Tuesday, June 30, 2009

The Pauper’s Gate


In my first post on this blog, I talked about technology leapfrogging. This is a process where a society bypasses a technology and adopts its more modern replacement. In Nigeria for instance, most people never had landline phones and have mobile phones. The US on the other hand, is still very much a landline culture. So as far as basic telephony is concerned, we are more advanced than the US.

Now one other technology where we have the potential to leapfrog again is the mobile internet. The first version of the mobile internet we have in Nigeria is internet access on laptops. With PCMCIA cards, USB dongles and mobile phone tethering internet solutions laptops can be can be taken anywhere in the coverage area. However the real mobile internet, internet over handheld devices, mainly mobile phones, is on the rise. Recently, Opera, providers of a popular mobile web-browser called Opera Mini installed on many Nokia phones and available for download to other devices, shows Nigerian usage has grown to number 9 in the list of their top 10 nations where the browser is used in the world and number 2 in Africa.


So there is tremendous growth opportunity for the mobile internet in Nigeria. However as great as this is, there are some obstacles that I see for this. First is cost. Mobile internet access is expensive. I have looked closely at the prices for MTN and Zain and both their offerings require significant upfront payment or high incremental costs. In fact using the lowest common denominator, their per kilobyte service is 15k. Assuming a conservative usage of 1GB of data per month, this becomes about N150,000.00. Unsupportable. For internet access on your phone from MTN one of their customer service persons insists this is the only pricing available for phone internet usage, though their website seems to suggest that their N10,000.00 per month for 3GB is available on their phones. Zain has better pricing, but the upshot is you get very little internet for your buck. Now if the Nigerian Communications Commission weighs in on this, we may see a drop in tariffs like we saw with voice tariffs over the years (I should mention that you get a better deal if you sign up for a Blackberry service). The point is that mobile internet access is still a pretty expensive proposition for most Nigerians from the point of usage costs. In addition, it is also expensive from a device perspective. the devices that give you the best internet experiences are also the most expensive devices – and they tend to be the less robust devices making their lifespans shorter. Another barrier to entry in my opinion is education. You don’t necessarily need a high school diploma to use the internet, but it does require a fair amount of literacy to use with any real depth.

However, one technology that is available to every single mobile phone user in Nigeria is the short Message Service – SMS, and SMS is the “pauper’s gate” that gives everyone access to the hottest internet services in the world right now.

image The internet giant, Google, recently unveiled its strategy for Africa. These are centred around a set of three services (for now) that are accessed via SMS. They include Google SMS Tips, Google SMS Search which MTN unveiled some weeks ago,  and Google Trader. Tips is interesting as it appears to be more of a social service tool as it currently is used to locate clinics, access information on health and provides agriculturally relevant information such as weather and pest management. Trader is the most compelling service because it enables you search for items to buy and also to post an item for sale. The potential of that alone is pretty significant. Currently, however, other than the Search tool, the suite is currently only available in Uganda.

This brings the power of internet to everyone who can get access to a mobile phone and it isn’t just Google either. Various popular tools allow updates via SMS. These include Facebook and Twitter which sadly do not yet provide their SMS services to Nigeria. Nigerian social network, Legwork.com.ng however does provide SMS updates for their services. Apart from these services that are tied to well-known websites, SMS has long been used a mechanism for promotions (at inflated prices) and the mobile phone services have had various “value added services” accessible by SMS. The question is will these services become popular? I tested Google SMS. Not bad. Problem is it doesn’t fit my browsing habits. A test using “news Iran” gets me a news item. With the Web, I get multiple results and I can select the one I want. Of course, there is no chance of pictures or other media. Still for a vast majority of Nigerians, might it be enough at the price – ten naira per SMS? I don’t know. It would be interesting to follow the Ugandan experiment to see how it goes.

SMS is the great opportunity to bring the principal benefits of the internet - information search and ecommerce to the ordinary Nigerian at a very low price of entry. The Google service isn’t fully available in Nigeria – yet, but there is opportunity for any number of entrepreneurs to bring new products to the market or better still make SMS an add-on service to a fuller web-based offering like Legwork.com.ng is doing. I can imagine Iya Alata doing offering an ecommerce service via her mobile phone.