Telecoms and Development

5G and the New Kenyan Economy

In their 2019 Hype Cycle report for Enterprise Networking, Gartner placed 5G services at the Peak of Inflated Expectations. This means that we are at the peak of media and marketing hype about 5G. In this phase, people are over-expectant about what the technology can deliver coupled with unrealistic projections of the same becoming available to the wider population. The report also says that 5G is about 10 years away from showing real-world benefits and being consumed by the mass market. The fact of the matter however is that 10yrs is not a long time and 5G is coming and it will change the economy in more significant ways than the current and previous mobile generations did.

The question in many people’s mind however is why is the world rushing to 5G when much of the worlds population isn’t even covered by 4G? The other question is some people’s mind is also why do we need higher speeds yet the current needs are being met twice over by the existing generation? The answer lies in how this new generation of mobile technology is designed. Unlike previous generations, 5G is designed with three things in mind namely; Offer higher speeds, connect a much large number of devices to the network and do this at a much lower latency.
These three focus areas of 5G means that wireless mobile networks will no longer just be high-speed highways to access content online, but will morph and become part of our critical supporting infrastructure to provide services such as urban transportation, medical services, e-government and run smart cities.

The same way previous generations of mobile networks have created jobs and revolutionized how we live and work (e.g. mobile money, internet, social media use), 5G will do even more. For example, to deliver low latencies on some critical services such as remote medical and machine operation procedures and access to the cloud, content providers will need to host their content and Machine Learning code as close as possible to the end-users. To achieve this, they will need to host their content, not on the cloud, but at the edge. Edge computing is going to experience an exponential growth as content providers host content at edge. This will democratize storage service provision and enable smaller investors and players to invest in edge computing services in their locality. A staff sacco for example, instead of doing the usual land-buying ritual as a form of investment can build small green energy powered data centers in rural Kenya and lease them out to 5G network operators and content providers.

The ability to connect a significantly large number of devices to the network is also a strong point of 5G. Unlike previous generations that only connected mobile phones, 5G will connect sensors and other everyday items such as cars, home electronics, gates, windows and doors, pets, furniture and many more to the Internet. The same way mobile devices have created employment for the masses ranging from those who sell them, repair or even maintain them or even sell airtime scratchcards, these newly connected devices and sensors will likewise create new business and job opportunities for the citizens in ways we cannot imagine today.

Finally, the higher throughput that 5G will bring will usher new ways of accessing online content and infotainment, due to low latency and high bandwidth in 5G, technologies such as Virtual Reality (VR) and Augmented Reality (AR) will go mainstream, product owners will be creating VR/AR tours of their products for marketing and sales purposes, e-learning will change from being presented on a 2D screen into an immersive 4D experience and this will change how education is delivered. All these technologies will spur new industries the same way the initial internet and mobile revolution spurred new jobs and careers for web and mobile app designers, social media influencers and vloggers. The lower latency and bandwidth will also enable the remote operation of machinery and patients by experts from halfway round the world and would bring world-class medical care or technical expertise close to where its needed in a cost effective way. This development will also spur new opportunities and business models will emerge. If you are amazed by the current mobile revolution, prepare to be one hundred times more amazed by what 5G will usher into the world.

Mobile Telephony

What Next for Airtel after failed JV Attempt with Telkom Kenya?

With Safaricom dominating the mobile services sector by commanding a 65% market share compared to Airtel Kenya’s 24.6% and Telkom’s 6.7%, the latter two saw it fit to form a Joint Venture (JV) and join forces in trying to erode Safaricom’s market share. They intended to do this by taking advantage of synergies derived from the JV. These include Telkom’s history as the incumbent operator and owning a lot of infrastructure and real estate, Airtel Kenya’s parent company’s experience in running successful mobile networks and services and finally, both parties customer bases.

In this JV under the name Airtel-Telkom (missed opportunity to name it AirT&T 🙂 ) , it was planned that Airtel would run the mobile business as Telkom focuses on Digital Services to the enterprise. However this was not to be as in August 2020, Telkom issued a statement saying they were no longer pursuing the JV transaction as they saw it fit to change their strategy. This announcement came some months after the regulator; Communications Authority of Kenya gave new conditions for them to give the JV a green light. These conditions included that none of the parties can enter into any other sale/merger/buy-out in the next 5 years. Other conditions included that Telkom relinquishes its 900 MHz and 1800MHz RF real-estate back to the government upon the expiry of license term because Airtel was the one now to offer mobile services and it has more than enough RF spectrum to serve their merged customer base four-times over. The two were also expected to honor any existing obligations to the government such as paying for their operating license and spectrum fees.

As you would imagine, these new conditions made it very difficult for the JV to make any business sense. It put Telkom at a disadvantage and made the JV unprofitable. Many saw Safaricom’s hand on these new conditions but I beg to side with the regulator here because:

  1. With Airtel running the mobile side of things in the JV, they have enough spectrum to serve both their customers and Telkom’s customers. The two will therefore be sitting on a lot of premium RF real estate yet they lack the customer numbers to utilize it efficiently. The JV according to the regulator was resulting in inefficient use of RF spectrum. One of the regulator mandate is to ensure efficient use of spectrum as a scare resource. This is why they asked Telkom to hand back to the regulator RF allocated to them in the 900 and 1800Mhz bands once their existing license expires if they went ahead with the JV.
  2. A JV does not create a new legal entity that is capable of becoming a licensee by the regulator. Both firms were therefore expected to meet their obligations individually. These include license fees payment, filling of returns to the regulator and other bodies and Quality of Service measurement.

With the JV now off the table and Telkom already announcing its new strategic direction, what’s next for Airtel?

Why is Airtel Here in the First Place?

The many mergers and acquisitions that led to Airtel Kenya aside, one of the cardinal mistakes that its predecessors made was failing to connect with the ordinary Kenyan. Kencell Communications, the first licensed mobile operator was the predecessor to Airtel today. They entered the market with per-minute billing which was at the time 35 shillings a minute, a call lasting one second or 60 seconds cost the same on their network. This was not very subscriber friendly. Enter the second mobile operator Safaricom who introduced per-second billing and this model was an instant hit with the nascent market. With Safaricom becoming the ordinary persons preferred network due to per-second billing, Kencell decided to focus its energies on the business sector by selling heir services to corporates. Unbeknownst to them at that time, the mobile market turned out to be a largely mass market one with individual users massively outnumbering corporates as the customers. With this early lesson, Safaricom learned to speak the ordinary citizens language and managed to connect with them in a way Kencell could only dream of. For example, unlike Airtel, Safaricom’s products and marketing were predominantly in Swahili. In fact all Safaricom products to-date have a Swahili name or origin. Failure to connect with the customer at a personal level by Kencell and its subsequent brands/owners is largely responsible for Airtel Kenya’s situation today as Safaricom’s product names have become verbs and nouns in the common citizens daily speak.

I however think that all is not lost for Airtel. If you look at Safaricom’s financial results, their profit and revenue contribution from new services such as Internet, enterprise connectivity, fiber to the home is on the rise while that from voice is not growing as fast. With this in mind, Airtel has the opportunity to reinvent itself as more than a mobile operator. It has the tools and resources to transform itself from simply being viewed as a mobile operator to a Digital Services Provider and Integrator. There is an increasing drive towards digital economy with many businesses going online and depending on connectivity and the cloud. Homes are also getting connected to the Internet and this is driving digital content consumption. This is the space in Airtel needs to play in. The recent launch of Airtel TV is a step in the right direction and should not stop there. Airtel’s dalliance in the African art scene through sponsorships in the past has also put them at a premier position to be a leading content generator in the country. If Royal Media Services with their relatively shallower pockets made Viusasa work, why can’t Airtel?

