The insiders guide to mobile Web and marketing in Kenya 2012

Mobile subscriptions in Kenya outnumber fixed lines 107:1. Mobile Internet subscriptions are growing at 69 percent each year and make up 99 percent of Kenya’s Internet connections. Two-thirds of the 29 million mobile subscribers in Kenya use mobile money services, such as the world-famous M-PESA, which offer an amazing array of financial and payment services. On top of that the government puts development of the ICT sector at the top of the agenda… Okay, do we have your attention now?

• This guide was published in September 2012.

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Q1. How mobile is the Kenyan population?
• There are approximately 29.2 million mobile subscriptions in Kenya – this equates to a mobile penetration rate of 74 percent of the population – as of April 2012, according to Communications Commission of Kenya (CCK). The assumption is that subscriptions are calculated from active SIM cards – i.e. those that have been used in the past three months or so.
• The mobile subscription rates in Kenya have been rising exponentially as the market was opened up to rival mobile network operators (i.e. in addition to the incumbent Safaricom) from 2000 onwards early. Compared with a year ago, mobile subscriptions are up 16 percent.
• Mobile subscriptions outnumber fixed lines 107:1. Today there are only 272,101 landlines in Kenya, a number that continues to decline as mobile subscriptions increase.
• Analysts predict that mobile will continue to boom. Business Monitor International (May 2012) forecasts that mobile subscriptions in Kenya will reach 39.5 million by 2016, a penetration rate of 83 percent.

Q2. What are the characteristics of the Kenyan mobile market?
• Most Kenyans are prepaid subscribers. Less than 1 percent (254,194) of mobile subscribers are on post-paid contracts (CCK, July 2012).
• The majority of Kenyans use feature phones i.e. mostly with data networking capability of EDGE or less. Mobile phone sales data isn’t freely available, but various sources suggest that the most commonly used phone online in Kenya is Nokia.
• Research by Opera (June 2012) found that all top 10 handsets accessing the Web via the Opera mobile browser were Nokias.
• Analysis of mobile browsers in Kenya by StatCounter shows that 57 percent of Kenyans using the mobile Web have Nokia handsets. Over the course of the year Nokia Series 40 phones have rapidly overtaken Nokia Symbian phones. The only other significant player is Android with 21 percent market share.

Source: StatCounter Global Stats – Mobile OS Market Share for Kenya

Q3. What distinguishes mobile in Kenya from a) the rest of Africa? b) other leading mobile markets worldwide? What can the rest of the world learn from Kenya?
• The most distinguishing factor of mobile in Kenya as compared with the rest of Africa and the world is the massive adoption and use of mobile money. Of the 29 million mobile subscribers, 65 percent (19 million users) are subscribed to mobile money, with estimated deposits worth Kenyan shillings 185 billion (US$2.2 billion USD). The crux to mobile money services is the ability to credit money to their account via a local agent (of which there is a huge network) and send money to a recipient’s mobile account, so they can withdraw the money from a local agent (or from an ATM if one is available). But mobile money can be used in many other innovative ways including paying utility bills or school fees, making in-store purchases, m-ticketing, phone top-ups (29 percent of top-ups on Safaricom come via M-PESA), withdrawing cash from ATMs, sending money home from 45 countries overseas, people even have their wages and stock dividends paid into their account. All of this is achieved without needing a bank account, bank card, a smartphone or a post-paid contract.
The success of Mobile Money in Kenya has been attributed to the fact that it has provided the much-needed financial services to a large number of the country’s unbanked population.
• Safaricom’s M-PESA service was the pioneer of mobile money in Kenya – and worldwide. Starting only five years ago, M-PESA now has an amazing 15 million subscribers, which would give it 78 percent of total mobile money subscribers in Kenya. It is also noteworthy that Safaricom makes more money from M-PESA than from SMS and data put together, which encourages it to keep innovating and competitive in face of increasing competition – all other operators and some banks also offer mobile money services. Find out more here.

