With the world reeling from the news of NSA eavesdropping on telephone and email communication of both citizens and their leaders, many questions are being asked about the security of modern communication channels. The biggest of them is if what we have believed as secure communication was just an illusion. The dossiers released by Edward Snowden on the extent of the US government sanctioned eavesdropping of communication channels are just but the tip of the spying iceberg.
Online security facade
There exists (or so we thought) various security measures that ensure secure communication. This is by way of encryption of the information being communicated. Encryption is not new and has existed since ancient times. One of the most notable use of encrypted communication was by Germans in the second world war, The allied victory in 2nd world war against the Germans was hinged on their ability to de-crypt German communication which revealed their war strategies leading to their eventual defeat. Secure communications (or lack of it) can build or destroy civilization.
Today, many algorithms exist to encrypt data and voice over communication channels. Many of these are created using complex mathematical computations such as Algebraic Number Theory (ANT) to secure data over communication channels. However the fact still remains that all these methods were created by humans and if enough effort is put, can be decrypted. Advancement in mathematics also means that encryption systems that were previously secure due to mathematicians inability to solve some mathematical theorems are now becoming less secure as solutions to these are being found. A recent article suggests that due to inching closer to developing a more efficient way of solving the ‘discrete logarithm problem’, both RSA and Diffie-Hellman key exchange that relied on there being no efficient algorithm to solve the discrete logarithm problem might be defunct in 5 years as there will be solutions to that problem by then. 3 years ago, a Chinese mathematician cracked the Triple DES encryption by solving a previously unsolved mathematical theorem.
The above plus the fact that these Keys are generated on systems accessible by humans with motives, means that data encryption is 99% trust and 1% mathematics. The motives of NSA means that they can decrypt any communication on the Internet today should it be of interest to them.
Deep Packet Inspection
The availability of devices from manufacturers such as Allot and Bluecoat and Nokia Systems and Networks that can perform Deep Packet Inspection of traffic means that IP packet signatures can be read to ascertain exactly what a user is doing or saying online. These devices are being used by ISP’s worldwide and posses in them powerful mechanisms to sniff deep into a users communication stream. Just to show how deep this can go, there exists devices today that can not just sniff and know you are accessing facebook.com, they can also detect and read your status update and block/modify it if need be. The systems are also able to build create log of your online activity. These systems are being used by ISPs here in Kenya today. Local ISP’s main use of these devices is mostly for bandwidth management and quality of service delivery, however, this is just but one of the many capabilities of these units as they can do much more than assign subscribers bandwidth.
Is Quantum Cryptography the answer?
I think so.
End-to-end quantum cryptography could be our answer to the currently non-existent privacy in our communication systems.
Our capacity to decrypt encrypted communication is based on our ability to observe a channel and see patterns which when matched with certain keys, can be decrypted legally or illegally. The key thing in this is our ability to observe. What if there exists an encryption system that by the mere fact that you observe it, it changes its state so that what you saw one second ago wont be the same thing you see now if you re-looked at exactly the same thing, the mere fact of observation changes its state. This was initially postulated by Erwin Schrödinger in his Schrödinger’s Cat theorem. In this he says that a cat can be both dead or alive depending on some random event in the recent past. He says that a cat that has just been poisoned by say a radioactive element will be dead because we chose to observe it and saw it dead, if we hadn’t observed it, then we are uncertain about its state. Read about this theory here.
Unlike the current cryptology techniques that depend on mathematics, quantum cryptology depends on Physics. The foundation of quantum physics is the unpredictability factor. This unpredictability is pretty much defined by Heisenberg’s Uncertainty Principle. This principle says, essentially, that it’s impossible to know both an object’s position and velocity — at the same time. It is this principle that can be harnessed to come up with secure communication.