Another area is the provision of digital services to corporates. Liquid Telecom partnered with Microsoft as Safaricom partnered with Amazon to offer hyperscale computing to the market. GCP, AliCloud are all potential hyperscale computing players that Airtel can partner with to target the corporate market.

Airtel has an immense opportunity to become a leader in digital services and content if it first stops seeing itself as a mobile operator (and therefore stop competing with Safaricom or Telkom) and moving fast to capture this emerging market and become the go to provider for Artificial Intelligence/Machine Learning, Cloud Computing and content delivery. The recent investment by Facebook into Reliance-Jio in India is indicative of what progressive mobile operators need to do to remain in business. The Facebook investment infuses into the telco, a new way of thinking about how value can be delivered to consumers.

Broadband and Internet

What’s attracting Microsoft to Nokia again?

There is a prediction by CSS Insights; a market research company, that Microsoft might buy Nokia Networks in 2021. This is because of the former’s new found appetite in acquiring Telecom gear companies as it reposition itself as a highly vertically integrated operation. Microsoft recently acquired Affirmed Networks and Metaswitch in a drive seen by many as positioning itself as the dominant cloud player. In 2013, Microsoft bought Nokia’s devices division for $7B in a largely failed deal that was seen as Microsoft’s attempt to catch up on the mobile space which it had lagged to innovate/invest into for some years.

With the telco network going to the cloud, it is now possible to host in the cloud, RF and other equipment traditionally found in a base station, on the cloud and share these resources across the entire network. With this change, telcos can roll out services with lightning speed and lower network costs significantly as resources are cross-shared on the cloud and can therefore be purchased as-a-service and not as equipment. Telcos will also enjoy a pay-per-use model which will significantly lower their capex on network roll-out and maintenance. The role of the telco equipment manufacturer is also changing as they now move from sale and maintenance of network equipment to the sale of full scale telco services from the cloud. This means that manufacturers such as Nokia, Huawei and Ericsson will run massive cloud based telco networks and lease these as a service to operators. This possibility of running large parts of mobile networks on the cloud is what is I believe is what the market analysts see as attracting Microsoft to Nokia. The reverse is also true, for Nokia to offer telco on the cloud, it will need robust cloud infrastructure and services which it currently lacks, pairing up with a large cloud player such as Microsoft will give it access to an already existing cloud platform run by Microsoft.

The other factor that I think is giving this prediction higher chances of coming to pass is that Over The Top (OTT) content providers market reach is being slowed down by telcos who levy a fee to subscribers for them to access the internet/content. By eliminating them from the content supply chain, OTT content providers such as Facebook, Netflix, Google and and cloud platforms will reach more customers who are currently unable to enjoy their services due to data costs. At the moment in many countries including Kenya, Facebook Inc is already working with telcos to zero rate access to Facebook page and WhatsApp on many data plans. Facebook does not believe you should pay your mobile provider to use their services, same for Google, Netflix, Microsoft who also fortunately or unfortunately have deep pockets and research and development teams to roll out far superior networks. These players will soon start taking up shareholding telcos as is the case of Facebook’s recent $5.7B investment in India’s Relliance-Jio. I discussed this developing trend of OTT content providers investment in telecommunication services in detail in a previous post here.

The ongoing trade war between China and the US which saw Huawei network gear and software being banned in US network could also be a factor. I discussed this trade war in detail here. With no major US based telco equipment manufacturer (after Nokia absorbed Alcatel-Lucent), Microsoft sees an opportunity to build an image of a US-owned supplier with the acquisition of Nokia as it will position Microsoft/Nokia as the preferred supplier to US networks. With 5G being heavily dependent on the cloud and edge computing, Nokia’s experience at the edge will enable Microsoft dominate the 5G space from the cloud to the edge with ease.

Regulation and Law

Kenya Needs a Well Coordinated Data Centers Investment Policy and Strategy

The growth of online content consumption fueled by the trinity of cheaper smart phones, social media and 4G is evident everywhere you look. Your average mama mboga, office workmate, spouse is today a regular consumer and producer of content such as video clips, photos (mostly memes) and posts to social media more often. The popularity of Facebook, Instagram, TikTok, WhatsApp, YouTube, video and audio streaming such as Netflix, Showmax and Viusasa says it all.

This therefore means that content providers need to ensure higher levels of service quality by improving their systems to cope with the demand and deliver the expected experience. One example is that these days YouTube Videos rarely buffer like they did 6 years ago because YouTube is storing those popular videos in Nairobi and not in a data center in Europe or the US.

This drive to deliver a good user experience by the providers means that they have to depend more and more on the public cloud infrastructure. This infrastructure is run by cloud providers such as Google, Amazon Web services (AWS), Microsoft, Alibaba, and many more. These cloud providers on the other hand, lease data centers (DCs) from private investors such as the Africa Data Centers and iColo.
The reason why these content providers use the public cloud is because of how it is designed to be fault tolerant and always avail services at the expected quality.

Cloud Infrastructure 101

The public cloud is designed in such a way that cloud services are provided as close to the consumers as possible without compromising service levels and availability. To do this, cloud providers have points of presence where they avail cloud services from. These points of presence are region based, so there would be Asia North region, Asia South, Africa North, Africa South, Europe East etc. Within these regions, they have city regions or zones. For example Africa South region can have Capetown, Durban and Johannesburg zones.
Within these zones they have data centers that are at least 60miles apart from each other and interconnected with high speed cables. To ensure high availability, many cloud providers usually have at least data centers in a zone. so using the example above, there would be three data centers in Durban area separated by at least 60 miles, same for Capetown and Johannesburg

Is Kenya ready?

With the example above, it means that for Kenya to be attractive to cloud operators, we must invest in DCs in a way that will make it attractive for providers seeking reliable infrastructure to provide content from. At the moment, when I take stock of our status, I believe there is room for improvement in as far as preparing the country to being a destination to cloud providers. The location of current DCs and future planned ones doesn’t inspire confidence on the service reliability from these DCs by would be customers.

The Africa Data Center- ADC at Nairobi (Mombasa road) is by far the best run and largest data center in East Africa, closely followed by the iColo data centers in Mombasa and Nairobi (Karen). Safaricom also runs a Data center in Thika town. There is ongoing investment by Huawei and a local partner in a Data center in Mombasa and also the government DC in Konza that is currently in makeshift modular structures as a proper one is being set up.
All these are investments in the right direction, but I think we are dragging our feet as far as investing in world class data center services is concerned. I sometimes imagine what the situation would be if all the Kenya’s empty malls investors had put money into DCs instead? We would become the regional cloud hub for East and Central Africa by virtue of having a more stable economy and political climate and better infrastructure and power supply by far.

Kenya needs to coordinate and catalyze the investment into data centers by private investors for example by giving tax concessions and incentives to anyone investing in a DC at a predetermined location or region. By this I mean that government policy makers can map out how Kenya can coordinate the investment into DCs to ensure that we become attractive to the large cloud players.

This year, Microsoft and Google announced that they intend to be carbon free by the year 2030. By this they mean that their services will run off offices, data centers and networks that rely 100% on renewable energy sources. This of course means that will stop using coal power and opt for greener sources such as solar, wind and geothermal. With Kenya sitting in a region where all these are abundant, there is no reason why Naivasha should not turn from a flower town on the decline into the DC capital of Kenya. Its closer to EA regions than Mombasa, has abundant geothermal and a lake to cool the DCs. Instead, Djibouti is eating Naivasha’s lunch as it’s fast becoming the regional DC go-to city.

