Wednesday, February 18, 2009

Internet Service provider Swift Global has acquired a Sh79.5 billion capital injection

By Dan Muhuni

Internet Service provider Swift Global has acquired a Sh79.5 billion capital injection from principal shareholders Altech Corporation of South Africa and Sameer Africa Group.Swift Global General Manager Nick Odero says the capital injection will finance the company’s ambitious regional expansion, development and launch of new products as well as an aggressive staff development programme.
Speaking at the launch of a new Business Plan, Mr Odero said the company was refocusing its business style in a bid to attract more small and medium term enterprises to partner with.“Swift Global has been a sleeping giant all this while and we are here to take our rightful place as leaders in the expanding internet market,” he said.“Swift Global will offer new value-added solutions like IT disaster recovery, Offsite backup, Server farm, Spam filtering and Hardware lease and sales,” Mr Odero said, adding that the ISP intends to grow its business and drive sales through franchising its regional branches which has proved successful in other market sectors.
“This strategy will also spearhead the initiative of taking ICT innovations to the local communities across the region. The project is aimed at creating partnerships with franchisees in various parts of the country,"he said.Mr Odero said 60 percent of the Sh79.5 million fresh injection, would be allocated to new product development, 30 percent for disaster recovery renovation while training will take up 10 percent.
He said provision of corporate internet solutions had been split into two categories: premium and standard services. Meanwhile, the company also launched its new website that will, among other things, allow customers to critique Swift Global on-line as well as request for online support. “The new website is in line with the company’s strategy to offer customers easy access to its wide range of Internet Technology services and products.
We have spent a lot of time in establishing what our customers want and we believe this is a remarkable value proposition for them.” said Mr Odero. Swift Global is a privately owned Kenyan company; it began providing Value Added Fax Services in 1995 and was among the first Private Network Operators in Kenya.

Microsoft Corporation signs agreement with UNEP

By Dan Muhuni

United Nations Environment Programme (UNEP) and Microsoft Corporation have signed a memorandum of understanding to work together on leveraging information and communication technology (ICT) solutions to help address today's complex environmental challenges.

The signing took place yesterday during UNEP's 25th session of the Governing Council and Global Ministerial Environment Forum on the theme "Globalization and the Environment", held at UNEP headquarters in Nairobi, Kenya, and attended by more than 100 environment ministers.

The partnership focuses on helping environmental stakeholders - including UNEP and other international organisations, governments, nongovernmental organisations and researchers - work more effectively by making use of new technologies.

UNEP and Microsoft are cooperating to support UNEP's mandate of promoting environmental understanding and increasing public knowledge about environmental factors and the problems facing future generations.

Areas of cooperation include providing access to research and scientific information on the environment, Building integrated knowledge platforms to enable better cooperation between different actors and supporting the development of applications for environmental sustainability management.

"We view our partnership with Microsoft as key to delivering solutions on a scalable level to a community of more than 190 nations and the UN system as a whole," said Achim Steiner, UNEP executive director.

"UNEP's ability to mobilise information technology and the platforms for sharing environmental information is a precondition for working together as an international community to tackle environmental issues."
"Without equitable access to information and the capacity for developing countries to engage on an equal level in negotiating key agreements like the climate change treaty or the biodiversity convention, we will not make much progress," he said.

UNEP and Microsoft have been collaborating since 2006 on Research4Life, a public-private partnership that includes the Online Access to Research in the Environment (OARE) consortium.

Research4Life provides access to the latest scientific research through an online library of more than 7,500 peer-reviewed scientific journals, books and databases, made available by 130 publishers at low or no cost to developing countries.

OARE focuses on environmental information, providing scientists, practitioners and policy-makers in participating countries with the information they need to implement targeted programmes and make environmentally sound decisions.

The platform is already having an important impact on communities, such as in Kenya's Rift Valley, where researchers used OARE resources to address pollution of the Njoro River watershed through a series of programmes, resulting in a reduction of waterborne diseases among the local population and cleaner use of the river.

Also, Microsoft Research's Computational Science Lab in Cambridge, UK, is partnering with the UNEP World Conservation Monitoring Centre (WCMC) to advance environmental and ecosystem science, prioritising areas of urgent concern in environmental policy, at the intersection of climate change, biodiversity, human activity and sustainability.

