This blog post is in reaction to The 3 Reasons Why Kenya is Beating Nigeria in Internet Business Opportunities as published by ICTworks.
I was perplexed at the title of the blog post. Could the author Wayan Vota simply be courting controversy as a means of drawing traffic to the blog? I would attempt to review the reasons listed in the blog post as to why the author is of the view that Kenya leads Nigeria in Internet Business opportunities.
1. Safaricom
Safaricom? When did Safaricom start offering Internet connectivity over a 3.5G network? Only recently. As at the last time I was in Kenya (February 2010), Safaricom was still offering a special promotion of unlimited Internet access for only 999 Kenyan shillings with each subscription lasting only a week. The promo was obviously a means of raising awareness on its new 3.5G network.
In contrast, MTN Nigeria has been offering super-fast Internet over 3.5G since the 2nd quarter of 2008. In addition, Zain and Glo Mobile both offer super-fast Internet using 3.5G technology covering all the top cities in Nigeria.
Nigeria may have more mobile phone players, and cheaper voice rates, but their 3G data services are no where near the quality and reach of Safaricom.
I used Safaricom’s mobile broadband service in Nairobi and Mombosa and frankly speaking, I have experienced faster Internet in Nigeria and Ghana. Safaricom’s service is no where near excellent. It disconnected intermittently and I had reconnect manually on several occasions. I have been too busy since I got back to publish a detailed review based on about 14 days of using Safaricom’s mobile broadband.
2. Seacom & Teams
Yeah. Seacom alone is a big deal. The hotel I lodged in Mombasa offers Internet connectivity using Swift Global. Swift Global is linked to Seacom. The speed was simply wickedly fast. Seacom was launched July 2009 and currently has an operational capacity of 100 Gbit/s. Considering Kenya (and the whole of East Africa) got their first taste of real Internet only recently, they still have some catching-up to do compared to their West African cousins.
Nigeria’s telecom sector is years behind. Yes, the Glo cable is coming, but with the current restrictive regulation, I bet it will still be cheaper for Nigerian companies to buy bandwidth microwaved over from Benin.
Really? The assertion by Wayan is highly inaccurate. Nigeria is presently the leading telecoms market in Africa with the most liberal telecom regime where several players are digging it in a highly competitive & dynamic market using various technologies. Nigeria is where GSM meets CDMA. Where 3.5G knocks head with EV-DO. Nigeria’s telecom not only offers a big basket of flexible options but is also the biggest in Africa.
- Image via Wikipedia
Nigeria has been served by the SAT-3 cable (whether directly or via Benin Republic is inconsequential in this context) since 2002. SAT-3 has a capacity of 120 Gbit/s; however, plans are in place to nearly triple SAT-3’s capacity to 340 Gbit/s soon thanks to technological advancements allowing 2.5 Gbit/s wavelengths to be replaced with 10 Gbit/s wavelengths.
The author wrote about the Glo-1 cable with a heavy dose of pessimism. Glo-1 is powered by Globacom Limited, a privately-owned commercial entity. I wonder what “restrictive regulation” would stop Glo from pricing its broadband services competitively. Already, Glo Mobile recently announced new mobile broadband packages offering much more data for the same old price, leaving its competitors to play catch-up.
The author forgot to mention that MTN Nigeria (a private entity) recently won a bid for the rights to SAT-3 and by inference, the submarine cable would witness a much better management in Nigeria.
The author conveniently excluded Main One, another privately-owned submarine cable that is set to be launched soon with an initial capacity of 1.28 Tbits/s serving Nigeria and some other West African countries.
Yet another cable is ACE. ACE (Africa Coast to Europe) submarine communications cable is a planned cable system along the west coast of Africa between France and South Africa. Etisalat Nigeria (a Nigerian telecom operator) is part of the ACE consortium. ACE would become operational in 2011 with a minimum capacity of 1.92 Tbit/s.
Some vital stats
- Nigeria: 11,000,000 Internet users as of Jun/09, 7.4% of the population, per ITU.