The reason I am calling for central coordination on this is because so far, the investments have been driven by other factors other than suitability of the DC locations in relation to other nearby DCs and the investment levels have also been very low. For example, the iColo DC in Karen is too close to the Africa DC on Mombasa road, this doesn’t meet the minimum distance DCs should be separated from each other. A natural disaster or major power outage on Mombasa road would likely affect Karen but not Thika town or Mai Mahiu town where I think the next DC in ‘Nairobi’ zone should be.

With content consumption expected to grow even faster with the adoption of 5G, cloud computing as we know it will also slowly morph into a hybrid of true cloud and edge computing. In the later, the content is hosted very close to the user than before. In the Nairobi case, instead of the content being hosted in a DC on Mombasa road, it would also be hosted in multiple locations near consumers such as at mobile base stations or nearest malls that will offer DC space for Edge computing services.

Please don’t get me wrong, I am not calling for regulation of the DC space in Kenya per-se. I am calling for government incentives akin to the Export Processing Zones (EPZ) concept but on DCs. So as an investor, I stand to gain tax breaks for example if I build my DC at Makindu town to supplement the DCs at Konza. I am however free to chose where I also think I should set it up as long as I am compliant to the existing laws and makes business sense. Saying that Konza Technopolis will answer my call above is missing the point as we cannot have all DCs located in one place. They will not be attractive to customers seeking high reliability and availability of services.

Regulation and Law

Timely Policies and Laws Needed in the Kenyan ICT Space

For sometime now, Kenya has continued to enjoy pole position as far as innovation and application of ICT’s is concerned. We have been hailed as an example of how, if applied correctly, ICT’s can be a catalyst for development. Kenya found itself here not by chance, but thanks to the forward-thinking leadership that put in place progressive policies, guidelines and regulations to spur the growth of ICT’s.

At around the turn of the century, Kenya formulated progressive policies, laws, regulations and guidelines that guided the growth and direction of the then nascent ICT sector. This was through the Kenya Communication Act (Cap 411A) of 1998 which underwent subsequent amendments thus: Kenya Communications (Amendment) Act of 2009, and the Kenya Information and Communications (Amendment) Act , 2013. These laws were informed by government policy towards ICT. To simplify the relationship between all these documents, Policy documents influence or result in laws (acts of parliament) which in turn result in sector guidelines and regulations (handled by the regulator). This therefore means that if we get the policy wrong on the onset, then all subsequent action plans and sector laws will be off target or with undesired outcomes.

With the rapid changing ICT sector, the task of a country keeping itself current to these changes can be daunting. I would say we did very well at the onset despite several challenges that arose. One of the most common example of where policy/laws/regulations lagged behind and failed the citizens was in the area of data protection which led to a lot of mobile phone fraud (ala Kamiti/’mtoto ameumwa na nyoka‘ SMSs) which has led to rampant identify theft and mobile money fraud. Another area that is facing challenges due to poor or delayed policy, laws and guidelines is on the infrastructure front on matters to do with protection of ICT infrastructure from accidental damage, vandalism and sabotage. Cybersecurity too is becoming a big problem especially now that many offline business transactions are going online and social media.

The above examples show that it is very risky for any country to have lagging policies/laws/regulations on matters ICT. It becomes very difficult to reverse any established ICT related vice using laws once technology gives laws a wide leading gap. To correct this often involves not just new laws, but adoption of newer technologies, whose cost is often passed on to the end users. In summary, lagging laws end up eroding any financial or technical margins we have. This is already happening on the e-commerce space where the lack of proper national physical addressing system, delayed data protection and cyber security laws led to the loss of trust in online transactions and higher operating costs by the vendors due to a poor national addressing system.

There is a saying that often, innovation leads regulation. This is true, the question however is by what margin or gap should regulation lag behind the innovation curve? Due to accelerating pace of technology advancement, this lag needs to be smaller and smaller. This is however not happening in Kenya. The Kenya Information and Communication policy guidelines were recently gazetted after nearly 4 years of review and deliberations. This is too long. The period of time it took to make these amendments is very long in the ICT universe and a lot has changed, making some of the documents content obsolete or near obsolete. Several examples below.

When the gazetting took place, many media pieces focused on the policy proposing that ICT companies can only be considered as Kenyan or local if the shareholding includes 30% local ownership. There is hue and cry over this as many seem to misinterpret the law to say that foreign owned ICT companies will not be allowed to operate in Kenya without 30% local ownership. This is far from the truth. What this says is that the government will give preference to Kenyan ICT companies when awarding govt tenders and then goes ahead to define what a local company is. This therefore means a foreign company can still operate in Kenya and still get government ICT tenders but can drastically increase it’s chances of being awarded the tenders if they meet the 30% local ownership. This is different from saying that only locally owned companies can operate in the Kenya ICT space.

The focus of the policy’s critics should however been on the fact that its taking very long to enact or gazette policies and laws on matters ICT in the country leading to a lag that is costing us our competitive advantage as a country. We stand to lose the gains made so far if we are not nimble enough to change with the times by ensuring that our legal, institutional and regulatory framework development curve closely follows the innovation curve.

As a country, we also can claim leadership in the region and Africa on our institutional framework setup. We have an extremely vibrant for forward-looking ICT regulator and bodies that are tasked with directing and spur uptake and use of ICT in our socioeconomic activities. We must however take care to avoid the pitfalls that seem to befall these institutions that are sometimes come across as being more interested in revenue generation than carrying out their mandate.The focus on levies by both parastatal/national and county governments for wayleaves means that governments will tend to take the approach which maximizes their revenues as opposed to an approach that is geared towards successful rollout of ICT services. A few months ago, the ICT Authority issued a notice that would have made all fiber plant operators to pay a levy to them in addition to seeking approval for cable laying on top of the already existing levies by local governments and roads authorities where these cables pass. I say this because great initiatives such as the National Broadband Strategy (2018-2023) might not yield much if the implementation of this strategy will be met with hurdles in the name of county levies such as the case when Turkana county government demanded KES 93 million in levies from Geonet Technologies for laying fiber in the county. See story here.

Considering the National ICT policy document has been in the works since 2016, the gazetting of the same close to 4 years later is a mistake we could only afford to make once. In the next few years, if we remain rigid in the quick implementation of these very good policies, laws and strategy documents, we risk losing our leadership in matters ICT in the continent. The rapid adoption of existing and emerging technologies that require trust to shift from offline to the online space for them to succeed (e.g e-commerce) means that legal and regulatory tools and frameworks need to be properly established. A good example is the hue and cry from citizens during the very noble Huduma number registration process. The process failed because of lack of trust that was caused by lack of requisite legislation on data protection being in place due to the nature of data that this registration process was collecting. The rise in cybercrime and mobile money fraud too is as a result of failure to be quick in enacting laws and regulations around online transaction authentication and trust management. For example, there is a disconnect in Identify verification for mobile money transfer as the form of identification is offline while the transaction takes place online, this makes authentication of transacting parties a subjective matter left to the vendor/agent serving you and not tied to a fool proof and objective approach such as online digital ID verification.

AI: A spanner in the works

The nearly four-year delay in the adoption of the new policy coincided with a period of rapid development and maturity of Machine Learning, Cloud hyper-scale computing and data analytics. These three have led to the increasing adoption of Narrow AI systems in many areas of life. The application of AI to algorithms that impact peoples very lives and health. The use and application of ICT’s such as AI now cuts across moral and philosophical areas, opening a Pandora’s box on how this can actually be regulated with the existing policy framework. Forward looking regulators and governments are now re-looking at the ICT regulatory space with AI lens. This is where we should be as a country as far as our national ICT policy is concerned. There is a drive in South Africa by industry leaders to have the local regulator be reconstituted into a more forward looking body that will help the citizens enjoy digital dividends.

