African ICT: moving in the wrong direction

Despite the obvious benefits to be had from ICT developments, sub-Saharan Africa unfortunately seems to be headed in the wrong direction (North African countries aside are mostly holding their own). This isn’t to say that progress is not happening at all, but rather that it’s happening slower than anywhere else. Confirmation of this trend emerges from a new World Economic Forum (WEF) report, which ranks most of the world’s economies according to their “networked readiness”, based on a ranking of infrastructure, regulation, business and private usage and so on. While other emerging markets, such as China and much of Eastern Europe, are developing rapidly, most sub-Saharan countries fell further down the list.

The highest sub-Saharan country is South Africa, which fell 10 places from last year to number 47 (the EIU’s own e-readiness ranking last showed South Africa in 35^th position globally, but also dropping from previous years). While the government there recognises the economic benefits of improved ICT, local Internet access costs remains eye-wateringly high. Outside of South Africa, less than 10 sub-Saharan countries manage to compete in the top 100 countries overall.

There are some exceptions. The WEF’s report highlights Ethiopia’s significant efforts to ensure that all of its 74m citizens live no more than a few kilometres from a broadband connection—by this year. And we’ve highlighted the astonishingly competitive telecommunications market in Somalia, of all places, but for the rest, a much greater effort clearly needs to be made.

Oracle vs SAP - The gloves come off

Jason Karaian at GTF’s sister site, cfo.com, reports that Oracle’s suit against SAP is a sign that the industry’s nasty infighting is getting even nastier.

 Oracle is suing SAP  for allegedly hacking into its customer-support database and stealing sensitive information that it used to lure customers from its fierce rival. The argument is over TomorrowNow, SAP’s support-services arm, one of many third-party maintenance firms chipping away at Oracle’s high-margin, vendor-provided support for JD Edwards, PeopleSoft, Siebel, and other recent acquisitions.

Jason points out that, “dripping with snark and venom”, Oracle’s complaint makes compelling reading for anyone interested in the enterprise software industry. In attacking SAP, however, Oracle isn’t doing itself any favors. For example, the company maintains that TomorrowNow, with its relatively small staff, couldn’t possibly offer deep discounts on maintenance services without extensive access to pilfered proprietary information, because of the hundreds of regulatory updates, bug fixes, etc that a customer would need to maintain Oracle software.

This isn’t the first time that Oracle’s and SAP’s dirty laundry has been washed in public, cfo.com points out. When Oracle was fighting for antitrust clearance to purchase PeopleSoft, a document dump by the DoJ provided an inside glimpse at the tactics top vendors use to lure customers, including several revealing memos on the extent of discounts they were willing to offer. There were also plenty of colorful E-mail exchanges, including Oracle boss Larry Ellison declaring that  “best of breed is dead - except at dog shows, “ while another Oracle executive eagerly passed on to colleagues advice on dealing with the DoJ from a “master,” the soon-to-be-incarcerated ex-CEO of Computer Associates, Sanjay Kumar.

While it’s too early to tell which way the chips will fall, ultimately this spat can only hurt both of the participants. Smaller competitors are no doubt looking on with undisguised glee.

Dell’s China caper

Since writing about China YouTV, we’ve heard that Dell is now aiming to flex its muscles in China with a super-cheap PC aimed at 90% of population who don’t already own one. The price, at $339, is nearly 70% cheaper than the lowest price model on Dell’s China web site. 

But what can the company reasonably offer at that price? If it’s just a box for pulling in email and checking the news, fine. But computers at this price will not help the country build a PC-educated workforce. No one can learn MS Office (like it or not, the standard for business productivity software) on Ubuntu Linux or other freeware.

Affordability vs national-building necessity - in other words, what you can get vs what you need - is a tough call for those who want to see a more equal pattern of wealth distribution around the world. Dell, of course, just wants to sell computers. But unless the company has developed a cheap computer that’s a real PC, this launch sounds an awful lot like a gimmick. 

Mobile phones in Africa

There’s much talk about how mobile phones are a big business in Africa. Growth in that sector, and its economic impact within the continent, has been startling. In fact, a new GSM World report covering East Africa suggests that in 2006, the mobile industry alone accounted for an astonishing 5% of GDP in Kenya, 3.5% in Rwanda, 4.6% in Tanzania, and 3.6% in Uganda. In just those four countries, the industry employs about half a million people.

And the future potential remains strong. Already, mobile phones account for some 93% of all telecommunication connections in the East African region. But while 70% of the area’s population lives within range of a signal, only 12% are actually connected as yet, primarily due to its relatively high costs.

There have been many stories about the beneficial effects of mobile phones in developing markets. Some articles claim that as many as 80% of people in Egypt and South Africa rely on mobile phones to run their businesses, while across the continent, businesses have set up trading platforms that are specifically created for mobile phones to facilitate commerce.