Population: 154.7 million (UN estimate). - Kenya: 3,359,600 Internet users as of Jun/09, 8.6% of the population, per ITU.
Population: 39.8 million (UN estimate)
3. Kenya Power & Lighting
If there is any single factor that would be the albatross of e-commerce development in Nigeria, it would be the lack of power. However, I am forced to reflect in this direction: if Nigeria could achieve this much as epileptic as power supply is, what wouldn’t it achieve when there is adequate supply?
I am far from being complacent and desperately hate the poor power supply in Nigeria but the modest achievements in the present hostile business environment deserve some commendation.
While it is true that Kenya is the regional IT hub in East Africa, Nigeria is the IT hub of a much bigger regional block (West Africa). In summary, Kenya does not beat Nigeria in the Internet business arena. It is a good thing that Africa gets more Internet connectivity but if there is any country to pitch against Nigeria in Africa, it is certainly not Kenya.
You have an opinion on this matter? Join the debate! Leave your thoughts in the comments area.
David,
The Nigerian bandwidth market has been crippled by poor regulation for years. Just look at Nigeria’s poor national rankings – 158th, a full 68 spots behind Kenya at 90.
And don’t tell me that you get fast Internet speeds in Nigeria, I know better: http://www.flickr.com/photos/dcmetroblogger/3799347808/
Waoh.
This is a skewed piece of statistics. A report where Zimbabwe, Swaziland, Cuba, etc are ahead of Nigeria is not one to be used in a debate because it does NOT offer a holistic view. Its like saying Seychelles is a more potential market than Nigeria because the GDP per capita in Seychelles is more than that of Nigeria. Obviously, there are much more realities than GDP per capita. Therefore, comparing both countries using GDP per capita alone would offer a skewed view.
Now, note that the topography of many of the Nigerian ISPs is such that they channel their subscribers through a few proxy servers. MTN Nigeria has millions of Internet users in its network yet uses only a few internet hosts as that is cost effective.
About Cool cafe, I have used that internet cafe in Victoria Island Lagos than any other and it used to offer one of the fastest Internet speeds. You must have gone there on a bad day. Seriously.
You know better? I hope we are talking about the same Nigeria because I have used MTN’s mobile broadband service in Lagos, Ibadan, Abuja and Kaduna and experience real broadband speeds in all those locations. Using Cool Cafe to judge Nigeria is laughable.
Swift Networks was one of the sponsors of ComBIT Africa; an IT event I attended in Lagos last year. Swift Networks offered free Internet connectivity to the participants and waoh, the speed was simply amazing. It still remains the fastest broadband I have used in Nigeria.
I agree with you when you said host should not be used as a basis for this argument but I must tell you that it a major factor because the people were denied the opportunities of having many hosts which could have been provided by many companies in Nigeria thereby providing employment and enough room for competition and expansion
…where is your location currently? The broadband are fast but very terrible!!!!..they should continue on the same momentum not working today and tomorrow problems.
Wayan,
We haven’t met, but you sound controversial. That’s cool as long as you can handle criticism.
I sincerely don’t want to think that this is an attempt to drive traffic to your blog(s) and increase your Twitter followers.
Trust me, if you’ve lived in or visited both countries (like David has), you’d be able to give a better picture.
That said, I think it’s still very early to say which country’s leading now. Reason? Both countries are yet to fully harness the potentials of the latest developments in Internet connectivity.
Until that happens, “Kenya would still be the regional IT hub for East Africa, while Nigeria remains the IT hub of a much bigger regional block (West Africa)”.
Great post, David!
Loy the diplomat! 🙂
Well, Wayan has been in Kenya, Nigeria and Ghana before on official duties. I have meet him in Ghana. He has been a long participant on this blog even before we met in Accra Ghana and yes, he is controversial. 😉
Loy,
I’m disappointed that David thought that I brought up this topic just for page views. Especially since it seems that he’s getting more than I am 😉
I brought forth this topic because I’m honestly curious as to why I see and hear more about Internet opportunity in Kenya than in Nigeria. And its not for a lack of trying. For my company, I cover West Africa – Ghana and Nigeria mainly – and I hoped and expected that Nigeria would be our #1 market in Africa.
