Deloitte Kenya Technology, Media & Telecommunications (TMT) Predictions 2016

1. Technology, Media and
Telecommunications Predictions
2016

2. Technology Predictions
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3. Touch commerce
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4. 10%
24%
30%
37%
8%
18%
25%
30%
13%
31%
32%
45%
9%
25%
35%
38%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Make an online
purchase
Pay/Transfer
money to a
business for a
service or
product
Browse
shopping
websites/apps
Make a payment
in-store
Total 16-24 25-34 35-44
M-commerce’ in Kenya
Still young, but with a potential to grow
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0%
10%
20%
30%
40%
50%
60%
70%
80%
Morocco South
Africa
Egypt Kenya Nigeria
% of shoppers held back from
online shopping by security reasons
Source: MasterCard 2014 Online Shopping Behaviour Study

5. Preference for mobile transactions
Which provider processes my in-store mobile payments
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11%
16%
35%
60%
0% 10% 20% 30% 40% 50% 60% 70%
Money transfer service
Financial institutions
Bank
Mobile operator provider
Base: All who have use phone to make a payment in-store

6. Near Field Communications or ‘just’ Biometrics
Innovation in Mobile Payment
We predict that the next major shift in preference for MNO or
Bank will occur as the result of the next innovation.

7. Cognitive technologies
enhance enterprise
software
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8. Kenya Examples in Education
Education Innovations set in place to improve
Kenyans lives…
8
Source: www.ibm.com; www.forbes.com
Develop daily reports that indicate the
conditions in these schools
This system is uploaded into affordable
tablets and mobile phones of teachers and
headmasters.
IBM’s Africa Lab - App
Provides accurate alerts to relevant
government authorities as to where
resources are needed the most.
How it works
At the touch of a button, the system can produce
colour-coded performance indicators and
attendance records.

9. Kenya Examples in Security
9
Integrated Public Safety Communication and Surveillance System
(IPSCSS)…potential in the security sector
CCTV Cameras
The IPSCSS involves placing CCTV cameras with face and
motor vehicle number plates recognition capacities.
Cameras
and Traffic
Lights
Facial Recognition
Enables the identification/ authentication of individuals by
comparing their faces against those in a database system
of known faces

10. Nairobi becoming a Smart City?
"A Smart City is an
urban area where
public and private
entities cooperate in
achieving sustainable
outcomes through the
analysis of real-time
contextual information
shared between
different expert
systems"
The Singapore of Africa? Maybe not yet ….

11. Media Predictions
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12. Sports Rights
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We are contributing

13. Between 2013/14 and 2015/16 premier league seasons the English Premier
League overseas rights were valued at GBP 743.3 million per annum.
English premier league overseas revenues
Expect to pay more for your football viewing
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GBP 55M p.a.
GBP 10M p.a.
GBP 32M p.a.
Sub Saharan Africa’s annual
revenue contribution to EPL
is valued at GBP 68.3M
>
2016/17 -2018/19 Sub Saharan
sports rights are now up to GBP 98M

14. OTT: A Disruptor, but not
yet
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15. OTT
Subscription Fees
+
Internet connection
TV Choices and Preferences
We predict that OTT will only appeal to a limited section of the market
One time fee
OR
Premium TV with monthly fees
Free To Air Digital TV
VS
Unless the quality and cost of internet
connectivity becomes easily accessible
OTT will remain a niche.

16. Considerations in the OTT space
Regulations and Market Restrictions
Who should regulate OTT providers
and content?
The only barrier to entry for OTT
players in an internet connection
How can local content requirements
be enforced?
OpportunitiesChallenges
There is a ready market of people
already consuming content

17. Telecommunication
Predictions
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18. Used phones: the market
you may have heard of
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19. Used phones: the market you may never have
heard of
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In 2016 we expect that up to 20% of Kenyans who upgrade their device will either
sell outright or trade-in their used smartphones. Globally we expect 26% of
smartphone users to follow this trend
37%
26%
16%
4%
3%
3%
3%
3%
2%
2%
1%
Gave it/sold it to a family member or
friend
Kept it as a spare
Lost it
Sold it/traded it in for a new phone to
the mobile operator
Sold it/traded it in for a new phone to
the device manufacturer
Sold it to a retail shop for cash
Disposed of it / threw it away
Other
Sold it online)
I did not have a mobile phone before
Can’t remember
0% 5% 10% 15% 20% 25% 30% 35% 40%
In Kenya about 63% of
used phones are
“available” for resale.
A used phone market exists.
Lost are likely already being sold
albeit without the owner’s consent.
1 in 8 Kenyans sells or trades-in
their used phone
Sources: Deloitte Research

20. Used phones: the market you may never have
heard of
Why would you sell a phone?
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• Increase of annual sales by encouraging a shorter
replacement cycle
• Devices more affordable to customers with smaller
budgets
• A likely margin in processing used phones
Direct benefits for phone vendors
82% of all phones in
Kenya were purchased in
the last 3 years
Growth of the used phone market is dependent on
the availability of a convenient market place
Sources: Deloitte Research

21. The rise of the data
exclusive
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22. The rise of the data exclusive
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In 2016 we expect that 10%of smartphone users in Kenya will not make any
traditional phone calls in a given week.
A “data exclusive” – someone that
substitutes voice calls for a combination of
messaging (including SMS), voice and video
services delivered ‘over the top’.
0%
10%
20%
30%
40%
50%
60%
70%
80%
Text messages
(SMS)
Social networks Voice calls Instant messaging Emails VoIP Video calls
Phone features used
in the last 7 days
16-24 25-34 35-44
16-24yr olds place less importance on
voice calls than instant messaging
Sources: Deloitte Research

23. The rise of the data exclusive
Two contrasting trends with voice
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Mobile voice volumes
(in minutes): 50%
increase between Sept
2013 and Sept 2016
Smartphone owners’
usage patterns more
data intensive
VOICE+ -
SMS grew by
600%
Mobile data
grew by
150%
Between Sep 2013
and Sep 2015:
• Growth in voice bucks the trend in
developed countries
• Growth driven by falling prices
and bundling of services
• Growth has slowed down in
recent years
• The growth in SMS is due to operator
initiatives
• SMS growth spiked in 2014, but has
slowed due to prevalence of OTT services
Could all you-can-eat app access and data
bundling be cannibalising MNO revenues?
Watch & read news stories
Top 3 ways
Kenyans
typically use
phones
Watching short videos
Streaming music
Sources: Deloitte Research, CAK

24. The rise of the data exclusive
Data over voice
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3rd overall in frequency of usage over
seven days after SMS and Social networks.
4th overall on increase in frequency of
usage in the last 12 months after SMS,
Social networks and Instant messaging
In Kenya voice calls were ranked
Voice calls rank SA UG NG ZW
Seven day usage 5th 2nd 3rd 3rd
12 month increase 4th 2nd 3rd 4th
Regional Comparison
Sources: Deloitte Research

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