By Moses Kaketo
How the economy stands to lose, gain
The 2030 Projections by United States Department of Agriculture reveal, Uganda’s economy will be worth US $64billion up from current US $24.70billion. This would make country’s economy among the best 14 economies on the continent. That is not news to strategists like Google.
Two years ago, Internet giant, Google, hatched a plan to directly enter Uganda’s growing internet market. And thus launched what is termed- Project link – which will deliver high speed broadband Internet first to Kampala, its suburbs and later roll out to major towns and the countryside.
You have probably seen men digging up Kampala streets, and trying to connect underground cables – that is what is said to be a Google backed project. Though the quality of the work done is un-Google-like, news reaching Summit Business indicates that Google is coming to Uganda to change the way people communicate.
The Google fibre-project which is being undertaken through a Local company as a front vehicle, is in advanced stages and soon or later Ugandans may begin enjoying benefits. When complete, Google will give Ugandans superfast internet that will improve data speeds by factor of 100. The carriers will be able to offer speeds of up to 2 gigabits per second. With such speeds, you will able to download a film of three hours on your mobile phone in just seconds or send those business documents in real time.
According to Kai Wulff, Google’s Access Field Director, the project goes beyond basic access. It will enable local service providers like MTN, Airtel to offer high internet speeds for buildings, universities as well as support newer technologies as they come to the market.
“For Kampala, we hope its foundation to support the needs of new crop of entrepreneurs and innovations, the media, rich projects of successful musicians, fast connections for local hospitals and new digital learning tools for students.’’ This will offer more opportunities to the country as it will enable access to resources and on-line businesses that are not possible with the current limited and expensive data services.
Good or bad news?
Industry experts see Google coming as real danger to the economy. Just like any other business, Google chose to give lighter side of the project. But there is more to that.
Experts predict, Google’s coming has serious negative implications on the economy in terms of job losses, revenue loss and perhaps, in medium or long-term, some business could close down. Telecoms fear losing billions of shillings.
A review of financials of the telecoms in Uganda, a big proportion of their net profits was amplified by data and mobile money revenues. When Google finally settles and shows its real face, experts predict, that would be no more.
While Google says it will sell internet to local carriers, inside sources say, Google has a lot in the pipeline. Google plans to launch so many things including her own mobile phone network, own computers, among others.
Simply put, Google is moving into hardware, software and connectivity. And it is hard to compete with Google. They have deep pockets and always want #1 position wherever they operate. That is why Google China is no more; as the restrictive regulatory environment was found unconducive to unleash fair play competition.
If this is true, there will no need for one to use services of local providers when Google offers better alternatives and relatively cheaper prices because of economies of scale.
The long-rumour that Google was planning a mobile phone network service was recently confirmed by Google’s SVP of products Sundar Pichai. In his speech at Mobile World Conference (MWC) held recently, Pichai confirmed that the fruition of the mobile phone network service from Google may come true before August 2015.
‘‘Our goal here is to drive innovations. I think we are at the stage when it’s important to think about hardware, software and connectivity together’’ he said.
Sources say, with Google’s own mobile phone, computer, internet and their relatively cheaper fares, given their economies of scale, would make existing providers very expensive. Ugandan’s want to associate with big brands and new providers – given that Google is Uganda’s #1 most visited website in Uganda, Google already knows the target consumer habits, purchasing power and it is easy to offer them clandestinely an attractive package to outcompete the rest. The only savior would be denying Google to opportunity to offer telecom services and only selling bundled data services through existing telecoms.
Existing telecom providers, MTN, Airtel, Africell, Vodafone, UTL and Smile, must plan for this new development. Otherwise, things in telecoms are changing so fast that you must keep thinking.
Will they develop local capacity?
The many projects government has awarded to foreign companies have not developed local capacity – be it roads or any other sector. Experts say the Google Project may not be any different.
One computer programmer who spoke to this magazine on condition of anonymity said: for us as a developing country we may see Google entry as good news, but in reality, the economy is going to lose a lot of money.
He added: we have not seen anything yet. Google will be able to know what each and every Ugandan including Boda Boda men, their behavior, what they want, what they consume. They have experienced and senior computer programmers who just watch and study something and turn into logarithms and that is extremely bad’’
And that Google entry would bring more positive news if only they would involve local Ugandans in research and innovations. Unfortunately, they will not do so, because they are maximizing on returns – and already have the capacity in terms of skills and resources they need – from other countries at even a cheaper fee.
Privacy concerns?
Google has developed a software that picks data everywhere, if you are logged in and using their network and send a document say to xxx@gmail.com, if there is something the software thinks is unique, it will grab it and store it on their database without the users knowledge. And you may never know when and how it will be used. It could be your company’s confidential information, business insights, strategy, name it.
