Kenya sitting on huge untapped data opportunity

Kenya’s mobile industry is on the verge of a second wave of growth. This new burst of growth, that is already under way, is largely driven by data and will catapult the industry to deliver even more value-added services.

Voice and SMS fuelled the first wave of growth for the industry when it premiered at the turn of the millennium, significantly disrupting lives in Kenya. About one and a half decades later, growth in these segments is slowing down and seems to have hit an ebb. Previously, the mainstay of telcos’ top-line, voice and SMS are maturing, with their growth increasingly being outpaced by data.

The emergence of data as a key strategic area and the next frontier for growth in the industry tracks similar trends in other developed markets. Together with mobile money that has already found multiple applications and placed Kenya on the global innovation map, data is expected to progressively shore up its contribution to telcos’ balance sheets.

Driven by increased penetration of the smartphone, as affordable entry-level devices become more available, data is shaping up as the new battleground for the industry. Demand for smartphones and data has been substantially driven by an increasing number of tech-savvy, middle-class consumers with substantial disposable incomes.

There are 21.5 million mobile data subscriptions in Kenya, according to latest statistics from the Communications Authority – accounting for 99 per cent of all the Internet subscriptions in the country.

Similar trends, though at varying rates, have been recorded across markets in sub-Saharan Africa. The GSM Association estimates that there are nearly 200 million smartphone connections on the continent, which translates into one in every four mobile connections. The trajectory of Internet penetration in Kenya is expected to continue rising, buoyed by the country’s aspiration to deliver universal access to the Internet, in line with the country’s long term socio-economic development blueprint, Vision 2030.

Through the National Broadband Strategy, Kenya aims at providing always-on Internet across the country to individuals, homes and businesses, as a strategy for unlocking a plethora of socio-economic benefits.

The adoption of e-government, Constituency Innovation Hubs and the Digital Learning Programme, among other government-led initiatives, have set the stage for even more Internet penetration. So far, the data explosion, from an industry standpoint, is causing a shift in the traditional telco model. For instance, Over The Top applications such as WhatsApp and Skype, which initially caused disquiet in the industry, attracting condemnation for cannibalising traditional calls and messaging, are opening up fresh opportunities. Since they run on data, telcos have realised they can still make money off them.

Ultimately, all trends in the utilisation of the Internet and efforts to grow it further, fit very well into Kenya’s ambition to become an international and regional ICT centre. Already, the country is home to one of Africa’s most vibrant “techie” communities, a feature that continues to attract the attention of Silicon Valley, the world’s foremost innovation hub, and indeed the rest of the globe.

The future looks even brighter with all these efforts driven by the private sector and government. Kenya is sitting on a huge data opportunity that does indeed need to be fully harnessed.