Traditional Business Principles Apply to Tech Start ups Too

In 2010, the Kenya ICT Board was formed, with the main agenda of catalyzing Kenya’s tech sector. Money was set aside for innovation grants, competition prizes and content grants.

Several companies were formed and benefitted from the sudden surge in the amount pumped to the Ministry of Information and Communication, while some people managed to form a career hoping from one competition to the other, while the grants went unquestioned. It was a great time to have an idea.

In the private sector, local and international journalists did their best to paint a positive and vibrant tech scene, which attracted venture capitalists in the hope of cashing in on the next big thing. International donor agencies also supported the tech sector to support innovation and the hope of replicating Silicon Valley progress.

Five years later, it emerged that even though several start ups had been supported, very few of the ideas resulted in solid businesses. Yes, the ideas sounded very nice during pitch sessions but it was hard to move from social funding to solid businesses capable of breaking even and making profits.


There are several reasons why the start ups did not do well; from lack of support from the public sector, problems getting data, to greed and professional ineptitude.

For the few that managed to jump through initial hoops, they soon realized that even for the modern, digital companies, traditional business principles still apply, when it comes to growing a business.

Having a product or service

For the young, and hip digital population, having a cool mobile app is good enough. As long as it receives accolades within the tech scene drunk with self-adulation, it is enough to move from one funding pitch to another. This tactic works until another cool app comes along.

Most of the “cool innovations” are centered on an idea, which in most cases is not actualized into product or service. This means that these companies do not survive when put through the rigors of normal business.

The start ups that tend to do well are the less talked about, usually away from the tech scene, and they usually develop a product or a service that targets a specific market sector. This is what happens in the traditional setting; you must have something that makes life or business easier, that people can invest it.

Managing Cash Flow

For many businesses that have been around for a while, cash flow management is probably one of the toughest tests they have had to pass and at times fail. Some of the more open founders will share tales of hiding from auctioneers, being auctioned and having no food.

This affects the start ups hard because our financial sector is not well matured to understand and gamble on tech businesses. The banks will ask for collateral, usually title deeds, and many of the tech enthusiasts may not have such collateral to put up.

Many of the companies have failed this test, and they usually quietly fold up or sell off to a more established player, and they found other newer companies, depending on the popular idea at the time. Currently, its cool to invest in Fin-tech, if you mention buzz words like financial inclusion, banking the unbanked, and block chain, you will attract some money, for the time being.

Business development

Even if the company has a good product that answers many of society’s problems, it needs to be marketed for the particular constituency to know that such a product exists.

For instance, there are cloud service providers answering many of the challenges faced by SMEs in getting online, but many do not know about it. In as much as more people are online, traditional marketing and business development processes must be employed to clinch bigger deals.

Given trust issues and cyber security concerns, it would require a few face to face meetings to convince a local insurance or financial institution to give their non essential data for archiving.

The start up would require an introduction and hand holding from someone familiar with both sectors, and for that person to command enough clout for their word to count. Ideally, this is the job a Cabinet Secretary like Joe Mucheru can do well, if he wants, because he understands the intersection between tech and most sectors.

Social good is good, but doesn’t always translate to business

Answering societal problems is great; some major solutions have been found for the agricultural, health, water and sanitation sectors. But some of the innovators think that developing a mobile app means immediate uptake. Developing a mobile app for everything is commonly known as “M-vitu” or “M-whatever”, it is fuelled by the belief that because most Africans use mobiles, then a mobile app is the magic bullet to conquer the market.

After the initial stages, if the company is to make a business out of the innovation, then it must answer the critical questions, meet the demands of the clients or customers and also generate income to support the running expenses.






Safaricom no longer outsources offshore, to launch innovation hub

Five years ago, there was a heated debate online; both twitter and FB. Kenya developers, led by the late Idd Salim complained that Safaricom was busy paying lip service on its support of local tech ecosystem, yet it was busy outsourcing its work to India.

There was a lot of acrimony and pointing of fingers but at the end of the day, Safaricom admitted that it was going to be engaging more with the local tech community. Of course, one of the jobs that went to one of the noise makers had to be recalled and finished by “Indians” after the guy took the deposit and failed to meet the timelines or deliver the final products. That guy has since been mute about Safaricom giving work; locally or otherwise. These are harsh lessons learnt on both sides.

