Businesses to prosper from Kenya’s bright internet future

By Steven Cohen, managing director, Pastel Accounting

Internet usage in Kenya has risen 11,4% to 8.69 million people over the past four months according to the 2010/2011 Communications Commission of Kenya (CCK) report which now places Kenya second only on the continent to Nigeria for number of internet users. This staggering increase really excites me as it signals a green light for the future use of online business applications.

Similarly, the outcomes of our own research conducted in conjunction with KPMG, the Kenyan Top 100 Mid-Sized Companies Survey (Kenyan top 100 survey), shows that 95% of businesses use computers and internet infrastructure for daily transactions and business management. This high internet usage in Kenya will be a big shaper of how businesses will operate in the future.

I love doing business in Nairobi because, in comparison to other African countries, the internet just works! And one always hears anecdotal stories about city centre and urban streets alike where internet cafes and post offices hum with online users and coffee shops are pungent with the aroma of Wi-Fi surfers.

The country’s virtually non existent legacy telecommunications infrastructure has made it easy to jump to newer technologies. Already Kenyans have quickly adopted the use of M-PESA branchless banking services which enables users to make banking transactions via their mobile phones. Launched in Kenya in March 2007, M-PESA captured 6.5 million subscribers in two years and now oversees 2 million local transactions daily.

Wireless rates are also one of the lowest in the world and any travel brochure will tell you that the cost of Wi-Fi ranges from 1 shilling per minute to 20 shillings in the rural areas. Africa as a whole has also recently seen the largest drop in ICT prices, with fixed broadband prices falling by over 55% and mobile cellular prices by 25%.

According to our Kenyan top 100 survey, broadband usage at 3% is the least used form of connectivity. However this is expected to grow rapidly with the advent of Seacom, a submarine fibre optic cable bringing high quality, affordable wholesale broadband capacity to the continent. Already, according to the CCK report, broadband subscriptions increased by 354.9% this year and are now the primary driver towards internet subscriptions. Simply put, as availability increases, prices will drop even further and the benefits for business will abound.

The opportunity for business owners to simultaneously cut costs and extend their reach is huge. Our survey respondents report that 76% of businesses are ready and willing to use software that would enable them to transact over the internet. And did you know that Kenyan internet advertising spend has been the fastest growing in the world over the last four years. So the online market looks set to become an important avenue for businesses transactions.

The increase in speed, accessibility, mobility, convenience and effectiveness of the internet means that using online business applications like customer relationship management (CRM), business Intelligence (BI) and enterprise resource planning (ERP) will surely gain popularity. Considering that our survey revealed 93% of Kenyan businesses use accounting software, the future also looks bright for online accounting packages and in response, Sage Pastel is assessing the viability of making its well known accounting and business products available online.

In spite of these exciting developments, there is still global anxiety about keeping business-sensitive information online. So, I’m advising all clients to first adopt a hybrid approach to their online operations. This means using a combination of desktop and online applications at first, so that users can grow more trusting of online security.

I believe this is an exciting time for the Kenyan business community and the rapid online adoption that we already see is testament to the go-getter spirit of truly successful people. I am quite certain that with this approach to business, Kenya will continue to be a dominant force on the continent.