Archive for September, 2007


September 19, 2007 Leave a comment

By Lai Kok Fung, BuzzCity CEO

In my hometown of Singapore, Africa barely makes the news and when it does the headlines are invariably bad: war, genocide, natural disasters, poverty and AIDS. But this past week, during a visit to Johannesburg, I saw a different Africa – a place of opportunity, an upwardly mobile Africa where cell phones are making a very real positive impact on people’s lives.
“I don’t like your program, actually I love it,” Tebzozo, a South African myGamma user, wrote us recently. “We don’t have the computers but now since you guys come along, we all have computers.”

Across the continent, African farmers and entrepreneurs are using mobile phones to tap new markets and save time.

Jack Ewing writes an excellent article about this trend in a recent edition of BusinessWeek. He tells the stories of people like Grace Wachira and Ezeresi Serukeera. Wachira used to have to walk several hours to the nearest town in a highlands area of Kenya to buy materials and speak with clients. Today, she can order yarn for her homemade cardigan sweaters and talk to buyers by phone. Serukeera meanwhile provides a sort of wire transfer service for Ugandan workers who want to send money to their families. Just transfer airtime credits to Serukeera. She pays the equivalent in cash to the intended recipient (minus a small commission), then resells the mobile minutes.

Twelve months ago, Africa wasn’t on our radar.

However around the beginning of this year, we noticed an increasing number of users from South Africa clicking on WAP links that we had placed across the mobile internet. These figures in turn attracted the attention of companies – from banks to the makers of consumer products – who want their ads to reach this audience.

Today, South Africa is one of our most important markets.

In February, BuzzCity served some 35 million ads in South Africa. Last month, we served almost 200 million. Three types of companies are placing these advertisements:

1. Local businesses. Financial service providers like Standard Bank, Fast Moving Consumer Goods (FMCG) like cosmetics and airtime sellers are all increasing the percentage of their ad spend on mobile channels. This is fostering the growth of boutique ad agencies specialising in mobile media.

2. Local mobile content providers. These companies find WAP channels to be the most cost effective way to convert eyeballs into purchases and subscriptions.

3. International mobile internet sites. These ad-supported sites, which are largely funded by US venture capital companies, are eager to boost their visitor numbers by advertising to South African surfers.

Rapid growth in the South African market is due in part to low data costs. South Africa has some of the cheapest data costs in the world. Prices start from just 2 rand per MB (about US$0.28) and can drop to less than 0.3 rand/MB for bundled accounts. There’s healthy competition among mobile carriers, who are even giving fixed line ADSL providers a run for their money as consumers opt for wireless over LAN connections for their PCs.

Unfortunately these low rates are not enjoyed throughout the continent. In some areas, mobile charges are higher than in Europe and the US. Prepaid card holders in the Democratic Republic of Congo pay 26 cents per minute to make peak hour calls, compared with 10 cents per minute in the US and 7 cents in Germany. The higher prices are apparently due to the extra costs associated with building (and protecting) infrastructure in areas without electricity or good roads. Some companies post armed guards at cell towers to prevent the theft of generators and fuel.

Paid mobile content is also not seeing the same sort of growth as mobile advertising. Paid content is actually stagnating or even in the process of declining. This could be due to the prevalence of free alternatives (free ring tones, for example, are readily available, though not necessarily legal) or a lack of sufficient disposable income.

Africa still has the lowest cell-phone penetration in the world (just 28%) but the continent also boasts the fastest sales growth. Take Nigeria, African’s most populated country. The mobile phone market there has grown from just 30,000 subscribers in 2000 to more than 32 million now. Another million subscribers are being added every month.

With such rapid growth, though, there are problems.
The infrastructure has not kept pace with consumer demand. There are frequent network blackouts, users often need to dial a number several times before a call connects and even then the sound quality can be patchy.

These glitches affect our business. On a good day, we see 400,000 page views on myGamma alone. But erratic network service means that on other days, we serve just 20,000 ads across our entire Nigerian network.

To its credit, Nigeria is trying to address the problem. Earlier this month, a government regulator fined a carrier 5 million naira (about US$40,000) for carrying out marketing activities without first addressing quality of service issues.