In layman terms, quantum encryption works on the principle of Quantum entanglement brought forward by Einstein, Podolsky and Rosen in their 1935 paper. What they said is that if two quantum particles such as photons interact closely, they will start influencing each others behavior even if they are separated by long distances, if you take a photon close to another, they become entangled and the behavior of one modifies the behavior of the other even if one was in North Pole and the other in South Pole, (This entanglement was first coined by Schrödinger). Using this, photons can carry encryption keys or be used to generate keys for transmission keys across communication channels with one photon left behind influencing the other wherever it goes. If an observer along the way tries to measure the photon properties such as spin and polarity, the photons spin and polarities change because of attempted measurement. (The act of measuring beings this photon to close proximity of other particles that influenced it). However, when it arrives at the destination, the original photon can influence the traveled photon to its original state. There you have it! encryption that changes by the mere fact of observation
NB: Some MIT researchers claimed to have been able to hack a quantum encrypted channel, they have however not been able to replicate their results.
Unlike current cryptographic techniques that were developed in government (read USA) and university research labs, many of the new quantum cryptology techniques are being developed by private corporations which in my opinion makes them more secure and less prone to government sanctioned decryption in the “interest of national Security”.
Long Term Evolution (LTE) networks have been receiving a lot of attention of late. Mobile Network Operators (MNOs) world over are falling over themselves as they race to deploy LTE networks.
An upgrade from the cumbersome and less scalable third generation (3G) networks, LTE, albeit not a true 4G standard, is promising to make it easier and much cheaper to run a mobile network than previous standards. (Definitions of the LTE standard can be found in the 3GPP release 8 and 9 documents)The key advantage of LTE is its flat architecture and a nearly all IP network making it scalable and easier to manage. The real motivation however for LTE deployment is not the desire by MNOs to provide customers with a great broadband experience, the real reason is that it is cheaper to run a LTE network because other than the all IP architecture, LTE’s spectral efficiency means that operators can push more bits per KHz of spectrum allocated because MNOs have tinkered with 3G networks and have reached the limit of how much they can milk out of the scarce spectrum real estate. There is only so much they can do in terms of modifying the network to deliver service and still remain profitable. A time will come when the cost of running the highly modified network starts to increase as optimal efficiencies start to diminish if they cross the designed running capacity of the network. The revenues and costs start to diverge and the MNO experiences diminished returns on his network and if not careful, the costs of maintaining the network will outstrip the revenues earned from the customers on it. It is at this point that a new way of doing things is needed if the operator is to survive hence LTE adoption. Trust me, its got nothing to do with giving you the consumer higher speeds, that’s just a by-product of the MNOs desire to lower network operating costs.
However, it is sad to note that majority of MNOs in Africa have joined the race to launch LTE, not because it makes business sense but just because everyone out there is doing it, it’s the ‘in’ thing to do, it’s the ‘wow’ in technology today. I do not think the African mobile consumer market is ready for LTE.
How MNOs can profit from LTE
While majority of MNOs in the developed world are marketing LTE as a consumer broadband product, their African counterparts need to take a different approach, I am of the opinion that the African operators stand to benefit more if they market LTE as a fixed broadband alternative and not as an upgrade to their existing mobile broadband offerings. The biggest obstacle in broadband penetration in Africa today is the poor last mile connectivity offered by fixed connections.
Fiber Optic growth
As of July 2012, over 732,000 route Kilometers of inland fiber optic cable has been laid in Africa, and this growth is not about to stop. It is estimated that inland cable in Africa is growing at a rate of 138 Kilometers per day. This means that about 40% of Africa’s population is now slightly about 50Km away from a fiber optic node that is connected to the undersea cables that land on the African shores. It would seem obvious that wireless technology such as LTE would be best suited to extend this reach to the population, however what we fail to note is that majority of this population do not have Internet enabled phones leave alone LTE capable ones. There is however a lot of potential in the setting up of fixed wireless shared internet access points for the rural folks and to also offer broadband connectivity to the many SME, NGO and enterprise customers who are also out of reach of terrestrial fixed broadband cable.