Other than AI, the advent of e and m-commerce apps and online shopping brings in new regulatory challenges too. For example what can the regulator do to ensure high levels of trust by the public of online service rating systems and that they are not abused or gamed? Is the 5 star rating on your Uber driver’s profile genuine? are the number of followers for that Instagram shop and it’s reviews genuine? The ICT policy or resultant laws and guidelines in the current market conditions should already be addressing that.

It is my hope that the pending legal, institutional and regulatory framework and tools at our disposal will be implemented with the desired timelines. These include the National ICT Infrastructure Masterplan- NIIM (2019-2029) which is a very key document for the future of ICT services roll-out in this country.

General Technology

Voice is About to Become the New User Interface and a Global Equalizer

In November 2014, Amazon released the first smart speaker that had a digital assistant named Alexa. For those not familiar with what this is, its simply a cloud-connected smart speaker that a user can issue voice based commands to do simple things like play music, seek weather, traffic, and news updates and also control other smart devices in the home. All this is done by initiating a conversation with the smart speaker by uttering a ‘wake’ word before the command such as ‘Alexa how is the weather today?’ and Alexa would respond with the weather update, here the word ‘Alexa’ is the wake word and the minute it hears this, it actively listens for the next words and decodes what you are saying by use of cloud-based speech recognition systems. As of mid 2019, Amazon estimates that 30% of American and European homes have a smart speaker, up from 22% a year ago. This is about 100 million Alexa devices in the market.
Not to be be left behind, in 2016, Google also released a virtual assistant called Google Assistant and was initially available on select smart speakers but in 2019 made it available in over 1 Billion android phones in the world (talk about scale!). Other virtual assistant flavors include Apple’s Siri that’s available in all iPhones, Microsoft Cortana in Windows 10 and Samsung’s Bixby.

With these assistants available in smart speakers and phones, a user is able to interact with a computing device such as phone or personal computer to access information and carry out tasks that would have traditionally required them to use an input device such as a touch screen, mouse or keyboard. For example, instead of unlocking my phone screen and opening Google maps to check traffic conditions to say Galleria Mall, all I need to do now is say to my phone ‘Hey Google, traffic to Galleria Mall?’ and the assistant would answer back with the results like ‘There is moderate traffic to Galleria mall, from where you are, it should take you 7 minutes to get there’. I can also initiate a phone call by simply saying ‘Hey google, call Thomas Sankara’ and the assistant will search for his number in my phone book and initiate the call without me touching the phone. On the appliances and electronics side, I will no longer need to look for the TV remote and change channels and I can instead simply say ‘TV, change channel to BBC news’ and its done. This is so good in many ways because:

  1. Its much faster and involves fewer steps to get the same results if not better
  2. It is more natural and intuitive than current interfaces that often need some training/skill or even literacy to use
  3. I can do all this while my hands and eyes are occupied doing something else. For example if I’m driving, I can still get to use maps and make calls without looking at or touching the phone. another example if I could ask the TV to change channels while I’m busy preparing a sandwich.

Other than accessing information from the internet as per the above examples, voice based assistants can also be used to control smart devices and appliances (explains Samsung’s foray with bixby) schedule/cancel meetings and open apps in the phone, all by using voice commands.

Why is this a big deal?
With the recent advances in Artificial Intelligence and Machine learning, Speech recognition systems have become pretty accurate in deciphering words in human speech. With speech being a highly variable input because everyone has a unique voice and accent and variable surrounding noises, it was initially difficult to get computing systems to understand human speech, but with AI and Machine learning advances in the last 5 years, this is now possible. Google assistant and Alexa can now decipher English speech and accent by Lemaiyan from Narok or Billy Ray Cyrus from Texas with near equal accuracy for both inputs.

The biggest leverage that voice has is that AI systems that power these digital assistants are now being trained in various languages and dialects. As of mid 2019, Amazon’s Alexa supports seven overall languages: English, French, German, Italian, Japanese, Portuguese (Brazilian), and Spanish. Google Assistant on the other hand currently supports sixty overall languages including Swahili, Telugu, Gujarati, Zulu, Mandarin and many more.
With the addition of more languages currently ongoing, a voice based interaction with the Internet through mobile phones and smart speakers means that people who were previously locked out of the benefits of the Internet because they could not read and write would all over sudden be able to access the limitless opportunities that being connected presents to them in the comfort of their local language. It will soon be possible for everyone in the world to search for information on the internet, interact with a mobile phone or computer apps, home appliances and electronics by simply speaking to it using the local language. This will be the most significant step in bridging the digital divide since the liberalization of telecommunications in the 1990’s and can be leveraged to create a more equal society. The multiplier effect of this is mind boggling if you think about it. A farmer in Eldoret will be able to seek markets for his produce or even operate a herbicide spraying drone by issuing voice commands in his local language, A mother in rural Sri Lanka will be able to seek nutritional information for her child by speaking the local language to her phone’s digital assistant, set reminders for hospital visits or school meetings without the need for her to know how to read and write in English. A non Greek speaker will also be able to participate in conversations taking place in Greek seamlessly by using the assistant to translate the conversations back and forth.

The popularity of voice based interaction is also growing with the touch screen slowly taking a backseat as the main user interface to the treasure trove that is the Internet and modern appliances and electronics. The below stats sampled from developed countries lend to the fact that voice based user interface to technology and the services it provides is on a hockey stick trajectory in adoption (source):

  1. 40% of adults use voice search on a daily basis (Forbes)
  2. 52% of people use voice search while driving (Social Media Today)
  3. 65% of consumers ages 25-49 years old talk to their voice-enabled devices daily (PwC)
  4. On average, more men than women use voice search at least once per month (Social Media Today)
  5. A study conducted by Uberall found that 21% of respondents were using voice search on a weekly basis (Search Engine Watch)
  6. Close to 50% of people are now researching products using voice search (Social Media Today)
  7. The number of voice search increased by 35x from 2008 to 2016 (Kleiner Perkins)
  8. A HubSpot survey found that 74% of respondents had used voice search within the last month (HubSpot)
  9. Mobile voice search on Google is now translated in over 60 languages (Wikipedia)

With the main mode of interaction with the online world being voice based, the rise of voice based services will also be on the rise. Organizations are today deploying chatbots and voicebots to answer customer queries, take orders and fulfill them. For example, in the USA, its now possible to order pizza from Pizza hut by simply saying ‘Alexa, order pizza hut’ and it will provide the menu options. If you instead say ‘Alexa reorder pizza hut’, then it proceeds to re-order what you ordered last time. This improves the efficiency of service delivery as these bots are available 24/7 at nearly zero marginal cost per additional customer unlike hiring humans to do the work. These systems are also very well versed in the specific details and operations of the company and know were each bit of information is in the organization. A chatbot does not need to put the customer on hold to confirm something from sales or finance department, it has access to all this information and can serve the customer in real-time.

