What's Keeping Africa's Craigslists from Scaling?

From what I can tell, the dearth of East African craigslists (Google Trader in Uganda; N-Soko and others in Kenya) have not yet gone to scale, and few are utilized outside of capitals (I remember Google Trader having more SUVs than matoke listed).

Is it simply a matter of time before this applications reach scale, or is there a deeper structural problem? Perhaps some insight can be gleaned from the research described in Fletcher School economist Jenny Aker's Boston Review piece 'Africa Calling'.

Professor Aker writes about how mobile technology profoundly changed the Nigerien millet market:

In Niger, millet, a household staple, is sold via traditional markets scattered throughout the country. Some markets are more than a thousand kilometers away from others with which they trade. The rollout of mobile phone coverage reduced grain price differences across markets by 15 percent between 2001 and 2007, with a greater impact on markets isolated by distance and poor-quality roads. Mobile phones allowed traders to better respond to surpluses and shortages, thereby allocating rains more efficiently across markets and dampening price differences. Mobile phone coverage also increased traders’ profits and decreased the volatility
of prices over the course of the year.

While this is striking evidence for the economic utility of mobile phones, its notable that this is a story about vendors not consumers. To imagine what a similar transition might look like for the average wananchi, I thought back to last May, when I sat at the Kenya School of Monetary Studies, listening to a Googler talking about a vision of a more connected Africa. The vision involved individual consumers in rural villages, using mobiles, connecting with traders in surrounding villages to get the cheapest price for commodities, paying for them over the phone, and having the goods delivered.

Am I impatient or is there a deeper structural challenge keeping such a vision from reality? Is it a verification and trust issue (should M-Pesa users have ratings? should there be mobile-based escrow accounts? Is there some sort of credit card equivalent?), an application issue, a behavioral change issue or an SMS pricing issue? Something to ponder.

Saturday Links 2.27.10

via Meg Rorison's photostream

In Washington, ICT Works writes about the ePayments puzzle in Africa. I'm exploring how law, code and trusted intermediaries can perhaps help mitigate this problem. More soon.

in Port au Prince, IEEE Spectrum interviews a leading Haitian engineer on why Haiti's cellphone network failed.

In Nairobi, Business Day reports that Kenya may cut 3G licenses to help smaller mobile providers compete better.

Mobile Web East Africa

Mobile Web East Africa is a very cool conference taking place in Nairobi of Feb. 3-4. The event focuses on "harnessing the potential of the internet and applications on mobile devices," and could not come at a better time. The faster connectivity associated with the launch of the SEACOM cable is reaching Kampala and Nairobi, and the price point of new and smaller mobile devices is falling.

The conference has several key themes. To me, the most interesting questions relate to how consumers will experience the mobile web in East Africa, and what this will mean for social and economic innovation. For example:

What handsets, standards, networks and designs will allow consumers to successfully access the content and consume it?
How will the consumer be able to discover that content – through a portal, application, browser, search engine, advert, social network?

There are some fantastic speakers lined up, including Eric Cantor of Grameen Foundation, Vincent Maher of Vodacom South Africa, Agosto Liko of Pesapal, Jon Gosier of Appfrica Labs and Erik Hersman of Ushahidi.

The organizers are still looking for more attendees from the Tanzanian and Rwandan tech industries, so if you know folks who are interested, please send along this link. More information registration and attendance is here.

Mobile Phones and Customary Law in Afghanistan

I 2006, I was working for USAID in northern Uganda as the 20 year conflict in the region was winding down. While negotiators in Juba were sorting out a lasting peace, our group was convening community leaders from the various regions to discuss tricky disputes around issues like land re-settlement and water supply. This was challenging because northern Uganda is a vast place, and getting leaders from disparate regions together was a logistical nightmare.

Can mobile phones make meaningful dispute resolution more efficient? Paypal's Mobile Phone Jirga, a project supporting the rule of law in Afghanistan, seems to think so.

The M-Jirga

View more presentations from Colin Rule.