There is a misinformed notion that African MNOs are profitable and their growth is unstoppable and that they are pace setters when it comes to technology adoption, this is the premise by which many argue that local MNOs should ignore naysayers and go headlong for LTE network deployment. The problem is the illusion of numbers. The African continent with just about 1 billion people has over 185 in-country licensed operators compared to China with about 1.4 billion people with just 3 mobile operators. By in-country licensed operators I mean that for example Bharti Airtel operation in each country is treated as an independent operator. The problem here is that all these 185 operators lack the critical mass to make a worthwhile LTE ROI, also the statistics peddled by development NGOs about Africa as a Mobile power house are misplaced as majority of African operators are loss making, in fact combined, all African mobile operators are net loss making entities . The ROI headache is also real and not imagined, for example, since its launch in 2009, Safaricom’s 3G network covers about 58% of its services areas yet only 10% of this network is utilized to-date. Majority of data revenues from Safaricom are from 2/2.5G based devices. Safaricom’s foray into consumer LTE would therefore be a mistake at this point in time.
Why LTE for SME and enterprise is the way to go
Statistics show that majority of MNOs in Africa lose money at the customer acquisition stage. This is the riskiest stage for any mass market oriented product or service. To stem these loses when it comes to LTE, operators will need to shift their focus to the customer who would normally require fixed broadband connectivity which automatically shifts the market from a mass market to a niche market. The data volume to network nodes ratio of consumed data by this group is also much higher meaning lower operating costs per bit and hence a better return on investment on LTE network deployment ceteris paribus
The other day a friend called me complaining how his new workshop equipment he recently imported has increased his power bill six fold and that all the benefits of purchasing this new equipment are being eroded by the huge power bills. upon my inquiry, he told me that he had purchased the equipment from a Chinese supplier. I paid his workshop a visit one fine weekend and the findings enabled us come up with a solution and his most recent power bill is close to half of the high bills he was paying. By half I mean KES 95,000. This was however still higher than what he had budgeted for. My friend was a victim of counterfeit equipment. I will try to discuss how cheap counterfeits are not always a good choice.
Some Electric Power Basics.
Electric power is derived from the product of Current (I) and Voltage (V) That is Power=IxV or IV. This however assumes that the alternative Current (AC) Current and Voltage are both rising and falling at the same time (in phase). To take care of the fact that this assumption is not always correct, the formula becomes for Power becomes: Power=IVCosø where ø is the angle separating the Current and Voltage as seen in the figure 1.0 and Cosø is the Cosine of the angle. The smaller the angle, the closer Cosø is to 1. So if ø is zero then Cosø =1. The value of Cosø is also called Power Factor (PF)
We would therefore expect Kenya Power to supply electricity whose Current and Voltage separation angle is zero. This is usually not the case and under normal circumstances, the value for Cosø is about 0.8 (about 36.7 degrees separation between V and I). The sad thing is that Kenya power calculates bills in Kilowatt hours (Kwh) where 1 Watt = (one unit of volt times one unit of current (1Vx1I). So if you consume 240 volts at 13 units of current (Amps) for one hour then you will have consumed 3.12Kwh. However the effective power you get to do stuff such as running machines and electronics is IVCosø and under normal circumstances Cosø is 0.8 then the effective power to your machines and devices is 3.12 x 0.8 = 2.49 KWh for one hour, you will however still pay Kenya Power for 3.12Kwh. In short, you pay for the power factor inefficiency.
What Can Cause The Angle ø To Increase?
It is evident from above that the higher than angle of separation of Voltage and Current, the less effective power that reaches your equipment. In fact, if this angle is 90 degrees, then Cosø is equal to zero and there will be no power at all! There are several things that can make this angle larger such as presence of inductive machines such as electric motors on the premises. Motors are found in water pumps, elevators, vacuum cleaners, fans, in workshop machines (my friends workshop in this case) and many more. The more motors you have in a building, the bigger the angle ø tends to be. This is especially true if the motors were not properly designed or are of a poor quality such as those in counterfeit equipment. It was the inefficient and poorly designed motors in my friends ‘new’ equipment from China that was causing an increase in angle ø. For the equipment to produce the required output, it had to suck in more power from the mains supply than necessary. One unit in his workshop had an expected output of 5000 Watts. At 240 volts and a normal power factor of 0.8 then it would suck from the mains about 6250 Watts (5000/0.8). But because of the increased angle ø, the value for Cosø was about 0.61 and the machine was now sucking 8196 Watts. The extra 3196 Watts (8196-5000)watts is excess power that has to be paid for. Because voltage is constant at 240 Volts, the extra power is produced by the equipment drawing more current (I) from the system. More current leads to excessive heating of equipment. Excess heat leads to a shorter life span of both electrical and electronic equipment.