Social media will also move from the current text and multimedia based platforms such as Facebook to voice based personas or avatars. Instead of curating an abstract Facebook wall with posts and status updates, people will curate voice avatars that will be continuously trained to learn information about us and even speak on our behalf (in our exact voice even). For example, a person can train his avatar to respond to questions on social media on their behalf. If my Avatar has access to my calendar and I have allowed it to respond to people (or specific people) about my schedule and itinerary for the day, then another avatar/user can ask it where the other user is or what they will be doing at 3PM today and get and answer. My avatar can also represent me in online meetings and take note of what was discussed and what my take aways or action points from the meeting are, and share this with me at the end of the day. The blurring of the line between social media and real-life will also happen as this avatar can also take on responsibilities in real life. For example. Instead of the HR manager sending a mail to staff inviting them for a physical meeting to brief them on the new staff medical cover, the manager can instead invite all staff avatars to the meeting and leave me to do more productive activities during the meeting time, a win-win for everyone. The avatars being AI based systems, will also be more efficient in recalling information and analysis better than a human and can be used to carry out repetitive tasks or work on my behalf and I get paid. The avatar efficiency and closeness to my offline behavior and character will be a function of how much information I allow it to learn about me. The more I let it learn about me (how I speak, my moods, my social life, my work life, my plans for the day etc), the closer it will be to resembling me as I am in real-life. Mix this with all the information that is on the Internet and you have yourself a virtual worker who can work on my behalf and also interact with others online while I sleep or go fishing in Murang’a. This is the idea behind Microsoft Cortana, create a digital assistant for the workplace that can learn about you and assist you in your work in the office to schedule and remind me of meetings, look for information in the company ERP systems, respond to emails, read reports and take action, etc.

Conclusion
Despite all these possibilities, the issue of privacy and security is at the forefront as the major road block to voice based user interface adoption. For example, is your smart speaker or google assistant on your phone constantly listening to your conversations that are outside the wake word? Can hackers eavesdrop into your intimate or personal one-on-one talk with others in the room?
The truth is there will be no escape to voice adoption as it presents the most natural way for most humans to use and control technology and also allow technology to talk back to us with feedback or results in a way we understand. With the coming hyper-connected world and IoT devices, the current user interfaces such as touch screens will be unable to make us efficiently interact with technology. There is therefore a need for the developers of these systems to put in place measures that will build trust in these systems and instill confidence that the systems are not being abused or used to intrude into our private spaces, thoughts and speech.

The other fear is the cybersecurity aspect. There was a story last year where hackers used AI speech generation systems to imitate the voice of a company CEO on phone and stole a large amount of money. (Read about it here or a local version of the same here). This presents a new threat by voice based systems to the cyberspace and this needs to be dealt with in the design and implementation of these systems.

Finally, web based systems and apps are these days being designed with the ‘mobile first’ philosophy, this is about to change into Voice first, Watch this space.

Broadband and Internet

Facebook, Google, Amazon and Microsoft Are About to Eat Telco’s Lunch

There have been recent developments in the Internet backbone and last mile space that should get every Telco CEO worried. These developments are about to throw into disarray well thought out and tested business models on the bandwidth provision front.

In the last few years, there has been increased activity by Facebook, Microsoft, Amazon and Google on the telco infrastructure front.

According to TeleGeography, the international capacity deployed by these companies rose 14-fold between 2012 to 2016 and continues to grow. For example:

  • A coalition of investors led by Google is funding the new Monet cable linking Florida and Brazil, and in February 2018 announced it was backing three projects set to come online in 2019.
  • In April 2019 Google completed the “Curie” project, its first private intercontinental cable, connecting Chile to Los Angeles. It also announced last year the Dunant transatlantic submarine cable project connecting Europe and the US to be lit in 2021.
  • Facebook and Microsoft both funded construction of the Marea cable connecting Virginia and Spain, which was completed in September 2018.
  • Amazon is one of the key investors in the Hawaiki Submarine Cable, which will connect Australia to the U.S. West Coast via New Zealand and Hawaii.

Closer home, Google recently announced its building a cable from Europe to Capetown in South Africa that will land in several West African countries. Named after the Nigerian slavery abolitionist and author Olaudah Equiano, who was kidnapped as an 11-year-old and sold into slavery in the 1750s, the cable will have 20 times the current capacity provided by all existing cables on the same route. Facebook too, in partnership with some local operators is finalizing plans to lay its cable (aptly named Simba) which is expected to land in most African countries in the East and West coast of Africa.
Other than undersea cable investments, these players who were traditionally in the OTT or cloud services space, are also laying or testing last mile infrastructure. Google is operating a fiber optic metro network in Uganda and is in advanced stages of testing their high altitude baloon- based (Google loon) wireless transmitters that will beam LTE signals over large areas of the continent. Unlike ground based wireless transmitters on masts that cover a small area, a single loon can cover the area the size of Nairobi county. Once tests are complete, end users can access the service using a Google issued SIM card or a cheap roof top receiver. Hot on the heels of this is Elon Musk’s Starlink Low Earth Orbit satellites that will offer high speed broadband at 25ms latency to the entire earths surface and oceans. As of November 2019, SpaceX has deployed 122 Starlink satellites. They plan to deploy 60 more per launch, at a rate of one launch every two weeks beginning in November 2019. In total, nearly 12,000 satellites will be deployed by the mid-2020s, with a possible later extension to 42,000. Facebook is also trialing free access in a different way; by partnering with mobile service providers to offer free Facebook or discounted WhatsApp data bundles access on their networks, Its free because Facebook has paid fees for the access to the mobile operator.

What is happening here is that slowly, OTT and cloud services providers are getting vertically integrated, owning the data center, undersea cable and last mile to the end user. Soon, if all goes to plan, Google will be able to serve you a video on YouTube from a data center it owns, via undersea cables it also owns through their LTE SIM card in your Android phone. This cuts off all traditional players in the Internet broadband space. With eSIM cards soon becoming the norm, traditional mobile operators will find it hard to compete. Googles own Pixel2 supports eSIM. A Phone will by default have an internet connection free for life.

This vertical integration has been taken a step further by Facebook where not only are they about to own the entire distribution chain for internet access, they are also manufacturing their own network hardware and servers. Facebook wrote faster switching software algorithms and made them open source while at it. Its now possible to build network switches that are way faster than what you can get off the shelf. Some are commercializing this already. On another front, Google announced that they are getting into banking services to offer bank accounts and credit cards.

Other than connectivity, these players are also investing in data centers and POPs in Africa and many other parts of the world, Amazon today announced that it will have presence in Kenya early next year. These will be inter-connected via these providers owned networks, cutting off many existing commercial undersea cable operators. Until Trumps recent trade War with China, Facebook in conjunction with Huawei were planning on building a massive data center in Kenya with other inland countries to follow. These operators will start by leasing data center space from existing data centers but will with time build their own spaces because they will need to even manage the data center operations end-to-end to be more efficient in their every expanding operations. This is a massive opportunity for Konza Technopolis or even Naivasha county offering Data centers land acreage near the geothermal power plants.

What is about to happen is these players, will now offer free internet access and voice calls directly to end users in addition to financial services. Most of the world outside china is already using WhatsApp (which is owned by Facebook) to send messages and call. Many don’t use the call or video feature because it costs data to use them. Users will now be able to access services such as YouTube, Facebook, WhatsApp video and voice calls, Twitter, Microsoft Skype/Teams and Amazon Web Services for free, to many that constitutes the entire Internet. Broadband pricing and poor speeds have been one of the biggest impediments to the likes of Google, Facebook, Netflix and Amazon. If they offer this free and cut off players who charge a fee, they will increase the number of customers drastically. Investing in these projects is deliberate and is expected to yield profits for these players. This is what Elon Musk’s SpaceX and Starlink project is all about, making re-usable rockets that can launch as many satellites to orbit as possible and at low cost. He can lease his network to the likes of Amazon or Netflix or even Google to deliver content directly to end users. Currently, I am paying $9.9 for Netflix and paying a Telco about $40 for Internet access. Netflix can charge me $11 and give me ‘free’ Internet access to Netflix. In this arrangement, Telcos are impeding content providers access to markets and the faster they are eliminated by the content providers, the better their fortunes will be.

