Julisha Final Report 1

8/9/2019 Julisha Final Report 1

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S U R V E Y

K e n y a I C T B o a r d I C T M o n i t o r i n g a n d E v a l u a t i o n I n d i c a t o r sS t u d y

Filing Information: November 2011, IDC #undefined

: Survey

i n g # n i t " $ , % i & a

' a r t m e n t s , ( ) a ' t a ( o a d , * e s t l a n d s , + i !

t o r i a I s l a n d , - " o . 1 0 1 / 2 0 0 1 0 0 , N a i r o b

i , e n y a

e l : 3 2 4 / 2 / / / 1 5 4 4 6 4 $

F a . : 3 2 4 / 2 / / / 1 5 4 7


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I D C O P I I O

Des'ite unfavorable global e!onomi! !onditions 'revailing bet8een 2009 and 200,

t)e enyan IC mar;et remained robust and 8as 'ro''ed u' by investments in

international !onne!tivity during t)at 'eriod, 8)i!) in turned s'urred a flurry of a!tivity

in investment in terrestrial net8or;s, broadband servi!es and devi!es<

)e enyan IC =ar;et is fore!ast to gro8 at a !om'ound annual gro8t) rate

>C?(@ of 14s@ to gro8 s;ills and nurture usage,enfor!ement of intelle!tual 'ro'erty and !o'yrig)t la8s >'ira!y, !ounterfeit goods, I t)eft, et!@, !reation of

industry standards and overall )armoni&ed 'oli!ies to govern develo'ment t)e se!tor<

ICT S$ills# )e gro8t) of IC 'rofessionals and t)e levels of s;ills in enya )inges largely on t)e si&e of

and number of bot) lo!al and international large organi&ations t)e level of maturity and so')isti!ation in

t)eir IC set u's and t)e gro8t) of t)e S=E segment as a ;ey !onsumer<

In)erent in t)is medley of issues are !on!erns on )o8 to retain staff t)at )ave a!uired e.tensive

e.'erien!e >after a maor 'roe!t@, 8)o may need to gro8 furt)er or use t)at e.'erien!e in anot)er

organi&ation and !annot do so in t)e lo!al mar;et and t)erefore ele!t to see; o''ortunities outside enya<

-n t)e ot)er )and, in t)e su''ly side, some mar;et 'layers t)at se!ure 8indfall o''ortunities 8)i!) t)at are

not li;ely to re!ur any time soon, 8ill tem'orarily im'ort s;ills to im'lement and manage large 'roe!ts and

8ill do so outside any frame8or; t)at ensures transfer of s;ills to lo!al 'rofessionals< )us t)e issue of

s;ills 8)en vie8ed broadly and 8)en vie8ed at )ig)er !adres, 'resents a double edged s8ord t)at reuires

a measured a''roa!) t)at fa!tors in t)e needs of t)e mar;et, gro8t) of t)e mar;et and resulting demand for

su!) s;ills<

C%anging Ecosyste"# +arious develo'ments in t)e se!tor, in!luding a unified tele!ommuni!ations

li!ensing regime, infrastru!ture develo'ments and te!)nologi!al advan!es, )ave !aused t)e lo!al IC

E!osystem to undergo some metamor')osis t)at )as gradually seen t)e lines blurred bet8een traditional

tel!os and traditional IC servi!e 'roviders< *it) voi!e servi!es nearing saturation, !ou'led 8it) lo8er

tariffs, tel!os )ave been !om'elled to ret)in; t)eir strategies a8ay from bot) voi!e servi!es and t)e mass

mar;et to8ards data servi!es and enter'rise solutions >!loud !om'uting, )osted infrastru!ture, managed

servi!es, et!@< )e overall effe!t )as been a redu!tion in t)e number of ier II tel!os in t)e mar;et, 'artly as

a result of some mergers and a!uisitions, and also by t)e gradual atro')ying of traditional ISs in t)e

mar;et<

Increased !resence o& "ultinational vendors# Numerous vendors )ave made entries into enya bet8een

2007 and 2011, and t)ose 'resent before t)at )ave drasti!ally s!aled u' t)eir o'erations bot) as a result of

t)e favorable o'erating environment and also to ta' into regional o''ortunities< o8ever, IDCGs analysis of

t)e !)annel stru!ture in enya, )as revealed t)at most vendors )ave a limited 'ool of !)annel 'artners

>distributors and +alue dded (esellers@ 8it) 8)om t)ey !an 8or; 8it) and most of t)e 'rominent !)annel

'artners are largely foreign o8ned and !an leverage of t)eir regional or international net8or;s to avail goods

and servi!es more !om'etitively t)an lo!al 'layers< IDC sees an o''ortunity in enya to )el' lo!al

!om'anies s!ale u' and 'arti!i'ate in a bigger 8ay and !reate more lo!al em'loyment in IC<

Kenya as an ICT 'u(# "en!)mar;ing data !olle!ted by IDC s)o8s t)at enya )as a mi. of indi!ators in itsfavor vis a vis some of t)e seven !ountries it 8as ben!)mar;ed against, mostly fri!an !ountries< Some

#undefined H2011 IDC


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'ositive ben!)mar; items in!luded )ig)er )ouse)old internet 'enetration, )ig)er overall internet

'enetration, lo8er broadband tariffs and !om'arable business internet usage< Indeed t)e business survey

!ondu!ted as 'art of t)is study s)o8s t)at 0A of res'ondent !om'anies )ave 8ebsites 8)ile A use

email< o8ever, as stated above, t)e issue of 'rodu!ing and retaining )ig)er level IC s;ills needs a

measured a''roa!) to !om'lete t)e 'i!ture in t)e business end user environment<

Mar$et De"and# In bot) t)e business and residential segments, t)ere is relatively good u'ta;e of variousIC servi!es t)oug) !osts >of devi!es and some servi!es@, uality and a!!ess >last mile, ba!;)aul@ still )old

ba!; !iti&ens and businesses from more 8)olesome !onsum'tion of IC<

Outloo$# -verall, given t)e !onsiderable a!tions ta;en by t)e government in t)e IC se!tor over t)e last

four to five years, 8)i!) are starting to bear fruit and 8ill !ontinue to in t)e years to !ome, t)ere is still great

s!o'e to address some issues in!luding IC s;ills, a!!ess >to devi!es and servi!es@, !osts >of devi!es and

servi!es@ and generally nurture in!reased usage among bot) businesses and residents< In some instan!es,

t)e interventions re!ommended by IDC in!lude easy to e.e!ute a8areness !am'aigns 8)ile ot)ers tou!)

on e.isting 'lans by t)e se!tor regulator >niversal !!ess Fund and subsidies@ and multi sta;e)older

intervention >a!ademia, government and business in revising IC !urri!ular, !ollaborating t)roug) various

s, et!@<

H2011 IDC #undefined


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T ) B * E O + C O T E T S

P

E,ecutive Su""ary -ey erforman!e Indi!ators 2010


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T ) B * E O + C O T E T S 9 C o n t i n u e d

P

)PPEDI7 I I 8 Key Per&or"ance Indicators 34

)!!endi, I I I : Pro;ect Bac$ground 30roe!t "enefits


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* I S T O + + I 5 U R E S

P

1 enya IC =ar;et Si&e 2010 and Fore!ast to 2014


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57 S;ills ?a' nalysis


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E , e c u t i v e S u " " a r y

K e y P e r f o r m a n c e I n d i c a t o r s 2 0 1 0

T ) B * E -

Ke y ICT I n d i ca to r s

Indi!ators Data

+olume of international traffi! >=b's@ 20,20


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)ey in!lude t)e follo8ing

International Band.idt% : )e arrival of t)ree submarine !ables bet8een 200 and

2010 )el'ed 8ean o'erators off e.'ensive satellite !a'a!ity and allo8ed for greater

s'eeds at lo8er !osts for !onsumers< o8ever, des'ite t)is e.tra !a'a!ity, t)ere still

remain !)allenges in final a!!ess as 8ell as develo'ment of suitable 'ri!ing models

>reseller and final end user@<

Terrestrial In&rastructure )e develo'ment of t)ese !ables s'urred investment in

terrestrial segments !)ief among t)em being t)e government led National -'ti! Fiber

"a!;bone Infrastru!ture >N-F"I@ 'roe!t t)at see;s to !over all maor to8ns in

enya< Indeed one of t)e first !ables to go live, E=S >)e East fri!an =arine

System@ 8as a government led initiative in !onun!tion 8it) EGs national o'erator

Etisalat, 8)i!) later 8as o'ened to in!lude 'rivate se!tor o'erators from enya<

In total enyaGs international band8idt) )as gro8n more t)an tenfold in t8o years

from .... mb's to .... mb's<

Uni&ied *icensing Regi"e : )e introdu!tion of a unified li!ensing frame8or; t)at

sim'lifies t)e mar;et stru!ture and allo8s o'erators more latitude in terms of servi!e

offerings rat)er t)an )aving li!enses tied to te!)nology de'endent delivery< )is

frame8or; )as also allo8ed for better stratifi!ation of t)e mar;et along t)e lines of

servi!es, infrastru!ture, !ontent and a''li!ations< nder t)is ne8 regime, several

mobile o'erators a!uired IS li!enses to add to t)eir e.isting mobile and

international gate8ay li!enses and started offering mobile based internet servi!es

8)i!) )ave seen residential !onne!tions gro8ing e.'onentially over t)e last 25

years< resently nearly 0A of all !onne!tions are mobile devi!e based !onne!tions

and many used by individuals<

Cost o& Mo(ile Services and Mo(ile Ter"ination Tari&&s )e intervention by t)e

se!tor regulator, t)e Communi!ations Commission of enya >CC@ to determine

ma.imum mobile termination rates sa8 mobile voi!e tariffs 'lunge do8n8ards to )alf

t)e !osts< Indeed enya no8 )as among t)e lo8est mobile tariffs in fri!a and t)is

)as resulted in in!reased subs!ri'tions and !onsum'tion of servi!es<

Su""ary : -verall t)e above develo'ments )ave im'a!ted ;ey as'e!ts of t)e

enyan IC mar;et in!luding better !ommuni!ations infrastru!ture for enter'rises

and residents, in!reased u'ta;e of servi!es, lo8er tariffs for voi!e and data servi!es,

in!reased usage of !om'uters >given t)e value addition from affordable internet

a!!ess and in)erent !ontent@, more so')isti!ation among business and residential

users, among many ot)er 'ositive develo'ments<

o8ever, a lot more needs to be done and by establis)ing t)ese baseline

'erforman!e indi!ators, t)at in itself !an )el' determine 8)at !ourses of a!tion mig)tbe needed to stimulate t)e mar;et furt)er<

)us for t)is study a se!ond ')ase is envisaged to revie8 t)ese baseline indi!ators,

note any areas t)at )ave !)anged signifi!antly and 'er)a's attribute !ertain a!tions

by government, investors or servi!e 'roviders to su!) !)anges and !ontinually

monitor su!) develo'ments in an effort to steer t)e se!tor in t)e rig)t dire!tion<

2 #undefined H2011 IDC


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S I T U ) T I O O V E R V I E <