Last week, Safaricom launched its sustainability report; it is one way for them to tell us how awesome they are. The report contained very detailed impact that it has in the country but if you are a dev, the question would be, does Safaricom still outsource to offshore companies? No.

“We have not outsourced any of our work off-shore.  As per our recently released Sustainability Report, we worked with 1,094 suppliers and spent a total of just under KES 76.8 billion on products and services between 1st April 2015 and 31st March 2016. 

We continue to favour local suppliers where feasible, and are satisfied with the weighting towards Kenyan companies achieved during the year, with 84% of our providers being local,” said Bob Collymore, Safaricom CEO.

Some of the companies taking a big chunk of the money are probably those we have never heard of; they are quietly doing their work and increasing their pie. For the tech companies  who would like to deepen this relationship or increase a share of the pie, what should they do? Collymore answers:

“Our current “customer first” strategy is driven by finding out what our customers require and creating solutions to meet these needs. We continue to explore partnerships around this strategy as well as around our three key innovation pillars (Health, Education and Agriculture). We are open to working with players in the technology sector to develop and take to market solutions that are in line with these pillars”


Launching innovation hub

Friday last week, Safaricom announced that it will launch its innovation hub, which usually is a cheaper way to access R&D. Safaricom has been supporting local innovation hubs, both financially and through bandwidth. I am yet to understand why it has taken this route, given the outcomes of other innovation hubs, including that announced by Equity Bank in 2011. Read the first two stories.

“We’ve also announced a new Innovation Hub, which will operate independently and will provide a space for developers to focus on innovation and research around mobile-based technology solutions, while at the same time driving our innovation agenda,” he added.

Apart from the innovation hub, Safaricom has the venture capital Spark fund. You will remember it with the controversial funding of a company that jetted in a month before……gave power to a few black people aka painting it to political correctness, then won. It gave the fund the right to say its all Kenyan. I am sure it has now improved.

The fund has invested in companies like Sendy, Eneza, Lynk, and mSurvey. Safaricom partnership with Little cab, which is meant to take on Uber, is probably its most famous investment.





Will connectivity frequency get affordable?

At the height of digital migration, there was a lot of optimism on the opportunities available to people not able to afford the huge capital outlay that broadcast services require.

One of the things we were told was that with the migration, there would be available spectrum for businesses to use and better still, the white spaces would be available for rural area wifi services. White spaces refer to the gap between two stations; usually left to avoid interference.

The ideas coming from the ministry of information and communication was that now rural folks interested in newer versions of cyber cafes or wifi services could use the white spaces. The Communications Authority wasn’t buying in the whole philanthropic angle; it ha always insisted that white spaces don’t work.

That is why the story by Business Daily today is not shocking; CA has said that white spaces is the domain of signal distributors. There is no rule that a certain group of people will get concessionary rates when it comes to buying space; the distributors are also in business.

Some companies had invested in the white spaces as a way to demonstrate the opportunities low cost internet can provide. One such project was spearheaded by Microsoft and the ministry, while the CA felt that it was left out of the discussions. With the rates going commercial, let us watch and see.

The CA gets so many things right, except those that involve catalysing business outside the bigger players. It has done well to stay out of the dispute between Airtel and Safaricom over frequency sharing. That is after Safaricom paid or committed $55m to blocks on the 700 freed after digital migration. There is an impasse on the pricing and whether the sharing envisaged under the policy was for the big players and smaller players like the wifi providers.

Have you ever wondered why smaller companies buying connectivity from bigger companies struggle? Read Kahenya Kamunyu’s optimism when he launched Able Wireless  then skip to his first blog outlining his frustration and then the more frustrations; rinse and repeat. Try and not laugh at the part where he disses Joe Mucheru, information and comms CS and the other luminaries of Kenya’s ICT sector.

Of course the CA is entitled to collect as much rent as it can, but it would collect even more if the companies thrive. Why not create another category for frequency recipients and peg it on radius? That way, we probably wouldn’t need the universal services fund to grow network in certain areas because these businesses will establish the business case. For instance, if a wifi provider in Tana river interests the local businesses, schools and the people, the big providers may just come with better offers.

