Why Multinationals Should Introduce Disruptive Tech Into Kenyan Telecommunications

July 2, 2007

One of the headline articles on Yahoo! Canada News this morning outline the Communication Commission of Kenya’s call to private sector telecommunications operators for an investment of 6 billion shillings or 90 million dollars to install an underwater fiber optic cable system to link, at a much lower cost, East Africa’s telecommunications infrastructure with the rest of the world.

One of my initial thoughts upon reading the article was that this is exactly the type of thing that will help an economy such as Kenya’s grow.  Poor infrastructure is definitely one economic component holding the developing country back.  The second thought I had was in the form of a question.

Is there a more sustainable telecommunications implementation that could be used that would have a lower environmental impact but equal or greater effectiveness in linking Kenya and other East African countries to the rest of the world?

In “Capitalism At The Crossroads: The Unlimited Business Opportunities In Solving The World’s Most Difficult Problems“, Stuart L. Hart discusses the “Great Leap Downward”; that being a focus on serving markets at the “bottom of the pyramid”.

What is the bottom of the pyramid?  For an in-depth background, follow this link to Stuart Hart and C.K. Prahalad’s groundbreaking article in Strategy+Business magazine from 5 years back.  But, basically we can view the pyramid as consisting of a base of 4 billion citizens of the earth comprising the base of the pyramid or the low-income markets of the world.  They have a purchasing power parity in US dollars of less than $1500 annually.  The middle of the pyramid is comprised of the emerging middle class, about 1.5 billion citizens of our planet who have a purchasing power parity, again in US dollars of $1500-$15000 anually.  And at the very top of the global pyramid is 800 million of us, almost all located in developed countries which a purchasing power parity of more than $15000 annually.  The top of the pyramid is where we see most of the market action.  Stuart Hart argues that there is a fortune to be made at the bottom, where we have 4 billion people subsisting on less than $2 per day!  While there has been some resistance to this argument, suppose it is valid.

Hart goes on to argue that the best place to introduce disruptive technologies and innovations is at the bottom of the pyramid.  Not in Canada or the US or Europe where our economies are developed and arguably efficient.  In developing countries such as Kenya, there are no real barriers to acceptance to disruptive technologies because there is nothing to compare them to.  In terms of telecommunications, their infrastructure is next to non-existent.

So, what I’m trying to get at is: wouldn’t an opportunity such as this provide the perfect opportunity for a huge Western multinational to bid on this project and introduce an innovative technology that is sustainable and has a minimal environmental footprint?  Do we really need to dig up the ocean floor?

Hart would argue that acceptance in a developing economy such as Kenya could ultimately most likely be transferred to economies such as those in Canada and the US.  That is exactly what will be needed in the coming years to save our earth and humanity itself.

While East African operators will be given priority in partnership in the project, I would argue that this would be a perfect time for an established multinational with financial power to assist in introducing a sustainable technology here.  Even if it meant not having direct ownership in the project and maybe not even any immediate financial return, this is something that will need to be done.  What better time than now?

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