I T E n v i r o n m e n t

In 2010, IC s'ending in enya stood at SB 5in subs!ribers@ and de!lining tariffs for bot) voi!e and data servi!es<

-ver t)e fore!ast 'eriod tele!om servi!es is 'roe!ted to gro8 at $


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+ I 5 U R E 1

I T S p e n d in g S h a re b y t op 5 v e r t i ca s

Sour!e: IDC, 2011

)e t)ree to' ;ey se!tors !ontributing to I S'ending in 2010 8ere Communi!ations

>20in!luding insuran!e and ot)er finan!ial servi!es 12in!luding 'ubli! se!tor edu!ation 1/smart ')ones,

la'to's and tablets@ in t)e mar;et and in t)e business segment, )ave su''orted initiatives to de'loy

!)ea'er 8ide area net8or;ing >*N@ te!)nologies li;e +irtual rivate Net8or;s<

5ro.t% o& (asic IT s$ills S;ills mainly nurtured in a nas!ent "- se!tor albeit only for I enabled front

offi!e servi!es >)el' des;, !onta!t !entre, et!@ )ave )el'ed bigger mar;et 'layers ma;e t)e transition to

outsour!ing su!) servi!es and en!ouraging ne8 business 'ra!ti!es to develo' around t)is and !reating

em'loyment<

Positive govern"ent interventions 'robably one of t)e main drivers on 8)i!) ot)ers drive )as been t)evarious measures ta;en by government in terms of 'oli!y and regulation to ma;e t)e IC se!tor t)rive<

)e setting of lo8er mobile termination rates, issuan!e of unified li!enses, investment in innovation,

/ #undefined H2011 IDC


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!ontribution to infrastru!ture and t)e revision of t)e Communi!ations !t are ust among t)e many areas

8)ere t)e government )as )el'ed drive t)e IC mar;et<

+inancial Sector gro.t% 8 s it 8ere t)is se!tor is !onstantly among t)e to' !onsumers of I and 8it)

'eri')eral te!)nologi!al develo'ments at 'lay >eo8ing to ot)er !ivil 8or;s or vandalism@< In areas 8)ere t)ere is no 'o8er grid, t)is serves to limit t)e

u'ta;e of I and for some 'layers, running generators in!reases t)eir !ost of doing business<

Counter&eit !roducts la!; of me!)anisms to verify t)e aut)enti!ity of 'rodu!ts as 8ell as 'oor business

'ra!ti!es ma;e !ounterfeit 'rodu!ts a maor !)allenge for bot) legitimate sellers as 8ell as !onsumers 8)o

end u' 8it) sub standard 'rodu!ts< -verall it also affe!ts vendor brand euity 8)en !ounterfeit 'rodu!ts fail

and 8)ere t)e !onsumer !annot distinguis) bet8een genuine and !ounterfeit 'rodu!ts<

Relative "aturity o& t%e "ar$et resently t)e enyan mar;et is largely unso')isti!ated and t)e number

of maor enter'rise users of I are not many< )is 'resents a uniue mi. of !onditions 8)ereby t)e si&e of

I 'roe!ts done )el' limit t)e number of 'rofessionals in t)e industry and also en!ourage )ig) staff

turnover es'e!ially in I De'artments<

C%ange o& guard 8 most !ommonly !ited 'roblem in t)e industry )as to do 8it) t)e !)ange of de!ision

ma;ers and leaders)i' in various government de'artments es'e!ially 8it) regard to t)e initiation of

!ollaboration 'rogrammes and 'roe!ts< Some vendors rea!) t)e 'oint of signing an =o but are

frustrated 8)en t)ere are su!) !)anges and t)e 'roe!ts 8it)er stall or do not ta;e off at all<

Politics *it) an ele!tion looming in 2012 and no !lear indi!ation of t)e dates 8ill be a !ause for disuiet

in t)e se!tor as businesses ado't a 8ait and see stan!e and 8)ile at t)e same time t)e government )olds

H2011 IDC #undefined 4


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ba!; on some IC e.'enditure in order to finan!e t)e ele!tion< t t)e 'eri')ery, ele!tioneering may disru't

'oli!y and ot)er dis!ussions in 'arliament and else8)ere<

Ta,es : a.es levied on !ertain I 'rodu!ts li;e !o'iers 8ill !urtail gro8t) for t)ese as 8ell as en!ourage

t)e 'roliferation of refurbis)ed !o'iers into t)e mar;et, 8)i!), ust li;e !ounterfeiting, may affe!t brand

euity<

Currency 8 In 2011 t)e enyan s)illing )as lost ground to maor !urren!ies, meaning )ig)er im'ort !osts

for I distributors and in turn affe!ting )o8 mu!) inventory t)ey !an a!uire and )old< S)ould t)e trend

'ersist, t)is 8ill not only affe!t t)e I Se!tor but overall ot)er se!tors t)at de'end on im'orted in'uts

>gri!ulture, =anufa!turing, et!@<

$ #undefined H2011 IDC


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I C T E C O S Y S T E M

)e su''ly side of t)e mar;et is 'resently dominated by a fe8 maor 'layers

>e.!luding vendors@ 8)o 'arti!i'ate in t)e bul; of IC 'roe!ts in t)e !ountry< )ese

in!lude some foreign o8ned !om'anies<

-verall, vendors 'resent in t)e !ountry are fairly satisfied 8it) t)e business

environment and are in!reasing t)eir investment and )ead!ount in anti!i'ation of

in!reased sales bot) in enya and in t)e greater Eastern fri!a region<

*it) t)e entry of ne8 vendors, it !an be e.'e!ted t)at t)e !)annel 'artners)i's 8ill

gro8 or t)e need for diverse !)annel 'artners 8ill gro8< "earing in mind t)e

!)allenges fa!ed by ier II !om'anies, as outlined later in t)is se!tion, t)is

unders!ores t)e need for a broad base of 'roviders to 8)i!) ne8 and e.isting

vendors !an )ave a!!ess<

Smaller 'layers, ier II 'layers, 8)o are ty'i!ally enyan o8ned !om'anies, need to

be su''orted and 'rovided 8it) an environment t)at !an )el' t)em gro8 and

'arti!i'ate in large deals< )ese 'layers 'resently only fo!us on 'art of t)e S=E

mar;et and t)e !onsumer mar;et and are ty'i!ally regional 'layers >'rovin!ial level@

8it)out mu!) te!)ni!al or finan!ial !a'a!ity to ta;e on !ountry 8ide or big 'roe!ts<

+ I 5 U R E /

Ch an n e an d M arke t S t r! c t! re

Sour!e: IDC, 2011

C h a n n e l A n a l y s i s - V e n d o r s a n d c h a n n e l

p e r f o r m a n c e a n d t r e n d s

IDCGs intervie8s 8it) vendors in t)e mar;et, indi!ate t)at enya )as, over t)e last

t)ree years, 'rovided a very !ondu!ive environment for business, as evin!ed by t)eir gro8t) in bot) )ead!ount and business bet8een 200 and 2011<



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?overnment initiatives in!luding infrastru!ture develo'ment, regulatory reforms

>li!ensing frame8or;s@, investment in 'ubli! a!!ess !enters, egovernment 'roe!ts,

!ontent !reation, devi!e subsidies, )ave all )ad a very 'ositive effe!t in transforming

t)e mar;et, stimulating investment, stimulating IC u'ta;e and bolstering !onfiden!e

in t)e overall IC mar;et<

mong t)e )ig)lig)ts of feedba!; re!eived from vendors in!lude:

)ere are an estimated 2050 vendors 'resent in t)e mar;et most of 8)om rely on a small 'ool of maor

distributors and ier 1 +alue dded (esellers >+(s@ and Dealers 8)o !ombined a!!ount for t)e bul; of IC

"usiness in enya estimated at nearly 40$0A<

-n average C and rinter vendors ea!) )ave bet8een t)ree to four distributors and at least si. ot)er

'artners >dealers and systems integrators@ ea!) at different mar;et levels<

t t)e lo8er 'art of t)e 'yramid are ier 2 +(s and dealers, estimated to number more t)an 100 'layers

and 8)ose fo!us is 'art of t)e S=E segment, t)e S==E and )ome user segment< )ese are 'layers 8)o

ty'i!ally do not )ave a !ountry 8ide 'resen!e and 8ould largely be found o'erating at a 'rovin!ial level or

even a national level >8)ere S=Es )ave su!) a 'resen!e to reuire nation8ide servi!es@ but at a smaller

s!ale nonet)eless<

)ese ier 2 firms are mostly enyan o8ned !om'anies serving ot)er enyan o8ned businesses and

o!!asionally se!uring 'arts of relatively good !ontra!ts in t)e government and edu!ation segments, 8)ere

'ro!urement of goods or servi!es may reuire a lo!al 'layer<

)e ier I 'layers largely !om'rise !om'anies 8it) bot) a national and regional 'resen!e, and in most

instan!es are maority foreign o8ned !om'anies s'inning off regional offi!es in Sout) fri!a, E, India

among ot)er !ountries<

-8ing to )aving a good foot)old in t)eir 'arent regions, !ou'led 8it) a!!ess to industry best 'ra!ti!es,

fairly solid s;ills bases and a!!ess to !a'ital, su!) !om'anies )ave been able to target t)e mar;et segment

t)at in!ludes multinational !om'anies >=NCs@, large enter'rises and government, 8)ere su!) !redentials

bear )eavily on de!ision ma;ing at t)is level<

+endor !om'etition on !)annel 'artners)i's )as intensified 8it) main distributors being soug)t after by

ot)er vendors to leverage on t)eir reseller net8or;< )us multi'le brand )andling by t)e !)annels is t)e

norm even for !)annel 'artners 8)o 8ere KloyalK to !ertain vendors<

)e !)annel is maturing fast 8it) t)inning out of grey s)i'ments 8)ile traditional tel!os and t)eir !)annel

'artners are oining t)e fray in terms of C sales<

+endors are ;een on setting u' offi!es in enya to serve t)e East and Central fri!a region<

+endors 8it) a lo!al 'resen!e en)an!e t)e brand image signifi!antly as 8ell as im'rove logisti!al su''ort

and in!reased mar;eting !am'aigns<

*it) more vendors setting u' lo!ally, t)e mar;et )as seen an in!rease in bot) t)e number of !)annel

'artners<

?overnment initiatives in!luding infrastru!ture develo'ment, regulatory reforms >li!ensing frame8or;s@,

investment in 'ubli! a!!ess !enters, egovernment 'roe!ts, !ontent !reation, devi!e subsidies, )ave all )ad

a very 'ositive effe!t in transforming t)e mar;et, stimulating investment, IC u'ta;e and bolstering

!onfiden!e in t)e overall IC mar;et<

)us vendors 'resent in enya )ave registered 'ositive gro8t) over t)e last t)ree years of bet8een 14

24A in business value and 8it) some 'osting gro8t) in )ead!ount ranging bet8een 24100A

K e n y a a s a r e g i o n a l h !

enya is 8it)out doubt t)e regional )ub for most vendors 8it) a regional rea!)s'anning bet8een t)ree to si. !ountries on average for vendors< side from being a



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)ub, it is also a ste''ing stone for t)ese vendors to set u' o'erations in neig)boring

