Telkom Kenya

So here I am at 11.55 pm (GMT) 24 June 07 and I wanted to check out the rates of Telkom Wireless (http://www.telkom.co.ke/). Instead I get the above. Telkom Kenya - you need your website up and running 24/7. Two possibilities here: Kenya Offline or Bongeni Jo!!

Rwanda - the ICT Tiger

On 18th June, 2007 Rwanda and Burundi formally joined the East African Community (EAC) as full members. They signed treaties of accession to the EAC bringing the membership of the regional body to 5 countries with a population of 100 million.

This event is important to all ICT practitioners and investors in Kenya. This is because Rwanda was developing its ICT industry before its regional neighbours had an inkling of the potential and competitive edge ICT gives nations. Rwanda has a knowledge-based economy that is only matched in the region by Mauritius.

The dot-com tuned President of the country - Paul Kagame - initiated the whole process when his ideas were actualised through the Vision 2020 which was launched in 2000. It focused on IT as a crucial cornerstone for future development. This is similar to our Vision 2030 which I believe should have been formulated much earlier. Contrast this with Mauritius whose Ministry of Information and Communication was busy with ICT policy formulation, implementation and physical development in 1997 (you can blame this delay on our asinine politics).

Anyway Kagame’s confidence and steely determination was remarkable when you consider he was pushing this new approach against a backdrop of national recovery from the genocide trauma.

His vision had logic stamped on it. With no port access, expensive airfreight rates and instability around it, Rwanda needed a new kind of economy. It chose the knowledge economy.

Much has been achieved. In January 2007 Kagame informed fellow heads of state, at the 8th African Union summit, that the country had set its science and technology spending at 1.6 percent of GDP. This is comparable to the OECD countries. Other developments include the building of telecentres, computerisation of primary and secondary schools, a $10 million e-Government project and continued investment in the Kigali Institute of Science and Technology (KIST).

ICT has transformed Rwanda. The Economist recently reported that Rwanda is well on its way to achieving several of the Millennium Development Goals due to the impact ICT has had on this emerging economy. With substantial business process redesign, government support and focused leadership, Rwanda has demonstrated to East Africa that much can be accomplished when ICT is used as an engine for development. However this feat is not unique to Rwanda. It was achieved earlier by Mauritius where its ability to harness ICT has enabled it achieve one of the highest GDP per capita rates in Africa.

Kenya has obviously heard the rumble of the digital tsunami. We have embarked on various ICT projects and more crucially we have recognised that the future will demand a knowledge economy. It is in our interest to work closely with Rwanda now that they are part of the EAC. There are many opportunities for mutual co-operation in ICT and it would be negligible if we did not exploit this opportunity now. Student exchange programs should be initiated, the respective Chambers of Commerce should meet with the aim of promoting ICT trade and ICT practitioners from both countries should work together to develop locally based software.

The opportunities are endless and I will soon be inviting Dr. Shem Ochuodho to furnish us with a comprehensive outline on how we can work more closely with our Rwandese brothers - with the aim of further developing our local burgeoning ICT industry.

The Potential of ICT in Kenya

The potential of ICT investment in Kenya is illustrated by the phenomenal financial results posted by Safaricom. A previous posting (1/06/07) in this blog had profiled the company and its CEO.

Safaricom has emerged as one of the most profitable Kenyan company with historic results that saw its pre-tax profits hit Sh17 billion. The results were released today (20th June, 2007).

This is the highest that a Kenyan company - whose results are made public - has made, eclipsing corporate giants listed on the Nairobi Stock Exchange.

With profits at this level, Safaricom nearly made as much money as what Kenya Airways, East African Breweries and Barclays Bank did combined. These businesses made a combined pre-tax profit of Sh21 billion on revenues of Sh94 billion.

This is the kind of money that all Kenyan banks and insurance companies have been struggling to make in a single year for sometime. Kenyan banks combined made a pre-tax profit of Sh27 billion in 2006.

With Safaricom’s revenues and net profits growing by over 30 per cent over 2006, these results underlie a robust performance of the economy, but also opens a new debate over whether mobile carriers are overcharging customers with the company now earning an operating margin of 38 per cent.

This means that for every shilling the company generates in revenues, 38 cents goes into operating profits. More on http://www.bdafrica.com/.

Bongeni Jo!!!