WCMC is the world's authoritative institution for monitoring biodiversity and ecosystems for conservation purposes and collecting data globally on important biodiversity indicators.
Microsoft Research's Computational Science Lab is one of the world's leading research laboratories pioneering new computational approaches to tackle fundamental challenges in the science of complex natural systems.

At the same time, a seven point plan to reduce the risk of hunger and rising food insecurity in the 21st century has been outlined in new report by the United Nations Environment Programme (UNEP). Changing the ways in which food is produced, handled and disposed of across the globe - from farm to store and from fridge to landfill - can both feed the world's rising population and help the environmental services that are the foundation of agricultural productivity in the first place. Unless more intelligent and creative management is brought to the world's agricultural systems, the 2008 food crisis - which plunged millions back into hunger - may foreshadow an even bigger crisis in the years to come, says the rapid assessment study. The report, entitled ‘The Environmental Food crises: Environment's role in averting future food crises', has been compiled by a wide group of experts from both within and outside UNEP.

The fibre benefit to hospitals

By Dan Muhuni

When Bitange Ndemo, the Permanent Secretary in the Ministry of Information and Communication announced that the government would pay 50 percent of bandwidth cost for the Business Process Outsourcing (BPO) sector, it caused excitement in the industry.
Everybody in the BPO business wanted to benefit from the government scheme, which is calculated to reduce the cost of bandwidth and allow Kenya to compete with countries like India’s BPO sector. The announcement also made many entrepreneurs to invest in the sector with the hope of enjoying the reprieve.
While the step can be said to have spurred activity and raised the profile of Kenya’s BPO, the health sector remains neglected, yet telemedicine could save lives and ensure that many people access expert doctors locally, regionally and even abroad.
This year, more than 50 hospitals in East Africa will be struggling to raise the money for internet connectivity so that they can benefit from a project that seeks to interconnect hospitals in the region. The project by Africa Medical Research Foundation (AMREF) and Computer Aid International (CAI) requires hospitals to cater for the cost of connectivity while computers, cameras, scanners and training would be provided by the two organisations.
Currently there are 15 hospitals across the region practicing telemedicine under the project but the high cost of bandwidth means that they are restricted to emails as opposed to real time telemedicine and video streaming.
The move has however improved quality, effectiveness, access and the cost of providing health care for the hospitals that are mainly based in remote areas. For effective telemedicine, a hospital would require bandwidth of 512kbps uplink and 512kbps downlink which costs about Sh140,000 (US$ 2000) per month. Because of poor infrastructure, the remote hospitals can not use wireless or microwave links; they will have to purchase VSAT equipment at the cost of Sh406,000 (US$ 5800).
Therefore, a hospital will have to incur an initial cost of about Sh1 million which includes bandwidth for two months, the equipment, internal networking and staff training.This high cost of connectivity has deterred many hospitals from embarking on telemedicine yet the referral hospitals are there and willing to assist other doctors from remote hospitals. Paul Maziku, an assistant ICT officer at Bugando hospital in Mwanza says connectivity is a challenge, citing instances when remote hospitals are disconnected because of failure to pay the monthly bills. The cost of bandwidth remains a stiff challenge to the hospitals; they have opted to lower bandwidth tiers, which are shared, making the quality and speed of the internet slow.
For instance 128 kbps uplink and a downlink speed of 384 kbps costs Sh64,350 (US$ 990) and is shared among eight users, meaning that the speed is low for a hospital that needs instant connectivity and response. With a 128/384kbps shared link, a hospital can send emails, scan and send attachments. The hospital can also network the computers among the offices within the compound and share information such as finance and administrative data and also access patients’ records online. For instance; if a radiologist in one wing wants to know whether a patient had been treated for any other ailment, she or he will access the data instantly by the click of a button instead of searching for the file or retrieving it from the archives.
In deed, apart from telemedicine, hospitals can improve their efficiency because records will be online and they can confirm details with suppliers before sending a vehicle to receive the supplies. The computer would also store details of the expiry dates of all medicines. With subsidised bandwidth, more hospitals will be in a position to deliver telemedicine to many more people who may not have the resources to travel to referral hospitals. Connectivity in rural hospitals would greatly help governments monitor the health care system. But connectivity is not the only issue. There is that of software and availability of computers.
Because they are few, hospital administration wants to utilise the computers for both telemedicine as well as a repository of all hospital information. This makes the computer slow and at times it is not used for the actual work. An increase in the number of computers would improve the level of efficiency. Then there is the question of software. Computer Aid usually donates machines according to software specifications by the users.
In this case, AMREF selects the software that should be installed into the computers before they are shipped to the rural hospitals. “The software specifications are similar in all stations, the packages, the needs for these stations are also similar in many ways, some of the software is installed in operating system but for some we have to install in all the machines we receive. We install Gimp application which helps the users in the station trim their pictures to the right dimensions and DPI (Dots per inch) without compromising the quality,” says Frank Odhiambo, who has been working with the remote hospitals all over East Africa.