!ountries but still maintaining some8)at !entrali&ed mar;eting, inventory and

su''ort fun!tions at regional levels< In)erent in t)is stru!ture are various

o''ortunities in!luding training, s;ills transfer, overall )ig)er em'loyment, te!)nology

leaders)i' and in!reased investment<

mong t)e most !ommon !ountries some vendors rea!) into in!lude from t)eir enyan )ub in!lude: ganda, an&ania, (8anda, "urundi, Et)io'ia and Sout)ern

Sudan<

In some instan!es vendor offi!es in enya )ave an even 8ider geogra')i! rea!) 8it)

some )aving subSa)aran )ubs or !ombined )ubs for East fri!a, *est fri!a and

Indian -!ean Islands<

y'i!ally t)ese regional )ubs 8ould )ave 'arent or 'rin!i'al offi!es in Sout) fri!a,

nited rab Emirates or various !ountries in Euro'e but 8it) suffi!ient autonomy in

terms of mar;eting, !)annel management and 'artners)i's<

K e y c h a l l e n g e s i n t h e s e c t o r

Purc%asing Po.er 8 In t)e 'resent environment 8)ere inflation )overs around t)e 20A mar;, t)e

!onsumer mar;et )as been negatively im'a!ted, es'e!ially in t)e lo8er e!)elons 8)ere in some !ases IC

s'ending, in!luding mobile voi!e servi!es, 8ill ta;e se!ond 'la!e to ot)er 'ressing needs< So 8)en vie8ed

as t)e long tail end of t)e mar;et, a lot less s'ending is being registered in terms of devi!e sales and

servi!es !onsum'tion<

Ta,ation 8 Des'ite 'ositive develo'ments to remove im'ort duty and value added ta. >+@ on !om'uters

and 'rinters, t)e 'resent ta.ation regime for !onsumables and !om'onents, es'e!ially amidst a rat)er

un!lear ta.ation frame8or; t)at does not al8ays 'ro'erly define various IC im'orts, affe!ts various

!)annel 'layers in!luding lo!al assemblers<

Product Perce!tion 8 )e enyan mar;et is mostly in!lined to8ards 8estern brands or brands asso!iated

8it) 8estern !ountries< For 'layers from sia and t)e =iddle East, gaining a foot)old in t)e mar;et and at

t)e same time !ommanding 'ri!es t)at are on 'ar to refle!t similar 'rodu!t uality, )as been !ited as a

maor !)allenge<

*engt%y custo"s !rocedures "ot) +endors and Distributors )ave !ited lengt)y !ustoms 'ro!edures as

a stumbling blo!; affe!ting )o8 fast t)ey are able to 'la!e 'rodu!ts on t)e mar;et, and furt)er !om'ounding

t)is issue are demurrage !osts levied by !ustoms aut)orities, 8)i!) !osts in many instan!es are 'assed on

to end user and t)erefore needlessly !ausing )ig)er 'ri!es<

Sourcing %ig%ly =uali&ied talent 8 )is issue is dealt 8it) in detail under t)e SI%%S se!tion of t)is re'ort

but suffi!e to say, for some vendors, es'e!ially t)ose 'laying in t)e enter'rise s'a!e, t)e issue of availability

and uality of IC S;ills is a !onstant 'roblem t)at in some !ases greatly affe!ts t)eir go to mar;et

strategies and sometimes ne!essitates t)e use of e.'atriates to underta;e 'roe!t im'lementation, te!)ni!alsales, su''ort and end user training<

Currency &luctuation )e re!ent de!line of t)e enya s)illing against maor !urren!ies, mainly bet8een

'ril and -!tober 2011, )as meant )ig)er enya s)illings !osts for im'orters and in many instan!es affe!ts

t)eir ability to maintain an adeuate inventory< t t)e !onsumer end, it )as meant )ig)er 'ri!es of goods<

)e !urren!y de!line )as been attributed to in!reased oil im'orts and s)ould t)is be sustained in 2012, it

8ill affe!t t)e over mar;et negatively in!luding t)e manufa!turing se!tor t)at rely on im'orts of some ra8

materials, 'utting IC !onsumers in a uandary in terms of 'rioriti&ing t)eir budgets<

5overn"ent Procure"ent : Doing business 8it) t)e government )as 8idely been !ited as a maor

!)allenge in terms of 'rotra!ted 'ro!urement la8s and sales !y!les< Im'ro'riety and la!; of trans'aren!y

are ot)er fa!tors t)at need to be addressed<

H2011 IDC #undefined


19/83

" p p o r t e # p e c t e d f r o m t h e g o v e r n m e n t

In vie8 of some of t)e !)allenges !ited above, and t)in;ing very broadly about 8)at

else !ould be done in t)e IC mar;et, t)e follo8ing 8ere among t)e interventions

vendors feel t)e government s)ould !onsider to )el' allay t)eir !olle!tive !on!erns:

Ta,ation rates : (evie8 of ta.ation regimes on a!!essories, !om'onents and !onsumables

Ta,ation categories : Edu!ation of !ustoms offi!ials on t)e different array of IC 'rodu!ts to ensure !orre!t

a''li!ation of im'ort duties 8)i!) !an also )el' s'eed u' !learing of goods<

Counter&eits )e government s)ould underta;e a8areness !am'aigns to enlig)ten end users as 8ell as

!ustoms offi!ials on )o8 to dete!t and manage !ounterfeit im'orts<

Co!yrig%t la.s 8 =ore so t)e e.e!ution of e.isting Co'yrig)t la8s< +endors feel t)at t)ere are adeuate

la8s e.'e!t t)at t)ey are not u')eld<

ICT *a(or "ar$et 8 o stave off t)e need to im'ort labor for various 'roe!ts, or to !onstantly s)i' in

e.'atriates to im'lement 'roe!ts, vendors feel t)ere is room for t)e government to !reate, nurture and t)en

'rote!t obs by strongly vetting im'orted labor and ensuring some s;ills transfer ta;es 'la!e< -ne additional

suggestion 'ertains to finding a me!)anism to establis) t)e value !)ain in IC obs >8)ere is t)e value

added and to 8)i!) 'arti!i'ants does t)is a!!rue@ to overall gauge )o8 mu!) ends u' in t)e lo!al mar;et<

Procure"ent Standards : -'ening u' 'ro!urement standards to allo8 a greater variety of soft8are and

)ard8are 'roviders to bid for government obs 8ould ease t)e !ountryLs ado'tion of te!)nology on a large

s!ale<

-verall t)e ty'e of interventions reuired of t)e government do not reuire signifi!ant

investment and !an be o'erationalised using e.isting !)annels and 8it) relative ease

of im'lementation but of !ourse bearing in mind t)e li;ely im'a!t of su!)

interventions e


20/83

mong t)e areas vendors feel t)ey !an validly 'lay a role in!lude:

Investing in s'e!ifi! IC S;ills li;e mobile a''li!ations develo'ment and setting u' innovation )ubs< Setting

u' bursaries at universities and 8it)in user and develo'er grou's

Develo'ing strategies to develo' and use more lo!al talent t)an im'orted<

Introdu!tion of 'rodu!ts relevant to t)e mar;et t)at ta;e into a!!ount t)e o'erating environment and

!)allenges e.'erien!ed by users e


21/83

R E 5 I O ) * ) D I T E R ) T I O ) *B E C ' M ) R K I 5

Overview

+arious ben!)mar;ing !riteria 8ere identified and enya 8as !om'ared to seven

ot)er !ountries 4 from t)e fri!an !ontinent >Egy't, =oro!!o, (S, Nigeria and

(8anda@ and 2 from t)e rest of t)e 8orld >;raine and )ili''ines@<

)e fa!tors !onsidered 8)ile identifying t)ese !ountries 8ere

1< o'ulation<

2< E!onomi! Indi!ators su!) as ?D<

5< Fo!us on I se!tor as an engine of e!onomi! gro8t)<

/< er!eived !om'etitiveness to enya >e


22/83

Com'aratively s'ea;ing, enya is not very far be)ind in terms of t)e number of

internet users in t)e 'o'ulation, and sur'risingly 'osting better 'enetration rates t)an

Sout) fri!a 8)i!) is 'er!eived to be more advan!ed, and only slig)tly lo8er t)an

Egy't and t)e )ili''ines<

-8ing to infrastru!tural develo'ments, enya is a)ead of neig)boring landlo!;ed

(8anda 8)i!) relies on its band8idt) bot) from satellite 'roviders and terrestrial'roviders in ganda and enya t)us 'resu''osing )ig)er band8idt) rates and

t)erefore lo8er !onsum'tion<

It !an be e.'e!ted t)at 8it) 'ositive develo'ments in t)e enyan mar;et 8)i!) are

yet to manifest fully, t)at enyaGs internet 'enetration 8ill in!rease in t)e !oming

years to be!ome even more !om'arable or e.!eed !ountries li;e =oro!!o and

;raine<

+ I 5 U R E 6

To ta I n t e rne t pen e t ra t i on vs &o! seho d I n te rn e t

P e n e t ra t i on

Sour!e: IDC, 2011

Internet 'enetration is one of t)e most !om'elling indi!ators of te!)nology ado'tion

in a nation, as it !an be safely assumed t)at on!e 'eo'le are !omfortable 8it) t)e

use of t)e internet, t)ere is a greater 'robability of ado'tion of ot)er te!)nologies< In

addition several studies indi!ate t)at t)e level of internet ado'tion on a !ountry

almost often signifies t)e e!onomi! develo'ment of t)e nation as it )el's stimulatene8 gro8t) areas< If udged on t)is 'arameter, t)e findings of t)e resear!) suggest



23/83

t)at t)ere is definitely a lot of room for im'roving t)e internet 'enetration rates in t)e

!ountries studied< )e reasons for a lo8 internet 'enetration rate !ould be !ost of

a!!essing t)e internet > internet affordability@ as also !ould be regulations t)at

'revent Internet servi!e 'roviders from entering a !ountry< enya , 8it) ust over 20A

internet 'enetration, stands among t)e !ountries 8it) lo8er 'enetration in

!om'arison to !ountries su!) as =oro!!o and ;raine< )oug) it is understandablet)e !osts of internet a!!ess !ould be a maor !ontributor to t)e 8ides'read u'ta;e of

internet, it !ould also be 8ort)8)ile to investigate ot)er as'e!ts su!) as regulations

governing Internet Servi!e 'roviders et!<

o furt)er validate t)e 'oint of s)ared internet !onne!tions, )ouse)old 'enetration of

internet 8as !onsidered as a 'ro'ortion of total internet 'enetration< )is matri.

revealed im'ortant fa!ts about t)e use of internet in addition to its availability< In

enya, it 8as found t)at, in !om'arison to t)e total internet 'enetration rates >8)i!)

