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The African Internet Effect – Everything it touches turns different

There’s been a lot of individual pieces of news and a slowly building awareness of the scale of Africa’s Internet users but noone has yet taken in the breadth of the momentum building up. Russell Southwood tries to get grips with the pace and variety of what’s happening.

I ran a session on online content at Capacity 2015, the wholesale bandwidth meet-point and conference in Dar es Salaam. I will be charitable and say it was lightly attended but I don’t take it personally. Those doing the business of business are often focused on the short-term in the form of next month or quarter’s sales targets.

Those selling wholesale bandwidth make most of their living from corporates and fixed and mobile telcos. Since neither of the latter are yet making a great hand of selling content and online services, they are in the unfortunate position of being in the back seat of the car, largely unable to influence the journey. But they have a massive wholesale fibre inventory and every day that passes means it has lost value, particularly those selling capacity from international fibre pipes.

Consumer online content and services will be the next big bump in growth for those selling wholesale bandwidth. But with notable exceptions (see at the end of this story) they all seem remarkably passive about making it happen.

The African Internet Effect is rippling out and affecting everything it touches. The first shocks of this earthquake have been quite gentle but its power will build for two reasons.

Firstly, the African “digital change” generation are 18-30 years old. In the next five years as they get older, there will be a new tranche of “digital native” Africans. They will themselves move into positions of power and decision-making.

Secondly, in the more advanced African markets 50% of phone users will have access to a smartphone or a smartphone-like feature phone. In other markets, a significant number of users will have smartphones. Argon Telecom will offer a US$40 smartphone next year and all the talk is of when a US$30 smartphone will arrive.

There are two big clusters which will have an enormous impact over the next five years: film and TV and music. Operators have enormous problems implementing them but let’s look at what’s happened so far:

Film and TV: Online has reduced the barriers to market entry and there are now over 100 online film and TV platforms. Not all of these will survive but some will dig themselves significant niches by focusing on local content. A couple of examples that have had less airplay than others include Ghanaian film-maker Juliet Asante’s Mobilefliks and the soon-to-be launched Tango TV in Tanzania. Much of the talk at Capacity 2015 was about the lack of local content: don’t get me started, local content is either already there or will follow. Nigerian diaspora performer T Boy demonstrates what can be done with a talent for comedy and You Tube. Safaricom has appointed a broadcast content person to head up its BigBoxTV service and Netflix will soon be in South Africa.

Music: As with VoD platforms, there are now over 100 online music platforms jostling for attention, the larger of which include Simfy, Spinlet and iROKING. Local contender in Tanzania Sune Mushendwa spoke at Capacity 2015 and is one of the more interesting operations. In our report on music platforms we calculated that there were already 10 million users across the continent and that these numbers were set for considerable growth. However, these numbers are soft in that they are not always active users.

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