It should be, right? It has the population, the wealth, the history of African leadership. Yet we see more sales in Ghana than in Nigeria. And more in Kenya than Ghana and Nigeria combined. And about as much in Uganda as Kenya.
This frustrates me, so I wrote about why I thought there was this imbalance. And yes, I have no fear of criticism – I welcome it. Challenging our long-held beliefs is the best way to learn.
..Thank you so much Wayan..I think the cat has been let out of the bag.
Hi David
I have long to see the internet speed become more efficient in Nigeria. Indeed all of Africa!. Having communicated for last 2 years, it has been difficult. Look forward to the improvements!
yeah…you are right Wayan. Nigeria’s problem was caused by greed and poor regulations.
Cool stuff, Kenya is really upping its game when it comes to Internet usage and local content. the only thing that nigeria beats us at is their population which is more than double Kenya’s 36 million people. This means that they have an advantage on their numbers but when you look at it in terms of penetration into country’s population we beat then.
CORRECTION
The Safaricom offer is 999 Kenya Shillings not 9,999 Kenya Shillings- thats could be damn expensive.
Cheers
Thanks for the correction, Joe. I initially wrote Ksh 999 but being unfamiliar with the Kenyan shillings confused me.
You people keep singing “penetration”. How much margin in % does Kenya lead Nigeria? 1.2% Is that enough to sing and dance about? Come on.
David remember a difference of 1.2 is small when you are talking in terms of millions but here it is a whooping over 16%. Furthermore when comparing things you MUST use percentages and ratios not numbers. remember in terms of numbers, India for example has far much more billionaires than the UK yet it is way poorer!
I have came across a few amazing kenyan dotcom startups in terms of look and feel, but I am not sure whether they actually play an important role in the kenyan market. Do they actually have a flourishing biz or service for kenyans that beat their counterparts in Nigeria? And is that the basis of this argument?
In Nigeria, there are a few small internet biz with more than 60k USD a year in revenue and some even make more than 100k USD a year in revenue. I am not talking about forums, or blogs, but actual online businesses with a Nigerian paying customer base.
So I do not quiet understand the argument regarding Nigerian startups been “whooped” by Kenyan startups.
Regarding Internet penetration, I think there are more educated Nigerians online in ratio to the number of educated kenyans online. I might be wrong, but Kenya and Nigeria? What a comparison.
Indeed.
I think the bone of contention is here is that Nigeria is a far richer country (an oil giant) …if things were in place –unemployment would have been close to 0%
The argument is that there shouldn’t be a slight comparison of Kenya and Nigeria in anyway…there shouldn’t have been such basis.
@Francis, Is there?
If we can give an example of 5 Kenyan dotcoms that are actually rendering either goods or services relevant to the kenyan market then, there is a point of comparison or rather mention.
Nigerian dotcom biz that actually have a significant impact in the Nigeria market.
1. http://www.flegz.com
2. http://www.zeevirtualmedia.com/
3. http://shoprite.com/
4. http://computerport.biz/home.php
5. http://www.goodlife.com.ng
There are much more of this kind of sites around.
These are dotcom biz generating not less than 50k USD a year revenue.
@Kayode…my point here is that Nigeria should have by far outperformed what she is currently doing at the moment.
..whatever Kenya is doing there is nothing wrong if we say they are ahead. Nigeria is by far bigger in population sizes. if we check the equation carefully, kenya is ahead, Nigeria need to wake up. I am sure this post is not saying that Nigerian startups been “whooped” by Kenyan startups, like someone puts it above rather this article is given strong indication of the seriousness of a nation doing better with the little resources available to her.
The parallel is healthy for lesson sake. But we all still have a long way to go.
Let’s stop arguing and go back to our IdeaLabs. Time is ticking, we are still behind running to catch up, overtake and stay on top of the global internet game.
I love the discussions anyway! Quite enlightening Niyyie!
Hey David! I love this new theme but my name is reading ADAMA J. ADAMA from Lagos, Nigeria.