Postal Corporation signs agreement with Kenya Data Networks

By Dan Muhuni

The Postal Corporation of Kenya's chances of survival in a highly changing industry seem to be dimming as competition in the telecommunication industry grows.

Postmaster General Fred Odhiambo says the corporation whose main service is postal services will introduce a hybrid mail service in order to stay relevant in the market.

It has been tough for postal corporation of Kenya to remain relevant by doing the same thing it has done for 60 years while modern technology becomes more dynamic.

With its core business being mail conveyance, PCK has seen its major activities come under serious competition from electronic mail and the mobile phone Short Message Service.

KDN Chief Executive Officer, Kai Wulff said the move was not just a commercial venture but aims at providing best services to their consumers.

Wulff said customers will access the top up cards and access the butterfly hotspots facilities in all postal outlets in the major cities and towns countrywide.

"We aim to provide value as a communication infrastructure provider. We will continue to explore opportunities that guarantee the very best for our customers and partners", said Wulff.

The post master acknowledged that their revenue collection from individual mails is decreasing while that from corporate mails is realizing a growth rate of only 15 percent annually.

Posta pay which is a money transfer service that contributes 17 percent of PCK revenue has also seen intense competition from mobile phone money transfer services.

Odhiambo say with the introduction of the hybrid service the corporation intends to cut on expenses incurred while delivering mails to various post offices countrywide which consumes close to 70 percent of its earnings.

The launch of the fibre optic cable in the country that is expected to bring down the cost of internet makes an already bad situation worse for PCK.

Meanwhile, Kenya Data Network has signed an agreement with the Postal Corporation of Kenya to distribute top up scratch cards to KDN customers.

The cards that allow KDN customers to make voice over internet protocol calls and surf the Internet will be available in 800 of the PCK branches countrywide.

KDN chief executive officer Kai Wullf says this service will allow its customers to connect to the web anywhere using the scratch cards.

Postmaster General Fred Odhiambo said the partnership will help the mail firm diversify its operations in the country.

The bandwidth question in e learning

By Dan Muhuni

This month, the Kenya ICT Board will commence distribution of bandwidth to Colleges and Universities to support electronic learning efforts. The project will double the current bandwidth at the institutions of higher learning.

Electronic learning is a type of technology-supported education where the medium of instruction is computer technology. In some instances, no face-to-face interaction takes place and uses a wide spectrum of technologies, mainly internet or computer-based, to reach learners.

The ICT Board seeks to support e-learning efforts by supporting internet-based learning by subsidising bandwidth. With the internet, students can register from other towns and get course materials and exams online.

But is bandwidth the solution to e-learning? Are the institutions well-equipped to offer online services or the bandwidth will facilitate idle internet surfing and email on Yahoo and Gmail?

Is there any conditions precedent that the ICT Board should consider before giving the bandwidth, apart from the fact that it is a college or university? What are the software and hardware requirements, to maximize on the available bandwidth?

This is a positive gesture by the government, which will lay the foundation for future projects but bandwidth is just one block; hardware, software and training are the other blocks.

There is no doubt that e-learning has become the new buzz word in institutions of higher learning. Colleges and Universities claim to offer e-learning just because they have a computer lab, which in many cases have five students sharing one computer.

For instance, an institution may be currently using one megabyte of bandwidth which will be doubled to 2MB. This is relatively huge capacity for an institution used to 1MB, but how will it help if the number of computers remains the same. The capacity will be there but students will still share the computers.

The institutions need to be interconnected so that students and universities can access services via their laptops at any point at the university. This may be an expensive exercise for many institutions, yet the board covers the bandwidth costs only.