The ease with which these operators are doing this is worrying and connectivity providers need to reinvent themselves because they will soon be cut off from the internet content distribution chain. Another worry is the locking out of content providers who cannot match the investment the likes of Google are making in connectivity services. The issue of Net Neutrality crops up. For example, will Google lease their network to competing service providers? If yes, will their traffic be treated equal to Googles in google-owned cables? How will smaller players and innovators compete in a space where the big players control/own even the operating system that your device runs on?

Broadband and Internet

What Needs to be Done to Stem the Frequent Fiber Optic Cable Cuts in Kenya?

Kenya’s broadband penetration and growth has been nothing but spectacular and has been fueled by capital intensive investment in mobile and fixed infrastructure by private sector players. The local regulatory environment has also in many ways aided this. According to the regulator Communication Authority of Kenya, as at 30th June 2019, the number of broadband subscriptions stood at 49.9 million with 99.9 percent being on mobile data. This was an increase of 21.4 percent since 30th June 2018. During the fourth quarter of the 2018/19 Financial Year, the number of broadband subscriptions stood at 22.2 million up from 21.9 million subscriptions reported during the third quarter. Broadband subscriptions accounted for 44.5 percent of the total data/Internet subscriptions.

This growth indicates that broadband connectivity is fast becoming a must have for many individuals and businesses to access digital services such as e-commerce, cloud services, social media, infotainment and conduct business communications. Reliability of the broadband connectivity therefore becomes important because any downtime has a direct impact on peoples livelihoods and their economic and personal well being. At the heart of broadband connectivity are fiber optic cables that are buried underground that aggregate and transport data being consumed by end users on both mobile and fixed connections. these cables are often found buried close or next to other underground infrastructure such as piped water, sewerage and underground power lines.

In countries where physical planning is taken seriously, underground infrastructure planning is centralized and owned by the local governments. These governments, incorporate into their physical planning, underground paths and conduits to carry power, fiber optic, gas and water pipes. They also maintain an up to date map of the paths taken by these conduits and which service provider is leasing which segment. This information is often publicly available or accessible to registered providers. The authorities also manage and supervise any works done by a provider in the conduits. For example when a provider is conducting repairs or extending their services. This supervision is necessary to ensure that a provider does not deliberately or inadvertently interfere with other providers infrastructure and services.

Here in Kenya, the story is different. Local authorities such as county governments and government bodies such as Kenya National Highways Authority (KeNHA) or the Kenya Urban Roads Authority (KURA) issue way leaves to underground infrastructure owners to allow them lay their infrastructure mostly on road sides and under pedestrian pavements. Each service provider then has to excavate, lay their own conduits and pipes, and backfill. There is no sharing of centrally managed conduits that should ideally be owned and managed by the authorities and leased to the providers as a small fee.
This approach would work very well if the way leave issuers managed the access of this infrastructure by the providers for the purposes of repair and service extension. As you would imagine, there is very little management and enforcement of access guidelines and every provider seems to work independently and can access their underground infrastructure at will as long as they have a way leave issued after paying the required fees. The result is the providers take little caution when excavating to extend or repair their infrastructure leading to interference of other providers plant. The providers also end up not doing a good job or restoring places they have dug up back to their previous condition as stipulated because of little or no supervision or consequences for non conformity.

According to statistics by fiber optic cable providers, second to power outages, cable cuts due to negligence and poor planning accounts for 26% of all downtime experienced in the country with power issues contributing a massive 38% of all downtime. These are grim statistics in a country that boasts faster average internet speed than the USA.
There have been efforts by the regulator and other sector bodies and lobby groups to reduce this through a ‘dig once’ policy or infrastructure sharing. It was believed that by making providers share infrastructure such as underground cables, they would pay more attention to any works being done to avoid damage to competitors cable because it also carries their traffic. This hasn’t worked well because there has been little uptake of this by the providers. Even if they had complied to this directive and share infrastructure, majority of the cuts are not by the fiber optic providers or their contractors but by other entities such as water and sewerage companies, road contractors and private developers. There is not a single day that passes in Nairobi and other major towns without a fiber cable cut that is caused by the water companies, road builders or developers doing works near roadside way leaves such as putting up a new petrol station.

What can be done to end this?
With the current way leave owners simply collecting revenues by charging each provider separate way leave fees and not putting in place measures to ensure the safely of the fiber plants, providers and contractors are on their own. They simply obtain the way leave and start work without caution or informing other underground tenants at the work area of the impending works. The result is damage to communication cables and other services leading to downtime in some cases, depending on the location of the cut. A recent example is when on 27th Sept 2019, The Nairobi Water and Sewerage company (NWSC) dug up a sewerage line on Mombasa road near the East Africa Data Center (EADC) and in the process ended up cutting over 200 fiber optic cores belonging to Telkom Kenya, Airtel, Safaricom, Liquid Telecom and others that carry traffic to the data center and towards Mombasa and to the Internet. This led to slow Internet experience for users of services such as Facebook, YouTube, Netflix and other services because the EADC hosts the Content Delivery network servers for local caching. The EADC also hosts many other services for organizations that were also impacted by this. There are several redundant paths to the EADC and this particular cut being close to the premises meant that the route diversity was reduced. Being carrier neutral, almost all internet providers connect to the EADC via multiple paths and reducing the number of available paths due to such a cut leads to slow services or total downtime for providers who were only dependent on the Mombasa road route. This borders economic sabotage and hefty fines should be applied to punish such negligence.

About 3 months ago, the ICT Authority of Kenya issued a notice to all fiber optic infrastructure providers to share with them an updated map of their existing and planned fiber optic cable routes in Kenya. The Authority also said that upon submission of the maps, any provider wishing to extend their networks needed their prior approval to do that. This has not been well received by the operators because:

  • There is no existing legal framework that mandates the ICT authority to ask for this information from providers and to ask them to seek their approval for network extension.
  • The authority’s requirement to seek their approval is also not well defined in the law and there is fear that this exercise is just a revenue collection avenue for the body.
  • The Authority owns the National Optical Fiber Backbone (NOFB) and leases capacity to customers in a commercial arrangement. This effectively makes the Authority a direct competitor to the private sector operators which it wants to now manage with this new directive.
  • Providers already pay way leaves to local governments and bodies such as KeNHA and KURA. It also takes an average of 35 days to get way leave approval from them. The authority should instead be working with way leave permit issuers on how to lower this from 35 days to less than a week, as opposed to making the process more difficult than it currently is. Some counties have even refused operators way leaves on frivolous grounds such as saying they recently paved the town with red cabro as if the providers have refused to re-pave the sections they work on at their cost.

The authority’s intentions were to centralize the management of fiber optic routes and offer a one stop map portal and resources. These are good intentions and are welcome, but they are not well anchored in law and many believe this mandate falls under the regulator; Communication authority of Kenya and not the ICT authority. There is also a feel that, considering that already the providers are already paying levies to other bodies, the addition of another approval and levy step will only go to make broadband access more expensive and slow down the rapid growth being witnessed.

There is need for the formation of a multi-stakeholder body that is in charge of issuing way leaves, maintaining an interactive map of cable routes with indications of ongoing or planned works and a process behind it to ensure cooperation in their activities. This body can be funded from the universal service fund (USF) so as to not turn it into a revenue generator with no substantial benefit to the stake holders as is the case now. The benefits of broadband access to the government and citizens far outweigh the measly fees being levied by these bodies and i believe its time the law is amended to outlaw them. Counties stand to benefit more if they provided a conducive environment for operators to extend their networks. They can find other ways of benefiting from this through beneficial partnerships with providers as opposed to levies and taxes. A good example is Nakuru county that has partnered with Liquid telecom to roll our public Wi-Fi hot spots for the county residents. A bad example is a county I won’t name that even asks branded provider vehicles to pay a branding license/permit for driving around their county in branded vehicles yet they were going there to conduct activities that benefit the county residents. County governments need to look at the bigger picture and create a suitable environment and not just be blinded by revenue prospects through levies and fees charged.