How Can This Be Corrected?
There are several ways to correct this situation where equipment inefficiency causes your bills to be high.
- By installing some capacitor banks. This is the cheapest but not the most efficient.
- Installing synchronous condensers and running them in over-excited mode. In simple terms, a synchronous condenser is a synchronous motor that runs with no load connected to its shaft and over-excitement means the current in its coils leads the voltage unlike the diagram in figure 1.0 where the voltage leads the current in the clockwise direction.
Considering it is not in every persons reach to install power factor correcting equipment in their businesses and homes, the easiest way to ensure that you pay lower power bills it to purchase original equipment from reputable brands. A cheap piece of equipment might save you the initial capital expenditure but highly inflate your monthly expenditure on power bills (as was the experience with my friend), repairs and parts replacement, labor and costs associated with downtime. At the end of the day, what you thought was a bargain from a cheaper supplier ends up making your total cost of ownership (TCO) higher. Cheap is always expensive.
After seeing many complaints and questions on social media on several areas of technology that we use in our daily life, I have come up with a Q and A list below to try answer some of these nagging queries that people have. I have tried to explain this in simple layman language.
Why does my Satellite TV (DStv) go out when it rains?
Satellite TV signals are transmitted from a Satellite that is 42,164KM away from the earth, The frequency used for this transmission is anything between 11,000 to 14,000 MHz, There are very high frequencies making these signals microwave signals. To put them into perspective, your normal TV signals are at around 700Mhz while your mobile phone signals are at around 900 or 1800 Mhz. A characteristic of microwave signals is their interaction with water. Your domestic microwave oven is able to heat the food only and not the plate because unlike your plate, the food contains water molecules which absorb the microwaves converting them into heat. The same thing happens when microwave signals from a satellite travels to your DStv dish encounter water in the atmosphere in form of clouds or precipitation (rain). The water absorbs a huge portion of these signals. If the absorbed signal is not too much, then some portions of the picture are lost leading to choppy pictures and sound, if however most of the signal is absorbed, then your decoder loses connection to the satellite. The easiest way to ensure that you do not lose the signal even when its raining lightly is to make sure the dish is installed by a professional who will optimize the signal or use of a bigger dish. The dishes we see around are mostly 60cm in diameter, a person using a 60cm dish will lose signal earlier and for a longer period than another using say a 98cm dish.
Why does electric power in Kenya go out when it rains?
Electric power lines are some of the highest structures in most open spaces, this makes them more vulnerable to lightning strikes. When lightning strikes the power lines, a surge of electricity several thousands of volts rushes through the system towards your home, if this high voltage power were to enter your house, it would destroy if not set on fire your electronics and electrical devices. Power companies therefore install items called reclosers on the power system. These detect the high voltage and disconnect the consumers from the power supply and hence saving them from the malevolent power surge that would have hit them. What is supposed to happen is that the recloser momentarily disconnects and reconnects the consumers once it drains the excess voltage into the ground, users should therefore experience just flickers during thunder storms on a system with working reclosers. The unfortunate thing is that in Kenya, due to poor maintenance, most reclosers are very good at disconnecting but poor in reconnecting back users. a technician has to physically travel to the recloser and restore power. Even without calling Kenya power to tell them your area has no power, they should able to identify where the fault is by use of time domain reflectometry (TDR) which tells them how far in kilometers from the substation the fault is. Again, due to lack of TDR equipment, when a recloser fails, they have to be called by affected consumers for them to act.
What are all those things hanging on Mobile phone towers?
The technical name for what we commonly refer to as a mobile tower/mast is Base Transceiver Station and consists of many other things with the most visible being the tower. The actual BTS equipment is usually in a housing on the ground (mostly the base of the tower) and the antennae is then mounted on the tower that we mostly see. The towers are used mainly to clear physical obstructions. The labeled items in the picture on the side are:
A- Lightning arrests: These are copper rods with sharp ends that are used to arrest any lightning that might strike the tower. Because copper is a better conductor than steel, it will offer the path of least resistance to any electric current that is discharged by lightning. The copper arrests will transmit this current to the ground and save the equipment from being fried by the high voltage and current from a lightning strike. At the top of the tower is also a strobe light that warns pilots that there is a structure at the location that might not be clearly visible at night.
