Monday, September 13, 2010

The Economics of Crowdsourcing

The new constitution has brought about an optimistic attitude and a conducive business environment. With vigorous competition in various sectors, many large companies are now outsourcing jobs such as call center services, e-mail services, and payroll, services that might otherwise be performed by in-house employees. The media industry, for instance, has been utilizing citizen journalism to cut down on costs of covering the remote areas. The business environment has also been enhanced by the tremendous growth in the ICT sector; with the recent launch of the second Internet Exchange Point (IXP) in Mombasa. Moreover, mobile phones are now the most-dominant modern technology in the developing world, majority of cellphone subscribers live outside developed countries. Kenya has nearly 20 million mobile phone subscribers.

One form of outsourcing is crowdsourcing. Crowdsourcing is a process in which tasks usually done by employees in an organization, such as developing software, are outsourced to the public. By definition, a crowd is a large number of persons gathered together. In this context, we can consider a crowd as a large number of talented and intuitive technologists in the public. The idea behind crowdsourcing is to involve the public in running activities of an organization. This could be for two purposes; to reduce operational costs or to create public ownership. What makes crowdsourcing economical is the broad participation that takes place at relatively no costs. Solutions and ideas are generated from volunteers or professionals in public who get paid only if you use their ideas. Sourcing tools, such as the Internet and mobile phones, gives an opportunity for the populace to participate.

The most prosperous crowdsourcing venture in Kenya has been the mobile crowdsourcing. Typically, mobile phones are easy to use while uses text messages or Unstructured Supplementary Service Data (USSD) require low bandwidth. In particular, the Ushahidi Engine is a platform that has allowed anyone to gather distributed data via SMS, aggregating information from the public for use in crisis response. The platform is probably the most popular crowdsourcing project. A similar project is ‘Txteagle’, founded by Nathan Eagle, a visiting assistant Professor at the MIT Media Lab. Txteagle is a service that enables mobile phone subscribers to earn money and accumulate savings by completing simple micro-tasks for large corporate clients. This is how it works: a client sends txteagle a task; the task is deconstructed into micro-tasks which are matched to users; the micro-tasks are sent to users using SMS; txteagle tracks responses until confidence is reached; the task is reconstructed and send to the client; finally, the users are paid in airtime or mobile money.

Mocality, a mobile-based and crowd-sourced business directory, is another illustration of mobile crowdsourcing in Kenya. Mocality operates out of Cape Town in South Africa but was recently launched in Kenya with over 10,000 businesses listed at this time. Using the Mocality website agents sign-up, enlist a business premises and are remunerated for entering new business listings once they are verified. The agents, over 60 agents working in Nairobi, are using paid via mobile money. Ways of enlisting a business premises include via the mobile web, email, a J2ME app, an iPhone app, SMS and web browser. Listed businesses in the Mocality database are then provided with 400 free SMSs per month for sending promotional messages to their customers.

Idea Bounty is also a platform for crowdsourcing based in South Africa. Creative ideas are shared in exchange for a reward, or Bounty. Idea Bounty is a social think tank that provides a secure channel for the world wide creative community to offer solutions to creative briefs. Clients are able to post creative briefs detailing their requirements. Only the creative (the person who submits the idea) and the client can see the idea. Idea Bounty reviews ideas to ensure they meet the briefs requirements. The clients review the submissions and select the best idea as the Bounty winner. A reward or 'Bounty' is offered for the idea that best answers the brief and the contributor of the winning idea gets the cash. Clients can only use Ideas that they pay the creative a Bounty for.

Another example from South Africa is IS (Internet Solutions) Labs. Internet Solutions (IS) Ltd a converged communications service provider based in South Africa. IS Labs provides a platform for individuals to submit their ideas on how to improve the internet in South Africa. The ideas are rated, discussed and reviewed. The best ideas receive support from IS Labs and are developed. This ensures the innovative ideas for provision of Internet services are harnessed from the general public. Crowdsourcing has proven to be one of the economical ways of harnessing talent and provides employment to thousands of young people.