I'm fascinated by this attempt to build process and code around customary law. The complainant initiates a jirga by recording a voice message, which is delivered to the respondent, who records his own rebuttal. Both arguments are delivered to the jirga elder panel, who hears the case, records their response, and delivers it back to the parties via mobile phone. I'm very curious to hear how this long standing Afghan tradition adapts to this experiment.

HT: Jessica Heinzelman

Coded in Country | Stoking Local Innovation

Can institutions [be they international organizations, companies, universities, foundations or governments] enable innovation in local technology industries? We explored this question on a rainy Saturday afternoon in New York at the 'coded in country' session of the Open Mobile Consortium's Open Mobile Camp in New York.

The challenge of 'coded in country' -- how to get more coders in the developing world working on mobile projects -- is in many ways a helpful proxy for thinking about the larger question above. In an energetic discussion, we developed something of an incomplete typology for developing the capacity of local programmers, each with its advantages and drawbacks.

Partner with Local Universities
Lucky Gunasekara of FrontlineSMS:Medic and Stanford University pointed to Nathan Eagle's Entrepreneurial Programming and Research on Mobiles project that partners with African mobile engineering department to strengthen capacity. challenge: ensure knowledge reaches beyond university-educated classes.

Break Down Barriers with Local Tech Industry
Chrissy Martin of the Fletcher School mentioned that in Tanzania, the most inspired, engaged, and talented programmers all worked at value added services companies. These are companies that charge premium rates for sending and recieving sports scores, concert tips and other local cultural content. Chrissy argued that there should be more cross-pollination between private sector talent and those working on M4D projects. challenge: find an incentive for private sector programmers to engage.

Convince Donors to Adopt a 'Coded in Country' Standard
Similar to a fair trade stamp of approval, what if the Gates Foundation declared that any development project with a coding element must be 50% coded in-country. To be sure, some projects already feel a need to hire local developers. Stephen Miller of the Ujima Project | Investigative Reporting for Africa, discussed how the group hired Appfrica Labs to do the coding for the project. challenge: in places where local capacity is not established, balance project goals with local capacity building.

Give Space for Informal Innovation Labs
Christelle Scharff, professor of computer science at Pace University, discussed the mobile development boot-camps she runs in Senegal. The goal is to create space and an incentive for young people to spend a week intensely tinkering with mobile solutions to community problems. This is a similar approach to Appfrica Labs 10,000 Hours project, which urges companies in Kampala to open their space to young people interested in digital technologies. challenge: ensure that peer-education ensures learning of fundamental skills.

FairMobile | An African Telecom Research Agenda

Over at Many Possibilities, Steve Song just introduced the idea of a Fair Mobile Index: a measurement, akin to the Economist's Big Mac Index, of what mobile pricing regimes mean both for the average African user and mobile innovators who benefit from a generative market.

Steve writes:

Evidence from the pan-African research network, ResearchICTAfrica, points to a remarkably high percentage of income being spent by the poor on mobile services. For low income earners across 17 countries studied, the average African is paying more than 50% of their disposable income on mobile services.

At the same time, mobile operators are posting impressive profits. Kenyan operator Safaricom generated over 900 million USD in revenue last year of which a staggering 40% was Earnings before Interest, Taxes, Depreciation, and Amortization ( EBITDA). Other operators are also posting impressive profits with most operators on the continent announcing year on year increases in revenue.

The startling contrast between the remarkable benefits of mobile infrastructure and the high price being paid for mobile services in Africa while mobile operators post record profits leads to the conclusion that more competitive mobile markets in Africa would lead to even greater social and economic benefit for all but especially the poor.

I'm incredibly excited to follow, and hopefully to contribute to, the FairMobile research agenda. The editor of my Venture Beat article on Africa's SMS Crisis cut a critical passage that alludes to the frustrations I felt amongst innovators while I was working in Uganda:

These [innovative mobile] services, however, represent a trickle of innovation where there should be a downpour. The source of this sluggishness is the “non-generative” structure of mobile phone networks. In The Future of the Internet and How To Stop It, Harvard Law Professor Jonathan Zittrain defines generativity as the ability for entrepreneurs anywhere, driven by any social or economic motivation, to quickly and cheaply create, test and deploy applications. Zittrain says that generativity is the key to the Internet’s rapid growth, and he worries that new web-based appliances, such as the iPhone, that can only be modified with the manufacturers consent, threaten this fundamental character. In other words, Zittrain fears that the Internet as a network is becoming more like the mobile phone: costly and closed.