There are initiatives to drive Huduma into every county but if there are private entities  providing similar services; the counties can only grow more.

The question is; will we ever get the free frequency to roll out services in whatever area  smaller players want? We usually think rural areas deserve more but there are other areas in urban that could provide opportunities.

The question of spectrum is contested, just read about the drama in South Africa, where people feel the impending auction will only benefit the bigger players. Of course  the big players like Vodacom have spoken on how the economy will receive a major boost.

If you are interested in reading more about spectrum developments in Kenya, Nigeria, South Africa and Senegal, please read this paper by Steve Song.




Angola Seeks to be the new Atlantic Hub

Angola is banking on its unique geographical location to establish its position as the technology hub connecting the Atlantic coast of Africa and South America.

Angola Cables, the leading ICT infrastructure provider in Angola has invested in various submarine cables, in its efforts to increase connectivity in West and Southern Africa. As a Lusophone country with deep relations with Brazil, there is another cable connecting to the South American country.

“Angola has the advantage of our strategic and geographically position serving both Africa and South America; the country is also investing heavily in carrier neutral Datacenter facilities,” ,” said Darwin Da Costa IP Product Manager, Angola Cables.

Angola Cables currently has Points of Presence (POPs) in Angola and Portugal but the number is set to increase to seven, with the addition of POPs in Spain, France, Germany, South Africa and UK.

“Our main strategy is to minimize high latency between Africa and Brazil to our IP and transmission customers; with one Hub in Luanda and the other one in Fortaleza, Angola Cables is aiming to provide a high quality services and accelerated web speed access,” added Da Costa.

In Southern Africa, Cape Town and Johannesburg have already established hubs while Lagos and Accra handle most of the connectivity in West Africa, offering stiff competition to Angola.

“Competition is always good in order to keep us innovating and deliver better services into the country and the region, the advantage of creating an Hub from scratch is that we can learn from previous mistakes and make the right choices in our core projects,” Da Costa said.

Angola Cables is an international carriers’ carrier with focus on wholesale business, built in 2009 by five major Angolan Telecom Operators. The five are; Movicel, MStelecom, Unitel, Startel and Angola Telecom.

In order to reduce the latency to Angola Cables customers, AS# 37468 is peering openly at: Angonix, Gigapix, LINX and DE-CIX Frankfurt. In addition Angola Cables plans to be connected at least into De – Cix Marseille, De- Cix Madrid, Espanix, France – IX, AMS – IX and Nap Africa soon.

“These new peering agreements will further enchance the performance and reduce significantly the latency for our customers.” Da Costa said.

Angola Cables is partnershipping the major CDN´s ( content delivery networks ) in order to serve the Angolan and regional market. The company IP strategy is now being supported by the WACS ( West African Cable System ) infrastructure whereby Angola Cables is one of the major investors.

“Our global IP strategy is driven by our customers demand, these demands are going further than exepected so far. Having said Angola Cables has two main projects SACS ( South Atlantic Cables System ) and Monet connecting Brazil up to Miami, in order to minimize the latency from Africa to South and North America and vice versa,” added Da Costa.

Angoloa Cables has established partnership with major CDNs such as Google, Akamai and Cloudflare, and is seeing increased demand for global content in the region. With the ICT infrastructure investments, Angola is expecting to be a major player in Southern Africa as well as West Africa coast.






Do local, smaller companies stand a chance at Safaricom?

For the better part of this month, we have been treated to stories of blackmail and extortion at Safaricom. While that is the bigger story, the amounts that were paid to suppliers were out of reach for many. Think of Scangroup and sh. 2.1b for media services, Huawei and sh 800m for Mpesa platform upgrade and God knows how much more for network services.

For many, this provided a platform to entrench our belief that business at Safaricom is done by a small clique of men (haven’t heard of many women paid these figures, maybe one). There is also another group that wondered, how can these guys be talking about these figures when I can barely make payroll or hit target revenues? Others wondered how to get into this business and make some money.

