- Title: KENYA: Broadband spurs new businesses and ideas
- Date: 25th June 2010
- Summary: NAIROBI, KENYA (RECENT) (REUTERS) (SOUNDBITE) (English) ROY WACHIRA, CREATOR OF RUMBA PHOTOGRAPHY, SAYING: "Digital laws are a big issue because when it comes down to photography of people the only thing that protect people are the laws…the only thing which keeps things in line is laws and the fact that our constitution is really backward, it is so old and it doesn't h
- Embargoed: 10th July 2010 13:00
- Keywords:
- Location: Kenya
- Country: Kenya
- Topics: Communications
- Reuters ID: LVA42DANM5BH97NNMBAMU4S3PHUN
- Story Text: Using the internet in Kenya is becoming easier by the day, thanks the undersea cables that has seen a decline in costs per megabyte.
Sanjay Sikka, the chief executive officer of Horizon, an 8-million U.S. dollar call centre in Nairobi, explains why:
"Earlier we were operating through satellite and the cost we were paying was significantly high and that way there is no way we can get any kind of business. Now with the landing of the cable and the three companies that have already operationalized and the fourth company is operational pretty much in the next couple of days et cetera; what's going to happen is there is going to be ample choice and there is going to be competition within people and they have different cost structures in terms of where they operate and the very fact that we have multiple companies and competition therefore will reduce bandwidth costs and like I said that is a huge plus to the industry because the lower the bandwidth cost the lower your cost structure and thereby you become more cost competitive than you competitors than India and Philippines and I think that is a huge boost," he said.
Sikka says Horizon was set up to take advantage of Kenya's ambition of going head-to-head with established business process outsourcing (BPO) players such as India and Philippines.
"It is a nice time to break into Kenya because obviously there is a big growth…a surge in the use of online media, internet is blowing up here everybody is expecting it to do something for them and we are trying to make it do something for the people," Sikka told Reuters in a plush building with the capacity to house 1,200 agents fielding calls and emails around the clock.
Horizon's clients include a Kenya telecoms operator and a large British-based firm, says Sikka, who has worked for Accenture and India's Genpact in a 16-year career.
When Kenyan graduate Roy Wachira, 25, set out to start his first business, he turned to the Internet, whose growth in the east African nation is spawning opportunities unthinkable even a year ago.
Wachira runs a free social photography site that allows users to view special occasions or travel photos online and provides firms such as telecoms operator Safaricom with a channel to reach their targeted consumers.
The site is one of many innovations in east Africa's biggest economy spurred by faster Internet speeds through three fibre-optic cables which link Kenya with the rest of the world.
Since the arrival of the TEAMS and SEACOM cables last year and a third one called EASSy last March, costs have fallen to as low as 22 US dollars per megabyte from 4,000 US dollars previously.
Usage has jumped to 15 gigabytes from 1.8 gigabytes eight months ago.
"It is a nice time to break into Kenya because obviously there is a big growth…a surge in the use of online media, internet is blowing up here everybody is expecting it to do something for them and we are trying to make it do something for the people," Wachira said.
Mobile data users quintupled to 1.98 million last year from 398,190 in 2008 and telecoms firms are hoping data services will drive growth as average revenues per user from mobile phone calls fall.
Those who have ventured into the brave new world of business made possible by faster Internet, however, say challenges abound, including on the regulatory front.
"Digital laws are a big issue because when it comes down to photography of people the only thing that protect people are the laws…the only thing which keeps things in line is laws and the fact that our constitution is really backward, it is so old and it doesn't have a lot of the stuff which you will require to enable people do a lot of digital activities," said Wachira.
Analysts say that a data protection law is long overdue, and a lack of data protection guarantees, coupled with a judiciary that is perceived to be weak and slow, could dissuade some foreign firms from investing in the sector.
There are other challenges to Kenya's ambitions for its outsourcing sector like unreliable power supply and perceptions of political instability, such as the 2007-08 disputed elections that led to clashes., shattering many people's perceptions of Kenya's political stability.
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