Harry Hare (Kenya) - My five predictions for 2011
Market Analysis

Harry Hare (Kenya) - My five predictions for 2011

2010 has ben an interesting year for the tech industry in the east African region, but the entry of Airtel Bhaarti through the purchase of Zain Africa and the bandwidth abundance on the east coast of the continent will go down in history as the two major occurrences that made the most impact.

Last year I made some predictions, which almost got me into trouble with some of the affected stakeholders, luckily looking back, I was not too far off. You can have a look my 2010 Predictions and let me what you think. But here are my 2011 predictions;

1. The death of voice as a business

Earlier this year, when the communicating Commission of Kenya (CCK) slashed the interconnection rates for mobile operators by 50% a move that Airtel took further and subsequently slashed their calling rates by a similar percentage. This started what many pundits and analysts called a price war, but to me this was the beginning of the end.

Voice as a business is long gone and 2011 will see the last kicks, as voice becomes a bonus service to other network services. We shall see operators giving free calls in order to woo subscribers to take up other profitable services such as data and other value added services.

2. Cloud-computing takes root

There has been a lot of sowing as far as cloud computing is concerned and awareness on cloud computing offerings seems high. With the death of voice, most of the networks in the region are now looking for other revenue streams and looks like they may have found one on cloud computing. Safaricom for instance has invested heavily in readying its infrastructure and have stringed a number of partnerships in preparation to offer cloud services.

I see cloud-computing taking off next year with small and medium sized companies, being attracted its utility-priced model, consuming computing and storage services on demand and pay for them as they go, using an Operating Expenses (OPEX) budget, instead of paying for infrastructure resources up-front using Capital Expenditures (CAPEX).

3. Seeds of ubiquitous computing

The developments within the mobile industry in the region have created a paradigm shift in the way people transact, access and process information. The mobile phone and the applications around it are becoming the way of life where people stop thinking of the technology behind transactions such as those of Mpesa.

The arrival of cheap smart phones with more computing power and the maturity of mobile application developers in the region will cause a major computing revolution and I see next year to be the beginning of ubiquitous computing environment with the mobile being at the centre of it all.

4. Free bandwidth

When the various undersea optical fiber cables landed on the east coast of Africa, there was high expectation that bandwidth prices will drop to match those in the Europe and America. This did not happen as operators tried to create scarcity in times of abundance in an effort to recoup return on their investment as fast as possible. This did not work, as uptake of bandwidth was slower than anticipated forcing market forces of demand and supply to check in.

Supply and demand, coupled with fierce competition to offload excess bandwidth has forced prices down to levels only imagined before. I see this trend continuing but with a twist. With slim margins from bandwidth, operators will choose to give free connectivity to gain a competitive edge on chargeable content and other value added services.  

5. Orange to take the lead in mBanking

Kenya has been severally been recognized as the country of mobile money especially with the runaway success of Mpesa mobile money transfer from Safaricom. There has since been a lot of innovation around the money market with a myriad of mobile money applications.

The launch of Mkesho – a bank account at Equity Bank connected to an Mpesa account heralded the beginning of mobile banking in Kenya and the region. But my prediction is Orange will dominate this space next year with its tweaked Orange Money, which provides true mobile banking features. Orange Money will emerge the most successful mobile banking service in the region, with Orange leveraging on its regional presence to roll out the services across East Africa.

Those are my five predictions for 2011, let me know what you think.

Harry Hare is a Director at African eDevelopment Resource Centre, a training and consulting firm based in Nairobi, Kenya and the publisher of CIO East Africa.

 

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