B and C- Sectoral GSM Antenna: In this picture, these are 120 degree sectoral antenna meaning to cover 360 degrees (all round the tower) three are needed (each for 120 degrees). For this particular picture, this is a shared tower and hence B belongs to one mobile operator and C belongs to another. The reason why in this case there are two antennas per sector is because of something called spatial diversity. In short, if this cell tower is transmitting in densely constructed area such as a city or an ares with many water bodies such as lakes, then two antennas are used in diversity mode to improve signal reception. This is because signals bounce off walls, water bodies and two signals from the same phone can reach the tower, the tower pics the best signal from either of the antennas.
D-Cable guide and ladder: The cables that connect the antenna to the equipment on the ground. If many, the run in the center of the tower because of weight, if few, they can run along one side of the tower. The ladder is enclosed for safety reasons and is used by personnel to access the antenna.
E- Microwave radio Antennae: These are the high-capacity links between one tower to another, the towers are usually interconnected with each tower passing its voice and data traffic to the next until they reach the Mobile switching office. These antennas size depends on how far they are transmitting to with bigger ones transmitting to far off towers and smaller ones to nearby towers. If you see two similar antennas one on top of another facing the same direction, the two work together as diversity antennas. These days however, fiber optic cables are replacing the microwave radios especially in urban centers and these towers now have less or no microwave radios at all.
Why don’t microwaves from an oven pass through the door and harm people?
Microwave ovens produce radio signals that operate at 2,400Mhz. This means that the signal changes direction 2400 times a second, that is very fast!. On the front of your microwave door, in addition to the clear glass, there is an iron plate with very many tiny holes on it. At visible light frequency which is between 668,000,000 and 484,000,000 MHz, These holes allow light through for you to see the food you are warming. However at microwave frequencies which are much lower to the light frequencies, the holes are too small to pass the microwaves out and the perforated iron acts like a solid iron plate hence blocking the waves from reaching you, Microwaves do not pass through iron. This is the same explanation as to why your home TV antenna is a wire mesh, a wire mesh at the TV signal frequencies will behave like a solid plate, so making antennas using iron wire mesh is cheaper (less iron used) but achieves the same objective and results as if a solid iron plate was used.
Why do cell phones consume more battery power when using data?
This is because other than just sending or receiving your voice or data, a cell phone also sends and received other information in what is known as signalling. This information includes your location, IMSI, timing, signal levels and other channel keeping information. When on data mode, the rate at which this information is sent by your phone is much higher meaning that the phone is busy throughout irrespective of if you are using the data connection or not. It’s therefore recommended to disable data so as to save battery life if you do not intend to use data or are far away from a charger and your battery is running out.
Why do car interior get very hot when parked in the sun?
This is due to a property of glass known as the green house effect. Heat generated by the sun has a smaller wave length than heat generated by other objects. When the sun’s heat reaches the car windshield, because its smaller infra rays, it passes through the glass, once inside, it heats the car’s interior and the interior produces heat of a higher infra wave length, these higher infra waves cannot pass through the glass to the outside and the car’s interior keeps on getting hotter. This is the same principle by which green houses work.
Vote for my blog under “Best technology blog” at ow.ly/jXEhM. Thank you.
The mention of the word drone conjures images of missile-carrying unmanned aircraft on a mission to bomb the lights out of a terrorist cave in Pakistan or Afghanistan. Unfortunately this is how most of us came to know about them; as weapons. However, these unmanned remote-controlled aircraft are now finding application in many areas such civilian and wildlife surveillance, agriculture and aerial cartography.
Other than long-term communication networks, there exists many short-term and ad-hoc networks that are created and destroyed on a as-when-needed basis, a good example is the outside broadcasting of live events such as sports, national parades, concerts and disasters (you can add election tallying and supreme court sessions if yo are from Kenya to this list). The list of ad-hoc telecoms networks is endless.