Pls correct it. I’m from Makurdi, Nigeria. I suggest you remove the State/City thing if you can’t help it.
Hi David, Could you help me do what you did for Adama? I am from Nigeria but my information i showing France.
Francis
Your ISP. Are using VSAT?
My blog automatically attempts to track your location based on your IP.
[…] You can download my presentation at the last Technology Outlook 2010 here (you might have seen some of the charts, but we took it to the movers in the industry). Read Wayan post here. Read David counter-post here. […]
Nigerian Internet Business Opportunities. An #ICT4D Skype Chat….
The following blog post is culled from ICTWorks.org and involves me. Nigeria is the Giant of Africa, with 1/8 of its population and all the possibilities and problems that come with such size and diversity. It also should be the ICT leader for Africa. …
Very nice rejoinder to Wayan’s blog post. I’m late to this debate and I am mindful of our upcoming Skype Public chat, but here’s my two cents worth. the current discussion seems to use internet connectivity as the barometer of internet/eCommerce leadership and development. I disagree.
I believe what determines leadership in internet entrepreneurship is a lot more nuanced than whose population has the larger proportion of people online. As Niyi says, the productivity of Nigerians despite the tremendous structural deficiencies is amazing. So the issue of whether Safaricom has faster pipes than Glo is moot if one can get more done with less.
One of the measures that must be taken into account for internet leadership is how much of Government can be accessed via the internet? By access I mean both obtaining information and completing transactions. In addition to availability, how about government policies that boost or hinder internet usage?
Another measure is eCommerce transactions. How much business can be concluded – end to end – over the internet? Are the payment systems robust enough to enable this kind of business?
A third measure I would use is how much cultural/entertainment content is available via the internet? One would argue that the sheer number of Nigerian social media apps appearing all the time would put us head and shoulders above every other nation on the continent.
Perhaps we should develop some kind of internet leadership index for Africa that takes into account multiple factors.
I think comparison at this time is premature. The best way to do it in the long run would be to look at what innovative ideas or startups are coming up from different African countries. How successful are these startups and what values are they adding to the local people. Let look specifically ate what Kenyans doing on the tech space that make them better than Nigerias, what Nigerias doing that make them feel that they should be ahead of the pack.
In the last one year since the arrival of fiber optics in Kenya there have been a number of initiative by the developers but such startups are not yet making money the real terms and cannot be at the moment be considered successful. Until that happens believe it is very early days to start saying who is a head in terms of online innnovation.
Nigeria has the numbers but talking to some of my Nigeria friends, i have the feeling that not much have been done although as i have said it is still early days
For Kenya check out http://www.maduqa.com, ecommerce site which we have been working on with a friend.
Nigeria is bubbling with Internet Business Opportunities than any country in East Africa. Organizations like Success Attitude Development Centre have done alot to push forward Online biz opportunities in Nigeria, to the point that Nigeria now exports information marketing consultants to Ghana and Benin Republic.
Jerry I think you are a victim of presumption. Just because Nigeria has all those organizations doesn’t mean Kenya doesn’t have any
i couldnt get to read the whole thread, (sorry i was kinda in a rush), anyways i can see the title of this topic is about internet business opportunities but most of the talk is about bandwidth, penetration and such. Does this mean bandwidth means more business opportunities? Maybe when youre dealing with data intensive services such as video… I wont speak for our nigerian cousins, but i will tell you about IT in kenya, we are no good. Its not that we dont have bright people, its just that we dont have bright investors. Startups still dont have a firm stepping stone so most of the great ideas go down the drain. For example, a while back we designed a cache system that sped up a certain isps bandwidth to the users up to 80 percent, and reduced their (the isps) external gateway conection usage.(turns out kenyans visit the same sites and download simmilar content) Our investors being greedy as they come, managed to force us to sell the company to the isp… Who then hired ‘qualified’ software enineers to replace us who insisted on using ‘proper’ tools (we used open source tools on debian.. They were microsoft certified developers)… Long story short, all they have now is some sort of data handling machine with a pretty GUI that just sits there.. Theres supposed to be a moral to this otherwise pointless story. And i think it applies to our nigerian cousins too…
This is quite interesting. I thoroughly enjoyed the article, the arguments in the comment section and here is my own view.
