Disruptive Technologies in the Insurance Industry

On 13^th November, 2016, Mr. Sunny Bindra wrote an article in one of the dailies that echoed my thoughts. In his article, he illustrated how the recent developments in global technology that might disrupt the insurance industry and find the conventional players unaware. Before you think it’s farfetched, recall the disruption caused by Uber and Air BnB. Both are global companies that identified a gap that transcends countries and cultures. Startups are leap frogging the archaic claims processes, static premiums and poor customer service and inventing in dynamic premium computation methods, numerous customer service channels, seamless onboarding and easy to follow claim procedures. In the current market, products are difficult to explain and covered in legal jargon that is too complex for customers to understand.

The risk of customers is treated equally, without considering the different attributes of individual customers, corporates or assets. A reckless driver is more risky in comparison to a careful driver, a moving vehicle is more risky in comparison to a stationary vehicle in a garage, goods stored at a warehouse in a war torn country as at a higher risk in comparison to goods stored in a peaceful country. These elements of risk are not captured in the product of most insurance firms. Most Kenyans are unaware of the merits of insurance and only take insurance that is required by law, namely motor vehicle insurance and national hospital insurance fund. In fact, based on the Association of Kenya Insurers report for 2015, the insurance penetration in the local market had worsened for the three years in a row, dropping to 2.79 per cent in the year 2015 from 2.94 per cent in 2014. What global technology trends in the insurance industry that could change this trend?

Use of location awareness of property and assets is a unique value proposition that would appeal to corporates. If the premium for an asset, fixed or mobile, is based on location then corporates can observe caution and prudence on how they place assets with an aim of controlling costs. In essence, this would lead to reduced claims hence improved profits for insurance firms. Most companies in the insurance industry shoot in the dark when looking for sales. There would be better rewards if companies would engage in customer intelligence and analytics. Gathering demographic data and understanding customer behavior is key in customizing products for various market segments. Social media platforms provide an opportunity to understand customer behavior in a dynamic way. Insurance firms can invest in social miners to gather trends and mentions from which needs in certain market segments can be identified and solutions created.

Brick and mortar presence has been overtaken by events. However, most insurance firms still require you to walk to a branch to sign up for policy and lodge a claim. Soon, there will start ups that would allow you to sign up remotely and policy deliver at your door step. Mobile applications can be used for viewing policies, policy inquiries, paying bills, filing claims, finding agents, quick notifications and updates.  How about covers that are less than 12 months and dynamic? Pay as you drive for instance, would make economic sense. Why should I pay for insurance for the car in the garage while am on holiday? Using Internet of Things, insurance firms can monitor assets and only charge a premium while they are in use. Imagine the savings that would be made if a firm leasing heavy machinery only pays a premium when the machinery is in use. As long as the machinery idle, no premium would be charged hence reducing the fixed costs.

Insurance firms need to contemplate investing in core business systems that allow integration to government agencies and partners that are stakeholders of the insurance industry. Wouldn’t it be great if your insurance firm had access to police records of reported accidents? Once you report and accident, the firm would pick out your number plate and process claims, repairs, courtesy car and all the value adds without you intervention. A seamless customer experience is a possibility that would give a competitive advantage to the firm the offers it first. The penetration of the insurance service in Kenya does not interpret to lack of need for it in the market. It’s an opportunity lingering for next innovator, a solution provider that will meet the needs of the 97 per cent.

Virtual Reality, Accelerated

Samsung recently launched the Samsung Edge S7 accompanied by the Gear VR, the virtual reality component. There is a new war front for smartphones, neither is it a sleek design nor a water proof nor battery life, its virtual reality. Consumers want to interact with devices in a natural way, as if they were part of their environment. The race for virtual reality has been on for a while. On March 25, 2014, Facebook purchased a company that makes virtual reality headsets, Oculus VR which was founded by Palmer Luckey, for $2 billion. There have been several virtual reality devices that seek to enter the market to complement Oculus Rift to enhance the game experience. In March 2015, HTC partnered with Valve Corporation announced their virtual reality headset HTC Vive and controllers, along with their tracking technology called Lighthouse. In July 2015, OnePlus became the first company to launch a product using virtual reality. They used VR as the platform to launch their second flagship device the OnePlus 2, first viewable using an app on the Google Play Store, then on YouTube.