Kenyatta University (KU) is probably one of the best examples because it has made major strides towards marketing the institution as an e-learning hub, after completing the final leg of the 30-kilometer terrestrial fiber linking all the buildings and campuses.

The University is seeking to emulate other institutions South Africa that have switched to fully converged solutions, offering connectivity through fiber in addition to 112 Local Area Networks (LAN) points.

The terrestrial fiber within the university along Thika road is owned by the institution while the fiber linking Parklands and Ruiru campus has been provided by local loop providers.

"KU currently uses 10 MB per month but the bandwidth is still insufficient for the 20,000 students," Andrew Mungai, the Director of ICT at KU.

In the new scheme, KU expects to receive 10 MB from the board, which will significantly improve speeds.

The university has a challenge of providing computers and laptops to lecturers and fully equipping the computer labs.

So far, the university has received 2000 computers from Computer Aid International and bought 1000 more computers, yet there is a shortage of 2,500 computers in order to satisfy the student computer ratio, according to Mr Mungai.

“Computer Aid International has focused mainly on provision of computers, but we knew of the related need for training and value added services,” said Tony Roberts, Founder and Director of International Programmes at Computer Aid International.

For e-learning, KU has received training on Moodle, an e-learning software, deployed with the help of instructors from the university of Worcester, who were linked to KU by Computer Aid International.

"Moodle implementation is very tough given that KU has the highest percentage of physically challenged students," said Mr Mungai. "The collaboration with Computer Aid and Sight Savers has helped provide laptops with speech functionalities for the blind students."

KU currently requires 80 MB to sufficiently cater for the students and staff, the hardware has its own challenges. The university will have to maintain the servers and ensure that they are efficient and least down times for communication to be fluent.

In this regard, if KU faces challenges of hardware and connectivity, how are the other universities expected to link their buildings with fiber and Local Area Networks, considering budgetary constraints?

There is the social aspect; students and staff have to start using official college emails instead of yahoo or Gmail and to gain this faith, the institution has to guarantee minimal downtimes and that information will not be lost at any one point.

Then there is the small problem of monitoring and evaluation, which is not unique to educational institutions.

The institutions will need to put in place a software solution that enables it to centrally collect and analyze internet activity. A comprehensive selection of built-in reports including most visited sites, individual user or user group activity, attempted access to blocked pages, bandwidth utilization and performance.

There are open source and proprietary software that allows network administrators to use a template facility to create, store and schedule their customized reports.

The application will ensure all web browsing activity is stored in database that can be either viewed on screen or exported for further external analysis. An extensive range of detailed reports can be generated to show anything from 'most visited domains' and 'top blocked categories' to time spent browsing and bandwidth utilization.

This will then confirm that the bandwidth is utilized through actual e-learning platforms and not emails only or other sites that have nothing to do with education.