tou!)ed 25A@, only 2A of t)e )ouse)olds )ad internet a!!ess< )is s)o8s t)at

internet u'ta;e is most 'revalent at t)e business, edu!ation and government levels

and not so mu!) in )ouse)olds<

enya )as a )ig)er internet 'enetration vis a vis Sout) fri!a but mainly bolstered bymobile internet !onne!tions t)oug) 8it) a lo8er 'ro'ortion of )ouse)olds !onne!ted

o8ing to a de!lining fi.ed net8or; and 'oor develo'ment of DS% based servi!es<

enya !om'ares mu!) better t)an bot) Nigeria and (8anda on bot) !ounts<

Egy't )as a mu!) )ig)er overall and )ouse)old internet 'enetration 8it) a )uge ga'

of almost 24 'er!entage 'oints at )ouse)old level<

1/ #undefined H2011 IDC


24/83

+ I 5 U R E 3

I n t e rn e t ' se rs v s ( Con n e c t i on s as a # o $ P op ! a t i on

Sour!e: IDC, 2011

In !ountries 8it) )istori!ally more develo'ed fi.ed line net8or;s and t)erefore a

!onsiderable user base, t)e total number of !onne!tions vis a vis t)e number of

users are evenly s'read<

In !ountries li;e enya, Nigeria and =oro!!o, t)ere are lo8er numbers of

!onne!tions but )ig)er number of users indi!ating most !onne!tions are s)ared

!onne!tions and largely !om'rise business !onne!tions >in!luding 'ubli!ly a!!essible

!onne!tions li;e !yber !afes, edu!ation institutions@< lso, a good number of t)e

!onne!tions in t)ese !ountries are mobile !onne!tions<



25/83

+ I 5 U R E 0

To ta I n t e rne t Pen e t ra t i o n )s ( Prop o r t i on o $ &o!seh o ds

* i th a co+p ! te r

Sour!e: IDC, 2011

Furt)er investigation 8as !arried out in t)is manner to identify if t)e internet

'enetration at a )ouse)old level 8as o8ing to t)e la!; of suitable infrastru!ture<

a;ing into a!!ount t)e number of !om'uters 'er 100 'o'ulations, it 8as found t)at

enya ran;ed among t)e bottom t)ree among t)e !ountries studied< *)ile (S )ad

9


26/83

It s)ould be noted t)at Nigeria as a manufa!turer of Cs >ino. brand@ t)at are

lo!ally affordable, a!!ounts for mu!) )ig)er C 'enetration at )ouse)old levels but

negligible )ouse)old internet 'enetration given infrastru!ture issues >submarine

!ables arrived 8ay after t)ey did in East fri!a@

+ I 5 U R E >

,! s in e ss I n te rn e t ' sag e

Sour!e: IDC, 2011

=oving on from )ouse)olds to businesses, and using a *EF indi!ator t)at measures

t)e e.tent of business use, it 8as found t)at enyan businesses use internet to a

large e.tent and is !om'arable to one of t)e more develo'ed business nations in

fri!a namely (e'ubli! of Sout) fri!a< )is is an im'ortant determinant in t)e future

of enya as an outsour!ing )ub as t)is indi!ator is a silent endorsement of t)e fa!t

t)at enyan businesses )ave reasonably robust te!)nology su''ort<

-verall all t)at may be needed in t)is segment is greater so')isti!ation and dire!tion

to8ards more solid online 'resen!e over and above 8ebsites and use of email to

ele!troni! trading< ?iven t)at mobile te!)nology is very 'ervasive, t)is 'latform

offers t)e most ideal 8ay for businesses to engage more 8it) t)eir !onsumers<



27/83

+ I 5 U R E ?

,road b an d -cce ss Ta r i. s /

Kenya

S-

igeria

*anda

'kraine

Phiipines

3gypt

Morocco

0(00 20(00 40(00 0(00 60(00 100(00 120(00

(road!and Access Tari)s

Internet -ccess Tari. / ,roadband

Sour!e: IDC, 2011

!om'arison of internet a!!ess rates in t)e region and internationally, s)o8s t)at

enya features among t)e to' 5 most e.'ensive !ountries for internet a!!ess but it

s)ould be borne in mind t)at t)ese are among t)e !ountries t)at only re!ently

re!eived lo8er !ost band8idt) via submarine !ables<

Nonet)eless t)is is an im'ortant fa!tor t)at needs to be addressed to a!)ieve t)e

level of internet 'enetration t)e !ountry desires< Internet affordability and 'enetrationmove )and in )and and suitable regulations on internet 'ri!ing and monitoring t)e

a!tivities of internet servi!e 'roviders !ould )el' move t)ings in t)e rig)t dire!tion<

Des'ite additional !a'a!ity, !ost of broadband is still a fa!tor for business vis a vis

ot)er !ountries<

Nigeria )as re!ently got a lot of international band8idt) but !onstrained some8)at by

t)e la!; of a 8ell develo'ed national ba!;bone, last mile a!!ess and ele!tri!ity

!)allenges<

%andlo!;ed (8anda largely relies on band8idt) from o'erators in neig)boring

!ountries<

OTE# )e full list of ben!)mar;ing indi!ators, in tabular format, !an be found under ''endi. I

I C T S $ i l l s ) n a l y s i s

I C T " % i l l s & v e r v i e *

)e 'resent su''ly of s;ills does not meet business reuirements in various 8ays

in!luding t)e !urren!y of t)e !ourses taug)t as 8ell as t)e need for business s'e!ifi!

training >soft s;ills@<

)ere is little visibility, at t)e a!ademi! level, on t)e demand for s'e!ifi! s;ills,

suggesting t)at greater and !loser !ollaboration is needed bet8een edu!ation



28/83

institutions, businesses and government to determine t)e e.a!t mi. of s;ills needed

in t)e mar;et<

resently some s;ills ga's are tem'orarily met via e.'at labor t)oug) it does not

al8ays translate into s;ills transfer to lo!als< )us 8)en 'roe!ts are !om'leted, a

void is left in t)e mar;et<

I T E m p l o y m e n t + i g h l i g h t s

IDC estimates t)e total I em'loyment in 2010 8as a''ro.imately 27,000 I 'rofessionals


29/83

+ I 5 U R E - -

7e +an d P re d i c t i on b y P ro $e s s i on a s

Sour!e: IDC, 2011

Nearly 10,000 I 'rofessionals are e.'e!ted to oin t)e I mar;et bet8een 2011 and

2015 8it) t)e biggest demand being for I su''ort 'rofessionals follo8ed by soft8are

develo'ers and 'roe!t managers<

)ese gro8t) rates )el' de'i!t t)e !urrent ma;e u' of t)e I mar;et 8)ere

e.'ansion in I set u' is ta;ing 'la!e >and t)erefore needs more su''ort for more

users@, ne8 'roe!ts being im'lemented >'roe!t management@ and e.isting systems

needing !ustomi&ation or en)an!ement >develo'ment@< *it) su!) !)ara!teristi!s, it

!an be e.'e!ted t)at t)e tide 8ill turn in t)e ne.t !ou'le of years 8it) more em')asis

in areas li;e IC !onsulting and administration but de'endent on different se!tors

and )o8 mu!) IC su''orts t)eir business needs<



30/83

+ I 5 U R E - 1

7e +an d 8-v a i ab i i t y M a t r i 9 b y I T P ro $e s s i on s

Sour!e: IDC, 2011

"earing in mind t)e e.'ressed demand, 'resent fo!us needs to be 'la!ed on I

'rofessions t)at are bot) immediately in )ig) demand and )ard to a!uire by

businesses and vendors<

)e diagram above 'lots t)ese different 'rofessions based on 8)at end users and

vendors )ave indi!ated in terms of ease of filling su!) 'ositions vis a vis demand for

t)ese 'ositions<

)erefore greater fo!us s)ould be 'la!ed on I roe!t =angers, Consultants

''li!ation Systems nalysts and Soft8are Develo'ers, being t)e 'rofessions in

)ig)est demand and )ard to fill<

*)ile t)ere is diffi!ulty in filling 'ositions 8it) Systems Engineers, t)e demand is not

very )ig) 'resently t)us some t)oug)t s)ould be s'ared to in!lude 'lans for su!)

'ositions<

-verall a !lose tab s)ould be ;e't on 'ositions t)at are in lo8 demand and 'resently

easily filled in order to tra!; develo'ments in I set u' a!ross t)e board<



31/83

+ I 5 U R E - /

7e +an d P re d i c t i on b y I T S k i s

Sour!e: IDC, 2011

8ay from broad !ategories of I 'rofessionals and loo;ing at s'e!ifi! s;ills t)at

t)ese 'rofessionals )old, t)e survey indi!ates t)at t)e greatest demand 8ill be for I

roe!t =anagement S;ills >15$A@ and Soft8are develo'ment s;ills >154A@<

gain t)is is indi!ative of 'ositions arti!ulated earlier i


32/83

global integration< )is 8ill !om'el t)e mar;et to a!uire and avail t)e reuired s;ills sets needed for su!)

im'lementations lo!ally<

Increase in ICT !layers : -ver t)e last ten years, t)ere )as been signifi!ant gro8t) in t)e number of

!om'anies o'erating in t)e IC se!tor, in!luding tel!os, )ard8are and soft8are 'roviders< )is e.'onential

gro8t) )as fuelled t)e need for more lo!ally ualified staff< In addition, a number of !om'anies are starting

to invest in I servi!es 8)i!) !alls for lo!ally available staff to be on )and<

Inhi!itors

I"!orted *a(or 8 )e im'ortation of s;illed IC %abor by some 'layers, 8it)out !ommensurate met)ods

to ensure t)e transfer of s;ills to lo!al I 'rofessionals, es'e!ially for t)e im'lementation maor 'roe!ts,

only serves 'resent needs but leaves a void in t)e mar;et< *it) a''ro'riate intervention, su!) im'orted

s;illed labor !an be leveraged to im'art s;ills and en)an!e t)e 'rofile of lo!al I 'rofessionals<

I"!orted *a(or Co"!etition : vailability of lo8er !ost im'orted IC labor >eand also bearing in mind t)at large 'roe!ts are fe8 and far bet8een@, t)ere is emerging a trend 8)ereby

s;illed I resour!es migrate from !om'any to !om'any >vendor or business@ see;ing outlets 8)ere t)ey !an

utili&e t)eir s;ills and gain e!onomi!ally< o a large e.tent t)is is a !ause for disuiet among em'loyers t)at

try to 'la!e a 'remium on loyalty<

I T " % i l l s a p A n a l y s i s . r a m e * o r %



33/83

+ I 5 U R E - 4

I T S k i s : ap -n a y s i s Fra+e * ork

Sour!e: IDC, 2011

K e y m a r % e t h i g h l i g h t s

)ere is relatively de!ent s;ills availability in t)e mar;et and of good !aliber< o8ever, t)ere are issues to

do 8it) et)i!s on bot) t)e 'art of em'loyees >greener 'asture see;ers@ and industry 'layers >)ead )unting

staff trained by !om'etitors< )us t)e 'ool is small and most 'layers ;ee' dra8ing t)e same 'eo'le out of t)e same 'ool

)ere is a limited su''ly of good s;ills !ou'led 8it) reuisite e.'erien!e a!ross )ard8are and soft8are

ty'es<

Et)i!s is 8anting loyalty to em'loyers bot) 8it)in t)e su''ly side and demand side is la!;ing t)us I

'rofessionals largely tend to be migratory and green 'asture see;ers<

)ere is little international e.'osure t)ose 8it) advan!ed s;ills leave t)e mar;et and t)e enyan mar;et