There could be a game changer in the VR scene, graphene. Let’s put this into context. The most popular material used in manufacturing smart devices has hitherto been silicon. Silicon has its limitations. Even though silicon has been shrunk to allow approximately 2 billion transistors in a chip, scientists predict that it will reach its threshold by 2020. The other limitation is that silicon is thick, from a VR perspective. What is graphene and could it be silicon’s replacement? What difference does it make in the VR world? Now, if you took your pencil and rubbed it on a piece of paper, you will get graphite. Graphene is graphite’s relative, made of carbon elements arranged in hexagonal shape and is one atom thick making it 2 dimensional. Try to imagine a honeycomb that is too thin for you to see using your naked eye. Despite being one atom thick, graphene is also one of the strongest materials in the known universe. The material was discovered, in 2004 by Andre Geim and Konstantin Novoselov at the University of Manchester. The duo won a Nobel Prize in Physics in 2010.

The most important properties of graphene are transparency and flexibility, apart from its electrical conductivity. This is ideal for smart devices of different shapes, even more appealing for surface computing. You can manufacture a glass pane with a layer of graphene and suddenly there is a smart window of your house. In future, we could have smart tables in restaurants with menus to choose, newspapers to read or game to play.  Devices such as plasma TVs and phones often have screens that are inflexible and breakable. Manufacturers are actively seeking alternatives that could cut costs and provide better conductivity, flexibility and transparency. Graphene is an emerging option. It is non-reflective and appears very transparent. The material presents possibilities to create wearables that fit appropriately and are comfortable. Visualize a contact lens with an interactive inbuilt screen, probably giving you details of a painting as you walk through a gallery or an artifact in a museum.   How about smart clothes? We could have newspaper vendor walk around with adverts or a group of dancers with images changing on their clothes.

Another perennial problem has been battery life. Graphene could dramatically increase the lifespan of a traditional lithium ion battery, meaning devices can be charged more quickly - and hold more power for longer. Batteries could be so flexible and light that they can be stitched into clothing or into the body. Solar panels can utilize the material for higher power output and durability. Carrying less weight and using batteries that can be recharged by body heat or the sun would allow for more applications in wearables. Heat dissipation is a major challenge in electronic devices. Now researchers have proposed a complex 3D structure made from a 2D material, known as white graphene, which may provide a solution to this problem. Its heat transfer capabilities are superb, but it’s also an electrical conductor. Graphene oxide can be used to create 'smart' food packaging products. Packaging which has been coated with graphene has the ability to detect atmospheric changes caused by decaying food. The possibilities of the graphene are endless and particularly exciting for the virtual reality world. 

Do we need still a CIO in a Company?

Recently, during one of my management classes, the lecturer said something very shocking. He predicted that in the next five years, most companies will not need a CIO. In fact, he joked about it and said it might stand for “Career Is Over”. In his view, majority of the youth are techno savvy and as they grow to the CXO level, there will be no need to demystify technology since it will be inherent to them. They will know what technology to use when and where in order to achieve the company’s strategy. I belong to the school of thought that feels that the IT department has been long marginalized, usually place under the care of the CFO. The two are acutely antagonistic; one is out to save money while the other is out to spend it on technology. Given, sometimes the spendthrift IT department needs to be controlled, looking for the latest high end appliances for data storage, security, and unified communications. Before I could criticize him, I paused and remembered that 10 years ago, there were colleges in our neighbourhoods teaching courses in Microsoft Word, PowerPoint, Excel and Access. Now they are extinct, there are needed any more. A child will simply log into a laptop or a smart device, go to Facebook and start chatting. To him or her, typing in any application is inherent, just like walking. Get the picture?

There is another growing but worrying trend; outsourcing. IT and cloud services are becoming easier to adopt. As standards and policies continue to be defined, small and medium companies-in which most companies in Kenya fall in- will find it easier to deploy leaving out the need for experts in the organization. For instance, when a company decides to move to Google Mail or Office 365, do they need the guidance of a CIO? Maybe they don’t. What if a company decided to use Skype for Business for communication or Salesforce.com for sales funnel management? May they don’t? Location of a server running and enterprise application is no longer important, whether on private, public, or hybrid cloud; on a virtualized machine on virtualized storage, over a virtualized network and so on. The important factors are determined by cost, service-level agreements and regulatory requirements. These are decisions can be made without a technical expert in the room, especially where time and cost are of essence. Outsourcing is a game changer, given the large economy of scale achieved by centralized purchasing; the costs are lower. The effect of this is better response time, governance, security, redundancy isolation, and other operational requirements. The fixed costs will are shared across a broader base, lowering them making them variable.

