Kenya: Andy Halsall, poa! Internet:”There’s massive home broadband demand….Fibre operators just don't want to go to these areas.”
11 August 2017
poa! Internet launched to provide low-cost internet services for low-income areas in Kenya. It started with Kibera and has now launched in Kawangware. It’s changed its business model from charging by MB to time-based charging. Russell Southwood caught up with poa! Internet’s co-founder Andy Halsall.
As a low-cost Internet operator poa! Internet has not rushed into things. It has chosen to move slowly but methodically to get its business model right. At the beginning of April it launched its unlimited service:”The (selling) MBs model felt like a cellular model.”
“Unlike all the other operators we no longer charge per Mb. Instead customers buy a period of time on our network (1 hour, 1 day etc) and then can use an unlimited amount of data during that time”. Prices vary by time: 1 hour costs KS10 (US4 cents); 1 day costs KS50 (US40 cents); 1 week costs KS350 (US$2.82) and 1 month costs KS1500 (US$12.08). The latter is the price for its new home broadband service described below.
“Our cheapest bundle is still just 10 Ksh, so customers could watch an hour of YouTube for that price if they want. Customer response has been fantastic. Rather than having a "mindset of scarcity" which means they try to avoid using the internet, they have developed a "mindset of plenty" where they now use the Internet in the way we would in the West. They don't think about the cost of clicking on an advert, or downloading a new app. We think this is revolutionary as it leads to the path of ‘always being connected’. There have certainly been more repeat purchases from existing customers.”
The biggest change has been an increase in the use of video that is very data intensive:”The use of YouTube and related video services has just rocketed. Most Kenyan users find it a comfortable way to get information. If they use a smartphone to read that information, it’s often in English and Swahili is their first language.”
At the beginning of May 2017, it rolled out its second network in Kawangware. North of the Ngong Road, it is an area that is a similar size to Kibera but is a much more mixed community in terms of income and housing. Whereas 90% of Kibera is tin shacks, Kawangware contains a mixture of tin shacks and apartment blocks and is a square area of between 2-3 kms on each side of the square:”There is a different topology, income levels and ethnic mix. We wanted to see whether the model went wider than Kibera. It’s compelling to see that the model resonates in other areas and isn't just a Kibera solution”.
In terms of access, Kibera has 80 masts delivering its Wi-Fi service and Kawangware a little short of 50 masts. Coverage in the latter is on major thoroughfares that poa! Internet describes as “dwell zones”:”We’ve tried some different vendors but it’s primarily the same model.”
In February 2017, it launched a home service trial in Kibera. Customers are provided with a Wi-Fi router and a small antenna. (In Kawangware, apartment blocks get coverage from a single antenna.)
“Access speeds are fast enough to stream video. I don’t want to talk about specific speeds. In Kenya (every provider) talks about speeds and doesn’t deliver. Our commitment is to provide a fast enough connection to stream video. People ask can I watch football? And the answer is yes.”
So what kind of devices do these home users use?:”Some people have quite serious kit. One guy edits videos and puts them on You Tube…The average customer might have between 3-5 cheap smartphones but the reality is more sophisticated than you might believe.” It currently has tens of thousands of public access customers.
Although poa! Internet continues to offer a small amount of free, cached content, it has no plans to offer content bouquets:”Most people want to mix and match their own content. We‘re offering an affordable internet service so they can do that.”
“There’s a massive home demand in these areas. Fibre operators just don’t go there and mobile modems are incredibly expensive to run.”
Until next year, it will focus on expanding organically in the two areas where it has network. Next year it will expand more in Nairobi and outside to peri urban and rural areas.
It has had another injection of cash from one of its existing investors and it will raise another round of finance next year to pay for the planned expansion.
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