Given that Safaricom provides a wide array of services, and the CEO has been quoted saying how they welcome new suppliers, I sought to know whether local companies can break into these clique of big money or the talk is just like Kenyan politics, where we are told to wait our turn forever.

To get some of these things on record, its always good to get it from the guy making promises, you just never know, you may break it big at Safaricom.   I posed some questions to Bob, in the hope that he will shed some more light for those looking to get into Safaricom supply chain. Read on…..

  1. What does it take to do business with Safaricom?

We typically partner with like-minded companies who uphold the same values and those who can do their part in ensuring that they enable us to achieve our strategic objectives.

We borrow heavily from the UN Global Compact, who call for companies to align their strategies and operations in line with universal principles on human rights, labour, environment and anti-corruption, and take actions that advance societal goals. This means that we take a zero tolerance approach to issues like corruption or ethical misconduct.

2. Over the years, how many local companies have benefitted from doing business with Safaricom?

If you had asked this question 15 years ago when Safaricom started operations, our response would have been just a small handful, as the network was managed by a significant number of foreign technology suppliers.

Since then, we have made a conscious effort to engage in mutually beneficial and sustainable relationships with local business partners in an environment of equity, mutual respect and honesty. We are committed to growing Kenyan businesses and offer preferential support to innovative local businesses. We also invest in heavily in building local expertise in the critical mobile sector – and this includes everything from partnering with local universities to ensure talent is equipped with the right skills to enabling the growth of the small business owner.

We currently work with 830 local companies who form 84 percent of our supply chain.

We have many examples, but companies such as Linksoft, Broadband Communications, Netsol and Adrian (who started literally from scratch years ago) have now grown on the back of Safaricom’s business to become multi-nationals operating across several countries in East and West Africa.

KPMG recently found that the value that Safaricom created for the Kenyan society in one year (2015) was estimated at around 10 times greater than the actual financial profit the company made in the same period. This was measured in actual impact on small Kenyan businesses who now exist solely because of Safaricom.

  1. How are the procurement procedures? (Pre-Qualification, Distribution of work to panel of approved suppliers, Evaluation of work)

At Safaricom we have an open invitation to any supplier who wants to be considered for business with us in a relevant areas. That is why we have published on our website, comprehensive information on how to do business with us. In addition, the applications for pre-qualification are all done online on a robust platform which has automated much of the evaluation and scoring with a fully auditable document trail.  See

Sometimes if a specific business need is identified, we will put out a Request for Proposals, which seeks to invite all qualified suppliers to bid for the work. Once received, these are examined for suitability to the request, after which we go through a rigorous process involving several steps of review, pitching and qualification to identify the right partner for the job.

We then vet the partner to ensure they meet the basic criteria; this includes examining their track record for human rights, criminal activity or ethical misconduct. At this stage, it is not uncommon for a supplier to meet all commercial criteria but to be disqualified because there is evidence that they have not met some of the ethical guidelines. Contracts will then only be offered to the supplier for their consideration once all these factors have been satisfied.

Once on boarded, our performance management process is equally open and transparent to the suppliers. All our contracts contain service level standards that the supplier is supposed to achieve, and the performance reviews are done according to these agreed standards. Our review process includes a feedback stage where we sit with the supplier and the agree the level of performance that has been achieved and the improvements that are necessary.

This process is overseen by Supply Chain Management Department and the supplier gets formalized feedback to help them in continuous improvement. This system has enabled suppliers to gain useful feedback to improve their systems and processes.

  1. What would you say to businesses wishing to do business with Safaricom?

As local company committed to this market, we have a deep appreciation for Kenyan businesses and are keen to enable their growth in any way we can. I am pleased that there is growing community of like-minded companies who have joined the local chapter of the Global Compact, as well as the fact that many more have committed to not work with any company black-listed by the government. We absolutely will not work with any companies that have known track records for unethical behaviour.


Safaricom internal audit leak deepens further

It is not everyday that the CEO of Safaricom calls a press conference to complain about blackmail and extortion. Being the telecom giant it is, you would expect it to be insulated against such acts and also expect that the person(s) doing this have to be ballsy, politically connected or both.