Harnessing the Power of Mobile 'Beeping'

Parallel to my thinking about the prohibitive pricing of SMS in Africa [see my recent piece in Venture Beat], I've been thinking a lot about how to harness the pervasive and utterly free practice of 'beeping' [which takes place when a user places a call and quickly hanging up in order to send an (often) pre-arranged signal to another user such as 'come meet me now' or 'call me back'].

I'm curious to explore how 'beeping' can be used to collect information and serve as a platform for mobile services? Here are two good ideas.

'Beeping' as Instant Feedback and Poll-Taking
Imagine you are in Pader, one of the major towns in northern Uganda. During a drought, your community receives food aid in six different locations from six different donor agencies. As you walk into town, you see a billboard that asks: which of these six locations serves you best? Each location is tied to a mobile number. To vote, you just beep the appropriate number, and the votes are tallied by a simple piece of software on a computer attached to the six different phones. [the software would check for repeat numbers, ect] The same system could be used for conducting local elections.

'Beeping' as Coded Messages
Last night, I was re-watching Ashifi Gogo's talk earlier this year on GSM Networks at the Berkman Center. In his discussion of how asymmetric encryption is leveraged for his brilliant m-Pedigree project, he mentions that the next generation of such services may involve 'beeping.' For example, imagine you are planning your drive to work across central Accra in the morning and you wonder how much traffic is on the road. Gogo asks what if there was a short-code you could beep, and get a coded beep in response- one beep means the road is free of traffic; two beeps mean you better walk.

There is an open question as to whether mobile networks would actively push back on a high-profile 'beeping' project because it leverages their networks for free. It is important to note, however, tha most networks could probably handle over a million 'beeps' without significant use of their capacity.

The platform itself seems like something both development practitioners and entrepreneurs should be intensely interested in. What other 'beeping' innovations are possible?

Appfrica Labs Launches 10,000 Hours Initiative

In college, when my thinking about communities first began to mature, I noticed the obvious discrepancy in Washington D.C. between the political elite who occupied a significant part of the northwest section of town, and remainder of the denizens, whose lower and lower-middle class communities lacked access to things like hospitals and super-markets. Since then, I've been a fan of community projects that put young people from communities with few resources in a new setting with a new vocabulary and a fresh take on the world. These shifts often provide the spark for new passions and new ideas to take home and expand.

For this reason, I'm excited about Appfrica Labs's new 10,000 Hours Initiative, described by Jon Gosier here:

Appfrica’s 10,000 Hour Initiative is aimed at offering a space for younger people to pursue their passions alongside professionals working in the field. The concept is very much inspired by the 826 National Project, which offers kids in the U.S. an after school hours community center where they can work alongside professionals who act as tutors and mentors. The name comes from Malcom Gladwell’s OUTLIERS, where he theorizes that it takes about 10,000 hours of practice for anyone to become truly exceptional at doing something. Of course we want to help offer those hours.

[...] The first space will be at my office in Kampala where I’ll encourage students interested in programming, new media and blogging to come by after school hours to spend a bit of extra time either working on their homework or learning new things from myself and my staff. Here they’ll have access to our staff, our internet connection, books, our computers and other resources that they can experiment with.

I find this to be a remarkably creative act of sharing, and one that can be highly successful with few resources other than a willingness to be occasionally generous with ones time.

Technology is Easy, Community is Hard

the view from downtown Salzburg, Austria

Sometimes conferences get in the way. Other times, especially when one is wrestling with an idea in progress, they can inspire. This week, the Salzburg Global Seminar, on new media in the developing world, held on a gorgeous lake at the foot of the Dolomites, was certainly the latter.