Traditionally, the CIO has not been a breeding ground for upcoming CEOs. For CIOs to survive, they must evolve. Most organizations see a CIO as a cost center spending projected profits thus impacting the bottom line. Today’s CIO, more than ever, must be strategic; mapping the value of technology across different disciplines in an organization. All companies heavily rely on technology to be ahead of competition. Consumers demand the use of technology to ease their purchase and for a seamless experience. There is no alternative. CIOs must plan to grow to be CEOs. Learn how to evaluate and analyse financial statement, understand the mechanics of business operations, gain hands on experience on other areas of the business and acquire customer service skills. In other words, CIOs need to move out of their comfort zones. Historically, CIOs have grown in IT departments, often from programmer or network administrator to the top of the IT division, without much time spent in other functions in the company. This makes them narrow minded and lack a certain perspective of the business. Most often than not, they do not interact with external customers and may not understand the challenges of the market they are in. This is comparison to COOs for instance, who have to understand the end to end processes of an organization. As other members of the executive board become more empowered technology wise, the CIO may be irrelevant.

The 3D Printing Disruption of Manufacturing

Recently, the new Uchumi CEO Dr. Julius Kipngetich hinted that the company is eyeing at the e-commerce model of retail business. In essence, consumers will no longer have to walk to a store but rather have products delivered at their homes by placing a request online. This is following other entrants in the market like Rupu, Pigiame, Ticketsasa, Nunuauza, Jumia, Mama Mike and so on. The retail business is in the verge of a huge disruptive change and 3D printing is part of it. With more sophisticated and demanding consumers, customization is essential. It is not economical to customize and in a short notice for traditional manufacturing method. The methods are optimized for large volumes of consistent output and not for an individual custom made product. With 3D printing, the difference between a customized item and the non-customized one is the same. Big online retailers like Amazon are already selling customized jewelry, toys and gifts using 3D printing. How about a customized phone casing, key holder, clothe hangers, aren’t the possibilities are infinite?!

From a medical perspective, 3D printing is really revolutionary. We can now print prosthesis for patients who need artificial limbs in a customized manner to ensure they fit comfortably. 3D printing of biological matter using organic inks and super-tough thermoplastics can be used to regenerate failed organs or part of it. These capabilities will also have an impact in the art industry; artists can create sculptures using software and print. In fact, Adobe Photoshop now has adding 3D printing capabilities, allowing users to design three-dimensional objects and they can send them to 3D printers in the cloud or print by themselves. Well, not sure whether the typical artist or a computer programmer will draw our sculpture in the future. I look forward to a day when the mechanic can print a car part, like a bush nut or screw, instead of waiting for it to be shipped from Europe or Asia for months. This would affect every stakeholder involved; from the manufacturer, shipping company, clearing agent, delivery truck, and spare parts shop owner and so on. NASA will be able to install 3D printers on the international space station so astronauts can print replacement parts as needed.

The biggest headache of 3D printing is how to regulate it. What happens when people start producing counterfeit goods at their homes? Among its other challenges are that the machine consumes a lot of power, poses as a national security threat due to its capability to produce guns, lacks guidelines and standards that govern production and licensing loopholes. The benefits outweigh these challenges. They can build complex components and achieve greater precision and finer resolution at higher speeds and lower costs, taking manufacturing to beyond limits achieve before. Prototypes can now be built as ease during product development without investing in a manufacturing line thus reducing time to market. Engineering tools required to manufacture some of these parts are not available in most countries but with this technology, manufacturing will truly be globalized.

This is the time for traditional manufacturers to think differently. The 3D printing is now limited to complex designs and shapes but not for too longer. It’s poised to move to the mainstream market segment where day to day products will be produced by households and not mega factories. It is possible to integrate this technology as a subset of production to cut down on overheads and remain competitive. In a similar fashion to software development which became open source and community based over time, the development and production of physical goods are about to become community based rendering factories uncompetitive. Open source software lead to growth of applications that lead to significant disruption of the market and can longer be ignored. It is predicted that 3D printing will have a similar impact in the manufacturing sector in the next few decades.

Dark Side of the Technology Revolution

 
As I routinely took a glimpse of the BBC headlines before heading to bed, an interesting documentary captured my eye and kept me glued to the screen for thirty more minutes. It illustrated an interesting perspective of the negative effects of the technology revolution. An example given was the invention of the Google Self driven vehicle, which would in this next few decades lead the taxi drivers jobless. Tesla, a car manufacturer, says that fully self-driving cars will be ready for roads in just two to three years.  For now, the company has rolled out a software update that enhances cars’ autopilot and allows it to be remotely “summoned” in and out of garages without a driver.