At the moment, nearly all news collecting organizations have signed contracts with satellite operators to lease either BSS or FSS satellite capacity for their live video links from remote locations. With normal SD video requiring about 9 MHz and HD requiring about 18 MHz of non-inclined orbit satellite capacity, the cost of one SD feed is about 2 Million shillings a month, considering that the link is not in use all the time, the per-use costs associated with provision of multiple satellite based video links can be huge for a large news gathering organization. Whereas this cost might be insignificant to the likes of Fox and CNN, it cannot be absorbed easily by smaller news gathering organizations like those found in Kenya. The fact that Satellite capacity lease contracts are usually long-term (3 years and above), such an undertaking can easily spell doom for a corporation that is not careful when signing the dotted line.
The other alternative is the use of UHF line of sight point to point links. these are however limited by the following facts:
- They suffer heavy attenuation over long distances making them useful for short hops (say from Nyayo stadium to CBD).
- Even with the use of high-powered UHF transmitters to enable the transmission of the signal over longer distances, the earths curvature means that if you transmit from the top of an outside broadcasting van parallel to the ground in the vicinity, the signal will end up in the sky after a long distance, a tall mast or several repeater stations are therefore required to target the signal downwards. The many radio repeater stations along the Mombasa-Nairobi highway that were used before fiber optics were there more because of the earths curvature than to amplify the signal.
Because of the random locations from which news happens, a fixed network cannot be economically used for the transmission of live news and events. The news and events happen anywhere any day any time. a versatile network is therefore needed and at the moment only Satellite can offer this versatility. Fixed networks also become unavailable in case of disasters such as floods and earth quakes and wars.
Enter the Drones
The fact that a drone is steerable within the atmosphere means that it can be flown to any location and with the aid of gyro-stabilizers, park them in air and be used as telecommunication facilities to receive regenerate, amplify and transmit onward a signal from users. compared to satellites, drones can offer the following advantages:
- They can be steered to any location to offer a line of sight to any user/OB van or if they are equipped with high zoom cameras, they can be used to gather news without the need of a human camera operator on the ground, this can be useful especially in disasters, war zones and in daily events like road traffic monitoring.
- The drones, by virtue of them being easy to deploy, can be effective in providing communication in areas that have been cut-off from telecom networks such as earth quake and flood areas, a drone can provide GSM and Wi-Fi connectivity to a large area without the need of setting up terrestrial networks.
- The fact that a drone can land back to earth unlike a satellite spacecraft, drones can be re-fueled and repaired and used countless number of times unlike satellites. They can be easily reconfigured for different tasks, the same drone unit might gather news, offer Wi-Fi to a disaster zone, relay signals and do aerial cartography by simply re-configuring it for each task.
- The ad-hoc nature and speed in which the drones can set up and tear down networks will considerably lower the cost of using drones for telecommunication purposes as a drone can be re-deployed many times for different missions. A While back Safaricom had to tow along a mini BTS and satellite dish to provide GSM coverage for the Lewa marathon, all they will need is to deploy one drone on the event day and provide GSM coverage for the even.
- Their proximity to the earth means that they can use unlicensed spectrum making it cheaper to communicate.
- They do not need long-term commitment to start using them, getting satellite capacity from an operator can take upwards of 3 months and the shorter the contract period the more expensive the capacity.
There will however be the need for a stringent regulatory framework on:
- Who can be a licensed drone owner/operator.
- For what purposes will the drones be used? Situations of drones infringing on privacy can be common if not checked. Imagine a drone trailing and photographing a cheating spouse in his/her escapades.
- Airspace control and navigation guidelines to avoid drones colliding with buildings, airplanes or other drones.
- Designated no fly zones for camera equipped drones such as residential areas, military barracks etc.
I believe, if well implemented, the use of drones can revolutionize telecommunications especially the creation and tearing down of ad-hoc networks.
Mid last year, local newspapers carried a story about the possible entry into the country of a fifth mobile operator in to the Kenya market. A Vietnamese state-owned operator Viettel had expressed interest in entering the Kenyan market after ‘successfully’ setting up shop in Mozambique.
