Thursday, May 19, 2011

Cut costs but don't Waflash

New colloquial words usually originate from a mutation or amalgamation of existing words. Take Waflash for example I know that most of you have probably never heard of this word but it carries deep significance for me.



Long long ago, in a galaxy far far away (...just had to use that, it's for the lulz) I shared an office with an otherwise affable chap called Wafula. Now I say otherwise because Wafula had a serious weakness... read on. Based on my limited business knowledge at the time, I knew that there were only two ways in which a company could maintain a positive cashflow: 1) increase sales 2) cut costs. Wafula however only believed in number 2, while I was a rather strong proponent of number 1.

I came to realize just how strong of a disciple Wafula was of the cost cutting dogma one sweltering February afternoon. You see in our office arrangement, Wafula would pay for electricity while I catered for the internet. Since we were sub-tenants, the main tenant would pay for the rent. Ordinarily the cost of electricity would be about Kes. 5,000 while internet was Kes. 10,000. This February the cost of electricity doubled and Wafula was furious. Since I never scrutinized the electricity bills I cannot say for sure what caused the increase. Wafula however was incensed and believed that the overhead fan that I would keep constantly on to ward off the heat was the cause.

What he did next remains etched in my brain forever. First he asked that I switch off the fan, to which I refused explaining that I would be unable to work in the heat. He walked off and I thought that would be the end of it, only to storm in minutes later brandishing a knife. Knowing the madness that staying in an office could cause, I immediately took a defensive stance. Wafula however was not a violent man (at least not violent to others) and he instead took the knife to the fan cable and with one swift motion sliced the electrical cable; severing the fan from its power. He then calmly brushed himself down and walked off, not uttering a word.

From that day onward, any time someone would take extreme cost-cutting measures I would label it as doing a Waflash.

I thought about this as I watched the Safaricom CEO declaring that Safaricom could have made higher profits if they Waflashed like KCB who recently fired 22 senior managers.

I still belong to the faith of increase your revenues, but I wonder: Have you ever Waflashed with your business?

Tuesday, May 10, 2011

Is Premium Rate SMS on its deathbed?

This post is dedicated to @kenyangetter. It's always nice when your ramblings are appreciated.

10 years is a short time in technology. When I got my first Airtel line (it used to be called KenCell those days young ones) the provider did not even have SMS as a service. They did launch it a few months later by the (very clever) name YesMS (for those who don't know the slogan for Kencell was Yes!). However you could not send an SMS from Kencell to Safaricom for a long time after its launch but on the bright side an SMS only cost Kes. 5.00. This was way cheaper than the appx. Kes. 30 per minute (billed per minute!) call charges one would incur for calling at that time.



With Kenyan's peculiar calling habits under attack, SMS became the preferred mobile communication means. Millions of text messages were transmitted across providers' networks and the providers milked this revenue source by keeping the rates virtually unchanged over the years.

It was not long before a small firm called Bernsoft popularized Premium Rate SMS (PRSMS) through SMS polls onKenya's leading (at the time) TV station KTN prime time news. It soon became commonplace for media houses to have a PRSMS short code through which one could comment on, vote, or answer questions for a prize. With about 50% gross margins on each PRSMS, this became a favoured way to shore up revenues while also gauging audience response by the media houses.

One unfortunate recipient of this new surge in PRSMS however was premium rate calls. Most notably used by Radio Africa's Kiss 100 FM station, premium rate numbers were prefixed with 0900 and a caller got charged a premium rate over and above the normal rate. This was a very useful way to bill for services, and even SoftLaw had it's own number which we used to automatically sell credits to people using our Laws of Kenya website. But with the prohibitive cost of calls, vis-a-vis the ease and completeness of SMS, premium rate calling quickly fizzled out and died.

PRSMS however continued to grow, and it was most famously taken to its zenith by PRSMS based lotteries that captured the greed of an entire nation and made hundreds of millions for a few wheeler dealers.