• Kenya has seen considerable increase in investment in the mobile sector which has helped to finance growth of technology infrastructure and improve the provision of mobile services. Revenues from the mobile sector feature largely in the estimated 20 percent that the ICT sector contributes to the Kenyan Economy. This is further supported by a favorable regulatory framework in existence that promotes healthy competition based on demand and a favorable mobile market.
• There are two important take-aways from Kenya: first is the rapid adoption of mobile, without taking the usual migration to PCs and fixed lines before mobile – this stage has been leapfrogged; second is that development of mobile services have all focused on meeting the needs of the Kenyan citizen – all of them – whether that’s providing essential services or content, it’s all local.

Q4. How do Kenyans use their mobile phones? How many people use mobile Web, text messaging etc?
• As noted in Q3, 19 million Kenyans subscribe to mobile money service. Mostly people use this to transfer money to other people or organizations (i.e. to settle a utility bill). There is a whole host of other ways mobile money can be used, such as paying for goods in-store and online, but it is unclear to what extent they are used.
• Texting is popular in Kenya, in the first three months of 2012, there were over 1 billion SMS messages sent – which is equivalent to 11.7 per mobile subscription and it’s growing at 54 percent per annum. Multimedia messaging (MMS), on the other hand, is not popular, with only 1.5 messages sent during the same period and negative growth (CCK, July 2012).
• In Kenya there are 6.5 million Internet subscriptions, 6.4 million (99 percent) of those are mobile. It should be noted that this isn’t just access via mobile phones, but also PCs via 3G modems. Mobile Web subscriptions are growing at 69 percent year-on-year. (CCK, July 2012).
• The CCK and independent organizations have conducted surveys into how Kenyans use their phones. These studies are not conclusive in themselves, but give a general insight into the use of mobile phones.
• A survey by InMobi and Decision Fuel (February 2012) found that the main mobile media activities for Kenyans were social networking (25 percent); entertainment (19 percent); general information and search (17 percent); and email (12 percent).
• Kenyan’s main Internet activities (99 percent of Web access is mobile), according to CCK ICT Survey (September 2011), are communicating by email and social media and conducting research.

Q5. What are the key mobile marketing activities for companies – mobile Web; mobile advertising; text campaigns; opt-in lists; applications etc.?
• Companies in Kenya make use of all available platforms to advertise and market their products and services, including USSD, text, apps and mobile Web.
• All the mobile network operators use SMS campaigns to promote new and existing services. Also, when a customer sends a query via USSD for airtime balance, the reply will often be accompanied with a message promoting a service.
• Independent companies collaborate with network providers to advertise products and services to mobile subscribers via text.
• The majority of text campaigns do not use opt-in lists. There have been numerous complaints about unsolicited marketing text messages by subscribers.
• Application developers, particularly those who create free or freemium apps, seek out companies interested in paying to advertise within applications.

Q6. What is driving growth?
The ICT sector in Kenya has seen tremendous growth. There are number of reasons for this:
• The Kenyan Government is a strong advocate for investment in ICT and telecoms via the Ministry of Information and Communication as well as the Kenya ICT Board. ICT is seen as playing an important role in Kenya’s economic growth and is expected to be a major contributor to the country’s economy in the future. The Government has enshrined development of infrastructure and the ICT sector as part of the country’s goals as stated in its Vision 2030 blueprint. Both the Government and the ICT Board have various campaigns underway to promote investment in this sector.
• Private sector initiatives have also helped to spur growth in the ICT Sector. In particular, there are a number of ICT Hubs in Kenya that have been established to promote the developments and use of ICT technologies through co-working, collaboration and incubation services. The iHub is one of the best-known hubs, bringing together local technologists, investors, tech companies and hackers and creating an ecosystem of creators, users of ICT and mobile technologies.
• Access to broadband services. The newly laid fiber optic network has been a great driver to the continued growth in this sector.

Q7. What is holding back growth?
Limitations still affecting the ICT sector include:
• Access to telecoms infrastructure – network coverage is an issue in northern parts of Kenya. While mobile networks are estimated to cover 89 percent of the Kenyan population, they only cover 34 percent of Kenya’s geography, according to the Communications Commission of Kenya (CCK) (July 2012).
• Access to mobile handsets – the mobile penetration rate may be 74 percent (as stated in Q1), but if some people have more than one active SIM card/phone, the proportion of Kenyan’s with a phone will be lower than 74 percent.
• Access to mobile 3G devices – while the main mobile network operators have already started investing in 3G networks, it is often it is lying idle while the lower 2G networks are saturated. This has been attributed to high cost of 3G handsets, particularly smartphones. Higher penetration of such devices could stimulate the market for mobile services/apps.
• High operations costs and regulatory costs/challenges – potential developers of mobile services may be put of by the high cost of USSD costs, for example, as well as ungenerous revenue share agreements for providers of value-added services.