In the last two weeks, the leaked internal audit by KPMG dealt with the sh. 2.1 billion pay out to ScanGroup for various media services and then emerged that the bigger battle was more about the lost tender by Transcend media and then the bigger fight over frequencies allegedly led by lawyer Kenneth Kiplagat and his drive to have the report well publicised.

Oliver Mathenge has done a nice analysis on how and who may have leaked the report and the motivation. Manwa Magoma had written why Safaricom may be a target; he also serialised the tweets for those allergic to long reads. John Kamau covered why Transcend Media lost its tender.

From the media advert placed by Safaricom, it was clear that the matter will drag for long. Bob Collymore, Safaricom CEO indicated that the matter had been reported to the police and given that the leaked report was hard copy, we can only wait and see whether the police will arrest the culprits.

It was also clear that heads will have to roll. Safaricom insisted that the report was only draft and the mentioned employees were yet to be given a chance to respond, but the die might be cast for employees mentioned. No matter how good the defence is, this one may be hard for the people adversely mentioned.

This whole saga has left everyone at Safaricom on edge, people holding the trigger have become twitchy because everything is under the microscope. Whatever decision taken from now on, it may not be fair but will look justifiable.

Safcom advert

ScanGroup also felt the need to explain why sh. 2.1 billion was not a lot of money, given that the company handles sh. 33 billion business annually. Here is the advert.

WPP advert

The question of risk

Sometimes back, I had a conversation with an American company with a huge contract with the government, and they are milking the public. I wanted to know more how they select local partners and the answer was that they depend on media coverage, the more you are covered, in good light I presume, the more you are likely to get partnership.

I suggested that the selection process may be flawed because there are so many companies doing good work but not necessarily covered in the media. The argument is that they need to calculate the risks and a known and famous company offers lesser risks.

Back to the Safaricom story, different companies have a different way of calculating risk and for Safaricom, Transcend’s adverse media coverage was a risk they were not willing to take. Maybe they didn’t want to be caught up in the same trajectory but we may never know. We may never know the actual reason for the tender decline but maybe soon enough, given the trends.

Risk is a double edged sword; the same way companies seek to defend themselves, it can also be an excuse to exclude certain parties from the bidding process. This is where that discretion clause in those tender documents comes in.

Even in government tendering, the issue of risk is part of the tender documents, but this mainly relates to court cases. The documents ask one to state the cases pending in court or decided, as a way to tell the litigious types or the vexatious litigants. This ground can make you lose your tender, regardless of performance. But do our public institutions cite risk as a reason to decline the tender?

Ethical and corporate governance

This is cited as one of the reasons for the internal audit commission and is also a common reason for some tenders to be declined, and there are several court cases pending on that front.

Whether there were valid reasons on the ethical front, details will surely emerge.

The big question still remains, can smaller companies be part of Safaricom chain?





What can we expect from Mucheru, Kyalo in ICT?

There is no doubt that the appointment of Joe Mucheru and ICT Cabinet Secretary and Victor Kyalo as PS is expected to provide new impetus to the ICT sector.


For the last two years, Kenya’s ICT sector has been uneasy over the rate of progress, much of which was blamed on unsupportive government officers and changing global trends.

The unease stems from the fact that seven years ago, there was a lot of hype, government support and international goodwill that resulted in competitions, grants and general investments in the sector. With this progress, Kenya seemed to be taking its place as a bonafide contender for Africa’s top technology hub.

That momentum seems to have slowed since the appointment of Dr. Fred Matiang’i as the head of Ministry of Information and Communication. The concern was that Dr. Matiang’I lacked deep understanding and appreciation of the ICT sector because he was an outsider in the ICT sector. In some cases, outsiders bring about change and development and in other cases, it doesn’t happen.

For those who know Kenya’s tech scene, these are the leading lights in policy and technology in the last 17 years; since the Kenya Communications Amendment Act took effect. Mucheru is probably well known for his role in growing Google in Africa, he was the first hire, when the content giant decided to set up offices in the region.

Mucheru and Kyalo were involved in policy advocacy and ICT sector involvement  through the Kenya ICT Network (KICTANET), an online forum that allowed members to contribute to government policy,  and the Telecommunications Service Providers of Kenya (TESPOK), a private sector lobby group.