Michael Osborne, an associate professor of machine learning at the University of Oxford, warned that the increasing use of machines in the classroom will mean that teachers will be less important when transmitting knowledge. Sounds farfetched? It’s not. Think about it. We have local scenarios where technology lead to the elimination of middle level skilled jobs. Remember how every big boss needed a secretary with the skill to write short hand, now they are no more. Looking into the future, remember how you had to queue to pay for electricity, water, driving license renewal and so on, while you can now comfortably pay for these services on your mobile devices. What will happen to the cashiers who used to attend to you, say twenty years from now?

Robots, mechanical or in software, are slowly taking on various tasks for humanity, not just the odd jobs but even the more sophisticated and complex ones. This phenomenon is known by scientists as Artificial intelligence (AI) takeover. It refers to a hypothetical scenario in which artificial intelligence (AI) becomes the dominant form of intelligence on Earth, with computers or robots effectively taking control of the planet away from the human race. Ask IBM Watson. IBM Watson is a technology platform that uses natural language processing and machine learning to reveal insights from large amounts of unstructured data. In other words, the system can analyse complex problems and compute a reasonable answers based on correlations and permutations. It is basically a brain. The IBM Watson Health cloud has a diverse range of health sources, cloud-based data sharing hub to assist doctors in diagnosis. At the least, we will need fewer doctors in future or may get rid of them in managing certain diseases and conditions. AI has gone a long in trying to create a robot that easily can learn and is self-aware enough to cast its human operators.

This marks a change in paradigm. The technology revolution is not just a threat to the repetitive tasks in a factory’s production conveyor belt; it’s a threat to every job.  The International Federation of Robotics says the number of robots in factories across the world rose by 225,000 last year, and will rise even further in the coming years. A few years back, tea farms in Kericho introduced mechanized tea harvesting methods and all workers were up in arms and the strategy had to be reverted. Well, that was a temporary measure but eventually, technology will catch as it clearly becomes more efficient to use mechanization in comparison to human labour. Advances in technology are moving too fast for most professionals to keep up. As some professions become obsolete, more knowledge may not lead to higher pay either, because everyone will be bidding for the same work, which could drive wages down. According to McKinsey Global Institute, by 2017, there will be 2 million industrial robots in operation worldwide. It has been estimated that by 2025, robots could produce an output equivalent to 40-75 million workers in both industrial and service roles. The good news is that more robots require more engineers to tend the robots. How about learning some robotics to be future proof?

Demystifying the Fiber Pulling Challenge

Sam Mwangi

Most often than not, we are enraged when we encounter contractors from various service providers digging the pavements and pathways to lay fiber. Ironically, we then demand for high connection speeds for our Internet service at the office and home.  The fiber pulling activity leads to disruption of certain services that leads to grave economic consequences. We have witnessed traffic jams, busted water pipes and interruption of other public utilities. In part, this is due to the uncoordinated manner in which different providers would lay their fiber infrastructure such that two different providers would be digging the same route within a short timeline, probably ripping up the same road and re-carpeting it within the said time. The other aspect is that the regulating authorities that approve the works do not keep proper records of the plans and of existing infrastructure. In fact, the works plans are submitted in hard copy making it difficult to correlate existing infrastructure vis-a-vis the proposed routes. Of course, soon after the fiber has been laid, there is a possibility of a road contractor cutting it in the process of road construction.

These challenges can be solved in both short term and long term. In the short term, instead of several authorities regulating the fiber laying activities i.e KENHA, KURA, County Governments, CRA and so on, one of them should take charge for better coordination and to avoid confusion. Long term, we need to evaluate the possibility of shared ducts, not just with other fiber providers but also with other utilities like electricity. Cost sharing among the various stakeholders of the duct would ensure efficiency and minimize disruption. There has been progress made in this front, the National Optic Fibre Backbone Infrastructure (NOFBI) provides a shared infrastructure for use by the Government and network operators. However, the infrastructure has been plaque by frequent downtimes causing most network operators to withdraw. The Kenya Power and Lighting Company (KPLC) telecommunications department has also provided fiber over high tension power lines to various providers for connectivity from one part of the country to another.  Multi-media firm, the Wananchi Group, has been using KPLC’s  national electricity transmission network to build a fibre optic platform, especially using electric poles in residential areas. The platform - a product of an agreement between the media firm and Kenya Power and Lighting Company - puts Wananchi on a converged media highway that enables it to compete in television content, internet provision, data and voice transmission markets.