Equity Bank’s website was defaced last week. Safaricom’s website is suspiciously unavailable. There is some mischief going around.

The cracker who defaced Equity’s site might not have caused serious loss to the bank apart from denting the reputations of the in-house IT team. However Bongeni Jo (let’s baptise him so - after one of his calling cards), exposes a security lapse that would have had more serious implications. I immediately recall the recent system intrusion of TJ–Maxx and its affiliates. During this incident over 45.7 million payment card details, owned by customers of this firm, were stolen. The more startling aspect of it was that this data was accessed during an 18 month period from around July 2005 to December 2006. The breach was only made public in March, 2007 (http://news.bbc.co.uk/1/hi/business/6508983.stm). The technical sophistication employed by the TJ-Maxx crackers was worrying.

The implication is obvious. How long was Bongeni Jo’s escapade? Did he compromise the bank's database? Of course Equity Bank would not have been so forthcoming if serious damage had been done. How many firms in Kenya have had intrusions and have decided to keep quiet?

It might have been a harmless prank but you have to note that cyber crime has become such a lucrative venture that criminal gangs are sponsoring their ‘bright’ members to pursue computer science degrees. The return now warrants this kind of investment.

It is one thing to apply defensive measures but there is no security system that is impregnable. The horse has already bolted in this instance. Equity bank therefore needs to embark on a computer forensic investigation that will not only identify the weaknesses of their system but also nab Bongeni Jo (he definitely left ample digital evidence). This would deter future crackers.

Computer forensics is a field that is slowly gaining global traction. It is something Kenyan firms who have a digital presence need to take seriously. I am initiating various projects in this regard however I shall discuss the relevance of computer forensics to the IT industry in Kenya in a future post. Due to its sensitivity I can only generalise but we need to start preparing for the cracker onslaught, it will surely come. Bongeni Jo was only a harbinger of things to come.

The Kenyan ICT Bigwigs (Corporate) – Part 3

Michael Joseph (61) is the Chief Executive Officer of Safaricom Limited and has extensive international experience in the implementation and operation of large wireless networks. He has been in this position since July 2000 and has been primarily responsible for the re-launch of the company and its subscriber growth from approximately 20,000 at the time of re-launch to over 5.5 million as at 21st January, 2007.

He was previously the Chief Technical Officer (CTO) for Vodafone Hungary where he was responsible for the implementation and operation of the company’s DCS 1800 network, including the installation of over 500 base stations, 2 switches, an Intelligent Network platform, and the introduction of Value Added Services like WAP, SMS and mobile internet applications.

He landed at his current port of call (Nairobi) in 2000 and re-launched Safaricom. Since then it has grown significantly. It began with a workforce of 200 and now has over 1000 employees. Staff are well trained both prior and during their tenure at Safaricom as Michael places great emphasis in a dynamic workforce that operates as a team. The subscriber base has subsequently grown by almost 600%.

Safaricom is arguably one of the most profitable listed businesses in Kenya. It's revenues and net profit have been growing at an annual compound rate of 27 per cent and 66 per cent - a huge momentum that could double the business in a few years. A profit of kshs12.77 billion in its last financial year made Safaricom the most profitable company in the region. Michael's stewardship has been exemplary.

This kind of growth not only makes Safaricom by far the biggest and most profitable business in Kenya but also the most influential in terms of how it affects everyday lives of the citizens. Michael recognizes that a significant part of the economy is informal and is being facilitated by the mobile phone sector. Safaricom promises to transform communities in Kenya so that the mobile phone, telephony and information technology should no longer be status symbols but integral business and personal tools.

Safaricom’s aim is to remain the leading Mobile Network Operator in Kenya. In order to achieve this Michael has placed a strong focus on quality of service to customers. Integral to this has been pricing and customer service. The ability to grow the rural customer base and offer them appropriately designed products is a particular feather in Michael’s cap.

Michael accredits Safaricom's growth and success to its ability to move fast towards bridging the digital divide, its innovative work force and the firm’s development policy. With Michaels amazing store of energy and the firm’s sustained will to succeed, the team has developed tariffs which are adaptable to every lifestyle and every pocket. Safaricom has derived most of its growth from airtime sales, especially the introduction of the lower denomination top-up cards.

