IoT in Africa: Still a long way to go

The great uptake of mobile phones in Africa signals the future of IoT

While the world is gradually adopting the Internet of Things, Africa is not showing much development in this sector even though experts in the field predict a marginal growth.

For the challenges that face Africa, IoT has been lauded to offer many of the solutions. But while implementation is still low, one way of measuring the growth is by looking at machine to machine (M2M) connections.

In Nigeria for example GSMA research shows (PDF – see page 15) that machine to machine (M2M) technology will grow 23% from two million M2M connections in Q4 2015 to 4.2 million connections by 2019.

According to the GSMA report, the marginal growth will still open up: “the potential for M2M-enabled devices, including solar home systems, providing real-time data on customer behaviour and equipment performance, which can be used to refine and develop business models and operations”.

Research by IDC in 2015 also revealed that some of the solutions that exist in terms of IoT in Africa are confined to transportation and retail verticals to deliver services such as fleet management, asset tracking, retail point of sale (POS), and pay-as-you-go insurance.

“While machine-to-machine (M2M) opportunities may be limited across the African continent, significant potential for growth exists, particularly in respect to the deployment of M2M energy, utility, and security services,” the IDC report said.

“M2M technology is clearly gaining traction in Africa, albeit at a slower rate than seen in the world's more developed markets,” Oluwole Babatope, a telecommunications and networking research analyst at IDC West Africa added in the report. “And while consumer applications for M2M technology undoubtedly exist, enterprises will be the main customers for such services, and thus the main drivers of growth.”

The most prolific example of IoT is the ability to deliver and control solar power consumption through the uses of mobile phones like M-Kopa in Kenya. Users acquire solar units and pay for their daily use through mobile money. If payment is not made, the solar unit is automatically disabled.


Vehicle car tracking systems have also been somewhat successful in chosen parts of Africa. In Kenya, companies such as Strack and Track N Trace give car owners the ability to remotely manage their vehicles.

The drivers of adoption have really been enterprise players. According to Vodafone’s 2015 M2M Barometer Report, 35% of organisations in Africa have M2M deployments in place.


Telecoms: A catalyst for IoT

Telecoms have been hailed to have the infrastructure to drive IoT. And the continent’s maturity in mobile penetration could offer great solutions in M2M department.

Already with solar unit purchase programs, Telecom providers play a big role in delivering the SMS/USSD communication as well as a payment platform through mobile money.

Airtel Kenya recently entered a pact with Flickswitch, providers of M2M services. This partnership will enable enterprise customers to be in control of their SIM, through virtualisation.

Through Flickswitch’s product, SIMcontrol, enterprise players can now remotely control mobile connectivity and can customise the SIM’s under their company to set business rules. This means that a company can remotely see their employee’s SIM cards, recharge them, limit calls or deactivate them using a web interface.

The company says that they are looking to provide these services even to startups in Africa to leverage on the power of M2M.

Ibrahim Epamba, an end to end design engineer at Orange Telkom Kenya said that telecom companies need to also expand their capacity to offer great IoT products.

“Telcos need to improve on their infrastructure,” Epamba said at the recently concluded East Africa Com in Nairobi. “There will be so many devices with IP addresses and they will be doing a lot of communication with the network. So the role of telcos is to build that infrastructure.

“Telcoms need to increase their capacities right from the BTS towers all the way to the submarine cable,” he added.

More bandwidth will be consumed in the end and the role played by 4G and 5G will come into play as high quality services will be demanded. The state of 4G and 5G in Africa is at its growth stage and this might hinder high end IoT products.

Vodafone SA supports the idea of establishing a strong infrastructure grid before rolling out massive IoT services to its people.

“The Internet of Things cannot be brought to life, however, without a robust IT infrastructure to underpin it. So while Western governments focus on repurposing and in some cases overhauling legacy IT infrastructures to seize the IoT opportunity, Africa has the agility to start afresh and establish an infrastructure robust enough to support the current and future mobile, cloud and big data needs of its population,” the company said in a recent statement.


There is interest in IoT


Although there is great interest in IoT products in Africa, Epamba believes that this space has currently been relegated to hobbyists with a passion for technology and products rarely get to the production stage.

One exception is Kenya’s Illuminum Greenhouses, a company that helps farmers set up technology enabled greenhouses. The units are fitted with sensors which measure the conditions in the greenhouses then send texts to farmers when they need to water their plants or change any other input. Farmers can also automatically turn on sprinklers on their farms remotely using their mobile phones.

Without having IoT for the sake of it, innovation around this area has to put Africa’s challenges at the forefront. An IoT product that solves certain problems will be relevant and might experience a faster take off.

In Nigeria Ericsson research [PDF] already shows interest in IoT projects such as Smart Homes and cars. This means a big percentage (nearly 70%) of mobile users in the country are hoping to benefit from it.

IDC expects the M2M market in most parts of the continent to grow slowly over the next five years, largely because mass-market consumer applications for the technology remain few and far between. IDC further predicts that, as the African M2M market matures, there will be a shift from providing solutions to developing service-delivery models.

“Due to the low average revenue per device (ARPD), there will be a need to generate recurrent revenue from services,” Babatope said.

“The profitability of MNOs in delivering solutions and services will, in future, hinge on how service-oriented they become; a greater focus on services will likely deliver improved profit margins,” he added.