!annot really attra!t e.'erien!ed 'rofessionals o8ing to t)e Kglass !eilingK in I >bearing in mind t)e overall

maturity levels in t)e mar;et<

)ere is a limited su''ly of good s;ills !ou'led 8it) reuisite e.'erien!e<

Et)i!s is 8anting loyalty to em'loyers bot) 8it)in t)e su''ly side and demand side is la!;ing t)us I

'rofessionals largely tend to be migratory and green 'asture see;ers<

)ere is little international e.'osure t)ose 8it) advan!ed s;ills leave t)e mar;et and t)e enyan mar;et

!annot really attra!t e.'erien!ed 'rofessionals o8ing to t)e Kglass !eilingK in I >bearing in mind t)e overall

maturity levels in t)e mar;et<

=ost university students readily dabble 8it) a''li!ation develo'ment using mainly o'en sour!e soft8are

and do )ave !onsiderable s;ills in t)at regard but !ome into a mar;et 'la!e 8)ere t)e u'ta;e of o'en

sour!e o'erating systems and a''li!ations are not very 'ervasive< <

& t l o o %

Seeing t)at various fa!tors are at 'lay in determining t)e s;ills base in enya,in!luding t)e o''ortunities 'resented by businesses to )el' nurture s;ills, t)e number



34/83

and si&e of 'roe!ts, t)e !y!li! nature of I 'roe!ts, a deli!ate balan!e needs to be

attained in order to address s)ortages 8)ile at t)e same time !reating more

em'loyment and en!ouraging more so')isti!ation in IC ado'tion<

mong t)e ;ey areas e.'ressed by vendors, businesses and a!ademi! institutions,

to address t)is issue in!lude:

Integrating I studies early in t)e edu!ational !urri!ulum to attra!t more interest and t)erefore talent to t)e

se!tor and demystify t)e industry<

Engaging in 'artners)i's 8it) )ig)er edu!ation fa!ilities 8it) greater involvement by t)e government and

!ontinually vet and in!entivi&e 'arti!i'ants in t)e edu!ation se!tor to in!lude more te!)ni!al s;ills in t)eir

!urri!ulum<

?iven enyaLs rising status as a budding innovation )ub in t)e region, develo'ing an enabling environment

for t)e se!tor 8ill be !riti!al to its su!!ess<

In!reasing globali&ation 8ill also 'us) !ountries li;e enya to lean more )eavily on I to 'arti!i'ate on t)e

same e!onomi! field as it !om'etitors<

=ainstreaming of basi! IC training at a large s!ale ebusiness@ IC te!)ni!al s;ills >business@ and general IC

end user s;ills >residential@ among many ot)er areas<

ote# In t)is se!tion IDC 8ill not !over IC s;ills as t)e feedba!; is treated

se'arately under a different se!tion< )us t)e follo8ing are )ig)lig)ts of feedba!;

obtained from t)e residential and business survey results<

/ e s i d e n t i a l

In t)is 'art of t)e survey, a total of 740 residents a!ross five to8ns >Nairobi, isumu,

Na;uru, =ombasa and Nyeri@ 8ere 'olled at a )ouse)old level 8it) feedba!;

soli!ited on various IC related issues< (es'ondents ranged from t)e age of 14 to

over /4 years and 8ere dra8n from t)ree main so!ial !lasses<

?iven t)e sele!tion of urban areas for t)e survey, t)e u'ta;e and usage of IC, t)e

level of s;ills >end user@ demonstrated and overall usage of IC 8as relatively )ig) as

outlined in t)e )ig)lig)ts belo8<



35/83

+ I 5 U R E - 6

e asons $ o r n o t h av in g an i n te rn e t con n e c t i on

Sour!e: IDC, 2011

Feedba!; re!eived from end users 'olled, on t)eir reasons for not )aving an

internet !onne!tion at )ome 8ere mainly asso!iated 8it) t)e !ost of devi!es

>!om'uters@ and t)e !ost of servi!es< o8ever, it s)ould be noted t)at a good

number also indi!ated t)at t)ey already a!!ess t)e internet at 8or; or 'ubli!ly

s)ared !onne!tions 8)i!) to a !ertain e.tent im'lies t)at residents 8)o )ave

a!!ess at 8or; may not ne!essarily be 'rom'ted to a!uire or invest in

!onne!tions at )ome, es'e!ially 8)ere !ost and level of use are fa!tors<

15A of t)e res'ondents !ited la!; of internet infrastru!ture as t)e reason for not

)aving a !onne!tion 8)i!) )el's !onfirm earlier assertions t)at last mile a!!ess

is a maor issue t)at needs to be addressed<

)e main issues t)at 8ere immediately a''arent, 8)i!) !ould be ustifiably

inferred to a''ly to rural 'o'ulations, )ad to do 8it) !ost of devi!es and servi!es,

and in many !ases, to a!!ess to servi!es and uality of servi!es< -n t)at note,

given t)at a!!ess and !ost are already issues in urban areas, it goes 8it)out

saying t)at t)ese are also very real issues in rural areas, more so on !ost of

devi!es and servi!es<

not)er as'e!t t)at may also be safely assumed to in)ibit u'ta;e in rural areas

)as to do 8it) litera!y >ust above 10A indi!ated t)at t)ey do not ;no8 )o8 to

use t)e internet@, a8areness and relative need of servi!es< *)ile t)ere may beneed for !ertain servi!es in urban areas, t)e same !annot be said for rural areas

8)ere !ulture, e!onomi! a!tivities and ability 'lay a maor role in IC

!onsum'tion<

+ighlights on ,etail ing PC Internet $o !ile Phone sage

=obile usage among res'ondents >A@ 'revails over internet >7A@ and C >$A@ usage

Internet and C usage is )eavily !on!entrated among young res'ondents >es'e!ially t)e 142/ yrs@ and

males

=ain reasons for not using a C or internet are !ommon and !orres'ond mostly to t)e inability to buy t)em

or not ;no8ing about t)eir fun!tions

sing C and internet at 'ubli! 'la!es is a 'rominent feature , e.'laining more t)e 8ea; internet a!!ess

from )omes

2$ #undefined H2011 IDC


36/83

9A of res'ondents use C mainly at 'ubli! internet fa!ilities >at varying freuen!ies 'er 8ee;@< -n t)e

ot)er )and, t)eir internet usage is mostly done t)roug) mobile at varying freuen!ies 'er 8ee; >94A@

Qoung res'ondents >142/ yrs@ tend more to use C for entertainment >77A@ and edu!ational >47A@

reasons 8)ile older res'ondents >es'e!ially 543 yrs@ s'e!ify most of t)eir C time for 'ersonal >7$A@ and

8or; obligations >4A@

Internet and mobile usage is !entered over basi! tas;s, 8it) t)e advan!ed features still not uite 8ell

e.'lored

)e main 'ur'oses for using t)e internet are !ommuni!ation via email or so!ial net8or;ing >9$A@ o''osed

by a lo8 'referen!e for doing online voi!e or video !alls

*)ile 7A of res'ondents use mobiles mostly for t)e normal !alling and te.ting, internetbased fun!tions

li;e 8eb bro8sing, !)atting et!< are dominated by young residents >142/ yrs@

ime s'ent on C and internet )ave similar distribution among different age grou's and is a resultant of t)e

general 'ur'oses t)at t)ese age grou's use C or internet:

(es'ondents >145/ yrs@ allo!ate most of t)eir C6internet time for 'ersonal or edu!ation reasons

(es'ondents >543 yrs@ are )eavily !onsumed by 8or; obligations 8)ile using C or internet

-n average, 12 )rs 'er 8ee; are s'ent using a C and6or internet

=ales tend to s'end 2te.t 'ro!essing, 8or;ing 8it) s'read s)eets,

et!email !ommuni!ation, sear!) engines, et!


37/83

Confirming earlier feedba!; about !ost of devi!es, la'to's and des;to's )ave mu!)

lo8er usage in t)e mar;et,

)ere is gro8ing usage of smart ')ones in enya, 'artly attributable to initiatives by

eui'ment vendors and mobile o'erators to avail lo8 !ost or subsidi&ed devi!es into

t)e mar;et< C)ief among t)ese are ndroid based ')ones from re'utable C)inese

manufa!turers< IDC in its resear!) on mobile )andsets sees a gro8t) of ..A >F !)e!; 8it) Simon "a;er@ in t)is mar;et segment<

+ I 5 U R E - 0

P r i+ary p ! rp ose $ o r ! s i n g a P C

Sour!e: IDC, 2011

(es'onses on 'rimary usage of !om'uters !onfirms t)at !om'uters )ave more or less be!ome very !ommoditi&ed items 8it) 'ersonal use !ited as t)e biggest use,

follo8ed by entertainment >still 'ersonal usage te!)ni!ally s'ea;ing@ and

!ommuni!ation<

Rust over 54A !ited use of t)eir !om'uters for 8or; 8)i!) largely !om'rises of t)e

self em'loyed or tele8or;ing demogra')i! of t)e survey<

It s)ould also be noted t)at nearly /4A !ited t)e use of !om'uters for edu!ation,

8)i!) in itself unders!ores t)e im'ortan!e of !om'uters as a medium to a!uire

edu!ation and learning materials< *)en loo;ing at !ontent later, 8e 8ill see t)at

edu!ation still 'lays a !ru!ial role and !an get a better understanding of t)is issue<



38/83

+ I 5 U R E - >

S e rv i ce s ac t i v e y ! se d on a +ob i e d e v i ce

Sour!e: IDC, 2011

Confirming IDCGs mar;et si&ing on tele!ommuni!ations servi!es e.'enditure,

feedba!; from residents s)o8s t)at t)e biggest use of mobile devi!es, at nearly

100A is for voi!e servi!es follo8ed by te.ting at about t)e same level and at a mu!)lo8er usage level, a!!ess to so!ial media and 8eb sites, mainly by t)e younger

'o'ulation<

IDC believes t)at s)ould more lo!ally develo'ed !ontent be availed for mobile,

s'e!ifi!ally for so!ial net8or;ing, 8ebsites and entertainment, 'lus )ig)er band8idt)

s'eeds be availed, a greater a''etite !an be reali&ed< resently su!) !onsum'tion is

via !om'uters and mainly at s)ared a!!ess 'oints or 8or; 'la!es<



39/83

+ I 5 U R E - ?

Con ; d e n ce i n 's in g a P C

Sour!e: IDC, 2011

"y and large, and t)in;ing of basi! end user s;ills, residents 8)o use !om'uters are

!onfident users of Cs and only !iting diffi!ulties 8it) infreuent uses su!) as

'roblem solving and 8riting 'rogrammes< )is in itself, more so 8)en loo;ing at te.t

'ro!essing, !reating 'resentations, et! s)o8s t)at t)e use base is already fertile for

develo'ment of lo!al !ontent and t)at t)e missing lin; to en)an!e or later reali&e t)is

8ould lie in !onne!tivity<

-ut of all t)e res'ondents, only 51A )ave never used a !om'uter and t)e maority

'ossesses fairly solid basi! !om'uter usage s;ills<



40/83

+ I 5 U R E 1 2

Con ; d e n ce i n ' s in g th e I n te rn e t

Sour!e: IDC, 2011

Com'ared to online s;ills >ii


41/83

+ I 5 U R E 1 -

es idents < =n ine P resence

Do you Have a Personal Website or Blog?