I've been wrestling with the question of where development institutions (widely construed) fit in the new media landscape in the developing world. I'm passionate about, and deeply involved, with the development of local technology industries in Africa. However, unlike many in this community, I do not feel the need to will away an international aid community that is working and succeeding on hard problems [to take just one example, how mobiles can become a tool that helps health workers in northern Zambia lower the death rate of babies born with HIV] that local tech industry can not yet serve. In fact, in the short to medium term future, these international institutions will continue to be the main client base for local tech.

One thought that I continue to ponder came from David Sasaki, Director of Rising Voices, a global citizen media outreach initiative of Global Voices Online.

Technology is Easy, Community is Hard
Too many projects focus explicitly on technology training, when in reality the technical skills necessary to create media, such as posting on a blog, become easier every day. Instead, these projects should focus on the difficult challenge of creating a lasting community of young people who are passionate about telling stories about their community and willing to experiment with new media tools.

Frequently, there are many individuals who care about community issues and are curious about technology, but lack a venue to come together and share both their story telling and technology skills. Media development projects can play this role. I believe they can provide 'scholarships' for ensuring that promising young people from dis-advantaged backgrounds have access to this community and the ideas that come out of it.

Africa's SMS Crisis- And How To Stop It

An article I wrote this summer appears today on Venture Beat:

It would be easy to conclude that Africa is entering the golden age of mobile innovation. In Kenya, mPesa, a Safaricom service, allows users to send money anywhere in the country via mobile phone at very low rates. Next door in Uganda, rural users out of reach of the Internet can use a new SMS-based service from MTN, Grameen Foundation and Google to trade goods, search the Internet and query local reproductive health and agriculture information.

These services, however, represent a trickle of innovation where there should be a downpour. The source of this sluggishness is the structure of African mobile phone networks, which discourage entrepreneurs from quickly and cheaply creating, testing and deploying applications.

[read more...]

From the Fisherman to the Cloud

I just moved to a fourth floor walk up in Williamsburg, Brooklyn and started a job with the UNICEF Innovations group. The group aims to leverage affordable hardware and open source software to both improve UNICEF's operations (they purchase over 1/2 of the world's vaccines) and empower young people. For me, this is a fantastic opportunity to explore both big intellectual questions (To what extent can large institutions learn from the African Digerati?) as well as fun practical questions (What is the best way to ensure that youth in Africa can participate in UNICEF campaigns with only Nokia 1100 phones).

Also, I have the pleasure of helping to moderate a HUGE event on Wednesday at the Berkman Center. Yochai Benkler, Amartya Sen, amongst others, are participating in Communication and Human Development: The Freedom Connection?, a discussion on the future of the overlap between digital technology and economic and social growth in the developing world.

Amongst the great essays written for the Public Project in anticipation for this event, Benkler, with his usual alactrity, gets to the bottom of things:

If the first generation of benefits of ICTs for development was captured by the image of fishermen calling different ports and negotiating the price of fish before they pulled in to port, so as to capture greater returns for their families, the next generation has to be similar deployment of the much more flexible and dynamic affordances of more powerful computational devices, cloud applications, and social software or organizational tools.

Benkler recognizes this is not easy in the developing world setting, and goes on to present a clear dichotomy for action: either force the mobile networks to be more open, or figure out how to make more sophisticated technology more widely useful and available.

As the community focused on the use of digital technology in the developing world continues to focus on SMS as the killer-app, Benkler's view that SMS won't bring the advantages of the information economy to the poor is important to consider. I'm looking forward to a path-breaking conversation on Wednesday.

Telecom Providers Less Than Thrilled About SEACOM

About to run to the airport to take that sweet, sweet direct Air Uganda flight to Zanzibar, but couldn't resist blogging my friend Joe Powell's recent piece in The Independent. Its simply an intrepid piece of journalism, helping us answer questions about how 'open access' SEACOM actually is.  In my interview with SEACOM executives, they maintained that wholesale prices would be identical for Infocom and other providers.  Joe's piece shows that the feeling in the telecom industry is that this is simply not the case.