Business and Technology, General Technology

My Thoughts on The US-China Trade Wars’ Effect on US Tech Dominance

The arrest of Huawei’s CFO, Meng Wanzhou in Vancouver in December 2018 at the request of the US brought to fore the ongoing trade war between the US and China which is mostly instigated by US president Donald Trump. The arrest came after the U.S. Department of Justice accused Meng (she’s also the daughter of Huawei CEO Ren Zhengfei ) for allowing SkyCom (a Huawei subsidiary), to do business in Iran, violating U.S. sanctions against the country and misleading American financial institutions in the process. This action attracts a jail term of over 30 years in the US.
Hot on the heels of her arrest were concerns that the perceived close ties Huawei has with the Chinese communist government, would allow the Chinese state to spy on any country that runs Huawei telecom equipment especially the upcoming 5G network. It is alleged by the US that Huawei has ‘backdoors’ to all their hardware that can allow unhindered entry into any network and conduct espionage or even shut down the equipment. The US has therefore banned all US telecom operators from using Huawei equipment in their networks especially in 5G deployment.

Why 5G and not 4G?
Unlike 4G which was backward compatible with older 3G and 2G technologies, 5G is the first generation of mobile technology that is not backward compatible. This means that to roll out 5G, a totally new network is needed compared to previously where an upgrade from 3G to 4G was mostly done by upgrading the software of several network components and adding few more components. 5G therefore means building an entirely new network from scratch for mobile operators.
Another factor is that 5G is designed to power the next generation of connected devices and enhance the adoption of IoT worldwide. What this means is that in the near future, vehicles, furniture, and factory machinery will all be connected; surgeries, remote robot operations and many of today’s manual activities will be done by machines that will be connected via the 5G network. In a global economy that is increasingly dependent on connectivity to derive any economic and technical efficiencies, the desire to have full control of the 5G network is obvious. Take a scenario where the entire US transport, agriculture and manufacturing sectors runs on 5G network equipment that Chinese government has a direct access through backdoors created by Huawei for the Chinese state. This is what Trump fears. Indeed he is somewhat justified to habour these fears, but the question is whether they are valid fears. I will not delve into the politics of it but will instead look at the possible scenario of the effect of America’s actions towards Huawei and the industry dynamics.

Trade Wars and Cybersecurity
With the escalating Trade war between US and China, Donald Trump last week declared a national emergency on cybersecurity. Trump signed an executive order declaring a national emergency relating to securing the US cybersecurity supply chain. Under the order’s provisions, the U.S. government will be able to ban any technologies that could be deemed a national security threat. The order, “Securing the Information and Communications Technology and Supply Chain,” opened the door for the US government to classify companies like Huawei as a national security threat and ban the company’s technology from the US and also forbade US companies from trading with Huawei unless they have special permission/license from the government.

This order has resulted in companies such as Intel, Qualcomm and Alphabet (Google’s parent company) stopping the supply to Chinese firms of components that use American technology. One of the most notable announcement was by Alphabet stopping Huawei from accessing the licensed Android Operating System that it uses for its smart phones. With Huawei being the largest telecom equipment manufacturer and 2nd largest smartphone manufacturer in the world (Samsung being the leader and Apple being number 3), this ban will have far reaching effects on Huawei’s business plans. However, if the rumors are true, Huawei has been anticipating this day and already have an in-house developed mobile OS that is believed will takeover from Android OS. They have also been stockpiling chips and components that can last them 3 more months as they seek alternatives.

In their 2011 book “That Used to be Us: How America Fell Behind in the World It Invented and How We Can Come Back”, Thomas Friedman and Michael Mandelbaum list the major problems the US faces today and possible solutions. These problems are: globalization, the revolution in information technology, the nation’s chronic deficits, and its pattern of energy consumption. They also go ahead and state that to reclaim their position, the US must approach this revival with ‘war-like’ conviction. Something Trump seems to be doing to the letter.

US Tech Dominance is Waning
There are several events that have shown that the US is losing its dominance in technology space and is doing all it can to try protect that privilege.
Early in 2018, the US banned ZTE, a Chinese mobile equipment manufacturer from sourcing electronic parts from US suppliers, the reason for the ban again was the flouting of the Iran sanctions by supplying Iran with telecom equipment. The ban resulted in ZTE seeking alternative suppliers and also led to more investment in the chip manufacturing sector in China. A month before, Trump vetoed the proposed takeover of the US based microchip manufacturer Qualcomm by Broadcom, (a US founded firm but domiciled in Singapore) due to the ownership structure. FYI, Qualcomm holds several key patents on 3G and 4G which are one of its biggest revenue streams. all 3G and 4G phones purchased globally pay a royalty fee to Qualcomm for using its patents.
With the upcoming massive uptake of 5G and the rollout of a connected global economy, the US fears that Broadcom’s takeover of Qualcomm would make the US lose control of the 5G technology space. With Huawei having developed their own 5G microchip and the global market for 5G chipsets in smartphones expected to grow at a compound annual rate of 75 per cent between 2019 and 2024, The US is fearful that the cheaper and better Huawei 5G chips will erode Qualcomm’s revenues and dominance.

The recent settlement between Apple and Qualcomm inadvertently put Huawei as a top contender for the 5G chip market. This is because when Apple agreed to pay Qualcomm the disputed royalties for Apples’ use of Qualcomm patents, they also agreed to now use Qualcomm chips in all their subsequent 5G phones. Since 2016, Apple has been using Intel chips as the court battle raged, this gave Intel an opportunity to finally ride the mobile wave crest it nearly missed some years ago. However, the shock announcement by Intel that its pulling out of 5G chip research and development hours after Apple and Qualcomm settled their dispute placed Huawei as a possible major 5G chip supplier. All this time, Huawei has been developing 5G chips for its own internal consumption (used on Huawei equipment only), but with Intel pulling out, Qualcomm’s obsession with high royalty fees and Huawei offering the same technology (if not better) for much lower cost than Qualcomm and devoid of royalties, means that Huawei can easily start supplying their 5G chips to third parties such as Nokia, Ericsson, Samsung and others. This prospect of a global economy running on Chinese supplied 5G chips is what is scaring Trump. All the ‘national security’ talk is but an excuse to defend these seemingly drastic measures the US is taking against China as they head full-steam towards tech dominance. On the Internet front, the US is also feeling the heat of the decreasing dependency on US internet infrastructure to power the global internet. China has effectively managed to create a separate internet for its citizens whose size cannot be ignored. For example, WeChat has 1.04 Billion active users in China (Compared to WhatsApp’s 1.5 Billion globally), Weibo, China’s version of twitter, has over 462 Million monthly active users (Twitter has 260 Million), E-commerce site Alibaba has been growing at an annual rate of 58%, despite its revenues being far behind Amazon ($178B vs $40B), Alibaba’s net profit is comparable to Amazon. If this growth is sustained (and all signs show it will), Alibaba will surpass Amazon in sales within 5 years. China also has all odds stacked in their favour because:

  • China has over 830Million internet users (That’s more than twice the entire US population)
  • China plus its Asian neighbors account for 49% of the global internet users, closely followed by Europe with 16.8% of global internet users.
  • China’s 830Million internet users account for 20% of all users globally, followed by India’s 500Million users.
  • 98% of all Chinese access the web via a mobile device, compared to 73% in the USA.