Safaricom has also introduced innovative products adapted to the Kenyan market such as “Simu Ya Jamii”, the community phone concept that has revolutionalised accessibility of mobile telephony among the lower-income population, which cannot afford a handset. Another ingenious product is “SMS Sokoni”, which provides daily agricultural commodity prices through SMS. The recently launched “M-Pesa” which allows subscribers to make simple financial transactions from their phones looks set to become a popular service. It marked the first time in the world that a mobile service provider had ventured in the e-money business.
(Note the development of products aimed at the low - income market).

Micheal has a passion for environmental conservation and has steered Safaricom's partcipation into numerous projects including the Aberdare Forest Fund and the Safaricom Lewa Marathon. He has a BSc. in Electrical Engineering from the University of Cape Town and is a member of the Institute of Electrical Engineers (I.E.E.E) and Institute of Electronic Engineers (I.E.E), UK.

CSK Needs To Flex Its Muscles

The Computer Society of Kenya (www.cskonline.org) is a non-profit professional association that exists to further the ICT profession. Its current Chairman is Mr. Waudo Siganga.

In Kenya we have various professional bodies, some vibrant, some lethargic and most in comatose. One of the most vibrant is ICPAK (Institute of Certified Public Accountants of Kenya) that co-ordinates and oversees the activities/interests of all qualified and registered Certified Public Accountants. Other visible associations include the LSK (Law Society of Kenya), AAK (Architectural Association of Kenya) and NNAK (National Nurses Association of Kenya) among others.

These associations, apart from safeguarding and promoting the interests of their members, have a more critical role to play in society. They are meant to protect the public interest. This means that these associations are responsible for the regulation and licensing of practitioners in their field. These members must be in good standing and professionally monitored if they are to be entrusted by society to perform various crucial roles. The public, in general, is not sufficiently knowledgeable in a particular field of practice so as to determine the validity, worth and integrity of a particular professional. An apt illustration would be the lawyer who defrauds clients of their money and does not deliver the professional services required of him/her. It is the LSK’s mandate to contain such errant members. Mention can also be made of the collapse of a commercial building in Nairobi (January, 2006) where nine lives were lost and over seventy workers seriously injured. Who was supposed to ensure that structural standards met the prescribed standards?

The Kenyan ICT industry is destined to experience phenomenal growth in the near future. ICT practitioners will develop various projects for Kenyans - some of them safety critical - others will be financial, health-based or even research oriented. CSK has a window of opportunity to entrench itself in this nascent but rapidly developing sector. It is time the CSK re-claimed its role in the ICT industry. As the de jure ICT professional association, its functions and activities cannot be viewed in isolation to the development of this sector. It's main role is too crucial to be overlooked.

My first recommendation would be that CSK needs to establish, formulate and maintain a database of all ICT professionals. This should not be voluntary, it should be a mandatory membership. Any ICT professional in Kenya must, by law, ensure they are registered as members of CSK if they are willing to conduct their professional activities within the confines of the law. This would ensure that our rapidly developing industry is not hijacked by white-collar criminals masquerading as ICT practitioners. The necessary legal framework would not be difficult to obtain especially when the relevant ministry is currently only too willing to listen and act on the needs of ICT stakeholders.

The CSK should also embark on an information awareness campaign aimed at dissemination of ICT issues to the society. The public should be informed regularly on any technological, social and legal developments/changes in the local ICT industry. Special emphasis should be placed on the risks that accompany the free access to information of all types. The need to inculcate a mature approach in dealing with this access would forestall, or minimize, cybercrime and general abuse. To this end, Kenyans need to be informed on their ICT consumer rights. The CSK, with the assistance of the recently launched Kenya ICT Consumer Association, can ensure that consumer education and protection becomes a priority in this sector.

It is evident that the shortage of IT skills will be a major impediment to the sustained development of ICT locally. The Minister for Education illustrated this fact recently when he stated that most teachers in our primary, secondary and tertiary institutions are computer illiterate (http://allafrica.com/stories/200705290181.html). These are meant to be the “ICT champions” and they are unprepared to surf the coming digital tsunami. As much as the government has an obligation and responsibility to rectify this situation the CSK would assist by initiating school IT projects and organizing the ICT Schools Congress.

To be able to build an ICT professional body, that is respected and valued for the exploitation and application of IT for the benefit of Kenya, we need the CSK to assert itself and provide a more visible leadership role.