The fact that a state-owned firm from a little known country wanted to enter the Kenyan market raised eye brows because the Kenyan market is not as easy to operate in, perhaps due to a mix of several factors that include the famous ‘peculiar habits’ of Kenyan mobile users. Sunil Mitall’s Bharti Airtel and Shashi Ruia’s Essar have found the going tough in Kenya after setting up mobile firms that have failed to capture the peculiar Kenyans imagination.
I will try and discuss what i think is the reason behind Bharti Airtel and Essar telecoms dismal performance in Kenya even with such high mobile penetration rates.
Where Bharti Airtel and Essar went wrong
After changing hands severally, Kenyans first mobile operator known as Kencell ended up in Sunil’s hands and changed names to Bharti Airtel. With high hopes of making it big in the Kenyan market, Bharti Airtel embarked on a marketing campaign to endear itself to Kenyans. However, several strategic miscalculations saw them fail to do this. These also apply to Essar telecoms and they are:
- An Out of touch marketing campaign: Many of Airtel’s advertisements featured non-locals (most had South African and West African looks), unfamiliar slogans that were all in English. Poor product naming and more so failure to use Swahili or sheng in their product naming and advertizing. This left them out of touch with the ordinary users who spent over 95% of their time communicating in Swahili. While Safaricom called it M-Pesa, Airtel called it Airtel-Money, While Safaricom called it Sambaza, Airtel called it Me2U. It is just recently their Airtel realized this and changed their marketing to include the use of Swahili words and product names, they now have “piga stori na bob”, “feelanga free”, “Kopa kredo”, “Lipa Karo” etc etc. This approach has started to work for them.
- Out of touch management: By shipping middle and senior management from their India operations to Kenya, Bharti miscalculated the need for local knowledge. One of the reasons why its competitor Safaricom is doing well is because of the local knowledge possessed by most of its management team. The other problem was the frequency at which the mid and top management changed, I once did a 5-month project for Airtel and within those five months, the CTO office bearer changed thrice and the CEO twice.
- Poor technology road map: The adoption of technology such as 3G has taken time to the point of it nearly being overtaken by events. Essar still runs a 2G network when its competitors are testing 4G-LTE. When it comes to VAS, the failure to accurately predict user requirements has seen Airtel and Essar roll-out irrelevant products to the market or even when relevant, they have failed to effectively market them, for example, Airtel rolled out the phone contacts backup service before Safaricom, but no one seems aware of the existence of this service at all. Other than lack of a clear technology and marketing road map. there is also lack of clear vendor selection and qualification with the effect that one segment of a network is handled by more than one vendor leading to confusion and eventual poor service. A good example is when the project I was working on required the system to interface to a competitors system for Sigtran signaling. The competitor, by the fact that he had not won the bid to supply what I was supplying, was reluctant to assist me complete my work by modifying his systems to interface with mine. This ended up causing delays and not meeting marketing deadlines until a work around was used to resolve the issue. An operator who structures his network segments in such a way that interfacing is standardized and minimal will have with him a scalable and robust network that will grow with the business. The current situation where all major and minor telecom equipment brands can be found in a single mobile switching office courts nothing but trouble for operators.
- Lack of strong channel partners: With a poor channel partner network, Bharti and Essar have failed to effectively demonstrate how they can serve the customers they are trying to attract. This is especially true when it comes to mobile money services and airtime card distribution. This is one area that Essar is trying to improve on though with mixed results. This is a chicken and egg situation, do they look for customers first then build a wide channel network or do they first build the channel then look for customers, I am of the opinion that they first need to set up a channel then look for customers.
- Price wars: The penny profit mentality of Indian businesses did not work very well in Kenya when Bharti Airtel and Essar started a price war by lowering their calling rates to unsustainable levels. The lesson all operators got from this is that contrary to folklore, users are not just after keeping their MSISDN numbers for identity purposes, they are after quality service and value added services (VAS), whoever manages to win the VAS battle wins the market.
Viettel is a state-run operator, the fact that Vietnam is a communist country might cause unease at CCK to grant them a license after all despite the millions they intend to pay as license fees. If granted, the Vietnamese operator with no experience in doing business in Kenya better learn from mistakes of its predecessors and ensure that they get it right from the word go. They can only do this if they do the following:
- Believe in local talent
- Do not engage in price wars to win market share
- Establish a wide-reaching distribution channel. I should be able to withdraw money from my phone in my village as is the current situation with Safaricom.
