The Final Frontier: Global Tech Giants Waking Up To Africa

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Written by Tom Jackson

Slightly more than a quarter of Africa’s 1 billion-plus people have access to the Internet. Smartphone penetration is even less, with only South Africa making it into the top 50 globally, and that with less than 40 percent of the population being online.

This might make Africa seem like an inhospitable place for global tech giants, used to markets where Internet and mobile penetration are so high they are almost as saturation level.

But quite the opposite. Africa is the final frontier, the last green field, and the last chance for these tech behemoths to acquire customers in their millions.

For as Africans increasingly get online, the opportunities are huge for international companies setting up shop on the continent. Some of these giants are even driving this connectivity themselves, aware of the long-term benefits in terms of customer acquisition.

Google’s Project Loon, the Facebook-led Internet.org, and Microsoft 4Afrika’s TV white space trials are all aimed at getting more people online. In Kenya’s BRCK, there is a local equivalent.

And there are increasing signs that global players are making early entrances into Africa in preparation for what they predict will be boom years ahead.

Facebook had made little or no effort in Africa until the launch of Internet.org, but fairly effortlessly reached 100 million active users in Africa by September last year. Now the company is ready for a serious push.

Facebook began 2015 by launching Facebook Lite in a handful of African and Asian markets. Lite, a simplified version of the Facebook mobile website, is specifically designed for bottom-of-the-line and dated Android devices. The app has been rolled out as a pilot in Nigeria, South Africa, Sudan and Zimbabwe, and will see further launches if it proves a success.

The social media giant is also quickening the rollout of its Internet.org app, taking it to Ghana in January after previous launches in Zambia, Tanzania and Kenya. The app allows users to access websites and services such as BBC News, Jobberman, Wikipedia, and, of course, Facebook, for free.

More launches will surely follow over the course of the year.

Facebook is so committed to beefing up its African presence, meanwhile, it is also looking to hire staff in Johannesburg, the first time the company has looked to build an African team.

The reason for the focus on mobile from Facebook is clear. Of the 100 million users it had obtained in Africa by September, 80 percent access the site on mobile. The 100 million users of Facebook make up half of all Africans connected to the Internet.

Playing the long game

Should Africa’s online penetration increase as predicted in the next few years Facebook could be looking at an African user base of up to 500 million, making the continent one of the biggest users of the site in the world. The financial possibilities for the company are exciting.

Another company rapidly expanding its presence in Africa to take advantage of the existing and future opportunities occasioned by the growth in access in taxi-hailing app Uber.

Launched in San Francisco in 2010, the taxi service company has grown into an international giant, present in over 220 cities in 45 countries on six continents and with a valuation of US$18 billion. It has almost 100,000 users in each of its major markets.

The company is making waves in Africa, and pushing its frontiers further.

Last month it made Kenya its third African market, rolling out services in Nairobi. It previously launched in South Africa and Nigeria, blowing away local competition and taking a large proportion of the market in those countries.

It has also shown a willingness to adapt to local conditions, and is considering integrating M-Pesa payments to better serve customers in Kenya.

It is not just Facebook and Uber that have seen the opportunities for growth offered in Africa but lacking elsewhere in the world. They are but two examples of the increasing trend towards international tech giants setting up and expanding operations on the continent.

The risk may be perceived as high, and the challenges are myriad, but cash-rich companies such as these can afford to play the long game. And the reward for getting in early and being patient will be extraordinary: the next 500 million customers for the likes of Facebook and Uber will be African.