Is venture capital becoming obsolete for Web start-ups? Yes, according to Robert Hendershott, a professor of private equity and entrepreneurship at the Leavey School of Business at Santa Clara University. This is an interesting article by Claire Cain Miller on the New York Times Bits Blog that Kenyan Internet Entreprenuers will find inspiring. Read more here.
Monthly Archive for May, 2009
Page 2 of 2
Everyone, it seems, has designs on Kenya’s fast growing internet and data services market. Its been reported in this week’s edition of the East African Newsapaper that MTN, which is undoubtedly Africa’s largest telecoms groups has acquired a 60% stake in UUNET Kenya. UUNET Kenya is one of the leading internet and data services companies in the country focussed on small to large businesses. UUNET Kenya is also a major private data network operator (PDNO) using a combination of fixed line and wireless mediums.
MTN has been interested in the Kenyan marketplace for years – since the time when Vivendi exited its investment in what was then Kencell Communications that subsequently was acquired and re-branded Celtel and is currently known as Zain. Thereafter, MTN was one of the bidders for hotly contested Telkom Kenya sale where it lost to France Telecom which has since launched is Orange mobile network in Kenya. Most recently, it was widely reported in the media that MTN had made overtures to acquire a stake in Econet Wireless Kenya which owns the YU mobile network.
The surprising thing about the MTN acquisition of UUNET Kenya is that it appears somewhat unorthodox in that having failed to acquire either a mobile network or telecoms operator in Kenya, MTN has settled for an internet and data services provider. This is a fast growing market in Kenya and could give MTN muscle in areas such as inter-connecting VOIP and other data services via its Pan-African network. At the same time, MTN’s subsidiary in Uganda is dominates voice and data services so clearly it hopes to replicate the same winning strategy in Kenya.
Going forward, what remains to be seen is how MTN, which is renowned for being an innovative telecoms group will penetrate and grow its market presence via the UUNET Kenya acquisition. At the same time, its expected that other major players in Kenya’s internet and data services industry such as Safaricom, Swift Global, Internet Solutions and AccessKenya will respond to the MTN challenge in Kenya. At the end of the day, one thing is for sure, the customer is bound to gain from the increased competition with lower service prices and especially since the SEACOM and TEAMS high speed undersea data cables will become operational starting June 2009.
Just found out that Safaricom has quietly launched its mobile portal, Safaricom Live!. The site is located at http://www.safaricom.com and features premium mobile content and services in the form of ring tones, wallpapers, videos, information services, email and games.
I have been hearing rumours for the past couple of years that Safaricom has been working with a certain leading telecom services provider to build a mobile portal so I guess that Safaricom Live! is the final outcome.
I wonder how this will position Safaricom with their various value added services (VAS) providers such as Cellulant, Interactive Media Services and Mobile Planet who presumably will now be competing with Safaricom with their offerings. However, considering that Safaricom is investing considerably in pushing their internet/data services, this is an obvious play to build traffic (and incremental revenue) using with proprietary content that they own/market to their customers.
On the way forward, what remains to be seen is how many of Safaricom’s 10+ million subscribers will sign-up for Safaricom Live! This will be a test of how much affinity Kenyan mobile internet users have for premium content and services, especially directly from an operator. In addition, it remains to be seen how well Zain, Orange and YU will respond to Safaricom Live! in launching their own mobile internet portals. All in all, its good to see progress happening on the mobile content and services front in Kenya.
Forget all the amazingly low voice and sms offers that Kenya’s four mobile networks have been promoting over the last year or so. At the end of the battle, what became obvious is that subscribers had grown by leaps and bounds but the average revenue per user (ARPU) had dropped significantly. To this end, Safaricom, Zain, Orange and YU have had to change tact and are now aggressively pushing their data offerings.
The interesting intrigue in all of this mobile data frenzy of offerings is that Safaricom is still the only mobile network in the marketplace that has 3G whilst the other three mobile networks are only offering GPRS and EDGE services which are significantly slower. This prompted me to do some additional research to see what each mobile network in Kenya is offering and how much they charge. The results, are as follows:
YU
YU is the newest of all the mobile networks in Kenya. They have a tough road a head of them as all the previous entrants have had time to build their respective subscriber bases substantively. Therefore, its no suprise that they finally (officially?) launched their GPRS/EDGE prepaid mobile internet services last week at one of the lowest rates in the marketplace. YU is offering its prepaid internet services at a fixed rate of Kes. 3.00 per megabyte. The interesting characteristic of this offer is that there is no bundle required to access the rate. It will be interesting to see how YU performs with its offer in the coming months since its a cost-effective pay-as-you-go service that would make it appealing to most Kenyans.
Safaricom
Safaricom has been aggressively marketing its various 3G data bundles for the past year or so. However, at the same time, the 3G data rates have been dropping significantly since they started marketing the service. I have personally been on Safaricom’s 3G for the past couple of months and what a revelation it is! Its fast, really fast compared to any other Internet service I have used in Kenya to-date. However, the limited use data bundles are kind of pricey and as a result one is always cautious of how much internet they are using. As things currently stand, Safaricom has the following bundles:
- 300 megabyte bundle for Kes. 999.00 with a per megabyte rate of Kes. 3.33
- 700 megabyte bundle for Kes. 1,999.00 with a per megabyte rate of Kes. 2.85
- 1 gigabyte bundle for Kes. 2,499.00 with a per megabyte rate of Kes. 2.44
However, the rate per megabyte goes to up Kes. 8.00 per megabye when one exhausts their bundle.
Orange
Orange has the widest range of internet access offerings based on its GSM, CDMA, EVDO and Fixed Line services. For the purposes of this comparison, I have focussed on their prepaid Internet Everywhere offering which has a “bundled” approach similar to Safaricom although its GPRS/EDGE based. The default rate outside the bundles is fixed at Kes. 7.00 per megabyte which is not bad at all. The following are the Orange Internet Everywhere bundles:
- Daily bundle is 50 megabytes for Kes. 150.00 with a per megabyte rate of Kes. 6.00
- 50 megabyte bundle for Kes. 250.00 with a per megabyte rate of Kes. 5.00
- 100 megabyte bundle for Kes. 450.00 with a per megabyte rate of Kes. 4.50
- 250 megabyte bundle for Kes. 850.00 with a per megabyte rate of Kes. 3.40
- 2 gigabyte bundle for Kes. 2,000.00 with a per megabyte rate of Kes. 1.00
Zain
Zain has been in the marketplace almost as long as Safaricom has. Therefore, its surprising to see that they have not yet upgraded their network to offer 3G yet and they are still using the GPRS and EDGE standards for their internet services. I am not certain as to how up to date their web site is but I just checked and their prepaid offer for mobile internet is Kes. 20.00 per megabyte (is this really correct?) which would make them the most expensive mobile network in the country for the prepaid mobile internet user.