NICE pioneers second generation low cost internet access points in Gambia – Will roll out in Tanzania and Zambia
With cheaper bandwidth access coming across Africa, cyber-cafes have been having a hard time surviving. Their non-profit cousins telecentres have always struggled to gain traction, particularly their Internet element, with poor network access and unreliable power. Also, not-for-profit management has not always driven high levels of skills and service. NICE International is a Dutch social venture that operates solar-powered ICT service centers with local entrepreneurs on a franchise-basis in Gambia. Recently it got EU funding to expand into Tanzania and Zambia. Russell Southwood looks at whether this new way of providing access might work and talks to its MD, Ties Kroezen.
NICE started in 2006 with two pilot NICE-centers in The Gambia in West-Africa. After a successful completion of the pilot, a third center was opened in The Gambia in 2009 and four more where opened in 2010. Six of the centers are operated by local entrepreneurs on a franchise-basis. NICE International plans to expand the network of NICE-centers in The Gambia and to other developing countries in partnership with local organizations.
As Kroezen recalls:”We set up the Energy for All Foundation with other energy industry people to offer decentralized energy provision in developing countries. We put together a container in a village with a grid offering power to the village. We knew it would never be financially feasible just through electricity sales so we thought, if we add ICT services, people might also pay for those as well. That’s the core of the NICE concept.” So it set up and ran a pilot in Gambia through its local subsidiary NICE Gambia and afterwards went on to open two more centres.
“We used the first two years to get the technology right. At first, the solar panels didn’t produce enough electricity and the computers over-heated. But as the technology became more stable, we began to put more emphasis on generating revenues. So by the end of 2009, the first two pilot locations were making a profit”.
At this point, NICE initiated a change in how it did things:“We decided to change the business model to a franchise so 6 of the centres are now operated by local entrepreneurs through franchise companies who get leased equipment. The capex is about 30,000 euros so the franchisee pays a fixed monthly fee and there is a local company that takes care of maintenance”.
In physical terms, the NICE centres have a reception and 1-2 computer rooms and can accommodate 15-35 people:”Ideally these are not all in the same room as education users and other customers need to be separated.” The centres are designed for energy efficiency and NICE has tried to push down energy consumption by using thin client computers connected to a server. Total power needed is 1,500W and 50% of the cooling is done by fans.
“On the computers, our own software system runs all the processes in the system. Every customer gets a personal account with their own password. Once they’ve logged in, they get their own desktop so it’s as if they are working on their own computers. There’s also a timer for Internet use. We also sell physical products like USB sticks and pre-paid cards.”
“Most NICE centres have a cinema where 50-150 people can watch things on a large, flat screen TV connected to a satellite TV provider and with a DVD player. They’re charged for the service and have to buy a ticket. So we sell primarily these kinds of ICT services but also sell snacks and drinks.”
So how many people use these centres?:”One location gets 2,000-3,000 people a month but the intensity of use varies widely. Most of the Gambian centres are in peri-urban locations. All of them are in Greater Banjul in places like Lamin and Serrekunda. It needs lots of customers to generate revenues but were are planning to go ahead in places like Basse.We want to use the centres as a distribution channel to Bottom of the Pyramid markets. We think we can reach them fairly easily to sell physical products and things like education services:.
NICE International has been granted a EUR 2.5 million subsidy from the EU for expansion over the next 4 years. This will allow NICE to expand to Tanzania and Zambia, setting up a total of 50 new NICE-centers in the 3 countries (including The Gambia) and develop new services that can be delivered through the NICE-centers. Furthermore, the project includes a pilot with a rural version of the NICE-concept in Zambia and the development of a solution for the e-waste of the NICE-centers.
Maybe, just maybe, this is the shape of second generation cyber-cafes and telecentres, bringing together all the first generation functions with the traditional African “video booth” and other retail sales.
Ties Kroezen of NICE is looking for other investors and can be contacted on: Ties.Kroezen@Nice-International.com
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