Data proliferation, price wars: What 2019 has in store for Kenya’s ICT space

January 28, 2019

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Economic data for the second quarter of 2018 showed a strong pickup of the economy, with real GDP growth averaging 6.0 percent in the first half of 2018 compared to 4.7 percent in the first half of 2017.

According to the Central Bank of Kenya, this outcome was due to a strong recovery in agricultural activity as a result of improved weather conditions, continued recovery of the manufacturing sector, and resilient performance of the services sector particularly trade, tourism, information and communication, transport, and real estate.

Overall growth in 2019 is expected to be strong, supported by the recovery in agricultural production, alignment of Government spending to the Big 4 priority sectors, a stable macroeconomic environment, an improved business environment, and a favorable external environment.

Global trends, which incorporate technology use, which we believe are central to this growth in 2019 include:

Market demands driving industry development

Whether big corporate, government entity, SME or home user, all customers want the same thing from communications providers: more for the same price. More data. More speed. More efficiency. And more flexibility in terms of payment models and “untethered” but secure movement between devices.

These market forces will certainly drive industry decisions in 2019. Faced with the data explosion, providers will need to assess how they keep up with that growth, and future-proof their organisation. Then there’s the issue of cost, especially since technology outlay is largely priced in US dollars.

For example, mobile operators who invested so heavily in 3G and 4G are now looking at the requirements of 5G, particularly the challenge of how to fund the infrastructure investments required when Operators’ income from data is largely flat, particularly in US dollar terms. Although not a new issue, 2019 will force ICT sector players to problem-solve based on both the market’s demands and their own budgetary constraints.

A move to the edge

Internationally and locally -as the cloud becomes the major basis of computing power and digital services – data centres, which support these capabilities and store-related information, are moving closer to the edge – namely their users, who insist on improved performance to enhance their own efficiencies and market competitiveness.

A positive sign, this change indicates international acknowledgement of South Africa’s (and Africa’s) economic potential. And ICT players have a key role to play, helping to advise on the location of the mushrooming new vendor-neutral data centres so that locations of computing power are diversified and optimised for high-traffic economic sectors. This is a break from the previous situation, where a couple of larger, highly-centralised and resource-intensive data centres were the norm.

2019 looks like it’s going to be more about the acceleration of existing ICT and digital economy trends than the emergence of brand-new technologies. That said, one of the most notable changes worldwide is the transplanting of processing power from desktops and devices to the cloud. Moving forward, expect our screens to act more like terminals while edge data centres are where the actual computing takes place.

The Internet of Things is becoming reality

A lot has been said about Artificial Intelligence (AI) and the Internet of Things  (IoT) but 2018 finally saw theory solidify into reality. Within a home context, we’re seeing more legitimate “smart spaces” with the proliferation of smart TVs and other appliances joining smartphones and watches. Everything is connected via the Internet, communicating in real-time to provide a fluid, interconnected experience.

Meanwhile, in a corporate environment, new office designs and infrastructure upgrades are prioritising integrated systems. As more people see the practical benefits of these online systems – such as the relatively simple but practical ability to check parking bay availability from your phone – there will be a greater uptake in 2019. Providers will be expected to provide the backbone of reliable high-speed fibre connectivity that these cloud-based systems require. Those vendors with a broader solutions basket should also promote their security offering, to ensure simultaneous compliance and business continuity for customers in an environment that is high-risk for data theft and potential security breaches.

Human data analysis as a solution for the economy

Kenya is employing thousands of young people in data-capture and ‘gig economy’ roles that handle work from other countries – in much the same way India built a name for outsourced call centres. The basic principle is that AI does a lot, but the intelligence of systems still needs to be programmed. Human involvement is very much a part of these digital processes, and this is what young Kenyans are doing: interpreting and translating information for machines to analyse.  Obviously, this also provides the opportunity to provide more and more value-add to these initial basic processes and workflows.

Similar ventures, adapted for the local business context, are likely to help bolster the Kenyan economy for the online future, opening the country to global, digitally-enabled opportunities while creating more jobs for digitally-savvy young citizens.

By Tonny Tugee, SEACOM GM: ENEA Region

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