Sour!e: IDC, 2011

-nly /A of residents dis!losed t)ey )ave a 'ersonal 8ebsite or blog and may sim'ly

refle!t 'ersonal 'referen!es and 'er)a's also de'endent on t)eir ty'e of o!!u'ation<

It !annot be inferred t)at lo8 online 'resen!e by !iti&ens is o8ing to lo8 !onfiden!e

in internet related s;ills<

)e 'revious figure !onfirms t)is, 8it) a good number of res'ondents 8it) fairly )ig)

levels of !onfiden!e in !reating 8ebsites, 'osting to dis!ussions grou's among

ot)ers<

o8ever, t)is is still an o''ortunity to engage 8it) residents at different levels on t)e

!reation of relevant lo!al !ontent, not ne!essarily 'ersonal 8ebsites or blogs, but

ot)er !ontent t)at may be relevant to t)eir immediate !ommunity e


42/83


43/83

mobile o'erators allo8ing su!) 'ayments to be made via t)eir mobile money

'latforms and !ou'led 8it) some a8areness !reation about t)is servi!e, online

!ommer!e !an only be marginally en)an!ed for !ertain demogra')i!s in!lined to do

so but 8it)out mu!) information about )o8 it 8or;s< s it 8ere !redit !ard users for

offline transa!tions are fe8 o8ing to e!onomi! reasons< )us for online 'ayments,

only a marginal in!rease !an be effe!ted 8it) interventions li;e using mobileo'erators mobile money 'latforms<

+ I 5 U R E 1 /

F inanc ia T ransac t ions on the In te rne t and Mob i e

Sour!e: IDC, 2011

?iven t)at mobile devi!es are most 8ides'read, it is )ardly sur'rising t)at most

transa!tions are made via t)is devi!e<

)e feedba!; suggests t)at bot) a!!essibility to mobile devi!es, as 8ell as t)e

relative ease of use of su!) mobile servi!es, !ontributes largely to t)e )ig) levels of

usage< t t)e ba!;dro' of t)is is a !iti&enry t)at )ave been isolated from traditional

ban;ing servi!es and t)erefore !annot migrate to traditional online internet

transa!tions ba!;ed by formal ban;ing systems<

)us innovations in mobile transa!tions )ave sur'assed internet transa!tions o8ing

to myriad reasons, !)ief among t)em being t)e ba!;ground 8it) traditional ban;ing

and a!!ess to mobile devi!es and servi!es<

o )el' in!rease more internet transa!tions 8ill reuire more 'ayment 'latforms to be

a!!essible for e.isting users, aside from !redit !ards 8)ose usage in enya is mu!)lo8er t)an t)e number of internet users< =obile 'ayment 'latforms, interfa!ed 8it)



44/83

internet ban;ing !ould 'rovide t)e missing lin; to 'romote internet transa!tions< )e

re!ent servi!e laun!) by irtel is a good e.am'le<

+ I 5 U R E 1 4

S a t i s $ ac t i on * i th I n te rn e t S e rv i ce s

Sour!e: IDC, 2011

*)en 'olled about satisfa!tion 8it) internet servi!es, a good number of res'ondents

8ere satisfied 8it) t)eir overall internet servi!e as 8ell as t)e su''ort t)ey re!eive<

Issues of s'eed 8ere among t)e areas 8)ere residents 8ere not satisfied and )ardly

sur'rising t)e issue of value for money 8)ere at least 20A indi!ated dissatisfa!tion<

+ I 5 U R E 1 6

-* aren e ss o $ on i n e g ov e rn +e n t se rv i ce s

Sour!e: IDC, 2011



45/83

*)ereas 45A of t)e res'ondents 8ere a8are of t)e egovernment servi!es offered

on 25A< Indi!ated t)ey )ave used t)ese servi!es<

s indi!ated else8)ere in t)e resear!), lo8 usage may be as a result of !on!erns

relating to !onstant availability, se!urity !on!erns and generally trying to !ontend 8it)

a bureau!rati! !ulture 8)ere t)e most effe!tive transa!tions are offline )o8ever

tedious<

+ I 5 U R E 1 3

=n i n e g ov e rn +e n t se rv i ce s ! se d

Sour!e: IDC, 2011

-ut of t)e 25A of egovernment servi!es users, t)e maority soug)t to obtain

e.amination results online, follo8ed by a''li!ations for 'ubli! servi!e obs<



46/83

+ I 5 U R E 1 0

,ar r i e r s t o ICT ! sag e

Sour!e: IDC, 2011

!!ess to !om'uters, t)e )ig) !osts of !om'uters and unaffordable internet a!!ess

are t)e t)ree main barriers to IC usage in enya and 8)ile t)is is a serious

!)allenge, it also 'resents an o''ortunity to in!rease 'enetration t)roug) various

means in!luding asset finan!ing, !ost subsidies and toll free dial u' rates for remote

and rural areas<

It s)ould be 8ort) noting t)at t)e level of !om'li!ation to te!)nology as 8ell as t)e

la!; of s;ills are not maor in)ibitors as issues of !ost, again !onfirming t)at t)e IC

litera!y levels among residents is adeuate to allo8 t)em to !onsume more and

move to t)e ne.t level<

mong t)e least !ited barriers in!lude la!; of lo!al !ontent, se!urity !on!erns andla!; of trust of IC<

/esidents' "rvey +ighlights

!uiring IC s;ills in enya is signifi!antly affe!ted by t)e overall so!ial status of )ouse)olds and

res'ondents

)e unavailability of C and internet at )omes due mainly to t)eir )ig) !ost and t)e inability of res'ondents

to 'ur!)ase t)em emerges as t)e main barrier against IC ;no8ledge

not)er barrier is t)e absen!e of internet infrastru!ture in some neig)bors 8)i!) is 'ro)ibiting t)ose 8)o

are finan!ially !a'able >SC% "@ form enoying t)is servi!e



47/83

)is is leading to t)e fa!t t)at most internet a!!ess is done via mobile or from 'la!es outside )ome 8)ere

res'ondents are satisfied by its !ost, s'eed and reliability

sage of C, internet and mobiles is generally limited to basi! features

)e same main barriers >!ost and unavailability of C and internet@ t)at are redu!ing t)e use of internet and

C are also 'reventing res'ondents from ta;ing IC training !ourses

*it) t)ese fa!tors 'ressing, only 1$A of res'ondents )ave been trained on IC s;ills in t)e last year

(es'ondents are aiming to in!rease t)eir general basi! s;ills for using mobiles, C and internet< )ey

refle!t less desire to learn advan!ed features



48/83

( s i n e s s

In t)e business survey, a total of 149 res'ondent organi&ations from five to8ns

>Nairobi, isumu, Na;uru, =ombasa and Eldoret@ 8ere 'olled on various as'e!ts,

in!luding IC s;ills< (es'ondents 8ere s'read 'ro'ortionately de'ending on t)eir

se!tors s)are of IC s'end and in!luded government de'artments and agen!ies<

-verall IC usage in business is fairly )ig) t)oug) some issues remain and 8)i!) if

addressed !an result in )eig)tened levels of usage<

+ I 5 U R E 1 >

,! s in e ss =n i n e P re se n ce

Sour!e: IDC, 2011

)ere is !onsiderable usage of 8ebsites among businesses in enya and a goodnumber are leveraging on ot)er online 'resen!e in!luding online adverts, e

ne8sletters and 'resen!e on so!ial net8or;ing !ites<

In t)is regard, t)e enya business !ommunity !an be !onsidered to be at 'ar 8it)

develo'ed !ountries 8it) all t)at remains being t)e level of 'resen!e in terms of

online trading6transa!tions 8)i!) is one as'e!t t)at t)is survey did not e.'ressly

measure but 8)i!), given ot)er areas !ited as !on!erns, mig)t be 'reventing more

enyan businesses from ado'ting a more 8)olesome online 'resen!e< C)ief among

t)e !on!erns !ited else8)ere in!lude se!urity<



49/83

+ I 5 U R E 1 ?

I n t e rn e t Con n e c t i on " ,! s in e ss I n te rn e t S p e e d s %

Sour!e: IDC, 2011

?iven re!ent develo'ments in availing )ig) s'eed band8idt), a good number of

organi&ations )ave !onne!tion s'eeds )ig)er t)an 1=b's but also de'endent on t)e

number of end users t)at t)ey need to 'rovide a!!ess to<

%oo;ing at t)e maturity of t)e mar;et, 8)i!) s)ould be denoted by t)e ty'es of

s'eeds, less t)an 20A )ad s'eeds less t)an 412;b's and only 1A 8ere not

!onne!ted<

-verall, a!!ess among business stands at A 8)i!) is a very 'ositive indi!ator for

organi&ations in enya<

+ I 5 U R E / 2

Con s t ra i n t s $ o r I n te rn e t ' sag e

Sour!e: IDC, 2011

+arious reasons 8ere !ited as !onstraints in terms of internet usage, !)ief among

t)em being availability and !overage 8)i!) )el's restate t)e issue of last mile

/0 #undefined H2011 IDC


50/83

a!!ess< -t)er ;ey !onstraints in!lude 'ri!ing and uality of servi!e bot) illustrative

of a dis!erning nature of organi&ations<

ItGs 8ort) noting t)at only less t)an $A indi!ated t)at t)e internet is not relevant or

ne!essary to t)eir business<

+ I 5 U R E / -

To ta n!+b er o $ $ ! t i+e e+poy e es t ha t h ave access t o

o r ! se sh a re d 8 d e d i ca te d P C

Sour!e: IDC, 2011

In terms of !om'uter usage at organi&ation level, in t)e =edium segment >100/@

em'loyees, a greater number of staff )ad a!!ess to !om'uters 8it) at least 40A of

t)em )aving bet8een 100/ em'loyees 8)i!) is t)e segment si&e )aving

a!!ess to a C< )is unders!ores t)e im'ortan!e of t)e S=E segment in enya

8)i!) is largely made u' of !om'anies t)at are servi!es oriented and t)erefore invest