Is Infocom's control of the SEACOM cable in Uganda fair?

Infocom's grip over Uganda's use of SEACOM cable is further strengthened as they have been appointed the hub provider for the country, what is known as the 'backhold provider'.  This means that companies seeking to buy bandwidth will have to negotiate with Infocom, currently the only company to have a contract with SEACOM.

What thinks the competition?

Infocom has been fortunate that rivals such as MTN and UTL have invested in an alternative submarine cable EASSY, which is running behind schedule and will not go live for at least a year. Both MTN and UTL have a superior fibre and copper network countrywide buy without a deal with SEACOM are in danger of being left behind..

The third submarine cable, TEAMS, has docked at Mombasa and is now undergoing final testing. TEAMS has significant investment from the Kenyan government. Sources have confirmed that telecom companies in Uganda are now scrambling to buy bandwidth from SEACOM and TEAMS directly, with one senior executive telling The Independent anonymously that there is no way they would tolerate working through Infocom.

SEACOM | This is What 'Open Access' Looks Like!

At least the way they portray it in movies, whenever my parents generation got together to protest something, they would always been a drum and chant ‘This is what democracy looks like.’ At the SEACOM fibre cable launch last week in Kampala, I wanted to stand up and chat, a geekier tech policy mantra: “This is what 'open access' looks like!"

 
A few years ago, when plans for east Africa's first fibre cable were being put in place, technology policy geeks of all stripes starting beating the drums of 'open access' [I join in in a piece in Princeton's Journal of International and Public Affairs], a policy framework that ensures that every ISP, anywhere, will get access to the wholesale bandwidth at the same price, ensuring more competition and ultimately more options and better service for consumers.

Judging from my interview yesterday at the yesterday's cable launch with Uganda director Fred Moturi, project manager John Mathwasa and investor Kevin Kariuki, SEACOM is bringing 'open access' to Africa for the first time. What does SEACOM's version of open access look like in practice?  I'm writing a piece for Africa Business Daily, but here some of the key points:

• Wholesale and Retail Cost-  SEACOM sells only directly sells large tranches of bandwidth, no smaller than STN 1 [155mb], presumably mostly to network providers, who then in turn sell it both wholesale to other ISPs and directly to consumers.  While we don't know the price for consumers yet, the wholesale costs come out to $150 mb/month. Assuming a 100% markup for consumers, this comes to $300 mb/month.  This price makes much of Kampala's bandwidth using population giddy, considering we are currently paying $900 for 192kb/month. 

• The 'PoP to PoP' Model- SEACOM is committed to delivering fair prices everywhere in the network.  They are partnering directly with KDN [in Kenya] and Infocom [in Uganda] to build out the land fibre. However, they are offering the same price at their point of presence (PoP) in Kigali, Kampala and Nairobi.  This means that, unlike SAT-3 in West Africa, SEACOM is not competing with its customers, and further, new ISPs can emerge to deliver more connectivity to more obscure places as demand grows.

Update:  I learned from a colleague last night that the picture may not be as rosy as it seems. Apparently, the other telcos are worried about a possible Infocom monopoly until the other submarine cable touch land.  I'm told they are refusing to buy from Infocom and want to deal directly with SEACOM. I'm on the hunt for more information.

Kung Fu Baby and the SEACOM Cable Launch

The widely known technique for watching YouTube videos in Africa is to immediately pause the video when it starts, wait 20 minutes (or much more) until the video fully loads, and then watch. Today I’m at the ceremony launching SEACOM, submarine fiber cable stretching from South Africa to Mumbai and London, passing landing stations in Maputo, Dar, and Mombasa, and in land to Kampala and Kigali.

In the corner of a conference room, Peter Moreton, a procurement manager for SEACOM, beckoned me over to a display computer with YouTube queued up. We launched Kung Fu baby and for the first time in Africa, I saw a YouTube video load completely and play in 6 seconds. We ran a speed test and showed 1.8mbps, 10x what we have in the Appfrica office. 