There are various models that can be used to provide a shared duct infrastructure. A single entity such as the county government can deploy the ducts and lease them to the interested parties. Alternatively, a consortium of stakeholders can jointly invest in the ducts and then share the infrastructure. The problem with the initial model is that the county governments cannot afford the deployment and lack capacity to manage it. Most probably, they would require financing from a venture capitalist based on revenue share or an International Bank such as World Bank or African Development Bank.  The second model is that consortiums are unpredictable and difficult to manage. Different stakeholders have different agendas and roadmaps based on their financial capabilities and strategies. In an effort to lay the submarine cable, a consortium of companies and the Government known as TEAMS (The East African Marine System) had delays in implementation that lead the private companies to opt for SEACOM. This illustrates the complexity of consortiums and the unlikelihood of competitors working together. Lastly, the regulatory authorities can digitize the records. There is software that digitizes maps and concatenates all public utilities, fiber routes, water and sewerage routes, underground electric cables and so on. This in comparison with the plan submitted by a service provider in soft would allow for better planning of fiber pulling activities.

 

The New Age, Micro Robotics

Most of us dread an experience at the hospital. The medics often use invasive methods that cause us pain and discomfort. Sometimes the method involves a lengthy meticulate process, usually a surgery, which is both costly and takes a long time to heal. What if we could go to the hospital, swallow a tiny device that gets into living tissue and the doctor would control it to carry out a procedure? Not imaginable? It shouldn’t be. It can be done with a small enough for injection without leaving a wound, new microrobots could revolutionize the way modern medicine treats certain hard-to-reach areas of the body. The eyes and brain are extremely tricky places for surgeons, and a non-invasive solution to certain ailments has long been sought. Micro robotics or microbots is the field of miniature robotics, in particular mobile robots with characteristic dimensions less than 1 mm.

Due to their small size, microbots are potentially very cheap, and could be used in large numbers to explore environments which are too small or too dangerous for people or larger robots. It is expected that microbots will be useful in applications such as looking for survivors in collapsed buildings after an earthquake, or crawling through the digestive tract. What microbots lack in computational power, they can make up for by using large numbers, as in swarms of microbots. The development of wireless connections, especially Wi-Fi has greatly increased the communication capacity of microbots, and consequently their ability to coordinate with other microbots to carry out more complex tasks. Magnetic Microbots are already in use for various operations, such as removing plaque from a patient's arteries or helping with ocular conditions and disease screenings.

Another application of the micro robotics is in space exploration. They can be used for planetary exploration, making them next-generation instruments for in-situ chemical and mineralogical analyses on extra-terrestrial planets. It's easy to imagine relatively lightweight micro-robots routinely probing the entire solar system. The challenge of building space-borne robots is in making significant decisions on their own. Radio signals can take hours to reach distant parts of the solar system thus remote control from the earth is not effective. This filed of microbots is still significantly in the research stage and wide deployment is not expected.

Microbots can be flexible and deformable to enable them to work in uncertain and dynamic environments. Researchers are working on various materials that our bodies can tolerate and would respond positively to body fluids. Stimuli-responsive hydrogels are a class of materials closely resembling biological tissues in their physical and chemical properties. These materials have unique capability to responds to different stimuli such as temperature, pH and ionic strength. They can be used in tissue engineering, drug and cell delivery and wound healing. They detect lesions, deliver medicine directly to affected areas, and remove tissue samples for further study.

One of the major challenges in developing a microrobot is to achieve motion using a very limited power supply. The microrobots can use a small lightweight battery source like a coin cell or can scavenge power from the surrounding environment in the form of vibration or light energy. Microbots are also now using biological motors as power sources, such as flagellated Serratia marcescens, to draw chemical power from the surrounding fluid to actuate the robotic device. These microbots can be directly controlled by stimuli such as chemotaxis or galvanotaxis with several control schemes available.Another challenge, once introduced into the body, they must be able to move through bodily fluids and tissue. Magnetic control is used in some cases but limits the areas microbots can explore. They have limits on motor power, motion precision, and energetic efficiency of modules making them less relevant. Despite these challenges, microbots have a great future. Some scientists predict that micro robotics will define the new age after the Internet.

