The telecommunications industry is quickly changing to meet new challenges, growing consumer expectations and competition. Within the industry, aggregators sit in the background, often unseen by the end user. They help the divergent parts in the ecosystem work together, forming the glue that integrates service providers with companies.
One of the leading aggregators in East Africa is Africa’s Talking which has operations throughout seven countries (Kenya, Uganda, Rwanda, Tanzania, Malawi, Nigeria and Ethiopia). Their platform allows businesses to integrate mobile communication - bulk SMS, USSD services, Voice over Internet and conference calling – as well as payment capabilities with their application. This enables companies to integrate their services rather that investing heavily in these in house technologies.
Samuel Gikandi co-founded Africa’s Talking in 2010 and serves as its CEO. Drawing on his work with Morgan Stanley in New York and Hong Kong building high frequency systems and his MIT degrees in Computer Science and Electrical Engineering, Gikandi returned home to Nairobi to create Africa’s Talking. Gikandi has a valuable perspective and unique set of experiences. We caught up with him to understand his views on the telecommunication channels, the shifting landscape of regulations and opportunities as an aggregator.
1. What is changing in the African telcom landscape?
Gikandi: It is definitely an interesting time. The way that people communicate, particularly person to person, is shifting fast. People are moving towards more data driven channels.
Businesses take longer to adjust to shifting consumer preferences. For businesses, there are more factors and complexity when engaging consumers, and in Africa, businesses are largely still figuring out how to effectively communicate with their customers and target audiences. Many businesses still need to digitize and get their information online so it will take more time.
2. How are business communications changing in Africa?
Gikandi: There is still a long way to go for African businesses. The main factor is how fast businesses digitize and store their data on the cloud. This will enable them to better create content and tailor communications. Once this happens the volume and quality of business communications will greatly increase. Also, the business communications will mainly flow from applications so more automation and less manual inputs.
In terms of healthcare, the move to digital is essential. When healthcare facilities or insurers are able to pull up electronic records and tailor health messages it will be great. There are a few hospitals leading the way with solutions that enable this now, but it will take time to see the industry throughout Africa get there.
3. Are the telcom regulations keeping pace with the shifting landscape?
Gikandi: How well a communication channel is regulated largely defines how effective it is. The more people trust in the channel, the better its use.
At Africa’s Talking we have become experts on the various national regulations, authorities, power dynamics, opt out options and more as clients turn to us for guidance. In general, person to person communications is relatively simple and the regulations are there. Governments also regulate SMS to try to guard against spam, so there are various processes, applications or forms and fee structures in place. Data tends to be a less regulated and there is more growth to be done in that area of regulation. And also WhatsApp, it tends to be a bit behind in terms of government regulation like spam as well as company regulations. For instance, where responsibility lies in a WhatsApp group - some regulators see the administrator of the WhatsApp group to be liable for comments in the group but it isn’t always clear.
4. How do you see the dynamics around WhatsApp and SMS playing out?
Gikandi: WhatsApp is really a main channel for person to person communications throughout Africa. But because it is so common, people belong to lots of groups and get so many messages, they tend to mute it or not respond. When people get an SMS there is still some sense of urgency.
Last mile channels like SMS and USSD are still very relevant. For mass communications, you want a channel that works for all people, so I still see a place for SMS channels and especially as we move towards more data to inform communications and apps. WhatsApp could partner with those doing SMS and have established businesses for Know Your Customer (KYC) and onboarding.
5. How do you see the future of aggregation?
Gikandi: We are still solving basic problems around access to operators but there is a big push to increase and simplify coverage. We need to create a better environment for aggregators, both in terms of regulations and also operators seeing the value of aggregators. As aggregation is really a business of volume, many players will fall out through mergers and pure competition, the field is crowded currently.
At Africa’s Talking, we are focused on the customers and how we can better and more simply integrate with the end-user’s system to improve their outputs. How can we make it easier for developers to build apps, whether better APIs or systems on our end? Also how can we improve access to the messages and data that we have flowing through our system to help customers better use messaging and drive their business efficiencies? As we grow bigger, there are also more risks that we are watching to ensure we can detect misuse or inappropriate messages or patterns.
6. What are your biggest current challenges?
Gikandi: From the supply side, we have a challenge with telcos appreciating the value that we bring to the network. When we go to meetings, we don’t go with a finished product like fancy ring tones and gadgets. Rather, we explain that we can make it easier for people to access their services. We don’t have projection of the revenue change but can simply speak to our past successes, expertise and clients. Sometimes they get it and sometimes they do not.
On the demand side, the challenge is software development skills in market. We are working with APIs, applications for voice that require a transition from states, menus and call backs and things that often go beyond the skills of developers in East Africa. We are working to grow the skills base in East Africa as are a lot of companies but the need for highly trained developers within East Africa is essential. We rely on developers. Once we build the systems, we can drive the automation and growth of our platform.
7. Any advice for entrepreneurs?
Gikandi: Entrepreneurship is a marathon. It is often glorified and people tend forget or overlook the time and effort that goes into it. When I talk to youth, I remind them to take a long view and step back before starting. I recommend getting a job in a startup that you believe in to see how it works, gain important skills, grow your network and learn what is essential to succeed. Wait to execute until you have the experience, skills, and network. Software is really just 10% of journey, the rest is a lot of hard work.