I also had the opportunity to do an exclusive interview Fred Moturi, Uganda director for SEACOM, and a couple of major investors. We talked about what the new international infrastructure will mean for competition amongst ISPs and what the cable will mean for rural users. I can't write that right now, because I'm waiting for the launch event to start, surrounded by a bunch of tech geeks, giddy as school girls, video-skyping friends in Europe for the first time.

Technology, Obama and Rural Africa

Tonight, I'm participating in a podcast organized by the Peace Corps Africa Rural Connect project, on how the Obama administration can leverage digital technology to deliver social and economic gains to rural Africans. I'm going to make two points:

Let Aid Recipients Tell Donors What They Want

Technology can change the foreign assistance industry by allowing recipients, via mobile phones, to tell donors what their need on their own terms. Philanthropic groups such as Global Giving are already experimenting with linking donors and projects via an online marketplace for aid.  Further, Global Giving is experimenting with mechanisms to ask recipients exactly what they need from donors. One such experiments allows people to dictate donor funds in their community via mobile phone. The new USAID coordinator should put in mechanisms that allow recipients to tell us what they need.

Convince Telecoms of ‘The Economics of Abundance’

It may seem as though we are in a golden age of mobile innovation: Google is delivering farming information to rural Ugandans via SMS and Safaricom has a low-cost mobile money transfer service for Kenyans. However, the truth is that telecom companies are holding back to a trickle what should be cascade of innovation. The typical value-added SMS (anything besides person-to-person messages) costs 10 US cents in Uganda. 

This means that new innovations that would contribute to economic or social growth will not be deployed, not because of engineering challenges, but because of artificially high costs. The truth is, lower SMS prices mean both more users and revenue for network providers and more access to services for rural poor. Luckily, the [unfilled] State Department Coordinator for International Communications and Information Policy position exists to lobby foreign governments and telecoms on technology policy issues like this. 

Why Bandwidth Prices Won't Fall Too Fast in Africa

Engineering News reports on the SEACOM submarine fibre cable:

The increase in pirate activity during April and May 2009, in terms of intensity and geographical coverage, has necessitated a change in undersea cable system Seacom’s cable installation plans, which has 
resulted in a delay in the ready-for-service date from June 27, 2009 to July 23, 2009.

Its hard to tell how much bandwidth prices will drop in East Africa with the arrival of the SEACOM. However, this article points to a more general problem: reliability.  How often will outages occur, either due to cable cuts or other problems? Since no one knows the answer to this question, most ISPs will have to maintain their costly satellite connections (at least as back up) until the reliability question is answered.

Steve Song on the Philippines, SMS Pricing and the Economics of Abundance

Last week I asked what arguments would convince network providers in East Africa to stop fixing SMS prices artificially high. Steve Song answered with the 'economics of abundance' argument, where carriers earn more by having more users at lower costs. This is a familiarand powerful argument in the telecom policy world.  Steve explains how the argument worked in Phillipines, resulting in 1 cent SMSs (the global average is 10 cents):

Regarding what sort of pressure it would take to get operators to voluntarily drop their SMS rates, I think they need to be convinced of the economics of abundance. They need to believe that if they halved their SMS rates, that their SMS traffic would more than double. I have given the example of the Philippines where they send roughly a billion SMSes a day as compared to roughly 25 thousand per day sent in South Africa. The cost of an SMS in the Philippines is less than 1 US cent as compared to 7.5 US cents in South Africa. If you double South Africa's population (and resulting SMS revenue) to roughly match the Philippines, they are still generating more than 3 times the revenue at less than 1/7th of the price.

Amassing evidence that lower pricing leads to more revenue is the first step. The second step is finding someone in the Kenyan or Ugandan telecom sector with the gravitas and positioning to make the argument to the network providers

I'm an Appfrica Labs Fellow!

Just over a month ago, when I arrived in Kampala via bus from Nairobi, I immediately started spending time with Jon Gosier, founder of Appfrica Labs, a for-profit incubator and software development firm in Kampala. Sensing that this fantastic company was growing both its bottom line and its international prestige (Jon was just named a TED Fellow), I immediately agreed when Jon offered me an opportunity to work on business development.

