Tech giant Samsung has reported its lowest quarterly profit in eight years this week an indicator to the weakened global economy to hit PC…
It’s not often that a geek rises to the top of a multi-billion dollar company. These are spots frequently filled by accountants or lawyers. But times are changing. In a technology-driven world, the geeks are rising to the top.
We know Microsoft was run by a geek (possibly the geekiest CEO of all time?) and Steve Jobs was somewhat of a geek (more a design-obsessed geek than anything else). In the startup world, technology investors frequently refuse to put their money behind startups unless at least one of the founders has strong geek credentials (they quite like programmers).
Enter Pieter Uys. He’s very much a geek. He runs a very large emerging markets mobile phone operator, but also codes iPhone apps in his spare time.
Vodacom is part of Vodafone, one of the world’s largest mobile communications companies by revenue, with more than 398-million customers. Vodacom claims to be the third largest operation in the Vodafone group of companies based on profitability.
Uys is obsessed with technology and obsessed with doing things differently. His desk, anonymously placed in an open plan office, attests to that. And so does his plan to bash down Vodacom’s staid, old corporate wooden boardroom and replace it with something brighter and more modern.
Uys managed to find a few moments to chat to Memeburn about the evolution of mobile technology in emerging markets. He reckons that in the next 18 months regions like Africa will be using a US$50 or less smartphone, ending the notion that smartphones are high-end devices, best suited for the developed world. During Vodacom’s country-wide outage, Uys reveals how he responded to every complaint on Twitter — and how Twitter has influenced Vodacom’s business. And yes, he thinks the web is history.
Matthew Buckland: Do you think smartphones are seen as a niche device in emerging markets?
Pieter Uys: We’ve now broken the US$100 barrier for a smartphone. In 18 months time that US$100 will be US$50… if not less. And then it keeps coming down — that’s what happened with ‘normal’ phones. Now we have US$10 phones — and they’re not bad. In the long term, it doesn’t make sense for manufacturers to continue with feature phones, because with scale, the prices just continue coming down. Smartphones will become the device. It opens up so many more possibilities. I’ve dumped my PC, I’ve dumped my iPad; I just use my phone. I went to a meeting this morning and I just had my phone and I was fine. I got onto my phone and downloaded the minutes, and everyone was sitting there with their thick folders. It’s the way to go.
MB: Do you think the days are numbered for voice calls and SMS in the era of internet-based communication?
PU: There is the world, and then there’s Africa: If you look at our prepaid base today, it shows that we still have challenges. Only 50% of our prepaid customers have ever sent an SMS. But maybe smartphones can simplify this?
Let’s say you can’t read, or can’t interact with a text menu or send an SMS to a service that gives you the weather forecast. If you are a farmer and have a smartphone, there could be an icon that shows you a ‘little sun’. The farmer could click on it and it would tell you ‘raindrops’, ‘sunshine’ or ‘cloud’. So the smartphone definitely opens up a new world for underdeveloped countries where literacy is not where it should be. That’s why the next generation will be different if we can solve the education issues — and I believe the tools of communication like the internet will play a role.
I think different technologies will start linking up. In today’s world you can’t have these many closed systems, you can’t force everyone to have an iPhone or a BlackBerry. In the end, everything will have to talk to each other. It will just be instant messaging or a different form of it. We’re upgrading our networks to be ready. Everything will be IP-based.
People want to message — there could be an equivalent like Whatsapp, MXit, SMS, or a new type created by standards bodies to ensure all these things work together and that you have the open version of iMessage or BBM. There will always be messaging. It is a way of communicating. An SMS is not rich enough. You need to be able to embed lots of things in a message — and maybe at one point email and messaging will start converging. If you look at the last ten years — if the current speed of development continues, the last 10 years will be packed into the next four years. Ten years ago we couldn’t imagine a phone like the Galaxy Note in our wildest dreams. So just imagine four years from now what it would look like…
MB: Our favourite question at Memeburn — do you think the web will die?
PU: I think the World Wide Web is dead already, because I can’t remember the last time I typed in ‘www’. If you look at Wired magazine from about 2010, where the front page said that the web is dead… it was spot on. Just think about yourself. I seldom go into my browser. Go into an app, click an icon. The internet is not dead, but the way it is presented will probably be different.
I’m not a big believer in cloud processing — the devices are so powerful that if you have to push everything through a web interface, it defeats the object — otherwise why have these powerful devices? But cloud (as in storage) is cool. I have Kindle on my iPad, Android phone and Kindle. If there wasn’t a cloud somewhere, I couldn’t read my Kindle at night in bed and continuing reading the book on my iPad when I’m bored in a meeting.
MB: Do you think that in the future telecommunications companies like Vodacom will just be a pipe that controls data?
PU: I think we can add a lot more value than a pipe. I see us as a communications company. With new ways of communicating, there is a layer that we can provide. Personally, I don’t see us as a dumb pipe. If it happens, then we should definitely reinvent ourselves because we don’t add value any more.
MB: What functions do you see phones performing other than voice calls?