There is evidence to that already. An published on article Time.com on April 21, 2015 indicated that you can find your search history of everything you have ever published in the Google search bar—and delete it. That “some of your deepest, darkest secrets have probably passed through the Google search bar. Now, you can download every last query you’ve ever typed into the search engine and see them all together in their raw glory (or shame). To access the data, visit your Web History page, click the gear icon in the top-right corner and click “Download.” A warning box will appear advising users to enable two-step verification and to avoid downloading their search histories to public computers.”
Without a privacy law yet, this is something that will be of much public interest. If you want to keep secrets, what are you still doing on-line, anyway?
National security at stake?
Is the project threat to national security? Experts say, country’s security could be at risk – now that the country’s communication infrastructure will be in the hands of foreigners. Could this be reason why countries like Rwanda chose to have their own fiber cable?
Huawei, a Chinese firm doing similar works like Google was under scrutiny in USA and was linked to Chinese military and said to be involved in cross-border cyber espionage and attacks. With many electronics, computers, mobile gadgets and everything in between being 100% manufactured and assembled abroad, the risk of cyber-attack to Uganda is already too high.
We hope NITA and UCC’s capability to develop cyber weaponry and warfare is on course, otherwise, the risk is excessive and long-term thinkers and geniuses Uganda has produced are needed to spearhead projects like cyber weaponry and defense academy for Uganda.
What happened to National backbone fiber optic project?
Experts say Uganda would be far ahead but challenge is that we don’t carry out enough research before undertaking certain projects.
Google did their research. They know very well how and when they will recover their investment or better, why they chose Kampala/Uganda as their first choice among the many countries.
What happened to National Backbone Optic project? Did some Ugandans frustrate the project so that they can earn big commission from Google project? These are questions that Ministry of Finance top honchos need to answer.
A few years ago, government undertook the National Fiber Optic Project. It was supposed to bring faster Internet to Uganda, and get the government off the satellite link for telephones and other forms of data transmission as well as reduce communications related costs for the government by nearly half.
The project was awarded to a firm which is said to have used wrong cables. Instead of using G655, the contractor used G652. The later is said to be substandard and insufficient for country’s current and future Internet needs.
The G652 can only transit 2.5GB vs. G655 cable which can transit 40GB per second. Above all, the firm is said to have overcharged for the project. Rwanda spent US$ 38m on similar project to cover over 2,300km to connect 35 sites. Uganda on the other hand spent well over US $63m to cover 2,100km, and the results are not yet visible. It is not by surprise that President Museveni is said to have directed the former Prime Minster Amama Mbabazi to investigate the fraud in this project.
The project, which commenced on October 11, 2006 had been scheduled for completion on March 10, 2010. Eight years later the project is just in its second phase. Now that Google has sniffed the opportunity, is this project financial forecast still viable? If Google comes, it will most likely offer better services for data.
Auditor General’s findings
The Auditor General report noted the procurement process for the Project was not duly done and the initiation and conceptualization of the project had serious weaknesses. He further noted that the use of single sourcing for a project of this magnitude and complexity denied government the benefit of competition. Report highlighted many weaknesses in the awards and contract management processes. Many of the problems are said to be a result of poor project initiation and conceptualization. The Auditor General report noted that the project inception should have not been handled by a ministry which was still in a formative stage.
Well, as we sort out our house, Google fiber cable is already here and one wonders why it is still necessary to continue with the project? The project was to be implemented in four phases, three of which were to be financed by a $106m loan from Chinese bank-Exim Bank. Reports reaching this magazine indicate that on the last floor of National Information Technology Authority (NITA) Uganda offices, one can find several Chinese experts providing back-end support. We hope they are training and transferring knowledge, and not just doing the work, whatever it is, on behalf of the government.
The good news
Whether Google or Uganda’s own fibre optic cable project, fast Internet has potential to turnaround the fortunes of majority of Ugandans. The faster Internet means that medical applications like surgery can done using the Internet. All you need is to link up with some of the world’s best surgeons. This would make formerly expensive operations affordable to many Ugandans.
In the education sector, Universities and other institutions of higher learning would be able to tap into services of world’s respected professors at cheap costs. With increasing online studies, this is a great alternative to classroom studies.
Instead of paying over US $3,000 one professor for a single semester, using this super-fast Internet, universities would be able to pay as low as US $750 a semester to tap into services of globally respected professors. The professor can offer lectures from the comfort of their home or office anywhere in the world.
Speaking at recent Broadband World forum in Amsterdam, Kevinn Lo, General Manager Google Fiber revealed that parts of USA that already access Google’s Fiber are enjoying/ seeing significant innovations in local areas as result of high speed connectivity.
‘‘Fibre-ing up Kansas actually took the area to point where it has more tech jobs than Silicon Valley. And the next 100x improvement in speeds will lead to more innovation. We can’t even imagine what next set of gigabit speeds Apps will do’’ he said.
Twitter: @mkaketo
About the author
Moses Kaketo works with Summit Business Review Magazine, holds a Master’s Degree in Business Administration from Uganda Management Institute, A professional diploma in marketing (CIM) and bachelor’s degree in Education. He sees business in everything. He loves writing business news, reviews and analyses.
