I remember quite vividly how excited we all were when the TEAMS high speed undersea cable landed in Mombasa in 2009 and went live soon thereafter giving Kenya for the very first time world-class broadband Internet. TEAMS was only the first of three more high speed undersea cables that would eventually connect Kenya to the world. It is now over 4 years since TEAMS went live and many of the things we expected have not yet come to pass. For one, it was expected that Internet access would become much much cheaper but this has not been the case given that rates are more or less the same. In addition, it was expected that broadband in Kenya would lead to an explosion of local digital content in the from of Internet-based offerings by locally owned technology start-ups and established businesses. To some extent, this has happened, but not in the shape or form that had been anticipated.
4 years after broadband came to Kenya, we now have millions of Internet users who largely access digital content via 3G enabled mobile devices. We also probably have too many technology competitions that are geared towards creating start-ups that could eventually become the next Facebook or Google, from an African perspective. In addition, there are now quite a few technology co-working spaces, incubators and accelerators in Nairobi where start-ups can begin operations from scratch with Angel, Seed or Venture Capital funding which did not exist just a few years ago.You could say we have the perfect storm to drive local digital content initiatives which is actually starting to happen. In fact, I seem to meet International Investors every so often in Nairobi and their challenge is not funding technology start-ups but rather that there are too few high quality start-ups they would like to fund – imagine that! There is more money available than there are promising start-ups to invest in. These are interesting times indeed!
Going to the heart of this blog post, the problem(?) I see with the emergence of the local digital content industry in Kenya is that contrary to what was expected, locally owned start-ups and established businesses are NOT leading and owning it. One just has to look at the cold hard facts to realize that leadership in the local digital content game in Kenya is actually owned by major International players. Take for instance e-commerce? This space is currently being led by the likes of OLX, Rupu, Cheki and Jumia. OLX is owned by South Africa’s Naspers. Rupu is owned by Switzerland’s Ringier. Cheki is owned by One Africa Media which is in turn backed by Tiger Global and SEEK. Lastly, Jumia is owned by Rocket Internet.
On the other hand, If we turn to mobile money we all know that Safaricom’s M-Pesa is king in this space. However, Safaricom does not own M-Pesa and this is actually a platform owned by Vodafone from whom Safaricom licenses the services offered for a hefty fee. Lastly, we all know that Facebook for instance has over 3 million users in Kenya and Google as well as YouTube, Twitter and Linkedin also have major user uptake that runs into the millions of users. However, its a no-brainer that all of these platforms are NOT locally owned, even though they have lots of locally generated digital content.This is the disparity that irks me – what went wrong? What happened, exactly? Why did the vision fail to match the reality? There are many reasons which I cannot really dive into here without going off-topic.
Ultimately, at the end of the day, market forces determine which businesses succeed or fail in any country and Kenya is no exception. It seems that although there has been a surge in the growth of local digital content over the past few years with the advent of broadband Internet, the majority of platforms that enjoy the highest levels of page views, unique users, search engine results pages (SERPs), downloads, installs, and ultimately user adoption in Kenya are not local at all but are owned by International companies who often have Pan-African interests. There is a major African digital land grab under way and these International platforms WILL become the dominant players in the long-term as things stand.
Going forward, the call to action is for many more local start-ups and established businesses to make a much bigger splash in local digital content as this is still a very nascent and undefined space where there are so many untapped opportunities. For one thing, even small investors who seem to be obsessed with buying real estate and/or stocks at the Nairobi Securities Exchange (NSE) have a chance to become the eventual winners in the same manner as David did with Goliath – by using brain over of brawn. Indeed, the story of the future of local digital content in Kenya is still being written and it’s NOT yet game over.