PU: Cellphones will become the one device that you can use for commerce. Instead of carrying your wallet, your phone and your bank cards, there will be much more integration going forward. It’s about standards, how this happens and who is going to move first. But at the end of the day, you will be able to leave your wallet at home. Ecommerce and payment is a big thing. It’s slow in taking off, but it will take off. In Tanzania, in one month, more than half a billion dollars went through the Vodacom network. It shows you that people want to use it in their lives.
Sensors will improve. I’ve taught my Android phone to call my wife. The messaging functions are still a bit geeky, but it will develop. If the phone is continuously location-aware, it can do really nice things. I can’t imagine what is possible if it knows that I’ve just walked into XYZ and I was there last week as well. It can recommend things to me. So I think it will become smarter at providing filtered information to you.
It doesn’t have to be one provider — I think the internet has such a vast volume of information that, with the phone becoming so smart, it’s become too complex for you to go and filter it all yourself. So the phone will become middleware doing it for you in the background. Maybe there will be a server that collects it for you.
It’s going to become a lot easier to find information. There is just too much information.
MB: Does the potential for augmented reality excite you?
PU: I’ve seen it overseas, where it performs better because there is more information available. It can become more than just “cool” if it’s fast and integrated, and your GPS is on. It will become integrated in communication services. Look through the camera and superimposed on your phone is where the petrol station is.
MB: Do you see mobile service providers like Vodacom becoming banks? You’ve got the relationship with the consumer, and you have an influence on the device…
PU: If you look at what happened in Tanzania — initially the banks didn’t want to work with us. They said “this will not work”. Now they have to work with us. In places, cellphone banking has become so big that now it is the largest bank in that region. Your mobile device is being used for everything from buying electricity to paying taxes. It has become integrated into everything in countries like Kenya and Tanzania.
Here it is more sophisticated, a lot more regulated. A lot needs to happen, but a mobile company has you as a customer, and we have a lot of information about you, so it makes sense that we play a role in providing this ecosystem. I don’t think we should just be the pipe — it will take too long. We need to facilitate some of these things and play a role. We will be involved and the device will be involved in eCommerce and money transfer.
MB: Do you need the banks?
PU: In South Africa, we don’t have a banking license so we need the banks. But in the long term, I suppose money will also evolve. Maybe there will be a day where you don’t have any money and you don’t know where the money is. We can outsource it — but to the customer it will look like his money is in MPesa, but whether it sits in FNB or Nedbank or whatever becomes irrelevant.
MB: MPesa has not been as successful in South Africa as it has in other African countries. Why do you think that is?
PU: Firstly, it’s much more regulated in South Africa. You need a base of users that have MPesa accounts and then you need service providers or partners or services where you can use MPesa to transact. In Kenya and Tanzania the regulations are that you can take a copy of a person’s ID and he becomes a provider and can cash in the MPesa currency. Here, you need that full FICA, which is not easy. So we should engage with the Reserve Bank and banking regulators to see if we can’t find a way of easing up on some of those regulations, so that we can get the system to roll. Because, if it’s small amounts, crooks aren’t interested in small amounts — rather open up and facilitate it so that it works better.
Secondly, you don’t have PEP stores and Pick ‘n Pay and big retailers across the country in Kenya and Tanzania. The system was developed for those markets where it is more person-to-person. But I can’t expect the person behind the till to have his phone and I send it to him and he plugs it into the till and it works. You need it integrated from MPesa to the system into the till point electronically — that we had to develop in addition to the standard functionality. That is coming now, and that will also help.
Same with the bank. Today if you have someone working for you and you want to pay him with MPesa, you have to draw cash, stand in a queue and deposit it into MPesa — that’s a pain in the butt. From your bank on the internet, you just want to click ‘pay with MPesa money’, and that’s it. Those are some of the reasons it hasn’t been as successful. But maybe the concept will work here in the end. I want to be able to do everything with this one device — it’s the one thing that I always have with me. It will happen.
MB: Do you think MPesa would be successful in developed markets?
PU: I haven’t seen it successful in developed markets, because everybody there has a bank and use ATM and credit cards. But your phone and the integration, that will happen. It may not be MPesa, but nobody has cracked it yet. There are too many interested parties. But will you be able to do what the Kenyans can do on MPesa in Europe? Eventually yes. But it will be a different system — it could be Visa — but eventually yes, it could happen.
MB: Who is going to lead that change worldwide?
PU: Near field communication (NFC) has been slow in taking off because they haven’t cracked the business model behind it. Who is going to do it first, and who is going to agree to what? It is a big system that you want to shift — banking, telecommunications, credit cards — and everybody knows what you want, but how to get it is probably two years away.
MB: Is there a role for government?
PU: Regulators should be involved to ease up things. Regulations are different in different countries, but if we can make what we’ve home-grown in Africa more successful… There are other versions as well. Visa recently bought Fundamo Systems — that came from Africa. There are good signs. I’m optimistic that in the not too distant future, I’ll be able to do exactly that.
MB: Will cellphones replace credit cards and cash in the near future?