Africa is now on BuzzCity’s radar for the long term. A number of people I met with this past week told me that BuzzCity offers the widest, biggest and most cost-effective WAP marketing inventory for South Africa, a class above our closest competitor. I also receive a lot of positive feedback on our customer support for advertisers.

In addition to South Africa and Nigeria, we are seeing good numbers from Kenya, Tanzania, Egypt, Tunisia and even Sudan – but I’ll save those stories for another day.

Note: Photo by Jack Ewing, BusinessWeek

Categories: Africa, Lai Kok Fung


September 4, 2007 Leave a comment

By Hisham Isa, Vice President (Marketing)

This week the mainstream media is abuzz with rumours from the blogosphere that internet search giant Google is about to launch a “G-Phone”.

“Is the Google Phone an Apple iPhone killer?” writes Peter Cohen.

`Most definitely’ replies tech analyst Rob Enderle (as quoted by the LA Times in this article).

Imagine a free ad-driven mobile service on a handset that costs just US$100. Telecom carriers can’t be very pleased with this possibility. But how close are we to an ad-driven mobile internet?

“What’s interesting about the ads in the mobile phone is that they are twice as profitable or more than the non-mobile ads because they’re more personal” Google CEO Eric Schmidt reportedly told a conference in May.

Search engines like Yahoo! and Google have transformed and driven the growth of the fixed line internet.

But mobile search is so far a different story.

First of all, there’s not as much content. Early development has been driven by telecom carriers, many of which implement “walled gardens”. The carriers decide which type of content to release and make it difficult or expensive for consumers to access content outside the carrier’s portal. In addition, aside from ringtones and games, most mobile content has been re-purposed from the web.

Second, it is generally accepted that mobile devices are not research tools in the same way as PCs. Conventional internet searches yield hundreds, if not thousands of results. Computer users are accustomed to spending time to sift through the information, clicking through the first twenty or so links to find the most relevant.

Search results on a phone need to be more immediate and relevant, even to the extent of being personalised. Half a dozen pertinent results to a mobile search is ideal.

Major players began dabbling with mobile search just a couple years ago. A popular strategy was to provide variations of “local search”, basically mimicking the Yellow Pages. This was soon followed by a “send-to-mobile” feature for addresses, maps, phone books, and reverse phone queries. By the end of last year, the US Yellow Pages finally launched their own WAP site to catch up with its imitators.

Phase II focused on location-based searches, such as “where is the nearest Pizza Hut?” Telcos and handset producers suggest that phones must be GPS enabled for searches like these, ignoring consumer demands for fewer features on their phones. In addition, the results of most location searches unfortunately yield hard-to-read maps with a beeping pointer on a screen.

Consumers want real-world references to locate. Take a lesson from pedestrians who use their phones to locate each other by taking pictures of nearby landmarks. Savvy shoppers are also snapping photos of dresses and shoes they might like to buy, followed by a picture of the store for reference.

The biggest driver of content on the mobile internet have so far been user-generated sites like tagtag and peperonity that enable users to create their own WAP sites for photos, ringtones, games and more. This is reminiscent of the early days of the fixed-line internet. Remember GeoCities?

In the meantime a few mobile players like Google are WAP-enabling web pages. At BuzzCity, we have two WAP-enabled search engines, both of which focus on user generated content: Wikipedia for WAP and the myGamma blog search.

The next flash point for mobile search is going to be speech recognition – still centered around finding places. Contextually relevant searches, like movies and music, are also on the way.

As the industry grows, though, I believe the search-type services that are most likely to succeed are those that best resemble the phone’s original use. A phone is at its core basically a networking tool. Search engines that deliver succinct relevant results, perhaps based on social bookmarking like, digg and stumbleupon, will be the most popular.

Google meanwhile is said to be using OpenMoko’s (open source) platform for its G-Phone. This is good news because open source will spawn more niche applications and content for mobiles. There are other groups producing open source mobile innovations as well, like the TuxPhone, but if the rumours about the Google Phone are true, and I hope they are, the pace of change is about to quicken.

Categories: Hisham Isa