverty in Eastern Kenya.

While all the groups had formal savings accounts along with other investments, the groups still continued to use an informal savings vehicle that has traditionally been used in areas that lack access to an institutional savings product. ROSCAs, Rotating Savings and Credit Associations, are groups of people who form in order to force themselves to save on a schedule. The group members will meet weekly for a set number of weeks, and in each week, each person “deposits” their savings for the week. But, instead of letting the money accumulate each week , a specific person in the group receives the entire pot for the week. The idea is that each week each group member saves a specific amount (say $100) with the understanding that when it is their week, they will receive the pot. For example, if there 10 group members, each week for 10 weeks one individual will receive $1,000.  During the weeks that a member does not receive the pot, they still must deposit $100, even if they have already received the pot. This is an example of a social contract in which the group members hold the other members accountable to pay each week. ROSCAs are especially popular when individuals are looking to make a larger purchase (i.e. stove, TV, merchandise for their business) and they do not have a formal financial product to save the money.

In these women’s groups, they saw M-PESA as a benefit in order to receive payments on time from the ROSCA group members. Instead of having to attend each weekly meeting to make the payment, women transfer the money using M-PESA. This allows for group members that are not located in the area, either permanently or because of travel, to still be a part of the group and make timely payments.

This is a great example of how end-users will always dictate how a product or service is used. In the case of the women’s groups, they saw a way to leverage M-PESA in order to make their ROSCAs more efficient. While M-PESA was not originally developed for ROSCAs, this is another way for Safaricom to market its services. These types of reports are very valuable since it shows how customers are using a product or service. By understanding how and why the service or product is being used, companies can further tweak their model or even create other innovative products to match the needs of the customer.

This is a guest post by Dr Ndunge Kiiti of Houghton College, New York and the GSMA mWomen programme.

Team of three people with M-PESA tshirts on, sitting at a tableM-PESA Responds

The M-PESA staff members were grateful for the feedback provided by the women’s groups. First, the workshop provided them with a broader context in which to understand how these groups were using their services in the rural areas. Second, they were able to spend quality time explaining how the women might confront and address some of the challenges they have faced as a result of the services. The challenges and M-PESA’s suggested responses are listed below.

Fraud

Several of the women had lost money to fraud. The M-PESA staff acknowledged the women’s concerns and highlighted that reported cases were always investigated. They emphasized several tips to prevent M-PESA fraud including:

  • Calling M-PESA to confirm the request prior to responding to a text message regarding their account (the phone number, which would require a small fee, was provided)
  • Checking to see if the text message is actually from M-PESA – if it was it would have the M-PESA logo and/or name)
  • Being aware of their account balance
  • Ensuring their pin number is always kept safe

It was also brought to the groups’ attention that M-PESA has introduced a new Safaricom SIM card which allows individuals to save the phone numbers used for M-PESA transactions. This enables the individual to just scroll and pick the accurate number instead of having to retype the number every time it is used. This reduces the problem of sending money to the wrong number. The M-PESA staff provided the SIM card service at the workshop and many of the women paid for the service and got their old SIM cards replaced. The women expressed gratitude for the service.

Network/Connectivity Problems

Why some areas face network problems was explained by the M-PESA staff. The company recognizes that network coverage is a problem in some rural areas. A key challenge for M-PESA is the platform or technology has faced limitations in keeping up with the demand, as the users of the service continue to increase across the country. The women were encouraged to report coverage issues to an M-PESA outlet, if there is one in their area, rather than an agent. They were also given a number to call or text, when they have access to service, to report these complaints to give the service provider the opportunity to rectify the problems. Again, this would require a small fee.

Cost

The challenge of cost for service was discussed; even though the service was deemed very useful by users, sometimes the costs involved proved challenging for them. The M-PESA staff explained their service costs, what they entail and how they have worked to keep them affordable for Kenyans. There was mutual agreement that M-PESA has tried to be fair in terms of pricing. In fact, it came out in the conversation that one of the reasons it was being used by all 21 women’s groups was because it was the most competitive in the mobile money market.

Services for Special Populations

In relation to services for special populations, such as the elderly, illiterate or visually impaired, there were no easy answers. M-PESA staff suggested that they would look into the possibilities of programs that might assist special populations to have positive experiences with their service.

Group Communication and Dynamics

On one hand, mobile money allows for money to be sent to facilitate planning at meetings, even if a member needs to be absent. However, some groups argued this can perpetuate the lack of meeting attendance, thus limiting the social aspects of the group meeting and affecting the socio-psychological support that comes from face-to-face group interactions. Since this issue relates more to the training and capacity building carried out by those running women’s groups, it was not addressed by the M-PESA in detail. However, representatives of the organization running the women’s groups encouraged members not to allow the use of technology to erode or limit their face-to-face communication by not attending meetings. The groups were encouraged to continue reminding members that a key part of their mission is being a support system for one another which require face to face communication.

Summary

Overall, despite the numerous challenges mentioned, the groups made it clear that the benefits of using mobile money services outweighed the disadvantages. In addition, bringing together M-PESA staff and their end users was mutually beneficial. The women’s groups were able to gain information, knowledge and services that will continue to help them with their poverty reduction activities. The M-PESA staff were able to garner insights and understanding that may contribute to framing policies and practice for mobile money services.


The upsurge in sub-Saharan Africa mobile telecommunications seems to be subsiding as companies continue to overcrowd the market while trying to gain more clients. Sizeable investments and how businesses aim to win over customers’ favour was investigated in a new report.

Bitange Ndemo, secretary of the Kenyan Ministry of Information and Communications

As one boom ends, another begins Bitange Ndemo, secretary of the Kenyan Ministry of Information and Communications, believes. (image: file)

As one boom ends, another begins Bitange Ndemo, secretary of the Kenyan Ministry of Information and Communications, believes. (image: file)

The Morgan Stanley Research report, a global investing firm, says as firms backed by big money, like Bharti Airtel, continue improving their network coverage and decrease tariffs, Africa will become more competitive. Old timers, such as MTN and Safaricom, that have enjoyed market dominance are set to be affected the most. According to the report, the boom will be replaced by market driven innovation, new products and expanding data services.

“All companies are focusing on driving data usage, and new services to reduce churn. The most important are mobile money services like M-Pesa, where innovation take-up is high,” the report says.

“We expect mobile revenues to grow from 3,4% of gross domestic product (GDP) in 2011 to 3,7% by 2015, as we believe mobile revenue growth will outpace GDP in the next four years,” the report says.

Bitange Ndemo, secretary of the Kenyan Ministry of Information and Communications, says there is little room for new entrants in the local market.

“Unfortunately, there has been market erosion of about 20%, mostly because of competition that has seen cuts in tariffs in the sector. A new entrant would have a lot of problems as the four firms (Safaricom, Bharti Airtel, Yu Mobile, Orange) are struggling due to stiff competition,” Bitange told Daily Nation.

Industry analysts agree with his conclusion. ”What we are seeing is a correction of factors like the supernormal profits that some telecoms have been enjoying in the past,” Techie Makau, a Nairobi-based telecommunications consultant, said.
Makau added that providers now have to focus on provision, customer service and value addition. In the Kenyan market, the average price per minute fell by 80% due to competition largely from Bharti Airtel, between Sh2 and Sh4 ($0.03-0.05).

Despite the report, Bitange believes the data market is set to kick off next. Kenya’s internet penetration is only 30%, so once fibre optic cables expansion starts he believes we are set for another boom. “The data market is beginning to take shape as the fibre optic network continues to expand,” he said, adding: “this will see a lot of consumption of broadband… and that is what the companies should be looking at.”

Nico Gous

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