Africa Goes For International Airtime Remittance

During the East Africa Com Conference at Safari Park on 9^th and 10^th September 2014, one thing caught my eye- International Airtime Remittance. The statistics involved are just mind boggling. For instance, in general, there are over 200 million foreigners in diaspora sending approximately 400 billion dollars to their home countries in cash. According to the Central Bank of Kenya, Kenyans remitted around 1.29 billion dollars in 2013 alone, which translates to 114 billion Kenya Shillings in cash. However, sending cash has hitherto been expensive. An alternative to remitting cash is to remit mobile air time instead. Mobile airtime is considered an electronic product, rather than cash, by most regulatory authorities, and is therefore easy to manage. Many people in diaspora now choose to use air time remittance as a gift for friends and family in their home country; a little bonus on top of a weekly cash remittances, or something to encourage the family member to phone. It is cheaper and allows them to send money is small denominations. 

A study by Juniper Research indicated that international transfers made via mobile phone top up exceeded $10 billion in 2013. In the developing world, there are 2.7 billion people who do not have a bank account. At this same time, there are 1 billion people who have cell phones in these areas. The overlap of these numbers is substantial. In Kenya, mobile penetration is at 78% while the banking is at 40% of the population. Many people without bank accounts have cell service. For those in developing countries, buying airtime for them could really make a difference. By having someone complete an airtime purchase on their behalf, individuals with a cell phone and no bank account can continue to stay in touch. This has propelled the growth of International airtime remittance.

How does it work? International Airtime Remittance can be implemented using a number of channels available to users, including web portals, SMS, USSD, Mobile Web Apps and Android Apps that can be fully customized. The solution requires a trans-global entity, providing a platform to integrate with mobile operator top up systems in different countries. The International Top-up Operator purchases airtime from international mobile operators at a wholesale or discounted rate. By offering international top up, retail channels can enable their customers to conveniently purchase airtime and send. Retail distribution channels purchase airtime from the international top-up operator, and sell airtime to customers for a service fee added to the top-up amount at the time of sale.

The future of International remittances is bright, with operators looking to offer consumers ability to seamlessly send value across virtually any border to any recipient without traditional intermediaries. For instance, paying electricity bills, dental bills, or school tuition with the same ease as sending of airtime from a prepaid mobile phone. Over the last few years, Kenya Power and Lighting Company has been rolling out prepaid meters for urban households and has installed approximately 400,000 meters. Instead of the postpaid meter, you’ve got a prepaid meter and as soon as there is no money left in the meter, the light goes out. Once this happens, the consumer buys prepaid tokens to resume the service. What if a relative living in the diaspora to top up your prepaid electricity meter to ensure that your lights never go off?

Another example of a prepaid utility service is the M-Kopa Solar. The solar lighting system offers clean lighting solutions to millions of homes that are not on the electricity grid. M-Kopa provides pay as-you-go solar home solution and comes with two LED solar lights and one solar rechargeable LED torch, and a larger 8W panel that gives 60 percent more charging capacity. Following the removal of VAT on solar-powered devices, M-KOPA Solar charges an initial deposit of KES 2,999 followed by 365 daily payments of KES 40. The growth of this service has been tremendous. M-Kopa is currently connecting 2,000 homes to solar every week, with a customer base of around 90,000 and targeting 1 Million customers in the next four years. Most of the M-Kopa customers are in the rural areas, some have relatives in the diaspora. Considering it only costs $0.40 per month to use the solar solution, most people in the diaspora would be more than happy to support their families back at home. There are many existing and upcoming pre-paid utilities that may use International remittances in the near future.

Farewell CDMA

In July 2007, Telkom Kenya took the market by surprise when they launched a wireless product based on Code Division Multiple Access (CDMA). The competitors at the time, Safaricom and Celtel, felt short changed. The Telkom Wireless product did not attract excise duty like their counterpart GSM products from the competition, meaning the cost to the consumer was lower. Moreover, Telkom Kenya did not have to pay for the mobile service license since the product was based on license to provide fixed wireless service with a region such as a province. Apart from voice, the company could now deliver data to any part of the country. By far, the company had a great advantage and the strategy was brilliant.

Fast forward to 2015, Telkom Kenya, now Orange, has halted the CDMA operations due to lack of advancement of the technology and its unviability in the market. According to the Communications Authority of Kenya report Quarter 2 2014/2015, the number of subscribers on CDMA has continued with a declining trend to 132,017.  Comparing this to the total number of GSM mobile subscribers by all operators standing at 32,768,828, there is a significant difference. So, what happened? Why couldn’t such a great advantage lead to astronomical number of subscribers on CDMA? The scenario in Kenya depicts the battle of the CDMA and GSM technologies as witnessed in other parts of the world, GSM is dominant with approximately more than 70% of the global market share. 