The energy crisis that Nigeria is having puts Nigeria in a poor position irrespective of what issue is being considered.
It is pathetic that an oil rich, resource-rich nation like Nigeria will be battling with darkness for so long.
Like David pointed out, if only we have a stable power supply, nobody will doubt the fact that Nigeria is a force to reckon with not just in West-Africa, but in the entire continent of Africa.
What private individuals and private companies have been able to accomplish despite the “decaying social infrastructure” is a proof of the true potential of Nigerians and Nigeria as a nation.
It doesn’t matter how we are rated for now, very soon, and that very soon, we will be playing the major leagues as far as Internet business is concern. Things are changing over here. Just keep tuned to David Ajao so you don’t miss the update. Cheers. 😉
Most commentators are missing the point by a mile. A few of them are on an ego trip.
I don’t know whats happening in Nigeria since Ive never been there, but would like to hear from an independent analyst on what market opportunities exist in all African markets, and which ones are most popular and why. Even more exciting would be having someone tell us which IT projects have been most successful in providing solutions to the local populations. As to which country beats which one, only time will tell.
Ghana is doing way better than Nigeria in West Africa. Don’t get this wrong, Nigeria has the potential as it does in many things, but always falls short. I have worked with people who cannot understand why Nigeria can’t get it right. They were frustrated and set up shop in Ghana and they are doing extremely well. Kenya will be the IT hub of Africa, which explains why Google and Cisco have made it their African headquarters. You only have to be there to see the amount of activity. The CEO’s of Twitter, Youtube and Foursquare were at a symposium in Nairobi and expressed their amazement and the Kenyan government actually gets it that IT will be employment for the youth. The entire country will be wired within a year. Kenya is the fastest outsourcing destination in Africa and is very closely followed by Ghana. Nigeria does not make the list of the top 5 in the continent. This is about ambitious leadership. A Canadian investor told me recently that “Nigerians have a sense of entitlement when it comes to business, but they do not understand that entitlement and ambition are not the same thing.” He added “Kenyans, Ghanaians and South Africans see it differently. They find ways to keep you coming back and they are willing to learn and this leads to more investment while most Nigerians believe they know it all.” This I have found to be true. Nigeria, and many Nigerians I have met admit it, that their country should be wealthier than South Africa.
I still insist that the potential in Nigeria is endless. The country could be the next Brazil or India. But it’s all about ambitious and visionary leadership and sadly it is not there. It can be found in Kenya, Mauritius, Ghana and South Africa.
by comparison nigeria is way behind kenya in IT.Kenya through safaricom is testing its 4G network and by 2012 kenyans will be surfing at speeds of up to 600MB/sec.all the mobile networks have taken up 3g except yu which has doubled internet subscribers from3.5 million in 2009 to7.5 million this year.kenya now has 3.yes.3 fibre optic cables online all of which have over200GBITS capacity(TEAMS SEACOM AND EASSY)and KDN has laid over20000km of fibre in kenya.this excludes other fibre optics owned by telkom kenya wananchi online access kenya and jambonet.this has forced the 91 isps to lower internet charges.safaricom is now offering 25mb for only 20 shillings daily for mobile subscribers while yu has the lowest fixed internet charges for computers at500 shillings a month($6.20)now who can beat that! that was part 1
As for me am a kenyan nigerian born guy have seen both worlds and frankly speaking is that kenya see’s Nigeria as a small pikin no one can compare mtn to safaricom unless you are mad ,Nigeria has more literate people with IT training but no jobs,Nigeria light issue is disastrous kenya enjoys light and almost cheap internet services compared to Nigerian yahoo industry that gives a bad impression out there and in kenya they dont look for cheat codes cause they dont need to internet service is almost free
With konza technopolis coming up kenya will definitely be leading in IT,BPO etc n will b helping other african countries.if u want real innovation in africa kenya is the place to be.kudos