However, those who have transitioned from private to public sector know that it can be tough. You need the workers at the ministry to help in delivery of promises, the supporting team usually determines the success and can sabotage or support, just like the private sector.

One of the arguments for sector challenges is lack of support for the government front, usually blamed on clueless leadership. Now you have people at the top who understand the challenges and opportunities in the sector. For once, the PS and CS are industry insiders, if they fail, then its not because of appointment of “wrong” or clueless leaders who don’t foster growth in the industry.

For those old enough to remember the “dream team”, we know that success in the private sector doesn’t always translate to success in the public sector. Success will be hinged on culture change for some of the characters who are set in their ways and may not be too happy with regime change. Kyalo has already navigated the murky waters, let us see how Mucheru deals with crocodiles.

So, what should we expect?

Leadership and direction- E.g Safaricom dominance

One of the biggest controversies relates  to the issue of Safaricom dominance and the best way to support Orange and Airtel to turn around profits and find a way to compete with Safaricom.

When asked about this topic by the parliamentary vetting committee,  Mucheru promised to work with the Communications Authority and explore ways to help the other telcos to be more competitive. He mentioned infrastructure sharing as one area that could promote more competition.

He was quick to mention that Safaricom is valued at $ 5 billion, which is lower than Whatsapp ($19b) and Uber ($60b). Of course there is no correlation between market capitalization and market dominance but I got his point to be that we must grow more billion-dollar companies before curtailing their growth. The fact that the committee didn’t pin him more means that they were either clueless or will allow Mucheru to bullshit around, as long as he can drop big names and jargon.

The CA and Matiang’I have been at odds with Safaricom, writing to parliament and promising to implement measures that cut Safaricom’s growth instead of helping others competing and catching up. Mucheru had constructive suggestions, let us see if he will implement/

The problem is that whether we like it or not, Safaricom supports other smaller companies and in cutting its growth, the government is eventually cutting the growth for other smaller companies. For instance, Mpesa depends on smaller local software developers to innovate, if the revenues drop,  this jobs go to India, where the costs are way lower. Of course, market forces could force similar results but its better than government doing it. That is why this fight makes more tech companies jittery.

It will be interesting to see how Mucheru handles this balancing act between the government and its largest tax payer.

Leadership and direction- Blockchain, bitcoin, etc

Every time new technology comes up, there is usually apprehension from the incumbent; mainly it borders on the economic effects but is usually masked as public interest; to a larger extent that is…… for instance, when Mpesa entered the market, banks complained to the Central Bank, arguing public interest and demanding that Safaricom be licensed as a bank and comply with all the rules if it wants to handle money. It was a convoluted battle that Safaricom finally won and banks had no choice than to partner.

Countries like Japan, Tunisia and many in the EU are exploring how to use blockchain. It will probably take another 10 years for it to go mainstream. You can read about bitcoin in Kenya here. CBK has already cautioned the public on its usage.

In this respect, Mucheru and Kyalo should offer leadership and insights on the best way for Kenya to go.  Whether CBK recognizes the opportunities provided by blockchain or not, will be down to the approach and guidance from the ICT ministry.

Restoring the vibrancy

There was a time Kenya’s ICT sector was vibrant, with competitions here and there, which provided opportunities for new ideas and career “app competition winners”. People say that the tech ecosystem doesn’t benefit from competitions but for the young guys from school, it can offer some motivation and a way to set up.

Its funny how some people vilify app competitions, even if they are well known or found their footing in those competitions. I recently read some WhatsApp messages from some guys saying how competitions spoil the industry. The irony is; the two loudest characters have won the most money and were a mainstay in those competitions. They ran professional start ups; being know just by pitching in those competitions.

For the people entering Kenya’s tech space now, you missed a boom of unaccounted government money, forget about the $1,000 Barclays is giving, this was money 🙂

There is so much we can expect, but this is all I can think about for now; read what Mucheru promises in this article.



African Union Project Helps Set Up IXPs in Six African countries

Six African countries have set up Internet Exchange Points (IXPs), after two years of the Arfican Union’s African Internet Exchange System (AXIS) project, managed by the Internet Society.

