African Companies: Innovate or Die

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Somewhere in the world today, a child is working on a hobby that would have ripple effects on some of the established African companies. I do not know this child. But, rest assured, disruption in Africa is imminent.

For a continent that leapfrogged from having no effective telephone service to being a driver of mobile technology, disruption should be second nature for upcoming companies. Unfortunately, there are few established companies that possess such second nature. Few are thinking to offer relevant services to the growing tech savvy population.

 

Remembering KPTC

In the 90’s, when a Kenyan wanted to get a telephone service, they would have to queue at a Kenya Posts and Telecommunications Corporation (KPTC) offices, fill in a form, and wait for months on end to be connected to the grid.

KPTC was the boss of the day. They decided if you will have a home telephone, enhancing your reachability, or deny you the right. At times, you had to pay bribes to speed up your application. They were the gods. They were untouchable.

In 1999, the government split the corporation into two. There was Telkom Kenya for phone services and Postal Corporation of Kenya for mail deliveries. But Telkom Kenya could not sustain its wired telephone services in the emergence of mobile companies. It then partnered with the French company, Orange, to enter the mobile business.

Fast forward to 2015. Orange Telkom Kenya had to be bought out by Helios Investments LTD due to dwindling returns in their mobile business. Postal Service of Kenya is now experiencing slow days, as many people have adopted emails. One technology that was too expensive became affordable and laid waste to the telephone and postal gods.

KPTC simply neither thought of nor worked around the possibility of being replaced by a better, lighter technology. Most African companies are a ‘KPTC’ god. Ruling with might and never thinking of how to bypass any future innovations.

I used to waste many hours queuing in banking halls waiting to deposit cash. But those trips have been cut to over half with the advent of mobile banking. These days people can top up their mobile money wallets though agents and simply send the cash to their bank accounts. This comes at a fee, but they could do that in the comfort of their homes and offices.

Now, it might be early, but tellers in such institutions should read the sign of the times. This is  especially true in urban areas, where the tech-savvy population is. Following this trend, soon, bank tellers will have less work to do.

 

The need for African companies to innovate around mobile content

The need for African companies to innovate around mobile content

Demand for Content is an Avenue for Innovation

The demand for entertainment and sporting content on digital assets such as phones and television is huge. The amount of pirated US television series that has flooded the market tells us of the untapped opportunity. The launch of Netflix into Africa and the fuss it made was was a simple indication how things can change in a day.

For long, content producers monopolize via exclusivity. DSTV, who hold rights to the English Premier League (the most sought after league on the continent) has made the content exclusive on their channel, Supersport.

Few were able to afford the subscription fees of DSTV. They either opt to go to a pub where the service is paid for, or stream from illegal sites. The latter might be a shaky option, but one that should be keenly watched.

 

The Age of Mobile Content

A few years, ago DSTV had an agreement with Safaricom. Safaricom users would be able to pay a small fee to stream exclusive channels on their phones. But smartphones were few and far between back then, and the concept of apps didn’t make much sense to people.

If the same was to be replicated now, they would definitely see a great difference in subscriptions. Targeting the small income market who demand content as much as the wealthy will open new revenue streams for the likes of DSTV.

In a recent report, Digital TV Sub-Saharan Africa Forecasts 2016, the company is said to be losing subscribers due to their pricing structures. This might one day be swept away by innovative technologies. Currently, DSTV has 2.16 million subscribers in Africa down from 2.56 million beginning of 2015.

DSTV can still afford to sit pretty right now. Bandwidth is not as expensive across the continent. But if Facebook’s plan to beam broadband to Africa by the end of this year are realized, then viewership will quickly turn to mobile devices.

 

Every Company is a Software Company

Currently, every business now has a mobile phone contact, email address, and even websites. Simply put, you cannot do without technology. One way or another, every company will have to deal with software. Computing makes various processes easier, with less effort. But it will demand courage and ingenuity from the businesses.

Upcoming African companies need to ask: How do they disrupt their processes from the norm and introduce new ways of solving problems that computing has offered? How do they leverage innovation fast enough to be ahead of the game?

Technology can make African companies big in one day. But it can also make them obsolete just as fast. Being the continent of “leapfrogs,” African companies should shift their thinking towards technology as a disruption of their business, an opportunity for new revenue streams.

The child I mentioned earlier? He is still working on that thing. Someday, it will render an industry useless. Just as many innovations have rendered obsolete those who refused to innovate.