Africa’s DNS Market: Challenges and Strategic Considerations for 2018

Did you know that the African DNS market is valued at a total of USD 38 million per annum for African ccTLD domains like .co.ke alone? Combined with gTLDs like .com, the African DNS market’s worth sums to about Sh5.4 billion ($52 million) and continues to grow at a rate of 33% annually.

But perhaps what’s interesting is that approximately 73% of the revenue generated annually is attributed to just ten countries despite the African DNS market consisting of 54 countries. This suggests significant growth opportunities for local providers in individual countries. After all, 91% of the African Registrants say they prefer to deal with local Registrars. However, with countries like Guinea registering only 103 domains annually, it’s crucial to review the challenges as well strategies for growth to ensure Africa as a whole is tapping into Africa’s lucrative DNS Market.

91% of the African Registrants say they prefer to deal with local Registrars.

Challenges Hampering the Growth of Africa’s DNS Market

According to ICANN’s 2016 report on Africa’s DNS Market, the lack of infrastructure, high access costs, and the fact that Africans access the internet mostly via mobile phones are factors that contribute to the lower demand for domain names than elsewhere in the world. Other challenges include:

• Africa lags behind other regions in Internet access with an average penetration of 28.7% compared to a world average of 50.1%. What’s worse, this overall penetration level masks big differences between countries in Africa with Internet access varying from 68% in Kenya to 1% in Eritrea.

• 75% of 400 million African pages indexed by Google is in only seven African countries – South Africa, Kenya, Zimbabwe, Uganda, Nigeria, Egypt and Morocco.

• About ten states have well developed local hosting facilities in Africa.

However, when we analyse the top players in Africa’s DNS market, we can identify key factors that have led to their success and emulate them.

6 Strategic Considerations for Africa’s DNS Market in 2018

1. We must continue to develop our local internet infrastructure

Although global of tech corporates like Facebook, Google and Microsoft have been rolling out programs to reduce the cost of connectivity as well as improve access in rural areas; local initiatives like BRCK- a rugged, self-powered, modem-cum-router – have demonstrated that local companies are better placed to solve problems around internet connectivity in Africa. Regional Registries, Registrars and Registrants should, therefore, engage with operators, regulators and policy-makers in support of measures that will:

• Promote the provision of fixed and mobile networks and services

• Ensure the reduction of prices, in particular, data pricing

• Support a range of universal access and service interventions to promote Internet uptake by disadvantaged individuals and communities in under-serviced areas.

2. We Must Educate SMEs on the Use of E commerce

There are an estimated 40 million micro, small and medium enterprises in Africa and their importance in the economy is widely acknowledged. For example, about 98% of Kenyan businesses constitute of SMEs, followed closely by Nigeria which has 96% of its businesses as SMEs. Most of these SMEs operate informally using mobile text messaging, free email services like Gmail and Facebook pages. However, as they move into the formal economy, SMEs represent an enormous potential of unmet demand for domain names. In this case, registrars like Legibra have made great strides to educate SMEs of the potential of registering a domain. They have even gone further to create packages that include domain registration and web design services to ensure SMEs get a return on their investment.

3. We must Introduce Effective Policies and Regulations Among Registrants, Registries and Local ISPs

To ensure adequate competition as well as a simple resolution system, there must be an effective number of registrars as well as clear policies to separate the roles of registries, registrants as well as registrants. Policies that support e-commerce must be developed as well as sufficient investment put in place to implement the said policies. After all, the domains registered must be used.

4. We must Boost Digital Awareness on the Part of Individuals and Communities

There are millions of people in Africa — at least — whose mental model of the “internet” consists entirely of WhatsApp, Instagram & Facebook. There is need to inform and educate such people of the lucrative opportunities offered by the internet beyond socializing and searching for information. In an environment where online services such as online banking and online shopping and e-filling of tax returns, it’s easy to imagine a high degree of DNS uptake. Again, Legibra, in efforts to boost growth within the online economy, frequently updates its blog with content on how to use the internet for business growth.

There are millions of people in Africa — at least — whose mental model of the “internet” consists entirely of WhatsApp, Instagram & Facebook.

5. We Must Make Domain Registration as Simple and Fast as Possible

For example, there are countries where domains registered are required to match the business name, while other require registrants to have a legal presence in the country to register a domain. Such bottlenecks should be reviewed to ensure the domain registration process is smooth and user-friendly. In fact, all African registrars should have a functional website complete with a user-friendly landing page. Also, the registration procedure should be automatic and must include various payment options including bank transfers, mobile money and credit card. Last but not least, the registrar should charge a competitive price.

6. We Must Increase Local African Content

There is need to facilitate the set of skills required to develop, update, and maintain suitable local web content. E-government is especially crucial in addressing the lack of local content in languages spoken in individual countries. To grow Africa’s DNS market, we must first ensure government services are available and accessible online.

Conclusion;

Globally, Africa has the fastest growing digital consumer market. In fact, in eight of the past ten years, Africa has grown faster than East Asia, including Japan. In implementing the strategies mentioned above, we will be able to create windows of opportunities, which if properly harnessed can translate to higher growth and yield for Africa’s DNS market as well as Africa’s online economy.

Ladies and gentlemen, what do you think we can do better in 2018?