Under the project, the Internet Society was to provide technical training to AU member countries. The initial engagement involved building a local stakeholder driven process to start the dialogue for countries without IXPs with an end goal of establishing a national IXP based on global best practices. The second part involved  initiating a regional process to support the growth of existing national IXPs and ISPs to become Regional IXPs (RIXPs) and Regional Internet carriers (RICs) respectively. Technical training was held in 28 countries, attracting more than 500 participants.

“This is the first major initiative in Africa that has utilised the multi-stakeholder approach towards the implementation of IXPs. Governments have played a facilitative role towards the establishment of IXPs in five countries launched in 2014 and are actively involved in the 3 preparing to be launched in 2015. As a result, there has been more IXPs launched in the last 12 months than in the 5 years before,” said Michuki Mwangi, Internet Society’s Senior Development Manager for Africa.

The new IXPs are in Namibia, Burundi, Swaziland, Gambia, Gabon and Seychelles  . Africa currently has 33 IXPs and according to Packet Clearing House (PCH), Africa’s domestic bandwidth production grew by 145 percent, from 113Gigabits in April last year to 277 Gigabits in April this year.

The engagement in countries involved bringing together government representatives, ISPs, content, research and education network operators, amongst others likely to be peering at the exchange. The countries also received, technical trainings that involved assessment of technical preparedness for networks expected to participate, discussion on benefits of setting up an IXP and benefits of getting Internet resources IP addresses and Autonomous System Numbers (ASNs) from AFRINIC.

“The five workshops at the regional level achieved their goal, which was to enhance interconnectivity within the region, encourage local content development and data localization by promoting investments in data hosting infrastructures and data centers as well as through cost-saving peering and content distribution mechanisms,” said the final report forwarded to the AU.

In terms of availability of technical experts in the area of IXPs, Africa is still considered lower than other regions, which means AXIS training has produced a high number of experts.

“The number of people trained and countries covered in the project was more than in the entire history of Africa and IXPs,” said Michuki Mwangi “Through the project we have developed a pool of subject matter experts in the African region. In addition, the process has enabled us to attach regional and international experts, to continue supporting the respective countries through their efforts to establish the IXP.”



Africa records major increase in domestic bandwidth production

African Internet Exchange Points have recorded a big increase in domestic bandwidth production, as a result of growth in sharing of Google cache, e-government services, local hosting infrastructure and services.

According to Packet Clearing House (PCH), Africa’s domestic bandwidth production grew by 145 percent, from 113Gigabits in April last year to 277 Gigabits in April this year. The number of IXPs also grew from 25 last year to 37 this year, a 48 percent increase.

“There is a general observation of significant traffic increase at IXPs where members have mutually agreed to share Google Cache and other CDN cache traffic; there is also considerable traffic being generated from e-government services, growth of local hosting services supported by the availability of local hosting infrastructure,” said Michuki Mwangi,

One of the fastest growing IXPs in Sub-Sahara Africa is NAPAfrica,. It has three locations in South Africa; Johannesburg  (Est. 2012), Cape Town (Est. 2012) and Durban (Est. 2014). NAP Africa Johannesburg records 20Gbps peak traffic, Cape Town has 5Gbps, while Durban has 100Mbps peaks traffic. Two NAPAfrica IXPs have recorded significant growth within a very short period. On the other hand, the INX operated by the South Africa ISP Association (ISPA) and also hosted in data centers in Johannesburg (JINX est. 1996), Cape Town (CINX est. 2009) and Durban (DINX est. 2012) have equally high traffic at JINX (14Gbps peak) and CINX (3.8Gbps peak) by the regions levels. However, it is of interest to observe that NAPAfrica’s two facilities have achieved higher traffic levels over a shorter time compared to the INX in similar locations.

“NAPAfrica is an IXP located in one of the few carrier neutral data center facilities in Africa operated by Teraco. As a result, NAPAfrica is in a prime location to attract membership from a diverse range of businesses collocated inside the carrier neutral facility. I believe that, the carrier neutral data-center factor has played a significant role in the impressive growth seen at NAPAfrica over a short period,” added Mwangi.