This week, we finally announced that I will spending the rest of the summer (at least) as an Appfrica Labs Fellow. I'll mostly be working on status.ug, a internet-mobile social network portal for Uganda (more on this soon).

Why Appfrica Labs? Since I left Uganda close to three years ago, both my research and private sector work has mainly been around two connected questions: What is the effect of digital technology on society; and, what communications policies will best promote innovation and growth in emerging market technology sectors-- both with a regional focus on Africa.

Appfrica Labs gives me a perspective on these questions from one of the leading innovators in East Africa. Not to mention, after meeting the amazing Ugandan developers that Jon works with [check out the great list of ongoing projects], I'm confident that he has the right business model to succeed. I'm happy to be on board!

Should Governments Force Providers to Lower SMS Prices?

Earlier this week, Google, Grameen Foundation and MTN Uganda launched a premium SMS service aimed at delivering health tips and critical agriculture tips to the poor. A debate erupted when it was mistakenly thought that MTN was charging users 220UGX to use this service.

nota bene: In Uganda, sending a person-to-person SMS costs 110UGX. Sending a premium SMS (primarily when businesses target potential customers) costs at least 220UGX.

When it was clarified that the service costs only 110Ugx, the debate turned to whether network providers are fixing prices artificially high, and if so, whether the government should set a price ceiling in order to both stimulate innovation and lower the prices for the poor.

Two thoughts:

(i) This is the lowest price ever for a premium SMS service in Uganda.

I was talking about this debate to a director of one of most prominent software companies in Uganda. He reminded me that this is the first time in the industry's history that a premium service has gone for less than 220UGX. This is a good first step, but most likely not a deal that anyone besides Google could get immediately. Many of the premium SMS services [usually targeting the rich] are adding their own fee (usually around 60UGX) onto the 220UGX base and making a killing

(ii) What kind of pressure would it take to get network providers to lower SMS rates voluntarily?

In Uganda, the best things are done without government intervention. Think about how amazing it is that an NGO, an Internet company and mobile company got together to launch this program without government intervention (contra programs run by, say, USAID or UNDP). Often when the public pressures an industry to reform, the industry comes together to create voluntary restrictions. This recently happened when the Internet industry came under fire for violating human rights in China. Is this concievable with the mobile industry in Uganda? If so, it would have to start with pressure from companies that are innovating in the SMS information space.

Digitally Doing Business | A Hypothetical

Imagine two teams of engineering students, the first in Silicon Valley and the second in Nairobi. Each of the these teams develops an equally sophisticated and useful SMS-based mobile phone software application that will allow health clinics to create automated responses to reproductive health questions submitted to them via SMS. For example, women in the developing world who send SMSs about HIV/AIDS, pregnancy or condoms would automatically receive detailed information about these requests. They often have no other source of reliable information. Each group believe this product can be profitably marketed to health clinics and aid agencies around the developing world.

It is well understood that entrepreneurs in the developing world (the Kenyans in our example) face significant legal and institutional barriers from reaping the benefits of their good ideas. Measurements such as the World Bank Doing Business Index, as well as the management, political science and economics literatures have addressed these barriers in detail. They include, but are not limited to, the ability to secure seed capital, incorporate and legally protect a business, transfer money both domestically and across borders and efficiently and flexibly find employees well-positioned to perform. In short, much of the developing world suffers from a poor institutional ecosystem for doing business.

This post marks the start of a series of blog posts that ask the question: to what extent can new digital institutions help entrepreneurs circumvent poor institutional ecosystems and privately re-design their incentives landscape? As more of the machinations of global commerce go digital, new tools are emerging that would help the Kenyans in our example lower some of these barriers. The Digitally Doing Business series will explore new opportunities ranging from digitally registering as a US company regardless of physical location to securing previously unavailable venture funds and low-cost payments from abroad to distributing work to employees via mobile phones.