But, as the GSM World report highlights, taxation is a significant (and unlike typical infrastructure problems in Africa, relatively easy to remove) barrier to growth in the industry. East Africans are taxed between 25% and 30% on mobile phone services, while Africa as a whole pays an average tax rate of 17%. Calculations by Deloitte for the report reckon that if East African governments implemented a modest tax cut on their mobile services, it would have a strong boost on both tax revenues and GDP growth in the region. Dare we hope?

Mining 2.0?

The lure of the Chinese market continues to dazzle. Add the internet and you’ve got a goldmine, right? That’s the conclusion of Admax Resources, a Nasdaq listed (AMXU.OB - News),  mining company in British Columbia. It has decided to change its name to China YouTV Corp.

Thanks to a story from China Tech News, we’ve learned that Admax plans to launch a business aimed at  the fast-growing video sharing web site market in China. So, while it continues looking for something valuable beneath the ground in Canada, it’s hedging its bets by tapping the natural resources of the growing numbers of net users in China.

In its press release the company explains that the 19th report of the CNNIC (China Internet Information Center) says there are currently over 137m netizens in China, accounting for 10.5% of the population, ranking second only to the US. Big numbers, true, but hopefully Admax has a Plan B if this diversification fails to hit the mother lode.

 

Technology or photo-ops?

 Following yesterday’s blog, a reader from the US has added some first-hand feedback on projects like the e-village in Sri Lanka. He writes: “I personally visited a couple of the telecentres (in South Asia) and have very mixed feelings about them. On the one hand, the people running them were clearly dedicated to trying to improve the lives of their neighbors. On the other hand, both I visited were poorly located and difficult for villagers to reach and the VSAT connection is very expensive - about $300/month. It is hard to see how the effort can be sustained without continual donor or government subsidy.”

His main point - that dropping 4PCs in a village in South Asia is a great photo-op, but unless the technology is connected to people’s lives, the computers serve little purpose - couldn’t be more apt. Getting information about the developing world from web pages like this one is clearly not good enough.

Sri Lanka - Take 2

 A reader has written in from Hong Kong concerning the e-village in Sri Lanka. He says the project is a mess. It’s taken over a year to get some wifi mesh infrastructure in place and what they have is nearly unusable. Sri Lanka Telecom (SLT) is, apparently, the culprit. He adds that the ICTA is an “unsustainable nightmare” as the centres are under-used and pay way too much for satellite connectivity. They’re trying to work with SLT for cheaper connectivity, but it’s just not happening.  Some may have to shut down because their funding runs out in March.

We’re going to look into this further. In the meantime, if you have more information on this project, do let us know.

IT happens in Mahavilachchiya

Will mobile phone networks go the way of fixed line networks? In the poorest parts of the world - where no phones exist - wireless makes a lot of sense. Take Mahavilachchiya, Sri Lanka, a village on the edge of the Vilpattu jungle. Thanks to wireless technology, it now calls itself the first model e-village in the country.    

This little miracle has happened thanks to the Horizon Lanka Foundation and Sri Lanka’s Information and Communication Technology Agency. Will other villages be so lucky? Possibly. In Nepal, a local teacher has pulled off a similar project for Yak farmers eager to keep in touch with their families while tending their herds.

For the world’s poorest, wireless makes sense. Longer term, could the same be true for the rest of us?

Jail or VoIP?

When you put on your headphones to make a Skype call, how often do you worry about being arrested? In Africa, according to a new report from Balancing Act , this is a real concern. The report says that in some African countries, the penalty for making a VoIP call is the same as drug smuggling. All in all, VoIP is forbidden by law or regulation in 36 out of 54 African countries.

That said, VoIP start-ups are mushrooming anyway and the tariffs for international calls from Africa are plummeting. Noting that VoIP is now legal in 9 African nations, Balancing Act’s Russell Southwood says “VoIP has pressured all carriers - including mobile carriers - to lower their rates. This is good news for Africa in general and business on the continent in particular.”

The lesson for African’s politicans couldn’t be clearer. Take the hand-cuffs off VoIP and watch the cost of doing business in Africa go down.

Greener thoughts

Since my last blog on things green, it’s struck me that creating a more energy-efficient computer starts with the prosaic matter of the power supply – the box of circuitry that takes electricity from a wall outlet and distributes the power to the computer’s motherboard, hard drives, and so on. Power supplies have never been the sexiest part of computing and have tended to be cheaply made. Consequently, most computers waste as much as 40% of the electricity they absorb, dispersing the unused energy as heat that can damage other components. And of course, to compensate, companies crank up their air conditioning, further draining energy resources. 

  Component makers are beginning to notice the problem and are developing power supplies that are more energy-efficient. These environmentally-friendly systems can be more expensive, true, but a scheme called 80 Plus has been set up by power suppliers in the US to encourage their uptake. Under the programme, participating utilities pay a rebate to computer sellers each time they sell an 80-Plus compliant machine to one of the energy company’s customers.

In Boston, for instance, the utility NStar pays a $5 rebate for each desktop computer, and $10 for each server, to suppliers such as Tech Networks, which markets Earth-PC and Earth-Server machines that use at least a quarter less power than standard computers. Makes sense?