The world's largest software maker
) is collaborating with the government of Kenya's Ministry of
Information and Communications and Indigo Telecom Ltd. to launch
a pilot project, which has the potential to deliver cheaper
wireless broadband access to the remote areas of the country.
The project is intended to decide the commercial viability of
using TV white space for the delivery of broadband services. TV
white spaces are gaps in the wireless spectrums generally used
for transmission of television signals. It has been seen that RF
signals through these bands are stronger, with the ability to
travel longer distances and penetrate through more obstacles.
Therefore, if commercially viable, they could be used for
delivering broadband services.
Of course, Microsoft has an interest in technology
developments in this under-penetrated region. If this initiative
is successful, it will create new opportunities in commerce,
education, healthcare, as well as the delivery of government
services. Microsoft's status as a technology provider is already
known. With better and more widespread Internet access in Africa,
the company would be able to offer both client and cloud
This pilot project is in fact a part of the Microsoft 4Afrika
Initiative. The initiative is aimed at expanding the reach of
smart devices among the African youth, bringing small and medium
sized enterprises (SMEs) on the web, upgrading the skills of
100,000 members of the current workforce and helping 100,000
graduates to hone their employability skills so it can place 75%
of them (low-cost labor for Microsoft).
Following the collaboration, Indigo Telecom will use
Microsoft's Window 8 tablets, applications and Microsoft Office
365 in schools, provide computer labs and instruction, and work
with community leaders and local companies. This exercise will
help the company and Microsoft to identify the most suitable
service and application for each sector.
According to market research firm Ovum, mobile broadband is
forecasted to grow at a compound annual growth rate (CAGR) of
19.2% from 2013 to 2016 globally.
Africa is changing its outlook and is trying to compete with
other developed nations so that it can attract investments, which
will benefit its overall development. The fact that 7.0% of
Africans are using the Internet and 5.3% of the population is
using social networking sites such as
) indicates that the country is still significantly
under-penetrated and therefore presents significant
Currently, just like other PC makers, Microsoft is also
battling the slump in the PC market caused by the sluggish
economy. In addition, the popularity of smartphones and tablets
) has been cannibalizing PC market sales, further deteriorating
the scenario. Whether it can come out of the slump on the back of
its new software and OS is a wait-and-see game.
Microsoft reported revenue, excluding deferrals, of $21.46
billion in the second quarter of fiscal 2013, which was up 34.0%
sequentially and 2.7% from last year, in line with our estimates.
All except the Entertainment & Devices segment grew both
sequentially and from the year-ago quarter. Entertainment &
Devices were down year over year.
Microsoft has a Zacks Rank #3 (Hold).
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