Phone operators banking for the poor

Dan Muhuni/ Agencies

Extending basic banking services to the world's poor is seen as vital for economic progress in underdeveloped countries and the mobile phone industry is emerging as part of the solution.Network operators, keen for the revenues such services generate, have launched money transfer programmes in more than a dozen countries, providing a basic service that local banks are unable or unwilling to provide.
The reason is that mobile networks cover large parts of even the poorest countries, while banks have limited numbers of branches and provide only for those able to pay what are substantial account fees for most people."There are over one billion people in emerging markets today who don’t have a bank account but do have a mobile phone," says Rob Conway, chief executive of mobile industry trade body the GSM Association (GSMA).
Research by microfinance centre CGAP and consultancy McKinsey & Company shows the mobile money market for the unbanked could grow to five billion dollars over the next three years, the GSMA said.
To this end, Microsoft founder Bill Gates's humanitarian foundation, which has mostly focused on disease eradication up to now, announced Tuesday a grant of 12.5 million dollars (9.8 million euros) to help fund 20 new mobile money transfer projects worldwide.The trust said the grant was part of its programme to extend financial services to the poor. It identified mobile phone technology as a means to help people "manage life’s risks and build financial security.""Traditional financial services are often too costly and inconvenient for people who earn less than two dollars a day to obtain, and too expensive for banks to provide," said Bob Christen at the Bill & Melinda Gates Foundation.Eden Zoller, an analyst at telecom research group Ovum, says any initiative in mobile banking should look to emulate what British network operator Vodafone and local partner Safaricom have achieved in Kenya.
A mobile payment system there called M-Pesa was used to transfer 40 million euros (50 million dollars) in January, mostly in small payments, and there are five million account holders, according to figures from Vodafone.Ovum forecasts that mobile money transfers in the Middle East and Africa will grow from one billion dollars in 2008 to 20 billion dollars in 2012.
"There is already strong evidence that mobile payments in emerging markets can be successful for all parties concerned," said Zoller.Nick Hughes, who set up the M-Pesa system in Kenya for Vodafone and is the group's head of mobile payments, says the key to the project's success is the ease with which people can deposit and transfer money.
Without a comprehensive banking network in Kenya, Vodafone and Safaricom set up a network of 7,000 agents, mostly storekeepers, who take deposits and issue cash on demand.Once money is deposited, a user can authorise payments on his or her mobile phone using a PIN number.Money can be transferred directly to another user's M-Pesa account and even to non-members, who receive a text message instructing them to visit a local M'Pesa agent to retrieve their cash."Our target is someone who doesn't have a bank account but wants to move money around quickly," he told AFP on the sidelines of industry event Mobile World Congress which is taking place here this week."We have a fantastic distribution network that is an order of magnitude bigger than any banking branch network."Vodafone has already deployed its mobile payments platform in other countries, including Afghanistan and Tanzania.
South African group Fundamo, which enables mobile phone owners to manage a bank account via their handsets, is already present in Africa, central Asia and Latin America and is working on a major new deal to extend its reach."You cannot consider someone is empowered if they don't have access to electronic money in a digital world," chief executive Hannes van Rensburg told AFP.In Zambia, for example, the company runs a system called Celpay which van Rensburg says handles transactions yearly equivalent to about 10 percent of the African country's gross domestic product.
