DATA IS THE NEW SLICED BREAD

In his first press interview in 2010 after taking over the helm of Kenyan telecommunications firm Safaricom, CEO Bob Collymore said that in the future voice services will be an add-on – will be given away free. That data services is where the money would be.

He has been proven right several times over. While revenues from mobile data have not yet outstripped revenues from voice services it is just a matter of time.

Last year data revenues grew by 46 percent compared to voice revenues which grew by just over one percent. And you are not even talking about revenues from mobile money, considered data services, which on their own grew 34 percent last year. Data and mobile money revenues came in at Kshs39b (sh1.2 trillion) and one can expect they will soon outrun voice service receipts, which stood at Ksh46b last year. The company’s total revenues came in at just under Kshs100b last year.

Compare this with the Kshs3 billion data, M-Pesa and SMS revenues brought in 2010, against a company revenue of Kshs84b then.

It is no wonder then that in our own market discussion over data services has been kicking up dust in recent weeks.

Earlier this month telecom company MTN announced a new data offer that while raising the cost expanded what subscribers could do with the service.

The regulator, The Uganda Communications Commission (UCC) took issue with the rate changes arguing that all such changes must be past by them first before being offered to the public.

MTN argued however unlike a tariff – a cost of service that all mobile users are affected by, an offer is optional with subscribers taking it up if it suits their needs and therefore they had no legal obligation to inform UCC in any change it may choose to make.

As with most of such spats it is often that each has a point and a seat down around a table would bring the discussion to a happy middle ground.

"It does not take a rocket scientist to see with more and more people hooking up to the net via their mobile phones, tablets and laptops that Collymore’s prophecy will come through in our market.The fact that some telecom companies have decided to curve out a niche for themselves in data provision and not voice is another pointer....

The point too can be made, that you don’t hear the regulator complaining about similar offers on voice services which are being launched at every turn.

The context for the regulator’s concern is not misplaced, if data services are to get wider adoption.

Clarity in the sector is needed sooner than later seeing as data services are going to be a major driver of growth in coming years.

At the beginning of the month a law allowing for agency banking came into force. Under the law banks will be able to contract retailers, petrol stations and other businessmen to help the collect deposits and pay out monies from their clients’ accounts. Advancements in communication technology, more specifically data services, means this service is more easily available now than even five years ago.

The various uses to which data services can be employed are already being seen --- transport and logistics management, financial services, health and educational services.

For a society that likes to talk a lot, it may be hard to wrap our minds around the revolution that data services herald, but they will come with or without our understanding of the subject.

Think of it like the paradigm shift that came with the invention of the printing press, which took the written word out of the exclusive enclaves of royalty and the monastery to the everyday man. What this meant is that information’s storage and distribution was no longer the preserve of a select few. It actually diffused their power, led to the downfall of kings and queens and the rise of democracy and also other kinds of despots.

Data services will ensure the storage of information within easy reach of every one with access to the net, as well as the rapid transmission of that same information.

Think of it.

Small businessmen, like consultants had to saddle themselves with getting physical offices to not least of all house their telephone, fax machines, the petulant receptionist and generally look serious. 

"Data means that when you really boil it down to the bare essentials, a physical office is fast becoming redundant for certain sections of the economy...

This is important because down history wealth has accrued to people and societies that had knowledge --- distribute it and employ it for their benefit. Now with the democratization of communication things are set to change, hopefully for the better. More and more people will have a shot at social climbing than ever before.

Already The Economist magazine has already announced that data is the new oil, coupled with Collymore’s prophecy and one can see why the battle lines are already been drawn around data.

Whereas it was the UCC seeking clarification on the matter, one can expect market leader MTN, which for its own very survival needs to dominate the data space will be the target of a lot of competitive action from its market rivals above and below the table.

We can expect more of these kind of spats in coming times as competitors, both existing and yet to come jostle for position in this new market of the future.

Watch this space.