However, as I look at the current landscape I feel that we have seen the crest of this business especially as a means of content delivery. It is now moving from a de facto communication model to a niche, specialised means of communication (and commerce) for only those who have original and unique content. I have a few reasons for saying so:

  1. The reason PRSMS grew so much is simple. It was making money for the content owners, and where money is growth will follow. Content such as breaking news, entertainment alerts, ring tones to quotes on love, health and God was big business.Information hungry users would subscribe to up to 5 daily alerts. That was until people discovered mobile internet. Before bundles became popular only early adopters would be glued to their tiny screens to browse the web. But as soon as mobile phone service providers started providing cheap bundles to access the internet, the content providers started feeling the heat. Ringtones were were especially hard hit as their main consumers were young, net-savvy, and would prefer freebies. Websites such as waptrick.com gave these consumers access to free music, ringtone, and screen saver content they would otherwise have had to pay for. Soon the full page adverts for PRSMS ringtones started disappearing from the dailies.
  2. The next nail in the coffin came in the form of twitter. With twitter, one could follow media stations, breaking news channels, and individual journalists and bloggers to get real-time updates on news or just receive quotes of their liking. If one had a smartphone you could configure this so that you'd receive a notification every time a tweet came in or every time a mention or direct message came in. Considering the cost of viewing your twitter timeline was a few cents of data as compared to the KSh.5 or more cost of a PRSMS, users once again followed their wallets.
  3. As if having twitter supplement PRSMS updates was not bad enough, the mobile phone service providers took it a step further when they allowed tweets to be received through SMS. This was the final blow which I doubt content providers relying on PRSMS can ever recover from. Now you did not even need a smart phone to enjoy getting tweets. Consider this: Capital FM have a PRSMS service where they send you four English Premier League PRSMS per day from the Mirror Football website. This service probably costs KSh. 5 per SMS totalling KSh. 20 per day. Alternatively you can choose to subscribe to Safaricom's unlimited SMS offer that gives you access to unlimited tweets and SMS at KShs. 10 per day. You can then follow the MirrorFootball twitter handle and receive ALL their tweets daily at no extra cost. And without spending a shilling more, you can also follow and receive twitter updates from Bundesliga, Spanish League, NBA, Formula 1 or any other sports franchise you are interested in. The only person who would still subscribe to Capital FM's PRSMS is completely ignorant.
Right now you might be reading this and saying oh well, but that is only for content delivery. What about other uses for PRSMS? I'd say take a look at this:
  1. PRSMS for Lotteries - after the 6969 fiasco of last year, its' highly unlikely that the existing regulatory regime will survive to allow another similar lottery. It's likely that some form of gambling through SMS will continue but it will be most likely highly regulated.
  2. PRSMS for Giving Comments - this is also on the decline for two reasons: 1.) Kenyan's no longer have peculiar calling habits, thanks to the very cheap cost of making calls. They now have no problem calling in the media houses to air their views. 2.) Media houses are starting to adopt twitter and facebook as a main way to receive comments from their audience. As net penetration goes, just as SMS supplanted calling in, so will twitter and facebook supplant SMS (mainly because of their social nature). In addition to media houses, other organisations that had tentatively adopted PRSMS as a way of collecting views (and revenue) are also dropping this in favour of social media. A great example is KPLC who have adopted an aggressive twitter strategy for customer support.
So is there any uptick to this?

Yes there is, Premium Rate Calls might make a come-back (that is until VOIP billing alternatives gain ground). With the low normal calling rates, it will be easier to add a premium on the call charges and use premium rate numbers for specialized professional support such as therapy sessions, IT support, legal aid. 

If there's any entrepreneur interested in an idea of how to use Premium Rate calls, send me an email at harrykaranja at yahoo dot com

UPDATE Feb 20, 2012
Interested in validating my convictions that Premium Rate SMS is on its deathbed, I started trawling the online market to see what was out there. What I found out more than shocked me, it made me see the SMS business in a totally different light. To understand why I've changed my mind so, check out http://marketing.genius.co.ke/landing/viva 

Friday, May 06, 2011

Is the government right to spy on your SMS?