A Celpay application comes pre-loaded on mobile phones and a user can complete transactions such as paying bills or transferring money by scrolling through a menu and entering his or her PIN number."Mobile phones give the opportunity to bank people more quickly and much more efficiently," he says.The main obstacles to expansion are regulation and the reliability of mobile networks which have to be able to handle the extra volume required to support mobile banking.Vodafone would like to move into India with its M-Pesa model, but regulators have so far thwarted its efforts."Regulators won't allow any mobile payment scheme. India has said you have to be a licensed bank," he said.In the midst of the financial crisis light-touch regulation is out of fashion, but Hughes is keen to see softer regulation to reflect the low-risk and small-scale transactions enabled by mobile payment systems.

Wednesday, February 11, 2009

'Digital divide' still need to be crossed in Africa

BY DAN MUHUNI(Kenya Times)

A study into Africa’s telecommunications sector has revealed that the industry will continue to record significant growth in the next three to five years. The study also shows that africva is the fastest growing mobile market in the world. The findings of the study conducted by audit firm Ernst and Young’s Global Telecommunication Centre indicate that despite the current global recession, the sector, driven by the increasing number of mobile phone subscribers and data usage would continue to develop faster. “There is still more growth and opportunity in the market. We hope that this report will help governments and existing operators to recognise the positive economic contribution that this sector can have on the development of Africa,” the Centre’s co-leader Julia Lamberth said. The finding also revealed that the digital divide in africa still need to be crossed since 70 percent of the population of sub-Saharan Africa still are living in rural areas and there is a dire need to connect them.The African telecoms market grew by 49.3 percent in 2002 compared to 7.5 percent and 28 percent recorded in France and Brazil respectively. This growth is believed to have been powered by a thriving economy driven by a commodities boom and increased liberalisation. The report, released in Nairobi on Thursday, forecasted that voice services would remain the largest contributor to operators’ revenues in the medium term, as they would be striving to reach people without access to mobile phone services. Later however, data could begin to contribute significantly towards the firms’ revenue streams as the operators would introduce value-added services, such as mobile banking, on their products. The report further noted that broadband adoption would still be low in the short term due to the high cost of bandwidth. Africa has the lowest internet penetration in the world at 5.4 percent with only 12 countries having a (penetration) rate of over one percent. The Centre’s co-leader Julia Lamberth pointed out that the laying of new submarine cables would result in the availability of affordable bandwidth that could open up the market for cheaper connectivity.The growth in the telecoms, the findings showed, would have a direct influence on the economy. It is estimated that a 10 percent increase in telephone penetration results, a 1.2 percent increase in the emerging markets’ GDP and a 0.6 percent increase in developed economies.The Francophone lead for the Centre, Serge Thiemele, predicted that the continent would see extensive mergers and acquisitions as both large and multi-national operators moved to consolidate their positions in the sector. The market remains fragmented with less than 10 large operators and more than 80 percent smaller operations, and the mergers would involve operators buying into Internet Service Providers and other IT companies. “Markets that have five or more operators are likely to see more consolidation, either as large regional players compete for access to lucrative markets or as the number of operators is cut down through in-country consolidation,” Mr Thiemele explained. But despite the positive outlook for the sector, the officials acknowledged that Africa still has significant challenges such as inadequate regulatory frameworks and political instability to overcome. “Other factors that inhibit the growth of the sector include poor infrastructure and unreliable electricity supply and high cost of energy in many countries. When those are addressed, we will see growth taking place,” Ms Lamberth said. The pace of development in different countries varies. In 2008, for example, Libya became the first African country to pass the 100 percent mobile penetration mark while South Africa was at 98 percent.