Q8. What role do mobile operators play in the mobile ecosystem?
• There are four mobile network operators in Kenya: Safaricom (65 percent market share), Airtel Networks (15 percent), Telkom Kenya/Orange (8.7 percent) and Yu/Essar Telecom (11 percent) – see table in Q1 for subscriber numbers.
• Mobile network operators in Kenya provide an enabling environment for development of mobile services/applications by providing friendly call, text and data rates (all below US $0.05 per unit). This – in addition to providing the mobile money services discussed in Q3 – has all facilitated the availability of mobile services that are more affordable for the general population.
• Safaricom has plans to help local developers, this includes launching a sandbox of useful tools to help them develop applications and Service Delivery Platform (SDP), to assist them as they develop apps for the operator’s app store. Safaricom has also launched an AppStar competition (ends November 02, 2012) aimed at Kenyan developers.

Q9. What role does the Kenyan government play in the mobile ecosystem? What is the regulatory environment like? Do government bodies deliver services via mobile?
• The Kenyan government is the key policy maker and regulator in the mobile ecosystem primarily through the incorporated bodies: CCK, the Kenya ICT board and other departments which fall under the Ministry of Information and Communication.
• The regulatory framework is designed to encourage, rather than stifle innovation and to promote healthy competition based on demand and favorable mobile market.
• Central Bank of Kenya independently supports the mobile sector through policies that encourage the growth of mobile money services (this is explained in this Alliance for Financial Inclusion video.
• There is huge potential for government bodies to provide services via a mobile phone, but the uptake is relatively slow. Exceptions include the Ministry of Agriculture, which use mobile phones to receive and relay daily market prices of agricultural produce. Kenya Medical Supplies Agency (KEMSA) has developed an SMS application to improve customer service. The potential problem is that mobile services are being developed by each government agencies and ministry in, with little standardization.
• Most ministries have embraced e-government but there is a long way to go before they begin to fully implement m-government.

Q10. What associations/industry initiatives are helping to push forward mobile best practice, standards etc or industry-specific initiatives such as m-health, m-banking, m-learning etc?
• Kenya’s ICT hubs have played a pivotal role in creating and promoting mobile ecosystems. In these hubs various mobile applications have created and taken to the market, not only commercial applications, but also those that are addressing fundamental social needs such as health and education. Pivot East is a regional competition and conference to encourage local developers to create commercially viable applications which will scale. Many private sector initiatives started have come under the umbrella of the ICT hubs – these include applications such m-Farm (allows Kenyan farmers to send an SMS message to get the latest wholesale price for their products); MedAfrica (provides free health information to consumers via the mobile Web); eLimu (a tablet-based m-learning aid).
• M-banking and other mobile money initiatives are driven by large industry players such as Hello Money (m-banking by Barclays), M-PESA (Safaricom), Airtel money, Orange Money and Yu Cash. However, third-party players have also been taking advantage of the growing mobile money economy, such as Kopo Kopo (enables small businesses to take payments via M-PESA) and MPAYER (also allows businesses to take m-payments).
• For a directory of useful companies and resources, see iHub’s Rolodex.
• Associations such as Mobile Marketing Association (MMA) East Africa are planning initiatives to encourage best practices in mobile marketing, through forums and networking events.

Q11. Which sectors have shown the most interest in mobile Web/services/marketing in Kenya? Which business stand out particularly?
• The Microfinance and the banking sector have been the biggest adopters of mobile outside of the ICT/telecoms sector. This is perceived to be a reaction to the competitive threat posed by mobile money initiatives driven by mobile network operators. Examples include: Barclays’ Hello Money and KCB’s Mobi Bank.
• The national electricity supplier KPLC has introduced the facility to for people to pay for and query bills via mobile.
• Nairobi Water and Sewerage Company has launched MajiSMS which allows customers to check their account balances and meter readings via SMS. It also allow people to pay by phone using M-PESA.
• Retailers such as Uchumi, Naivas and Deacon’s allow customers to purchase items in-store using M-PESA.