Amid the hullabaloo of Osama’s killing and the crippling fuel shortage that hit Nairobi, a shocking announcement sneaked its way into the paper yesterday without anyone making too much a fuss about it. 

It was reported that the National Cohesion and Integration Commission has been monitoring text messages and internet-based communication for any clues of hate speech and incitement. Surprisingly though this news does not appear on the front pages of any of the main media houses websites this morning.

As if to allay the obvious concerns on privacy, Commissioner Halakhe Waqo “assured phone users that adequate steps have been taken to safeguard individual privacy unless it breaches national security and peaceful co-existence “

Seems harmless enough so far. But then Commissioner Waqo went on to say:

“We do recognise that privacy is very important for an individual but public security and safety is much more important. We want to pin down that breach in public safety and security,”

Now this is where things get scary, is the NCIC saying that in the fight against hate speech, privacy comes second to “public security and safety”?

Before making an emotional response to that question, it is better to consider all issues that this question brings up:
  1. What is the mandate and authority of the NCIC in tackling hate speech?
  2. What constitutes hate speech?
  3.  What are the constitutional/legal safeguards of privacy vis-à-vis national security?
Mandate and Authority of the NCIC
The National Cohesion and Integration Commission is a creature of the National Cohesion and Integration Act 12 of 2008. The act is defined as an act of Parliament to encourage national cohesion and integration by outlawing discrimination on ethnic grounds; to provide for the establishment, powers and functions of the National Cohesion and Integration Commission, and for connected purposes.

Under Section 25(2)(i) of the Act, one the Commission’s functions is to investigate on its own accord or on request from any institution, office, or person any issue affecting ethnic and racial relations. This seems to allow the Commission to investigate hate speech being propagated through SMS or social media.

It is a matter of public knowledge that SMS were used to devastating effect to propagate hate speech that contributed to a lot of the post election violence in 2008. The rise of social media also as a tool of mass communication seems to advise the Commission’s focus on this.

So far it seems Waqo has the backing of the law, but what exactly is the Commission monitoring? 

What does Hate Speech constitute.

To understand the origins of hate speech legislation an excellent read is KNCHR’s Lawrence Mute’s 2008 piece

In this post, I will limit myself to what the act says on Hate Speech
Section 13 of the Act defines hate speech as.
13. (1) A person who-
(a) uses threatening, abusive or insulting words or behaviour, or displays any written material;
(b) publishes or distributes written material;
(c) presents or directs the performance the public performance of a play;
(d) distributes, shows or plays, a recording of visual images; or
(e) provides, produces or directs a programme;

which is threatening, abusive or insulting or involves the use of threatening, abusive or insulting words or behaviour commits an offence if such person intends thereby to stir up ethnic hatred, or having regard to all the circumstances, ethnic hatred is likely to be stirred up.

So for the SMS or Social Media posts to constitute hate speech they must be:

  1. threatening, abusive or insulting
  2. intend to stir up ethnic hatred or be likely to stir up ethnic hatred
  3. be published or distributed.
The first two conditions are subjective and in the absence of any judicial direction on them (or is there) it is hard to say exactly what constitutes hate speech. However from those who have been charged so far (Wilfred Machage et al) we can say that any talk of evicting a community from an area falls in this category.  On the other hand comments from Raila and Uhuru which some considered insulting to a community did not seem to fall within NCIC’s interpretation of hate speech (or does it).

As to the third condition we can ask if SMS & Social Media posts can be considered published or distributed.  From the common law definition of publication (under the Tort of Defamation) we can conclude that to be published includes by:

(a) spoken words or audible sound or
(b) words intended to be read by sight or touch or
(c) signs, signals, gestures or visible representations

Of course this alone is not enough to constitute published if for example the author keeps it to himself. The other qualifier for something to be published is distribution. The offensive publication must be available for consumption by a person other than the author.  However there are requirements as to who constitutes the audience of the published material?