ANOTHER DEATH, ANOTHER BUSINESS IN JEOPARDY?

Last week veteran politician and businessman John Sebana Kizito died and immediately attention went to concerns about what would happen to his business holdings, a hodge-podge of real estate, insurance and everything else in between.

The same worries followed in the wake of the deaths of school proprietors Ivan Semwanga and Lawrence Mukiibi and any number of our lesser, neighborhood tycoons when they move on.

Is it possible to bullet proof our businesses against mortality? And if so why do our businessmen fail to do this?

Given the frequency of this occurrence, clearly the more natural thing is to live everything tethering on the brink of chaos, given how our businesses are more likely than not to self-destruct on the passing of the founder.

When we fail to do something that is good for us, in effect dooming us to a less than desirable future fate, it’s more often than not because it is too much work to do the right thing.

For business it’s easier to set up your stall, make sales and dip into the till whenever the need arises.

 It’s too hard to keep books! It’s too hard to think ahead! It’s too hard to delay gratification in order to build an enduring company! It’s just too hard to do the right thing.

"There are four reasons to start a business –  to maintain a lifestyle, to pass on to future generations, to sell in the future or for philosophical reasons...

These are not written in stone but the record shows that your business has a higher chance of longevity if its driven by the motives that tend towards the more philosophical than subsistence.

It’s not difficult to see why.

 If you build a business to only create subsistence for you and your family it cannot grow very big, because once you have sated your needs, which are not very much – how many meals can you eat or beds can you sleep in or cars can you own or children can you father before you reach the outer limit of your appetites. The logical conclusion to this is why should I bother being systematic in business, after all I will eat it all before I die.

If you build a business for legacy purposes, you want to leave it to your children, then you have to be a bit more systematic. You have to think more about keeping books, for instance,  because getting finance or attracting quality partnerships or beating off the competition will depend on an objective measure of your business that outsiders can understand and also one to which you can refer you to grow the business.

Think about it if you are going to leave the business to the children may have to be around for a few decades before you can pass it on. And in business if you are not growing you are dying and the way to grow consistently is to be able to measure the process in your business so you can replicate the good and do away with the bad.

The next level of being systematic will come with if your end game is to sell the business somewhere down the line. 

"The level of complexity of the business has to rise so that one, it can operate without the founder, keeping alive, growing and beating off the competition, also that that outsiders looking in can make a fair assessment of its value....

Last week it was reported that Kenyan based coffee shop chain, Java House was being sold to Dubai based private equity firm Abraaj Group for about $100m. Kevin Ashley who founded the  company in 1999, had earlier on sold a controlling interest – 90 percent of the firm to private equity player Emerging Capital Partners in 2012.

Not only has selling the company – twice, made Ashley a very rich man but it also ensures the companies longevity and possible expansion into the rest of Africa and beyond. Talk about a legacy.

A philosophical reason to build a business may be one like Bill Gates goal to put a computer on every desk in the US. While this would have made Gates a very rich man, which it did, it oriented his company to reach for a higher goal that made being systematic and thinking beyond the founder’s ego necessary of not critical.

But think about it, even if you wanted your business to just guarantee you and your family and generations after you a good life wouldn’t it make sense to build a company with the intention of sell it eventually or to chase after an outlandish goal that would not only drive its growth but yours as well – as a person and business person?

Interestingly when you set your vision and commit to it, that high it is not a pain to keep books, to think strategically or delay your purchase of your dream car, home or wife in service of a greater goal.

What it takes to reconfigure your business is a change of mindset - easier said than done, but once the mental shift is done it is not hard to execute the necessary steps to build an enduring company.

"At last checking Uganda was second only to Chile as the most entrepreneurial country in the world. We have no fear of starting companies, that is one hurdle out of the way. Now we just need to grow durable companies – less than five in a hundred companies started in Uganda make it past their fifth birthday....

Part of the reason our economy is in such a shambles is because we do not have the size, quantity or quality of businessmen to create the jobs that we so desperately need.