Thursday, February 5, 2009

M-PESA’S POPULARITY IS BAD NEWS TO LOCAL BANKS AND COMPETITORS

By Dan Muhuni
(Kenya Times)

The ministry of finance last week gave Safaricom’s mobile money transfer service M-Pesa a clean bill of health confirming the fears of commercial banks in the country that were up in arms that the mobile service company was eating into their market share.In making the announcement, finance permanent secretary Joseph Kinyua finally put a lid on a raft of regulation questions raised by the banks in regard to M-Pesa’s safety and uneven competition in the industry.Last month, former acting finance minister John Michuki ordered an audit of M-Pesa after concerns were raised about the safety of users’ money.The minister’s move was the first by the government to contain the currently galloping growth of electronic money transfers.M-pesa has become so popular in the country especially among the un-banked and low income groups with subscription standing at 5 million as a t the end of last year. By august last year, the money transfer service alone had a turnover of some Sh17 billion making it the most lucrative and active business venture in the recent times.Hardly two years into its existence, the money transfer service has been subject of discussion even among the rural folks most of whom cannot access banking services in the country.In a statement, the Permanent Secretary in the Ministry of Finance, Joseph Kinyua, said that an audit by the Central Bank of Kenya (CBK) found the service safe and reliable.“I therefore reiterate that the Treasury and the Central Bank of Kenya are committed to promoting safe and efficient innovations that enhance access to financial services thereby addressing the challenge of financial exclusion due to infrastructural constraints.”The government’s move therefore points to a bright future of the service that has in the recent days given Safaricom an edge over the other mobile service companies in the wake of heightening competition.Among the accusations leveled against the service was money laundering in what would pass for a dig in by the commercial banks to cut the rival to size despite not being very aggressive to penetrate the millions who make up the unbanked lot in the country.According to Kinyua, the fears, issues and concerns raised had been mitigated through a number of measures which the Central Bank of Kenya (CBK) and the Communication Commission of Kenya (CCK) monitor regularly.Mr Kinyua said there was no evidence to support the allegation that the service was competing with commercial banks.“In any case, there is nothing wrong with competition as long as it is pinned by a level playing field,” he read a statement by the finance permanent secretary on Saturday last week.On credit risk, Treasury said that since M-Pesa agents pay before offering services to customers, the risk cannot arise.“CBK has placed the maximum limit of Sh50, 000 per M-Pesa account per day and a transaction limit of Sh35, 000 per day in order to mitigate against settlement risk,” he said.Safaricom is still the leading mobile communications provider in Kenya. The company recently announced that it wants to partner with corporate organisation to be making cash transactions through the M-Pesa service in what will further shore up the service subscribers.M-Pesa is an innovative mobile payment solution that enables customers to complete simple financial transactions by mobile phone. M-PESA has been developed by Vodafone, the world’s leading mobile telecommunications group, with the pilot in Kenya operated by Safaricom. Kenya was the first country in world to use the mobile money transfer method earning Safaricom a UN global award.Safaricom is part of the Vodafone group, and hence Treasury believes that the M-Pesa product benefits from the research and development of Vodafone and as such, the operational risks are minimal if not non-existent.CBK has proposed and formulated the enactment of the National Payment System Bill that will strengthen its mandate as an oversight body over all payment systems including money transfer.The development is expected to raise reactions from the industry as Safaricom’s competitor, Zain Kenya last week accused the Central Bank of taking too long to licence its money transfer service Zap despite having applied for approval in October last year.“We have been struggling to get an approval for the past few months unsuccessfully which puts us at a disadvantage to competition,” said Zain Kenya managing director Rene Meza.Initially, M-PESA was aimed at mobile customers who do not have a bank account, typically because they do not have access to a bank or because they do not have sufficient income to justify a bank account. However the service has slowly but surely become a reliable money transfer service even among the middle and high income groups in the country.All one needs to do is register at an authorized M-PESA Agent by providing their Safaricom mobile number and their identification card. Once registered, customers can load money into their account by depositing cash at a local agent, send money to other mobile phone users by SMS instruction, even if they are not Safaricom subscribers.Cash is paid into M-PESA and withdrawn at M-PESA agent outlets. These outlets are typically local Safaricom Dealers, but can also be other kinds of retailer such as petrol stations, supermarkets, chemists and local shops. There is currently a large network of M-PESA agents across the country who have been trained to use the service. It is planned to grow this network significantly in the coming months.
The M-PESA service was originally created as a pilot funded jointly by Vodafone and the UK Department for International Development (DFID) Financial Deepening Challenge Fund. The pilot ran for over 6 months in Kenya from October 2005 in partnership with Faulu Kenya, a local Microfinance Institution.M-Pesa and Zain’s equivalent, Sokotele, have been operating outside Central Bank’s (CBK) regulation unlike other money transfer services pending the passage of a National Payments Systems Bill.At the time of the announcement of the audit, Safaricom’s chief executive Michael Joseph welcomed the audit, saying it would prove that M-pesa is a reliable money transfer service.
“We welcome the audit because it will verify the concerns and satisfy the regulator that we have put safeguards and the risks are minimal,” he said.Mobile money transfer services are popular since unlike banks, one does not require a bank account, neither is interest charged on the amounts being transferred. They are instant and flexible.Critics of M-Pesa point out that apart from being a merely money transfer service, some users have converted it into a bank account using it to store money they use to settle bills and buy services much to the chagrin of the banking institutions.
Concern has been rising over how users would be compensated in the event that the service collapsed. But the financial sector regulator, CBK, has in the past argued that it does not have the legal backing to monitor the service.Plans are already underway by Safaricom to make M-Pesa a regional cross boarder money transfer services. This will be done through a new partnership with Vodafone and Western Union to pilot a cross-border mobile money transfer (MMT) service.The service will enable customers to send cross-border remittances from select locations in the UK directly to Safaricom mobile subscribers in Kenya in minutes.
An earlier effort to expand the service to UK in March was hampered by regulatory concerns by the British Government.The UK authorities were demanding that Safaricom meets the regulatory requirements governing banking, money transfers and exchange rates before it could be allowed to enter into the lucrative international money transfer business.

