The start-up with the US$1 smartphone, a mobile money app and nanosatellites pitches for the rural market in Nigeria

29 March 2018

Top Story

Access device strategies where you build a business on the back of distributing and selling devices don’t have a great track. But John Enoh, founder of Nigerian telecoms start-up BeepTool is looking to buck the trend and has brought together an interesting set of partners and technologies. He’s also offer a smartphone for US$1. Russell Southwood spoke to him about what he’s hoping to achieve.

In May 2016 I covered a Nigerian telecommunications start-up called BeepTool that offered an intriguing mix of VoIP calling and money transfer. When I spoke to him it had attracted 0.5 million users, most of whom were from Nigeria. Now the founder John Enoh is pitching another telecoms product that looks interesting.

As a way of describing it, he talks about Devices as a Service (DaaS) (see here) in a package that brings together the original BeepTool app, a US$1 smartphone and nanosatellites. The Humanity-BeepTool $1 Smartphone is actually a US$50 smartphone that will be leased to users for two years. There is also a US$50 Humanity-BeepTool $50 Satellite Phone. The partner for both of these phones is a UK organization called Social Finance.

The business model is that the users of these phones will lease them for two years in exchange for accepting advertising on two levels of their lock screens. They will also look to get a share of the data revenues generated and get users to fill in surveys for clients.

The other device is the BeepTool-SAS Wi-Fi Hotspot Terminal that is about the size of an iPad Mini with a solar panel attached. This device receives the nanosatellite bandwidth and can distribut e it up to 50 devices where there is no cellular presence. According to Enoh in addition to individual users:”It’s going to be used to connect POS equipment and IoT”.

In terms of the use case, he gives an example taken from Northern Nigeria:”You have herdsmen going to a village to kill people. They can do nothing. If they had access, they could call the police.”

All this is knitted together with the BeepTool app, the Android version of which was launched in October last year. It has a mobile banking app and the user can open an account:”There is also new integrated software that connects the user indirectly to their own bank account and we’re asking the banks to sponsor this”.

Enoh is pitching this package as a solution for rural communications:” The initial roll-out in Nigeria is aimed at bridging the rural communications gap. Other communities will follow. Affordability and access to communications are key to the process”.

One of Enoh’s current challenges is to raise the capital needed:” One major problem is the funding to deploy it in Nigeria and Africa. The pitch is based on US$4.9 million but this would be billed out in phases. There is a need to deploy the terminals first. There’s also a need to invest in the cost of manufacturing the smartphones and the licence for the mobile money platform. We’ve created a Money Pool entry to raise US$1,000 for 4-5 terminals already.

Once he’s got the initial money, the challenge is to keep raising so that he can create a “critical mass” of users and roll out beyond Nigeria. Technology device strategies of this kind don’t have a great track record but the combination of elements might just be a winning ticket: after all, it’s not everyday that someone offers you a smartphone for US$1.

Meanwhile BeepTool users have increased to about 800,000 which is a mixture of app downloads and agent locations. Monthly financial transactions are around US$10,000 a month:”We’ve enhanced the app and users can now send money to each other and to banks. We’re working on expansion to Cameroon and Ghana”.

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