Thursday, September 9, 2010

Mobile Broadband Revolution in Kenya

Recently, the Communications Commission of Kenya (CCK) director general Mr. Charles Njoroge announced the reduction of the 3G license fee from $ 25 million to $10 million, a 60 percent decline. What did not occur to most people is the fact that CCK will allow telecom operators to upgrade to 4G technology without additional license fee charges. This presents an opportunity to the telecom operators to migrate to higher bandwidth data service on high-end mobile devices or suitable customer premises equipment (CPEs). The 4G technology would provide a suitable platform to IP based solutions such as web conference, IP telephony, high speed Internet access, gaming services and streamed multimedia.

4G refers to the fourth generation of cellular wireless standards. It is a successor to 3G and 2G families of standards. The nomenclature of the generations generally refers to a change in the fundamental nature of the service, non-backwards compatible transmission technology and new frequency bands. The first was the move from 1981 analog (1G) to digital (2G) transmission in 1992. This was followed, in 2002, by 3G multi-media support, spread spectrum transmission and at least 200 kbit/s, soon expected to be followed by 4G, which refers to all-IP packet-switched networks, mobile ultra-broadband (gigabit speed) access and multi-carrier transmission. Currently, Pre-4G technologies, such as Long Term Evolution (LTE) and Mobile Wimax, exist in the global market. In October 2010, the International Telecommunication Union (ITU) is scheduled to release the 4G International Standard after a further test and evaluation of the proposals for 4G Standardization.

Looking at the history of mobile telephony, digital wireless and cellular networks go back to the1940s when commercial mobile telephony began. The first invention of the cellular phone is referred to as 0G. Since there were no telephone networks at this time, callers had to connect these phones to a base station, which connected them to an operator, then connecting their calls. In 1946, AT&T and Southwestern Bell introduced the first American commercial mobile radio-telephone service. Mobiles used newly issued vehicle radio-telephone licenses which operated on six channels in the 150 MHz band with a 60 kHz channel spacing. In the early 1980s, 1G Technology debuted, featuring large cellular phones, sometimes referred to as cellular radios, connected to limited networks of stations. A conspicuous icon of the 1G was the large car phones of the 80s, fitted in executive limousines.

In the 1990s, the 'second generation' (2G) mobile phone systems emerged, primarily using the GSM standard. This marked the first time that the general public began widespread use of this type of technology, introducing the public to portable phones. Networks were still somewhat limited at this time, with many cellular phones subject to roaming charges when their users wandered outside of a specified geographic area, and the vast majority of these devices were used solely for phone calls. These 2G phone systems differed from the previous generation in their use of digital transmission instead of analog transmission.


The first pre-commercial 3G network was launched by NTT DoCoMo in Japan in May 2001. 3G Technology marked the first time that cellular phones could directly connect to the internet, transforming the technology from a phone-based technology to a technology used in a wide array of devices. 3G allows simultaneous use of speech and data services, and provide peak data rates of at least 200 kbit/s for internet access, email, instant messaging and a host of other functions. Additionally, this technology allows laptop computer users to connect to the internet wirelessly.

With us now is the 4G Technology. This technology aims to provide users with much faster connections capable of transmitted much larger amounts of data. The peak data rates of up to approximately 100 Mbit/s for high mobility such as mobile access and up to approximately 1 Gbit/s for fixed wireless access units. Smart devices will be able to stream high-definition television and radio, and allow users to walk from one network to the next without an interruption in reception. One of the major differences between the 4G and 3G technology is the elimination of circuit switching technique and replacing it with an all-IP network. This means that voice calls are processed just like any other type of streaming audio media, utilizing the features of a packet switched network.

Safaricom is the only network operating the 3G technology on GSM commercially, with Telkom Kenya operating on EVDO/CDMA2000. Zain, Yu and Telkom Kenya are yet to introduce 3G on GSM commercially. Zain Kenya has already indicated that it will be rolling out 3G services by December, after both Telkom Kenya and Zain paid $10 million each for their 3G licences. These operators have the advantage of upgrade to 4G at no additional license cost in the future. Safaricom has already started testing fourth generation (4G) services on its network, planning on a release later this year. The challenge for the introduction of this technology by the telcom service providers is the availability of a frequency spectrum. Digital TV will probably assist to free up some of the frequencies occupied by commercial television.