The intensifying battle for Africa's burgeoning tech landscape

The intensifying battle for Africa's burgeoning tech landscape
From TechCrunch - February 23, 2018

Long gone are the days when Africa was disparagingly regarded as theWhite Mans Burden. Today, Africa is the continent with the youngest demographic in the world, on thebrink of a technical renaissanceyet the worlds tech titans are floundering to understand and gain a foothold in this market.

The scale and complexity of Africas technical landscape sits at the heart of the problem, and connectivity issues are particularly prevalent. Internet users in Africa represent only 10 percent of the total users in the world, despite representing 16 percent of the world population, according toInternet World Stats. And only 31 percent of the total population has access to the internet, which represents a penetration that is well below the rest of the world at 52 percent.

Africas technical future depends on widespread connectivity. As a result, both Eastern and Western businesses are eager to get Africa online. But for every proposed solution, myriad challenges spring up that are unique to the region.

For example, when Facebooks co-founder and chairman Mark Zuckerberg announced plans to connect100 million peoplein Africa through the now infamous initiative, the proverbial can of worms opened.

Naysayers were quick to point outa lack of infrastructure, technical knowledge and disposable income to fund smartphones and data packages (not to mention the need to meet the continents diverse linguistic needs) would all hamper his ambitious goal. And there are concerns thatthe initiativeis a cover forFacebook-backed digital colonialism.

But Facebook is all too aware of these issues, which were highlighted in the recent Facebook-commissionedInclusive Internet Indexreport.

The Free Basics app (aka is giving African users free access to a limited number of websites, WhatsApp and Facebook itselfwithout charging data costs. It works through partnerships with mobile operators (which are left to cover those data costs) and is now available in63 countries, 27 of which are in Africa. Facebookspartnership with the Airtel Africamobile carrier in 2015 has certainly boosted its dominance in Africa.

While Facebooks popularity in the region is growing, Google isnt going down without a fight. It is focusing on improving Africas infrastructure and, in particular, its last-mile connectivity.

Through its Project Link initiative, Google is building links between undersea cables, ISPs and mobile networks. Its first metro fiber network rolled out in the Ugandan city ofKampala in 2015and has expanded into Ghana, where it plans to build more than 1,000 kilometers of fiber in Accra, Tema and Kumasi. Project Link has subsequently evolved in the independent CSquared business and recentlycommitted an additional $100 million to further its expansion in the African region. And thats just one of a handful of initiativesGoogle announced in 2015to bring the internet to a further seven billion people.

Facebook and Google are also fighting for connectivity over African skies. While Google announced plans for balloon-powered connectivity throughProject Loon, Facebooks plans to bring connectivity to Africa using satellite systems were left in tatters in 2016 afterthe SpaceX rocket carrying its payload exploded.

Such ambitious plans are laudable, but lets hope they do not suffer the same fate asthe Iridium satellite venture. The company filed for bankruptcy in 1999 after having spent $5 billion to build and launch its satellites and provide a worldwide wireless phone service.

The Iridium service was hit with several setbacks. It was viewed as too expensive for users, and mobile phone adoption was beginning to gain traction in the emerging markets. Also,the service would not have given users complete coverage and would not have worked inside moving vehicles, buildings and many urban areas.

This highlights a dangerous assumption that many Western companies tend to make when providing Africa with new technologies: that a watered-down service is better than no service at all.

Another oversight from Facebook and Google is that the same business models will work in Africa and Western nations. A prime example is the revenue models for both tech giants, which rely predominantly on online advertising. However, an ad-supported internet is unlikely to thrive in Africa due toa range of factors, including a lack of digital footprint for many consumers who still carry out most of their transactions offline in cash (with a few notable exceptions such as the widespread use of M-Pesa in Kenya, for example) and low disposable incomes.

While Facebook and Google do earn enough in the developed world to subsidize the growth of their user base in these emerging markets, this does not seem to be a sustainable business model.

Eastern promise

Money matters


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