Q12. What mobile campaigns stand out particularly?
One of the most popular and successful mobile campaigns was the Kenyans for Kenya. This was conceived by Safaricom to respond to the recurring cyclical drought and famine in Kenya. The trigger for the initiative was the fact that close to 4 million Kenyans were highly food insecure and at risk of starvation and death. The Kenya Red Cross Society, the leading humanitarian and emergency response agency in the country launched an urgent appeal for funding in January 2011 to initiate an early response, but barely anybody listened. In July 2011, the magnitude of the drought and famine hit home and now, Kenyans were listening. Kenyans for Kenya is Kenya’s largest fundraising effort to date. 677 million Kenyan shillings were raised (US$8 million). Of this amount Ksh 165 million (US$1.9m) was raised through M-PESA, through contributions from over 750,000 unique contributions. M-PESA has facilitated 25 percent of total contributions in terms of sums of money; and 99.5 percent of all contributions made via mobile money transfer within the initiative period. With every donation sent to M-PESA, real time updates were made, making it possible to track and publicize donations to the public and the media. Half of the money went towards emergency food and water, and the other half will go towards three long term projects which will rehabilitate water infrastructure and implement integrated agriculture, health and water projects. To date, the campaign has won two awards from United Nations Millennium Development Goals Trust and one award from AfricaCom. Watch the video case study.

Q13. What are the most popular mobile sites in Kenya? What are the most successful mobile commerce sites?
• According to Opera (June 2012), the most popular sites accessed with a mobile device using an Opera browser were: 1. Facebook; 2. Google; 3. Twitter; 4. Waptrick; 5. Tagged; 6. Eskimi; 7. Goal; 8. BBC; 9. Daily Nation; 10. Wikipedia.
• Notable m-commerce sites include MyOrder and Bid or buy, but most of Kenya’s e-commerce retailers are yet to embrace m-commerce.
• Many mobile sites make revenue by running third-party adverting campaigns alongside the content of the sites. Others sites offer goods for sale, making the most of Kenya’s abundance of mobile money and mobile payment options.

Q14. Which mobile sites stand out as good examples of best practice? What makes them stand out?
Only a few mobile sites in Kenya have been fully optimized for mobile viewing. Increasingly Websites – the blogging community particularly – are waking up to the fact that the majority of their views come from mobile access and have taken steps towards creating mobile or mobile optimized sites. Good examples include: Eatout; Afrinnovator; Diasporadical; Media Madness and Pesatalk (these sites are responsive to the kind of browser accessed from mobile or desktop devices).

Q15. Who are the key players in mobile Web/marketing in Kenya, in terms of:
• Mobile agencies or creative agencies: Inmobi; Squad Digital; Sprint Interactive
• Mobile directories and m-coupons: Mocality; Rupu; Zetu Deals
• Mobile content providers: Telcos such as Safaricom, application developers, blogs.
• Mobile advertising networks: Inmobi
• Mobile search engines: Google Kenya; Mocality
• Mobile network operators: Safaricom; Airtel; Orange; Essar Yu See above for subscriber share.
• Mobile money and mobile payment services: M-PESA; Airtel money; Orange Money; Yu Cash; Hello Money; Mobi Bank; Kopo Kopo; MPAYER
• Other providers of essential mobile services: Cellulant
• Associations: Mobile Monday, Akira Chix (association of female technologists), Bloggers Association of Kenya
Mobile Marketing Association (MMA) East Africa
• Mobile Web/marketing evangelists/gurus: Moses Kemibaro
• Must attend mobile events: Mobile Monday Kenya; Wireless Wednesday; Mobile Web East Africa; Pivoteast

Q16. Where should people go for more information
CCK statistics and resources; Investing in ICT in Kenya; iHub Research; Kenya ICT Board; ITU.

Is there anything else we need to know about mobile in Kenya? Comment below or email editor(at)mobiThinking.com.
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