The above few examples show that China has been successful in creating its version of the web that is somehow independent of western resources.

Russia’s National Internet Plans

With the announcement by Russia that a law is now in place to create what they call a ‘national internet’, Russian aims to be in full control of how Russian internet traffic is routed. Among other measures, it dictates the creation of the infrastructure to ensure the smooth operation of the Russian internet in the case of Russian telecom operators’ failure to connect to foreign root servers.

This seemingly drastic move was necessitated by the aggressive nature of the U.S. National Cybersecurity Strategy adopted in 2018 under Trump. To give a background as to why Putin signed the bill into law, It would be worthy noting that the US currently controls the top level root servers that help all internet users worldwide to convert human friendly domain names (such as http://www.tommakau.com) to computer friendly address names, see the list here. This effectively means if the US decided to block certain countries from accessing the root servers, they will have effectively blocked them from accessing much of the internet and world wide web. The US also has legal right over all dot com, dot org, and dot net domain names (including this blog) and can take down any website it so wishes because they are all legally US websites. “Under these conditions, protective measures are necessary for ensuring the long term and stable functioning of the internet in Russia.” Said Vladimir Putin when signing the bill.

What Next?

These recent events indicate one thing; The world is detaching itself from over-dependence on US technology and infrastructure. This has got the US into panic mode. With the future becoming highly connected, technology will be at the fore front of human advancement and the US fears it might not be the world leader it has been in the past, like oil today; whoever has control of technology in future will control the world. To cloth this fear in ‘national security’ is callous for Trump to say the least, this is not about national security but about commercial dominance. The outcomes of such drastic moves cut both ways and will end up harming the US more than helping it. What I am sure is that China will emerge victorious if today’s statement by the Huawei CEO is anything to go by. In the last 8Hrs, the US has offered a 3-month ‘stay of execution’ for the Huawei ban because of the number of US citizens who own Huawei phones and operators who are heavily dependent on Huawei gear. This is to enable them transition to other phones and network equipment.

Locally, the US-China trade war might have major ramifications especially if the ban extends to other Chinese telecom gear and handset manufacturers. Tecno, infinix and iTel command a 34% market share of all smartphones. All these three brands are made by one company and this extends the risk further based on the market share by this one company should it also face the ban. It is also worth noting that large sections of Kenya’s mobile network runs on Huawei gear (including the base stations serving State house). The short term effect of this ban will be increased operating costs by local mobile operators as they seeks alternatives from European suppliers whose equipment and deployment cost is more expensive. The long term effect is that these Chinese companies will adapt to not depending on US tech and come up with their own technology and processes to manufacture even cheaper telecom equipment; couple this with the ambitious Belt and Road Initiative by Xi Jinping and the US will have forever lost its dominant position on the world stage.

Broadband and Internet

East Africa: The Race to The Terabit Backbone

In the last few months, two major operators in Kenya announced their plans to upgrade their traffic backbones. Safaricom announced it’s partnership with Huawei to upgrade its Mombasa-Nairobi backbone to 400Gbps while Liquid Telecom announced its partnership with Nokia to upgrade its East African backbone to an initial capacity of 500Gbps using OTN/DWDM technique. This as you would imagine is a massive upgrade from the current capacities.

With the increase in the use of Internet and mobile phone use in Kenya and the greater East African region, these backbones will ensure that the region does not suffer from bandwidth constraints due to lack of capacity to carry the traffic. Also, to enhance the user experience, Internet giants such as Facebook and Alphabet (parent company to YouTube) have set up powerful cache servers within the country. These cache servers store most popular content locally in Nairobi at the Africa Data Center in Nairobi and iColo in Mombasa. How these work is for example is when a person watches a YouTube video and shares the video link with others in Kenya, the next person won’t get the video from the YouTube servers in the US or Europe, but will get the video from a server in Nairobi where a copy will be temporarily stored. What this means is that the video will load faster with no buffering and also ease up capacity on the international backbone that would have been used to access the video by everyone to whom the video was shared. Same case for Facebook videos and photos. With the increase in smart phone adoption and multimedia content sharing on social media such as WhatsApp and the fact that over 70% of East African internet traffic is social media and video streaming, the amount of traffic is bound to increase exponentially if the region starts to use broadband and cloud more productively and not just for recreation, these backbone upgrades are therefore happening at the right time.

Fiber-Optic Upgrades 101

Other than the high capacity they provide, the other main advantage of using fiber optic cables for data transport is that once the optical glass core is buried in the ground, any upgrade of capacity does not necessarily need additional cores buried (unless better cores with much less losses per km come to market or the existing core is extensively damaged). The upgrade only needs to happen at the end point equipment.

Fiber optics use light to carry information, in the early days, a single color of light (a.k.a wave length) was used to carry traffic. However, with the advancements in physics, it became possible to use several colors of light (several wave lengths) to carry traffic in a single glass core; a technique known as DWDM. All advancement in optical transport is simply based on how many color shades or hues that a fiber network equipment can detect. Just like in the 5G arena, there has been a silent war between European and Chinese OEM’s on whose equipment can detect more hues (more wavelengths). The more hues the equipment can detect at the same power levels, the more data can be carried on that channel.

5G and Multimedia Traffic

With the approval by the 3GPP of the 5G-NR standards, it is expected that 5G networks will deliver speeds of up to 20Gbps (in lab conditions), real world speeds will hover around 1Gbps which is still high by today’s metrics. With the increase in consumption of multimedia and streaming content, the demand for even bigger data backbone pipes will continue on an upward trend. Just to give an example, in mid 2017 Liquid upgraded their EA backbones from 10Gbps to 100Gbps and less than two years later to 500G because of the demand. In the next 3 years or so, Liquid’s 500G and Safaricom’s 400G won’t be sufficient. There will therefore be the need to scale up to the Terabit space. This will allow the operators meet capacity demand in the region for both data and voice traffic. This is especially critical at a time when many Internet companies are setting up Content Delivery Networks (CDNs) and cloud presence in Kenya. Facebook is already in Mombasa, Google in Nairobi and Mombasa, Netflix and Akamai in Nairobi and many others. Microsoft is finalizing the setting up an Azure Stack in Nairobi as Amazon Web Services (AWS) announced that they are setting up local cloud presence in Africa with an availability zone in Nairobi and South Africa. These locally based cloud points of presence will enable cloud service providers offer lower latency to end users across Sub-Saharan Africa and will enable more Africans to leverage advanced technologies such as Artificial Intelligence, Machine Learning, Internet of Things (IoT), mobile services, and more to drive innovation. With the current broadband use not being productive use; with most traffic being recreational and social media, the availing of low latency cloud services from within the continent will drive up our efficiencies and help the region to develop.

Government’s Role

I happen to have attended the National Broadband Strategy II (NBS II) stakeholders consultations and review of the proposed strategy. There seemed to be a shift from the strategic direction of NBS I which mainly focused on creating an enabling environment for private investors to roll out broadband networks in the country. In the proposed NBS II that covers the period 2018-2023, government seems focused on using tax payers money to roll out broadband. This to me is not the way to go as previous government investment in similar projects such as the National Optic Fiber Backbone (NOFB) haven’t been well executed and currently stands at 12%. The percentage completion of the other projects under NBS I such as digitization of core government registries where several registries have been digitized was not documented. For some other projects, there was no indication whether they were undertaken or not; an example is the development of county management information system. All these projects were allocated KES 250B under NBS I. The NOFBI’s current performance and availability is far below the closest competitors offering. The government should leave telecom infrastructure development space to capable private sector hands. Government can aid the private sector with incentives and tax breaks on equipment and other costs associated with broadband roll-out and creating a level playing field through proper policy and sector regulation.