 

CDMA is neither a viable nor competitive and has lagged behind as GSM advanced to 4G (LTE) at 100Mbps and now the yet to be standardized 5G. 3G CDMA networks, known as Evolution Data Optimized (EV-DO) is stuck at 3.6Mbps. The major difference between GSM and CDMA is the way subscriber information is stored. For GSM, the Subscriber Identity Module (SIM) card stores all the information on the mobile device. This means that subscribers can migrate from one GSM provider to another easily, as long as the mobile device is not locked to a particular provider, most aren’t. With number portability, consumers can now maintain their phone numbers as they migrate. On the other hand, CDMA operators usually store subscriber information including phone book and scheduler information, on the operator’s database. CDMA phones are more or less locked to one provider. In Kenya, there was only one CDMA provider thus there was no provider to migrate to. 
 

Another essential difference is that, generally, CDMA can't make voice calls and transmit data at the same time. The user will either use data or make calls; there are instances when this affects the quality of service. Its rival, GSM, has capability to handle voice and data simultaneously on 3G. The user can browser while making calls simultaneously hence an improved customer experience. The area which GSM takes itself from its competition with CDMA is in International roaming. Most mobile providers in the world are on GSM technology. Availability of quad-band handsets makes it convenient for business travelers to move from one country to another while they mobile devices adapt to the available GSM frequencies dynamically and offer roaming service. CDMA does not have this edge, only few select countries have CDMA while the frequency range is limited.  
 

The ripple effect of the advantages of GSM over CDMA above is that most manufactures prefer to make GSM mobile devices and most providers venture into GSM research and deployment. CDMA has a bleak future with more subscribers moving to GSM and some of the global operators such as Verizon planning to move to LTE. The future seems to be in LTE. The Long Term Evolution (LTE), a new generation of mobile network technology, promises to revolutionize the use of voice and data services. LTE gained significant momentum as the dominant next-generation mobile access technology throughout 2008. Commercial LTE launches will initially appear on a small scale in Japan, the U.S. and Sweden in 2010, with larger players in Western Europe following in 2011 to 2012. The technology landed in Kenya in 2015 and soon all providers in the country might have this technology. In the end, the consumer is the main beneficiary with most bandwidth at a lower cost and better customer experience.

Making Use of Big Data

A lady pregnant with twins gets a call from the local supermarket for a 50% offer on baby items on Thursday between 10 o’clock in the morning to midday. On arriving at the supermarket, she is lead to a section where all the baby items suited for twins were arranged carefully. She has an easy time piking the necessary items and heads to the till. As she walked out, she asks “How did you know I was going to give birth to twins?” The manager informs her there they had noticed her shopping trends; she would buy baby items in twos in all the supermarkets of the chain. May be your favourite supermarket might do this for you soon. This in essence is known as customer profiling from Big Data analysis. 

Citing an example closer home, M-Shwari uses a credit score algorithm based on your credit history as well as usage of M-PESA and other Safaricom products, to determine your loan eligibility and maximum loan amount. In Tanzania, Vodacom Tanzania has partnered with a New York based company, First Access, to enhance financial inclusion. First Access is a data analytics company that can predict risk for consumers who have never had a bank account or a credit score, using their prepaid mobile data. First Access offers the first instant risk-scoring tool for financial institutions serving low-income customers. Scores are authorized by subscribers in real time via text message through an approval system that First Access has pioneered The scores are based on demographic, geographic, financial and social network data from subscriber mobile records. Delivered in real time to any participating financial institution, they include a recommended loan size in the local currency and eligibility for instant disbursal.

In some cases, these analytics can be used to prevent calamities. During the recent Ebola outbreak in West Africa, Orange Telecom in Senegal handed over anonymised voice and text data from 150,000 mobile phones to Flowminder, a Swedish non-profit organisation, which was then able to draw up detailed maps of typical population movements in the region. Authorities could then see where the best places were to set up treatment centres, and more controversially, the most effective ways to restrict travel in an attempt to contain the disease. In developed countries, Port, train and flight data, and number plate recognition, can all help track potentially infected people and identify who they may have come into contact with an infected person.

To most of us, Big data is an all-encompassing term for any collection of data sets so large and complex that it becomes difficult to process using traditional data processing applications. Every day, we leave traces of data on social media, telephone calls, bank transactions, mobile money transactions, hospital visits, credit card transactions, supermarket tills, fast food restaurants, online trading and many more. The sheer size of data generated on a daily basis is amazing. Both Google and Ebay generate approximately 100 petabyte, each to 100,000 Terabytes, of data per day. This is in comparison to Facebook at 600 Terabytes and Twitter at 100 Terabytes per day. The presents challenges such as analysis, capture, curation, search, sharing, storage, transfer, visualization, and privacy violations. 