Tuesday, January 27, 2009

NetHope ups its commitment to enhance ICT skills to NGOs

Story By Dan Muhuni
(Kenya Times, ICT Reporter/ Specialist)

NetHope in its quest to enhance connectivity and Information and Communication Technology skills building within the NGOs has upped its support through its NetHope East African chapter. NetHope has been able to design, develop, and pilot an ICT skills building program that address the most critical ICT skill shortages in the humanitarian sector.The pilot phase of the ICT skills building program engaged NetHope member NGOs to test the model and provide feedback, with the ultimate goal of adjusting and expanding the program to support the entire NGO sector.In an exclusive interview with Kenya Times early this week, visiting NetHope Global Projects Director Mr Frank Scott said that NetHope is committed to help non governmental organizations use their Information and Communications technology investments to better serve people in the most remote areas of the world. In Kenya NetHope is working closely with NGOs in enhancing ICT skills within their employees. “We have expanded NetHope’s impact by creating Chapters, launching ICT skills building, expanding the Very Small Aperture Terminal (VSAT) satellite programme, deploying new Network relief kits, forming new special interest working groups, and launching shared services and innovation initiatives” added Frank.By 2007 NetHope members added over 100 locations to the Etelsat/Skylogic VSAT project where additional NetHope member organizations were trained and certified by Eutelsat to perform VSAT installations. Skylogic also developed two new services for NetHope members namely: Direct bandwidth only Virtual Network Operator Service and LinkStar Virtual Network operator Service. Frank added that the NetHope member interest is expected to shift fro traditional VSAT service to a more Internet Protocol based VSAT service that was adopted last year.According to International Committee International (IRC) Information Technology Manager Mr Nenad Bojovic, NetHope has continually supported NGOs in the world in enhancement of the VSAT technologies since most NGOs are located in remote areas where connectivity is limited. “VSAT technologies are the only way forward for these humanitarian bodies like IRC (which is one of the beneficiaries) who have offices in the remote areas and the marginalised parts of the country. We have applied VSAT technology in our operation since it connects us even to our offices which are miles away, for instance we can connect to the Kakuma refugee camp which is over a thousand kilometres away from our Nairobi head office" added NenadVSAT technology has many advantages, which is the reason as to why it is used so widely today. One is availability. The service can basically be deployed anywhere around the world. Also, the VSAT is diverse in that it offers a completely independent wireless link from the local infrastructure, which is a good backup for potential disasters.Its deployability is also quite amazing as the VSAT services can be setup in a matter of minutes. The strength and the speed of the VSAT connection being homogenous anywhere within the boundaries is also a big plus. Not to forget, the connection is quite secure as they are private layer-2 networks over the air. Last but not least, most of the VSAT systems today use onboard acceleration of protocols (eg. TCP, HTTP), which allows them to delivery high quality connections regardless of the latency. Nenad applauded the NetHope support in providing the VSAT skills and launching Information and Communications Technology skills building which has been vital towards solving common ICT problems.NetHope members include Care International, Action Aid, Catholic Relief Services, IRC, Plan, Water Aid, Federation of Red Cross and red Cresent Societies among many others.

CFSK pleads with Govt to Waive taxes on refurbished computers

By Dan Muhuni
(Kenya Times ICT Reporter/ Specialist)

Computers For Schools Kenya (CFSK) in conjunction Computer Aid International have appealed to the government to wave the 25 per cent tax that is imposed in the refublished computers at the port. Speaking during Media visit to the East Africa’s first e-waste management plant in Embakasi yesterday, CFSK Executive Director Tom Musili expressed fears that Kenya is likely to be on the loose as donor countries are forced to dig deep into their pockets to pay the 25 per cent duty. "It‘s very embarrassing for a Non Governmental Organisation that is willing to donate computers to our country for free only to be told to pay taxes at the port for the computers, We are appealing to the government to exempt NGOs from paying taxes on donated computers so that we can be able to continue proving computers to schools." added Musili.Said he : "We currently have 4 containers containing over 2000 computers that have been donated by various NGOs but they are yet to release them until the government of Kenya comes clear on the taxes issue". Kenya is the only country in Africa that has imposed tax on computers that are donated by various NGOs in Africa. Computer Aid International Africa Programme Manager, Gladys Muhonyo conquered with the CFSK saying the Computer Aid International, a world's largest non profit provider of refurbished personal computers to schools and community organisations in the developing world has already donated one container. "We are very much willing to donate computers to Kenya, but its very unbecoming to expect us also to pay taxes on someting we are giving for free to benefit Kenyan schools, we are appealing to the government to reconsider its decision on the taxes issue so that Kenya can benefit from this programme. Its very unfortunate since it’s only Kenya that has imposed taxes on the donor consignment in Africa" added Muhonyo. Computers For Schools Kenya (CFSK) opened the East Africa’s first e-waste management plant in Embakasi, Nairobi, Kenya last year, to handle the region’s electronic recycling needs with the help of Safaricom Foundation, City Council of Nairobi, Kenya Airways and some other well wishers.The workers in the plant have been properly equipped and educated on how to handle and separate metals such as aluminium and copper, which can be recycled locally, while motherboards will be shipped to Asia and Europe for disposal, said Musili. “The management plant has a very safe working environment,” said Musili. “We now have the capacity to handle over 2000 computers in a month and its my hope that eventually we will handle the e-waste from East Africa region.” “For the monitors that are considered toxic, CFSK is shipping them to Norway for recycling. The Norwegian government supports recycling of 50,000 tons of monitors from CFSK every year. The monitors are sent to Fair International, which has the expensive equipment required to dispose of the monitors.” CFSK has also been promoting local innovation by recycling CRT (cathode ray tube) computer monitors and converting them to affordable TV sets from as low as Sh4500.