PU: “Near” is the question — what is “near?” But it will become your key payment mechanism in the future. I don’t think you will carry a credit card. It’s just not secure enough anymore. The guys will continue to hack the system. But if it’s integrated into a device that can remotely communicate — you can add another layer of security on the phone. You can communicate via the phone, you know “it’s mine” even if somebody steals it. Because of that, it has a big chance of success.
MB: How have you found Twitter?
PU: I do two things with it. If I look at it two years ago, I had people from our media and communications department bringing me a whole stack of photocopied news clippings every morning, but pretty soon I knew that just by following the right people on Twitter, I knew more than they did. It’s a rich source of real-time, up to date information — it is amazing. You can filter it, you can search it.
The big turning point for me came last year when we had the network problem. It was the only means for me to communicate. When I finally got back to Jo’burg, and I managed to escape the airport without someone killing me [laughs]… it was too late to go on TV, too late to go on radio, so the only avenue available to me was the internet. When I logged onto Twitter that evening, I was horrified at what I saw — people were swearing at Vodacom. And it hurt so much that I started responding to them. It took me three hours to respond to all them…
But the amazing thing was that [as a result of my Twitter responses] someone who had earlier been swearing at me, started defending us… Then I realised “this thing is for real”. Then we launched our @vodacom111 Twitter line, and today it is very successful. The only problem today is that it can’t be the only tool. It must be one of many. We shouldn’t say to customers “only report problems by dialling 111 or through Twitter or Facebook”. Customers should have a choice and we should offer the same quality of service across all these platforms. End of story. So a lot of my focus in the last year has been to see how we can get the same level of service across all those touch points.
But for me personally, Twitter has helped the company. It’s made us more approachable. We’ve launched an internal version of Twitter (called Yammer), and most employees are on Yammer, so the days when I had to call are not necessary. If I feel like I want to launch a new tariff tomorrow, I can just tweet it.
MB: Twitter allows consumers direct access to you — it’s a good thing, but it can be overwhelming. How do you deal with it?
PU: I can’t get to all of them, so we have the @vodacom111 to help me, but I personally see all of the tweets. Even the real nasty ones — I personally answer and make sure we immediately help. You see that there are some just taking a chance and then the system (ORM tool) handles them. But for most of them, where there is smoke there’s fire. So if I suddenly see a trend, then I know I need to go and investigate and change how we do business and change the procedure. I’ve learnt a lot because I have more direct access. But I’ve also made quite a few good friends through there as well.
MB: Who do you follow on Twitter and why?
PU: I follow a lot of tech blogs and publications locally and internationally. I follow mainstream media — mostly information. A couple of friends, customers now and then until I know they’re happy, then I delete them again. But mostly information sources to learn. Then I do my searches — I search “vodacom”.
MB: BlackBerry, iPhone, Android or Windows Phone?
PU: I’ve tried all of them, but at the moment I’m hooked on the Samsung Galaxy Note, for two reasons: The one is I like the form factor — it allows me to leave my PC and my iPad at home, and I do most things with the Note. Like the meeting this morning — in the meeting, I could run the business, do my tweets, read the minutes, send my emails. I could run my office from this one little phone, and I could listen to some music as well.
The other thing that I like about it is that it is more open, so I can copy things in and out of the phone. So it has become my PC. It is my hard disk, I do my backups on there, I carry everything on there, I have a copy of my passport on there, and I have a copy of my driver’s license on there. With that phone, I know that I can’t get stuck anywhere. I have access to almost everything. If I lose it, I have a problem, but it backs up automatically.
Android is a bit more open, more flexible — there are apps you can download to tweak the OS. I like tweaking things and playing with Android. I like to just write an app occasionally. It is also easier to write an app — but I’ve also written some iPhone apps. We were sitting in front of the minister negotiating interconnect, and the minister would ask “what will the impact be if the interconnect comes down by four cents?” Another network would be like “we’ll get back to you next week”. What I did then (I’d downloaded all the traffic data into my phone) was to write an app that calculated the real-time impact on revenue. On Android it’s easier, you don’t need to be a C programmer — it’s quicker and faster.
MB: Is Vodacom going into the app creation space?
PU: We launched an app store last year, and it was done mostly to facilitate app development in South Africa, to help the ecosystem. Because for a developer to go and interface and work with Apple is kind of complex, so we will facilitate the interface and payment mechanism.
The next thing is that there are lots of feature phones that can do basic Java apps, where you can have a bite of an app, and a feel what the app can do, before you have a smartphone. So now it’s interesting to expose the 12-million feature phones to apps so we can upgrade them to the next smartphone. There are a lot of Java apps on the app store that you don’t find on the iStore. We’re working with an overseas partner, and they’ve provided all these apps.
Apps are key to the success of smartphones — it’s even more important in Africa where literacy is a problem, because you don’t have to be able to read to use an app.
MB: iPad or Galaxy Tab?
PU: At the moment, I’m using an iPad, but I use a Galaxy Note as well.
MB: What Twitter clients do you use?
PU: On Android I have the Twitter app, but on my PC I have TweetDeck.