In today's environment of data abundance and frequent data overload, the ability to discover unique insight enables organizations to improve decision making, resulting in the ability to take advantage of opportunities, minimize risks, and control costs using Big Data analytics. Big data analytics is about asking new questions, formulating new hypotheses, improve customer experience, exploration and discovery, and making data-driven decisions. Big data analytics is about bringing together many different data sources and mining them to find patterns. The first task is to break down data silos to access all data an organization stores in different places and often in different systems. A second task is to create platforms that can pull in unstructured data as easily as structured data. Specialized software tools and applications are then used for predictive analytics, data mining, text mining, forecasting, and data optimization.

International Airtime Remittance

During the East Africa Com Conference at Safari Park on 9^th and 10^th September, one thing caught my eye- International Airtime Remittance. The statistics involved are just mind boggling. For instance, in general, there are over 200 million foreigners in diaspora sending approximately 400 billion dollars to their home countries in cash. According to the Central Bank of Kenya, Kenyans remitted around 1.29 billion dollars in 2013 alone, which translates to 114 billion Kenya Shillings in cash. However, sending cash has hitherto been expensive. An alternative to remitting cash is to remit mobile air time instead. Mobile airtime is considered an electronic product, rather than cash, by most regulatory authorities, and is therefore easy to manage. Many people in diaspora now choose to use air time remittance as a gift for friends and family in their home country; a little bonus on top of a weekly cash remittances, or something to encourage the family member to phone. It is cheaper and allows them to send money is small denominations.  

A study by Juniper Research indicated that international transfers made via mobile phone top up exceeded $10 billion in 2013. In the developing world, there are 2.7 billion people who do not have a bank account. At this same time, there are 1 billion people who have cell phones in these areas. The overlap of these numbers is substantial. In Kenya, mobile penetration is at 78% while the banking is at 40% of the population. Many people without bank accounts have cell service. For those in developing countries, buying airtime for them could really make a difference. By having someone complete an airtime purchase on their behalf, individuals with a cell phone and no bank account can continue to stay in touch. This has propelled the growth of International airtime remittance.

How does it work? International Airtime Remittance can be implemented using a number of channels available to users, including web portals, SMS, USSD, Mobile Web Apps and Android Apps that can be fully customized. The solution requires a trans-global entity, providing a platform to integrate with mobile operator top up systems in different countries. The International Top-up Operator purchases airtime from international mobile operators at a wholesale or discounted rate. By offering international top up, retail channels can enable their customers to conveniently purchase airtime and send. Retail distribution channels purchase airtime from the international top-up operator, and sell airtime to customers for a service fee added to the top-up amount at the time of sale. 

The future of International remittances is bright, with operators looking to offer consumers ability to seamlessly send value across virtually any border to any recipient without traditional intermediaries. For instance, paying electricity bills, dental bills, or school tuition with the same ease as sending of airtime from a prepaid mobile phone. Over the last few years, Kenya Power and Lighting Company has been rolling out prepaid meters for urban households and has installed approximately 400,000 meters. Instead of the postpaid meter, you’ve got a prepaid meter and as soon as there is no money left in the meter, the light goes out. Once this happens, the consumer buys prepaid tokens to resume the service. What if a relative living in the diaspora to top up your prepaid electricity meter to ensure that your lights never go off?

Another example of a prepaid utility service is the M-Kopa Solar. The solar lighting system offers clean lighting solutions to millions of homes that are not on the electricity grid. M-Kopa provides pay as-you-go solar home solution and comes with two LED solar lights and one solar rechargeable LED torch, and a larger 8W panel that gives 60 percent more charging capacity. Following the removal of VAT on solar-powered devices, M-KOPA Solar charges an initial deposit of KES 2,999 followed by 365 daily payments of KES 40. The growth of this service has been tremendous. M-Kopa is currently connecting 2,000 homes to solar every week, with a customer base of around 90,000 and targeting 1 Million customers in the next four years. Most of the M-Kopa customers are in the rural areas, some have relatives in the diaspora. Considering it only costs $0.40 per month to use the solar solution, most people in the diaspora would be more than happy to support their families back at home. There are many existing and upcoming pre-paid utilities that may use International remittances in the near future.