!onsiderably in !om'uting<

Inversely, t)e maority of t)e bigger organi&ations )ave a lo8er 'ro'ortion of staff t)at

use IC and most of t)ese organi&ations are in se!tors t)at are not e.'ressly IC

de'endent for a maority of users and in!lude agri!ulture, mining and some

government bodies<

Online Government Services

)ere is fairly good a8areness on government servi!es offered online t)oug) 8it)

lo8er levels of usage< systemati! and !onsultative a''roa!) !ould ado'ted to

sensiti&e users on servi!es available as 8ell as a!t on feedba!; on t)e ;ind of

servi!es needed<

mong !iti&ens, 8)ile t)ere are lo8 levels of !onne!tivity, for t)ose t)at )ave

!onne!tivity, t)ere is fair ;no8ledge of t)e ty'e of government servi!es offered and

some usage of servi!es<

)ere is 'resently demand for various online servi!es li;e driving li!ense a''li!ation,

birt) !ertifi!ate a''li!ation, et!<

H2011 IDC #undefined /1


51/83

mong !iti&ens, t)e mobile devi!e is t)e most !ommon met)od of a!!essing t)e

internet and s)ould more government servi!es be issued for mobile 'latforms, a

greater u'ta;e !an be a!)ieved<

+ I 5 U R E / 1

' sag e o $ e / g ov e rn +e n t se rv i ce s

Sour!e: IDC, 2011

)ere is more a8areness of servi!es li;e !ustoms, business li!ense registry and

re'orting !orru'tion online, but !om'aratively usage of t)ese servi!es is rat)er lo8

and ust li;e 8it) t)e residential segment, issues relating to !ulture, bureau!ra!y and

ease of doing business are 'robable reasons for lo8 usage among t)e business

!ommunity<

o a !ertain e.tent, t)e a8areness and usage of t)ese servi!es is !ontingent on t)e

a8areness !am'aigns underta;en by t)e 'roviders of t)e various servi!es< enya

(evenue ut)ority is most notable in t)is regard and t)e results !onfirm t)is< )eir

annual !am'aigns to en!ourage ta. 'ayers and im'orters to utili&e t)eir online

servi!es is indi!ated 'ositively )ere<

-verall s)ould t)ere be similar levels of 'ubli!ity about ot)er government servi!es,t)ere !ould be greater ado'tion<

/2 #undefined H2011 IDC


52/83


53/83

In total t)e !ombined I and ele!oms mar;et 8ill gro8 at a C?( of 9


54/83

. o r e c a s t T a ! l e s

ICT Spen%in&

H2011 IDC #undefined /4


55/83


56/83

T ) B * E 1

To ta ICT Spend ing "'SM% by Techno ogy 2010>201?

2010 2011 2012 2015 201/ 2014 C?(

-t)er * 50


57/83

T ) B * E /

To ta ICT Spend ing "'SM% by )e r t i ca Marke ts 2010>201?

2010 2011 2012 2015 201/ 2014

gri!ulture, Constru!tion, and =ining 21


58/83

T ) B * E 4

To ta ICT S p e n d in g " ' S M % b y ,! s in e ss S i ze 2010> 201?

2010 2011 2012 2015 201/ 2014

110 22


59/83

K e y . o r e c a s t A s s m p t i o n s

T ) B * E 6

Ke y F o re cas t -s s! +p t i on s $ o r t h e Ke n y a ICT M arke t 2012> 2015@

=ar;et For!e IDC ssum'tion Im'a!t

!!elerator6

In)ibitor6

Neutral

Certainty of

ssum'tion

Macroecono"ics

oliti!al Stability Ele!tions e.'e!ted in 2012 8ill

stymie government s'ending in

t)e latter )alf of 2012<

rogress 8it) e.isting and

'lanned IC investment and

s)ared servi!es may grind to a

)alt during t)is 'eriod<

↓

E!onomy Curren!y stabili&ation !an bee.'e!ted to s)ore u' im'orts of

goods, in!luding oil, and overall

)el' alleviate inflation and

resulting effe!ts on !onsumers

>s'ending 'o8er and 'ri!e of

goods@<

Im'roved ability to maintainim'orted inventory by !)annel

'artners< %o8er s)s !ost of

goods !an be 'assed on to

!onsumers

%abor IC S;ills 8ill remains a serious

!)allenge

)e survey s)o8s t)ere are

ga's in demand and small 8ins

!an only be made in terms of

soft s;ills and a8areness

among under graduates about

t)e dire!tion t)ey s)ould ta;e to

be able to fit in t)e mar;et<

Mar$et

C%aracteristics

Inflation Inflation 8ill affe!t !onsumer

IC S'ending

Des'ite t)e fa!t t)at

!ommuni!ations servi!es

!om'rise a !onsiderable

'ortion of )ouse)old s'end,

in!reased !osts of food,

trans'ort, ele!tri!ity and ot)ers,

8ill eat into overall budgets and

diminis) 'riorities for non

essential IC s'end among t)elo8er !adres of t)e !iti&enry<

↓

(egional

Integration

-ngoing initiatives to develo'

t)e East fri!an Community

-ngoing develo'ments among

t)e East fri!an Community

!ountries 8ill )el' IC furt)er

along t)e road in terms of f ree

movement of goods and

servi!es< enya !an 'lay a

'ivotal role in t)is, es'e!ially in

t)e 'rovision of s;ills and IC

related servi!es<

+erti!al Fo!us In!reased so')isti!ation amongS=Es 8ill graduate t)em to t)e

ne.t level of a''li!ations

resently S=Es, 8)i!) formt)e bul; of businesses in

enya, and 8)o are largely in



60/83

T ) B * E 6

Ke y F o re cas t -s s! +p t i on s $ o r t h e Ke n y a ICT M arke t 2012> 2015@

=ar;et For!e IDC ssum'tion Im'a!t

!!elerator6

In)ibitor6Neutral

Certainty of ssum'tion

servi!es related industries,

)ave !onsiderable IC usage

>even in terms of end users@

and 8ill soon be ri'e to ado't

more so')isti!ated IC

a''li!ations<

Tec%nology

%E6/? Net8or;s ?overnment 'lans for a s)ared

/? net8or;

ro'osed roll out of s)ared /?

net8or; may not )ave asignifi!ant effe!t on t)e

!onsum'tion of data servi!es

but 8ill )el' o'erators address

UoS and ot)er 'rovisioning

issues

Cloud Com'uting Cloud Servi!es 8ill start to ta;e

root

?iven t)e !)anges in t)e

!)annel, more so 8it) tel!os

entering t)e enter'rise IC

Servi!es s'a!e and modeling

most offering around a !loud

model, businesses 8ill )ave

greater !onfiden!e 8or;ing 8it)

tel!os on t)eir !loud strategies

Mar$et

Ecosyste"s

C)annel )ere 8ill be distribution

!)annel !)allenges as vendors

see; to )ave uniue !)annels<

)e limited 'ool of distributors

and ier I +(s 8ill !om'ound

t)e ability of vendors to enter

mar;ets more !om'etitively

(esidential =ore lo8 !ost smart ')ones

8ill be a!uired in t)e mar;et<

Smart ')one usage 8ill

en!ourage in!reased data

servi!es !onsum'tion in t)e

residential segment

"usiness "usinesses 8ill gradually

leverage t)e mobile 'latform to

rea!) !onsumers<

?radual efforts by businesses

to de'loy enter'rise mobility

and mobile a''li!ations 8ill

also foster more online trade

and intera!tion 8it) !onsumers

%egend: very lo8, lo8, moderate, )ig), very

)ig)

Sour!e: IDC, 2011



61/83

E S S E T I ) * 5 U I D ) C E

A c t i o n s t o C o n s i d e r

Pro"otion o& locally o.ned distri(utors : )ere need to be efforts to gro8 t)e

distributors)i' 'ool in t)e mar;et, 'ossibly 8it) lo!al and regionally o8ned 'layers to

offer greater diversity to any vendors t)at feel t)e need to )ave 'rodu!t and servi!e

e.!lusivity< s it 8ere, t)e do&en or so distributors already )andle 'rodu!ts of

various vendors 8)o are sim'ly ;een to leverage t)eir mar;et rea!), but s)ould

alternate 'layers oin t)e mar;et, t)e distribution !)annel !an undergo some

transformations< In!entives for su!) 'layers may go a long 8ay in fostering greater

lo!al 'arti!i'ation<

+oster Innovation# )e 'resent initiatives to in!ubate S=Es in IC and 'rovide seed

funding for startu's is yet to be measured but IDC believes t)at t)ese initiatives 8ill

!ertainly )el' foster innovation es'e!ially in t)e younger 'o'ulation and more !ould

be done by 8ay of a8areness !reation as to )o8 young 'eo'le !an start 'arti!i'ating

in a ;no8ledge e!onomy<

)us a multi fa!eted a''roa!), involving in!ubation, sensiti&ation on te!)nology

trends and o''ortunities, !ou'led 8it) relevant syllabi t)at 'rovide t)e ste''ing

stones to attaining t)is, 8ill go a long 8ay in 'roviding a solid foundation for

innovation<

5ro.t% o& Tier 1 !layers# *)ile in!ubation initiatives may foster u' starts to ma;e

an entry into t)e mar;et as IC 'layers, 'er)a's t)e im'a!t may be greater s)ould

ier 2 'layers be suitably engaged to )el' t)em undergo !onsolidation by t)em

a!uiring smaller 'layers, in!reasing t)eir resour!e and s;ills base as 8ell as t)eir

geogra')i! 'resen!e<

)us given t)e limited 'ool of 'layers from 8)i!) large enter'rises, multinational

!om'anies and government !an dra8 from in terms of e.'ertise, resour!es and

e.'erien!e, t)ere is need to nurture more lo!al 'layers to !om'ete effe!tively 8it)

more establis)ed 'layers t)at !urrently dominate t)e mar;et< Su!) measures 8ill

bot) )el' !reate em'loyment and nurture reuisite s;ills<

)us some fo!us s)ould also be dire!ted to8ards e.isting ier 2 'layers, more so

enyan o8ned IC !om'anies, to allo8 t)em greater a!!ess to business

o''ortunities in large enter'rises, government and multinational !om'anies< s it

stands, t)eir limited resour!es, ability to retain s;illed staff and limited geogra')i!

rea!), serve to limit )o8 mu!) t)ey !an gro8 as businesses and em'loyers<

ier 2 !om'anies, by virtue of not being foreign maority o8ned, if nurtured 8ell and)el'ed to be!ome more robust 'layers, !an ma;e good !andidates for foreign dire!t

investment by multinational =NCs and ot)er global IC investors t)at see; to gro8

t)eir mar;ets by investing in or 'artially a!uiring lo!al !om'anies in order to enter

t)e mar;et and !om'ete favorably 8it) ier 1 !om'anies<

Protection o& local ;o(s# In t)e survey t)at IDC !ondu!ted, more so to do 8it) t)e

issue of IC s;ills and ga's, a !ommon t)read running t)roug) most dis!ussions

relates to a some8)at rela.ed and unregulated stan!e to8ards foreign 8or;ers,

more so 8)en t)e reuired s;ills are lo!ally available already< Su!) )as been !ited

often as a reason t)at some 'ositions are not a!!essible to enyans leading

sometimes to brain drain 8)en enyans see; better o''ortunities in neig)boring

!ountries or fart)er beyond<



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S;ills transfer: *)ile in reality t)ere may be various 'ositions and s;ills t)at are not

easily available lo!ally, for t)ose instan!es 8)ere foreign 8or;ers arrive in enya to

underta;e various IC tas;s, t)ere is need to monitor 8)et)er a!tual s;ills transfer

ta;es 'la!e 8)ile at t)e same time ensuring a favorable environment for IC

investors and end users t)at reuire su!) servi!es<

*ast "ile access and =uality o& service# From t)e results of t)e business andresidential survey, as 8ell as intera!tions 8it) vendors, even t)oug) so mu!) )as

been done to develo' IC infrastru!ture via international !onne!tivity, national

ba!;bones, 'ubli! a!!ess !enters, t)e issue of reliable and affordable last mile

a!!ess 8ill !ontinue to in)ibit t)e 'ro'agation and usage of IC<



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" m m a r y / e c o m m e n d a t i o n s