Social Media posts are usually public. The fact that these posts can be accessed by anyone with an internet connection seems to meet the qualifier of audience mentioned above. We can therefore assume that they squarely fall within the definition of published and jurisdiction of the NCIC to investigate.

How about SMS? This is a much trickier one to figure out, because SMS are generally not public in nature. Perhaps we look at this from a different angle, from the perspective of the recipient of the SMS (assuming that NCIC is also tracking who is sending what to whom)

As to who qualifies as a target of hate speech: according to  Mute’s article, hate speech is not that which offends the feelings of the community  targeted but actually changes the perception of other communities against that targeted community. E.g. if you are a Kikuyu and you tell a Luo that he is a Kihii (derogatory term for an uncircumcised boy) that does not constitute hate speech; but if you tell another Kikuyu that Luo’s are Kihiis, then that is hate speech.

So in brief if NCIC knows that you are from community A, and sending an SMS which is threatening, insulting or abusive likely to stir up ethnic hatred among your community against community B then that is hate speech and NCIC has the power to investigate you.

So far so good, but where does privacy come into all this?

Going back to Waqo’s quote he recognizes that privacy is a concern but says it plays second fiddle to national security. But what does the constitution say?

Under the Bill of Rights, Article 31(c) of the Constitution everyone has the right of privacy which includes the right not to have the privacy of their communications infringed. Infringement of communication includes invasion of privacy through any means of disseminating private information.  So if the means being used to send the information is intended for private communication (e.g. email, twitter direct messages, facebook messaging, SMS) then NCIC would be breaching the right of privacy by invading this.

But of the Commissioner’s assertion that National Security trumps privacy?

Article 238 of the same constitution is very specific on the principles of national security.

238 1(b) national security shall be pursued in compliance with the law and with the utmost respect for the rule of law, democracy, human rights and fundamental freedoms.

 It further says under 238 (1)(a) that national security is subject to the authority of this Constitution and Parliament;

I think from this reading it is fundamentally clear that the hierarchy is Privacy first (human rights and fundamental freedoms) and national security second, contrary to what the good commissioner is saying.

Worryingly the commissioner seems to echo the thinking of the shadowy figures who had illegally inserted the words “national security” to the constitution as it was being prepared for the referendum. The illegal insertion added made Article 24(1)(d) read as:

The need to ensure that the enjoyment of rights and fundamental freedoms by any individual does not prejudice national security, the rights and fundamental freedoms of others

Luckily Kenyans were vigilant and the ensured that the constitution passed removed those odious two words.
In light of these constitutional provisions, then is NCIC flouting the bill of rights by monitoring private SMS messages?

Putting it all together
It is disappointing that the commissioner’s statement has not been met with vigorous opposition from those we charge to protect our rights, and those we rely on to inform us.  The rule of oppression and suppression of liberties begin with small tentative chipping away at these liberties. When no one complains, even in the face of obvious flouting of the constitution, then they take away a bit more. Soon we realize that our constitution is only a piece of paper when no one is left to defend it.

I will leave you with two quotes to think about.

The first is from the National Cohesision and Integration Act which makes it mandatory for the NCIC to publish any messages which they have investigated and found to constitute hate speech.

Article 26(2) In the discharge of its functions under this Act, the Commission—
(b) shall publish the names of persons or institutions whose words or conduct may undermine or have undermined or contributed towards undermining good ethnic relations, or who are involved in ethnic discrimination or the propagation of ethnic hate;

The second is from George Orwell’s 1984. Those who’ve read the book know that Big Brother is not some DSTV show but rather the embodiment of invasion of any semblance of privacy an individual can have to the point of invading the private thoughts of an individual.

"It was terribly dangerous to let your thoughts wander when you were in any public place or within range of a telescreen. The smallest thing could give you away. A nervous tic, an unconscious look of anxiety, a habit of muttering to yourself--anything that carried with it the suggestion of abnormality, of having something to hide. In any case, to wear an improper expression on your face...; was itself a punishable offense. There was even a word for it in Newspeak: facecrime..."