Considering that most carrier neutral CD’s are often served by major operators. It is likely that NAPAfrica’s growth is buoyed by its ability to easily connect and cross connect providers within the data centre and at high speed, without the need for procuring additional links with infrastructure operators.

According to preliminary data from research being conducted by Africa IXP Association, 35 percent of the IXPs charge port fees (monthly/annual) which is considered a global best practice to ensure sustainability of the IXP operation. This position is enforced by the fact that 35% of the IXPs that do not charge are planning to implement fees in the future. If this would be considered it would be safe to say that soon, at least 70% of all the IXPs in region would be self-sustainable and capable of establishing themselves as regional hubs.

The survey also highlighted that majority of the IXPs (55%) have small networks and content friendly peering policies. This policies appear to be in line with the current level of development where most of the IXP members are small networks and are looking to attract content providers. Fifteen percent of the IXPs have bilateral peering which is friendly to large networks, that prefer to have the choice of whom they interconnect with at the IXP. The remaining 30% of the respondent IXPs have less favorable peering policies that enforce peering for all IXP participants. The mandatory peering policies are often favored by startup IXPs to develop the peering culture. These policy tend to be reviewed as the IXP grows and members have a better understanding of the benefits of peering.

AFIX was formed in 2013, to provide an enabling environment for IXP operators and to help IXPs maximise their value, to improve connectivity within the region and increase Internet’s value for all.

Even though the research shows growth and stability in terms of power back up and security in the IXP facilities, many IXPs are struggling to grow the number of networks peering and the capacity exchanged locally.

“To grow their capacity, the African IXP operators need to consider expanding the target market of the IXP membership to include a diverse range of non-traditional members such as banks, government networks, media, academia, research and education networks,” said Mwangi.

With the massive investments in ICT infrastructure, Mwangi says IXPs need to develop strategic partnerships with terrestrial infrastructure and submarine cable operators to provide suitable  ackages for connectivity to the IXP facility. This will serve as an incentive to connect the new diverse range of (local and cross-border) businesses to the IXP and with higher capacity.

Mwangi concluded that the notable growth in traffic exchanged at IXPs is a clear indication of the regions potential and future growth potential is dependent on the stakeholders ability to nature and leverage on the relationships formed within the IXP’s ecosystem.



AMS-IX and TESPOK end Mombasa Internet Exchange partnership

After one year of joint operations, Amsterdam Internet Exchange (AMS-IX) and the Telecommunications Service Providers of Kenya (TESPOK) have terminated the agreement for operations at the Mombasa Internet Exchange, a Point of Presence (POP) based at the SEACOM landing station.

The decision to terminate the agreement was reached after the POP failed to attract more users to exchange content, commonly known as peers. Google, a Content Delivery Network (CDN) is currently peering in Mombasa, exchanging content with three other Kenyan networks.

“Since the exchange point went live in mid 2014 it has proved difficult to attract parties to participate in the exchange. This has led to the difficult decision to close the East Africa Exchange Point as of June 1st. This doesn’t mean that the development of the Internet infrastructure in East Africa has reached a standstill,” said a statement posted on AMS-IX website.

In response, TESPOK sent out a statement saying it had launched the Mombasa Internet Exchange Point in August 2009 at the SEACOM Landing station. The partnership with AMSIX was to support the growth of the already existing POP in Mombasa and add value to the region.

“This partnership has seen the location attract several international operators and at the same time brought to the fore some of the challenges of the set up in Mombasa,” said Fiona Asonga, TESPOK CEO.

In the statement, Asonga blamed the failure of the partnership on the challenges of set up in Mombasa, such as; lack of appropriate local government support for ICT infrastructure investment, absence of carrier neutral data centers in the region and the costs of transit between Nairobi and Mombasa to facilitate peering at both the Nairobi and Mombasa locations.

“TESPOK is determined and will continue to run Mombasa Internet Exchange Point as it had began in 2009 and with the standards it has used to operate  the Nairobi Kenya Internet Exchange Point POPs since 2002,” added Asonga.

On its part, AMS-IX promised to continue supporting peering and interconnection in Africa through forums such as Africa Peering and Interconnection Forum (AfPIF) through sharing of knowledge and experience, and the provisioning of equipment to developing Internet exchanges.