T ) B * E 3

e co++e n d at i on s

=a!ro rea Details !tion "road (e!ommendations

I S;ills In!rease out'ut of

number of s;illed staff

Fo!us • 8areness 'rogrammes at edu!ation institutions

on:

• business needs vis a vis !ourses ta;en

• ty'e of s;ills in )ig) demand for t)e ne.t 54 years

• !urrent =IV(E of s;ills needed

• attra!t more 'eo'le >es'e!ially yout) and females@

via 'romotional !am'aigns

• In!lude middle lo8er tiers of edu!ational

institutions to get !onne!ted

I S;ills En)an!e uality of

s;ills

Fo!us • "ridging 'rogrammes to involve a!ademia,

graduates and IC "usiness leaders

• Curri!ulum refres) and 'lan to do t)is regularly

• In!lusion of basi! soft s;ills !ourses as 'art of t)e

!urri!ulum

• Establis)ment of Industry Standards, !!reditation

and Et)i!s body

• S'e!iali&ed funding for IC !ourses

• artner 8it) training6IC !om'anies and ensure

training availability

I S;ills rote!t lo!al obs

stem brain drain

Consider • =e!)anism to balan!e t)e need for e.'at labor vs

s;ills transfer value

• In!entivi&e Dias'ora to reverse brain drain

• =ore atta!)ment 'rograms and interns)i's 8it)

te!)nology !om'anies to learn and a''ly

(esidential

sage

in!rease e

government servi!es

a8areness

Fo!us • 8areness 'rogrammes on servi!es !urrently

offered and follo8 u' on suggested online

government servi!es

(esidential

sage

in!rease e

government servi!es

usage

Fo!us • %everage mobile o'erators to u'date !iti&ens on

government servi!es vis S=S >subsidi&ed !ost for

government for bul; S=S@<

• De'loy relevant SSD driven servi!es for !iti&ens

(esidential

sage

IC do'tion Consider • Content soli!it feedba!; on !ontent of interest,

es'e!ially from nonusers

• a8areness on ot)er !ontent and servi!es >business

servi!es, online trade, et!@

• Content revie8 feedba!; on !ontent most used

and s)are 8it) benefi!iaries of digital !ontent funds

to ta;e a!tion6innovate6res'ond

• Close !ollaboration 8it) media to 'ursue t)einternet as a !)annel for delivery<



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T ) B * E 3



• ddress !osts See ma!ro item C-S belo8

• !!ess see ma!ro item INF(S(C(E and

C-S belo8

(esidential

sage

Cost of

servi!es6Devi!es

Fo!us • rioriti&ed subsidies of 'ubli! a!!ess !enters after

evaluation

• rovide infrastru!ture su''ort and servi!es

subsidies

• (eanimate lo!al assembly initiatives t)roug)

vendor and 8it) 'oliti!al 8ill

"usinesssage

egovernmentservi!es a8areness

Fo!us • 8areness !reation on e.isting !ontent andservi!es

• %everage on )ig) internet ado'tion to intera!t 8it)

businesses more via a various databases >e


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T ) B * E 3



• Collaborate 8it) CC to sensiti&e o'erators on SF

Infrastru!ture "a!;bone6"a!;)aul

remote areas

• Develo' a frame8or; under 8)i!) s !an be

started and de'art from t)e 'resent s!enario 8)ere

s are !overtly !ommer!ially oriented, ad )o!,

bereft of synergies and leveraging value<

• Consider 8ireless6satellite te!)nology elements in

national infrastru!ture 'lans for e!onomi!ally

unviable areas to mi. 8it) *iFi and ot)er

te!)nologies for last mile a!!ess

Infrastru!ture o8er • -ffer subsidies >and re8ard s!)emes@ to o'erators

8it) rene8able energy fo!us or innovation t)ataddress 'o8er issues

Cost Internet Servi!es Consider • Furt)er subsidi&e 'ubli! a!!ess areas, se!ondary

s!)ools

Cost C Costs Consider • (evive lo!al assembly initiatives >eSmart6*@

Consider • artners)i's 8it) vendors of lo8 !ost devi!es, ta'

into lo!al a''li!ation !ommunity

Sour!e: IDC

T ) B * E 0

-c t i on s b y M ac ro - re as

Intervention Ty!e Macro areas addressed

Finan!ial Infrastru!ture S;ills (esidential C)annel Cost

rivate ubli! artners)i's Infrastru!ture S;ills (esidential Cost

(egulation Infrastru!ture "usiness (esidential C)annel

8areness S;ills "usiness (esidential

Content S;ills "usiness (esidential

Curri!ulum reform S;ills

Sour!e: IDC



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* E ) R M O R E

/ e l a t e d / e s e a r c h



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) P P E D I 7 I 8 I T E R ) T I O ) * B E C ' M ) R K I 5

T ) B * E >

, e n c h + a r k in g

enya (S Nigeria (8anda ;raine )ili''ines Egy't =oro!!o

International Internet "and8idt) =b6se! 'er 10000 'o'ulation /


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T ) B * E >

, e n c h + a r k in g

enya (S Nigeria (8anda ;raine )ili''ines Egy't =oro!!o

?overnment Su!!ess in IC romotion *EF Indi!ator /


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) P P E D I 7 I I 8 K E Y P E R + O R M ) C E I D I C ) TO R S

T ) B * E ?

Ke y P e r $o r+an ce I n d i ca to r s

Des!ri'tion Indi!ator

+olume of international traffi! >=b's@ 20,20'er 100 in)abitants@ 0'er 100 in)abitants@ 0-ut of a 17 >best@ s!ale@ 2


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T ) B * E ?



Is enfor!ement in enya 8it) regards to intelle!tual 'ro'erty and ele!troni!

transa!tions adeuateW

4A of -rgani&ations Disagree

-rgani&ation is !omfortable 8it) transa!ting online for business 'ur'oses from t)e

'oint of vie8 of 'riva!y and data 'rote!tion

$4A of -rgani&ations gree

Number of o'erators buying !a'a!ity at t)e landing station or Number of o'erators

8it) a!!ess to t)e landing station

11 maor o'erators ot)ers

?lobal Net8or;ed (eadiness Inde. 2011 (an;ing 91 >out of 15@

ri!e of Internet !!ess for 412 b's SB 22

Fi.ed broadband Internet a!!ess tariff >B 'er mont)@ SB 5best@ s!ale@ /


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T ) B * E ?



?overnment Su!!ess in IC romotion /best@ 0


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) P P E D I 7 I I I : P R O A E C T B ) C K 5 R O U D

*it) an aim to im'rove servi!e delivery, trans'aren!y and effi!ien!y, t)e 'roe!t

8is)es to !ondu!t a t8o ')ased survey >an initial ')ase I and a follo8u' by ')ase II,

one year later@ as 'er t)e s!o'e of t)e servi!es belo8, as 'art of t)e overall

monitoring and evaluation 'lan to:

Establis) data based information for assessing euity of IC a!!ess, 'enetration and usage

Establis) t)e baseline data for t)e =E IC indi!ators tra!;ed by t)e IC"

Identify t)e !urrent si&e of enyan IC mar;et for 200, bro;en do8n by subsegment su!) as

C6Servers6Storage6Soft8are6Servi!es6ele!om Servi!es

nderstand t)e gro8t) trends of t)e IC mar;et and t)e role of enya as a )ub of IC in t)e region

nderstand t)e role of %o!al enyan I !om'anies in t)e gro8t) of IC in t)e !ountry and ;ey !)allenges

to8ards t)eir develo'ment

Identify !riteria to !reate a ben!)mar; for t)e develo'ment of IC in enya in !om'arison to surroundingregion

nderstand t)e !urrent and 'lanned usage of various IC te!)nologies in !riti!al industry se!tors

nderstand t)e !urrent su''ly, usage and future demand of different ty'es of I s;ills by organi&ations in

enya and

naly&e t)e !urrent fulfillment strategy em'loyed by organi&ations in enya of t)eir I s;ill needs,

evaluation of t)e su''ly of I s;ills in t)e !ountry and t)ereby t)e e.'e!ted ga' in t)e !oming years<

'ro(ect )ene*ts

)e 'roe!t deliverables 8ill engender a range of benefits su''orting t)e 'rimary and

se!ondary 'roe!t obe!tives< )e maor benefits !an be summari&ed as:

H2011 IDC #undefined $5


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T ) B * E - 2

P ro A e c t ,e n e ; t s

%evel "enefit

"enefits to t)e I Industry nderstanding t)e !urrent usage and 'enetration of t)e I 8it)in enya

Identifying lu!rative I industry o''ortunities for enya and develo'ing a strategy to

in!rease ado'tion of 'rogressive I te!)nologies 8it)in t)e !ountry

Contributing to develo'ment of information so!iety in s'e!ifi! and enya as a )ub for

IC in general<

"enefits for enya IC "oard nderstanding t)e !urrent state 8it) regards to IC barometers and gro8t) trends

nderstanding maor !)allenges and o''ortunities for t)ese areas

nderstanding enyaGs 'osition 8it) regards to its 'eer !ountries

?aining o8ners)i' of ;ey I to'i! areas and s'ear)eading t)e im'lementation of

initiatives in t)ese areas in !onun!tion 8it) ?overnment em'o8ered and 'rivate

se!tor asso!iations

nderstanding t)e !urrent availability of IC s;ills and t)e ga's

(einfor!ement of enya IC "oardGs t)oug)t leaders)i' and !ustodian role

"enefits for ot)er I sta;e)olders nderstanding t)e state of I 8it)in enya

nderstanding t)e ;ey !)allenges of IC in enya and analy&e )o8 to develo' enya

as t)e IC ub in t)e region

Creation of 'rogrammes >based on t)e results of t)e study done by IDC@ to augment

t)e lo!al enyan IC industry and t)e IC s;ills available<

Sour!e: IDC

'ro(ect +ow

IDC 'ro'oses a stru!tured resear!)based !onsulting engagement to address enya

IC "oardGs s'e!ifi! reuirements< s 'er IDCLs inter'retation of t)e (F, 8e

'ro'ose t)e follo8ing flo8 for t)is engagement:

Stage 1: roe!t i!; -ff

Stage 2: Creation of In!e'tion re'ort

Stage 5: Inde't) =ar;et nalysis and (esear!)

Stage /: nalysis of results and !reation of t)e final re'ort

Stage 4: IC "oard (esults *or;s)o'

Stage $: )ase I 'roe!t revie8 and )ase II finali&ation<

'ro(ect O,tp,ts

)e maor out'uts of t)e roe!t 8ill be t)e follo8ing: In!e'tion re'ort

$/ #undefined H2011 IDC


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IC E!osystem re'ort

"en!)mar;ing table

I table

I s;ills re'ort

Final re'orts

Delivery 8or;s)o'

H2011 IDC #undefined $4


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+ I 5 U R E / 6

M e th od o og y

Julisha Final Report 1

Documents

Transcript of Julisha Final Report 1