Andrew Mack Principal AMGlobal Consulting iWeek , September 2012

1. Internet Opportunities in Africa-- or some of the many places I’d recommend people put money and time if they want to take advantage of the coming growth Andrew Mack Principal AMGlobal Consulting iWeek, September 2012

2. Increased Access a fact, but not enough • Bandwidth exploding with the landing of major undersea cables • Costs going down across the board – and more is expected – especially in smaller markets, but Nigeria + $600M/year • Better service and connectivity, wireless is the vector – but… everything needs to be taken to scale

3. Internet Penetration Can you be in the modern economy without internet?

4. New technologies are increasing access and the reach of the web • Making it easier to get higher bandwidth in remoter areas (WiMax, lower cost satellite, others) • Permitting things like true telemedicine, e-gov, post conflict; Q: is a real partnership with government possible? • Traditional infrastructure – especially electricity – remains a really significant limiting factor • Is there a role for localized energy like small solar? • How can low-power computing factor in?

5. Bandwidth, up and up – but not keeping up

6. Broadband here and there

7. More Broadband

8. Growth opportunities that need addressing • Still very focused on the major cities – how to reach the secondary markets, and with what model? • Still very focused on the office (few people connected at home) • Still limited culture of email, e-gov – though this is changing • Broadband still very limited, too limited given opportunities • Still unclear how the mobile web will play out • Internet still an elite phenomenon in most places…

9. Internet – there’s no place like home And why internet at home is crucial

10. Demand is picking up from all sides • As workers and employers – investment in ICT is a part of nearly every company, CSR and development project – seen as the key leverage point, the key multiplier • As consumers – estimated nearly 70% of cellphones in Africa will be web-enabled by 2014 – people are moving in the direction of mobile web • As citizens – anecdotal evidence suggests people like using e-gov, as it saves time and is more transparent, fits a changing dynamic across the continent of service ethic in government – part of wave of good governance and democracy

11. Q: Are Africans in large numbers making money off the internet? A: Obviously it varies, with hubs in places like Kenya and Ghana and SA, but • in terms of creating the software industries that nearly every government says it wants, not there yet • In e-commerce, Africa is less than one percent of global totals • In banking, outsourcing, call centers some progress but in terms of jobs, nothing like what is hoped for

12. Where is Africa – in terms of access? • African governments and companies are working together to a meaningful extent to provide service. Some real impressive levels of cooperation between biz and government in countries like Kenya. • Financing to improve access still appears to be largely coming from outside the continent. • Legacy PTTs still an issue. Basic infrastructure still a big issue. Opportunities here – but will African be participants or just takers? Hard to say. • Q: Can we create – and maintain – the necessary national coalitions around access?

13. Where is Africa – in terms of training? • A lot of talk, but very few of the programs we see in nearly every country reach anything like scale. Aid and government-based programs have generally failed. • Real concerns about the newness of netizensaround the continent and their vulnerability to scams, abuse – and the impact on the broader internet ecosystem – there is danger for new users! • Especially since there are few if any programs aimed at teaching for a mobile web audience. • Q: Can we create new business model here that get us to scale

14. Where is Africa – in terms of content? • Africa’s presence on the web very limited – globally 94 domains/10,000 people but in Africa only 1/10,000 people! • Precious little African content on the web. The numbers are shocking. One seventh of humanity has less than 1% of total internet content based on estimates we’ve seen. • True for content from Africans for Africans. Also true from Africans for the to the broader world – and often (as in the case of Amharic content), the bulk of content is actually coming from the diaspora. • Q: Assuming there’s a much broader audience, how to reach it?

15. What will the tipping points/opportunities be? • Invest in payment options – we need desperately to enable more business on and through the web – need to make more business online business – this is a business opportunity that needs to go to scale… creating true cross border model • Invest in increasing access to low cost laptops and tablets – since there’s only so much you can do with a phone-sized keyboard – the vast majority of Africans don’t have access to computers – the cheap computer is a friend to business and builds familiarity, capacity – the chance to tinker…

16. What will the tipping points/opportunities be? • Invest in entrepreneurship platforms • The culture of business and provide investment opportunities -- incubators and programs aimed at young entrepreneurs • Including legislation around the continent that makes it easier to start businesses and raise small capital, including across borders • Desperately need to establish a regional VC culture that promotes fast-growing businesses and “positive, entrepreneurial tech-recklessness” • Invest in infrastructure, especially light infrastructure • WiMax, broadband and distributed power • Need to create models to bring franchised access to smaller areas – find a way to enable local players to more effectively be partners, share risk

17. What will the tipping points/opportunities be? • Invest in smart IP protection • Perhaps less of an investment than a partnership between government, legal establishments across borders and the investing community • Demand regional thinking and pro-growth policies, and support the legal infrastructure to make business viable longer term • Invest in African content and market it worldwide • For the outside world, Graceland isn’t a fluke – African content is interesting to a world audience • The Diaspora is real – be there • MOST IMPORTANT – Africans are still largely takers of outside content • Africa as the small apps continent?

18. South Africa can play a special role… • You have the technical capacity and organization which is crucial • You have good rights and IP infrastructure • You have a largely functional business-government relationship, which can be a model for other countries

19. South Africa can play a special role… • The rest of Africa may be ready, after flirtations with China and others to see SA as partners… if you’re ready to partner • Given the size of the market and its diversity, it still makes sense for outside players to partner to reach Africa

20. Go for it!