Definitely, reason to celebrate

The recent defeat of South Africa’s Springboks at the Rugby World Cup may have resulted from their players’ desire to return home quickly and snap up some very enticing new pricing plans available for broadband service. Despite the rugby loss, South Africa is poised to become the Southern Hemisphere’s leader in telcoms.

A retail pricing war is underway in South Africa. Vodacom, MTN, incumbent carrier Tellkom, iBurst, and others are dramatically lowering prices while improving consumer choice and service quality.

An example of some of the changes:

…stepping up to the plate is MTN, which has launched an unlimited and uncapped data promotion that gives customers navigating options on MTN’s network at peak HSPA+ speeds from as little as R289 (FJD 70) a month.

And iBurst has also introduced new data packages ranging in price from as low as R49 (FJD 11) per month for 1GB to 50GB at R445 (FJD 105).

New devices such as smartphones and tablets drive consumer demand for data. Serame Taukobong, MTN South Africa’s chief marketing officer, said that with the increase in smartphones and tablet technologies data usage has gone up:

“We have seen a significant number of our customers taking up latest smartphones, tablet PCs, wireless routers and laptop deals that MTN is offering. This promotion is a response to the increased data appetite that comes with the usage of these devices,” he said.

At the same time, the Vodacom Apps Store has reached 100,000 downloads in its first month of operation and the company is now launching a program to support local talent in applications development.

New devices driving consumer demand for data

South Africa has achieved that enviable balance where the pipes are in place, and there are adequate numbers of players at wholesale and retail level to drive widespread adoption. As more consumers buy smartphones and tablets, increased data usage will enable even more volume discounting. Most importantly, there will be a user base in place to support an app development community that will have a local market of millions who are in position to buy their creations.

This thriving ecosystem is something the Pacific Islands can only dream of—as I was reminded by a local telecom CEO who said, “we don’t do applications and services”. You might as well be telling me that you don’t do the future. So much for all the empty rhetoric on ‘innovation’. 

Advertisements

Several weeks ago, I came across this new Submarine Cable Map from Telegeography Research. It’s a great visualization for understanding how the underpinning physical layer of the Internet actually works. By clicking a cable on the map, you can view when it came into service, locations it connects and the companies that own it. Note that cables appearing in gray are projects expected to come online in the near future.

The map reveals a lack of infrastructure in the Southern Hemisphere while, the East Asian corridor reveals the most number of new cables coming into service.

Around the time I started writing this blog in 2006, S. Hemisphere nations of disparate size such as Fiji, Australia, and South Africa faced the same dilemma: lack of cable infrastructure resulting in very costly wholesale pricing.

Cable projects ready for service in the near future shown in gray

In that time however, Australia and South Africa have pushed forward with several new cable projects. In October 2009, Australia added the Pipe Pacific Cable-1 (Read 2009 CW Post) and has since seen dramatic reduction in Internet costs for users.  South Africa has several cable projects that will be ready for service in the near future. As a result, their consumers are beginning to taste considerably lower prices.

Meanwhile, Fiji and New Zealand, without real competition at the wholesale level lag considerably behind as seen in this table comparing budget plans:

Fiji Australia NZ South Africa
$ FJD/Mo. Data Cap $41/2 GB

(Mobile)

$55/20 GB

(Fixed Line)

$80/5 GB

(Fixed Line)

$11/1 GB

(Mobile)

Sources: Fiji, Australia, New Zealand, South Africa

This is not the best comparison as the pricing for Fiji and South Africa are from mobile service providers, while ANZ pricing is for fixed-line service. Still, it does help to paint the contrasts. South Africa is poised for major competition as one mobile provider now offers an unlimited cap service for FJD 70. 

If there is one variable that has the most effect on retail Internet pricing, it is competition in wholesale.

Barring that, only an effective regulatory intervention can bring about a more competitive outcome. It is no coincidence then that New Zealand and Australia have been at the forefront of movement to enact functional separation of incumbent operators.

Taking a closer look at the South Pacific region reveals some interesting information. If you recall, the SPIN project promised to connect New Caledonia to Tahiti, via the islands in between. It does not appear on the map and its unlikely it ever will. The Governments of Vanuatu and Tonga are investing in cables connecting to Fiji’s Southern Cross Cable connection that should come online in the next two years. Other cables that have come online in the past few years are Gondwana (New Caledonia – Sydney), Honotua (Tahiti – Hawaii) and ASH (American Samoa – Hawaii).  

Where the previous post concerned discussion of the impact on organizational culture resulting from a shift toward openness with data, the discussion here is about creating new tools for collecting data, with the purpose of aiding decision-making. 

The Black Star, shining down

Filtering through a great many articles on ICT and development, I came across the example of the mFarm initiative in an article on Ghanaweb. The project is part of a wider policy drive to increase agricultural output in Ghana.

The issues surrounding the lack of information in the agricultural food supply chain were on my mind when I had opportunity to catch up to my long-time friend, Corneliu Cotofana–entrepreneur/engineer. I described to him the difficulties growers, suppliers, and buyers contend with operating in an information vacuum and we discussed some of the policy initiatives in Ghana. Before long, we realized that there was enough of an engineering problem and policy challenge to merit a collaboration. 

reuniting to fight for food security, more dangerous than battling drug lords

So, Ladies and Gentleman, we would like to introduce our joint initiative:

Farm-e, a combination SMS and web-based market information exchange, decision-support tool, that will use technology to build the linkages to support planning, production and marketing. For the first time in Fiji, it will be possible to have a real-time birds-eye snapshot of agricultural food production at the macro level. Our mission is to have the information serve the purposes of growers, suppliers of seeds and fertilizers, buyers and exporters, and everyone involved in the policy discussion around food policy.

Across the developing world, agricultural output falls short of its potential because of a lack of linkages between the different players involved. Growers face uncertainty about whether they will find buyers for their crops. Suppliers of seeds and fertilizers are never certain how much stock to keep on hand. Buyers, made up of consumers, food processors, and exporters are at the mercy of irregular supply.

The mFarm initiative was so compelling to me because the wider policy initiatives achieved a 15-20% growth in income for farmers, while lowering transaction costs some 30%. For people with the lowest of incomes in Fiji, these possibilities represent a revolutionary, not evolutionary leap

Please remember that  the collaboration between Corneliu and I, would not be possible without the near ubiquity of mobile phones in the developing world. It’s only because this device is already in the hands of so many that we can think about how we can try to transform it from its intended purpose of social communication device to business tool.  

What’s next for us? We are attempting to secure a time slot to present at the South Pacific ICT Expo being held July 20 – 23 at USP’s Laucala campus. The Expo is being held to launch the Japan-Pacific ICT Centre. Our bid to present at the conference is an attempt to secure space in the technology venture incubator that will be housed at the research centre. 

Looking slightly further ahead, we have a rough outline of how we expect to proceed over the first year. Software development should take take 6-9 months. Toward the end of that time frame, we hope to bring in the first round of early-adopters and beta-users to help test the system and provide feedback. Once design and implementation with telecom partners is achieved, then we undertake the challenge of marketing on the national level.

We expect Farm-e to change and evolve as we work to ensure timely and relevant data is available to facilitate good decision-making by our users 

We’re also in search of a logo/mascot to make Farm-e a recognizable brand. Here are some possible contenders:

Find Old Posts

RSS Communications Direct

  • An error has occurred; the feed is probably down. Try again later.

RSS CGAP Microfinanice Technology Blog

  • An error has occurred; the feed is probably down. Try again later.