- VAS, VAS, VAS
This week, Kenya Power company announced a plan to increase the electricity tariffs and connection fees by about 45% from the current prices. They have also proposed a reduction in off-peak tariffs by about 20% to encourage heavy power users to utilize off-peak periods for their consumption. Off-peak in Kenya is from 11PM to 5AM where power consumption is about half the peak consumption.
The move to lower the off-peak power tariff is something I have been advocating for because doing so will lead to the following:
- If heavy users shift their consumption of power from peak time to off-peak time, then the spike in demand will reduce. Power for peak load conditions is mostly generated from sources that can come into and out of the grid at short notice, these are mostly fossil fueled plants. Lowering the % of power generated from fossil fuels can considerably lower the overall electricity costs. Take a look at the fuel adjustment figure on your electricity bill to understand what impact lowering this figure can have on your overall bill. If electric power utilization in Kenya were nearly a straight line, there would be no need for introduction of expensive peak load power plants into the grid as base and intermediate load plants can serve customers at a lower cost.
- The utilization of off-peak period by heavy users such as factories can lower their cost of production because energy is a huge component of manufacturing costs in Kenya. Kenyan manufacturers pay 21 US cents per KWh compared to Egypt and South Africa which pay 3.1 and 4 cents per KWh of electricity respectively. Power costs are the main reason behind many manufactures shifting base to outside Kenya.
History of Electric power Monopoly in Kenya
In 1908, Harrali Esmailjee Jeevanjee (Jevanjee Garden in Nairobi is named after him), a wealthy merchant in Mombasa bought a second-hand generator from Seyyied Bargash who was the sultan of Zanzibar. The Sultan had purchased this generator from spice money in 1875 to light up his palace and nearby streets in Zanzibar.
At around the same time an engineer, Mr Clement Hertzel, was granted the exclusive right to supply electricity to the then district and town of Nairobi. This leads to the formation of the Nairobi Power and Lighting Syndicate. in 1922 the Mombasa and Nairobi generators are merged under a new company incorporated as the East African Power and Lighting Company (EAP&L). Between 1922 and 1983, EAP&L expands into East Africa and builds power networks and sales the distribution rights to the respective governments. By 1982, EAP&L was only present in Kenya and it changed names to Kenya Power and Lighting company (KP&LC).
Breaking the Monopoly
Since 1908, electricity distribution model has been an expansion of the original one consisting of a centralized source of power shared by many. The acquisition of exclusive rights from day one by Clement meant that no one had the permission to generate and distribute electricity. A Monopoly was therefore born. Kenya can considerably lower its power distribution and generation costs by opening the market to several players. I have discussed in detail in a previous blog post how this can be done here
Improve generation and distribution efficiency to lower costs
A huge chunk of the electricity costs go towards three things.
- Paying for the capital expenditure in the generation and distribution network equipment: Most of the CapEx comes in form of loans from ‘development’ banks and western foreign governments. We can considerably lower the cost of these loans by borrowing in the currency in which we will buy the equipment in or better borrow from the Chinese who are giving the lowest long-term development loan interests.
- Costs introduced by inefficient systems: The Kenyan power grid is inefficient. We lose about 7% of the generated power due to poor electric lines and about 10% due to use of old inefficient generating systems and transformers. My former Electric transmission lecturer who was also the then director at KIRDI reckons that improving the electricity grid efficiency in Kenya by 1% can save the economy about 7 Billion shillings annually.
- Idle capacity costs introduced by a short peak time demand period: During off-peak, the idle capacity becomes a cost, See how idle capacity can become a cost here. By spreading the load over a 24 hour period through encouraging heavy users to use off-peak power, the component of idle capacity costs in the operating costs of the national power system can be drastically reduced leading to lower electricity bills to consumers.
If the above costs are reduced as outlined, the Kenyan consumer can continue to enjoy lower power tariffs for a long time to come. The reason why other countries can afford to offer power at five times below what Kenya is offering is because they adopted these measures to lower the cost of electricity.