London — The idea of a low-cost data provider is at last beginning to find its legs. This week we look at Surf in Kenya that has expanded to offer 1,000 Wi-Fi hot-spots across 20 towns and cities. Russell Southwood spoke to Mark Summer, one of Surf's co-founders.
We last spoke to Surf 10 months ago in April 2017 and since then it has implemented its partnership with Facebook and rolled out 1,000 Wi-Fi hot-spots: 150 are in Nairobi and the balance are in places like Mombasa, Kisumu, Eldoret and Naivasha. They probably cover more than 50% of Kenya’s population centres:”It’s now big enough to start to understand the business.” Although he’s reluctant to talk user numbers, he does say they are in the “hundreds of thousands.”
Data pricing in the Kenyan market remains dynamic and - good news for the consumer - it's still continuing to go down:"It's constantly evolving. Costs are still going down. We like to compare ourselves to mobile data and we want to be about a third of that cost."
One aspect of pricing they've been working on is an ad-supported, free entry-level service:"The advertiser gets a choice of offering the user a 100 MB or 400 MB bundle. We've had a pretty wide range of advertisers. The most successful have been digital businesses with online users at the lower end".
He gives the example of Ulima, a farmers' app which targeted its core audience in a very precise way:"We worked with them targeting market locations where farmers buy agricultural inputs, If it has a digital component and strong relevance, this is what seems to work best. We can specify location and time of day."
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It's also working with advertisers to offer them quick polling:"Users really respond to this and you can take opinion polls in a really quick and easy way. One we had was by a housing provider thinking about offering student housing. They wanted to know how they spent their money and whether they would prefer a slightly more expensive room with an ensuite bathroom or a cheaper one with a shared bathroom? They were able to optimize their products and services."
Scale has bought savings right across the business but particularly for wholesale bandwidth:"We're getting better wholesale prices with better conditions as we buy more."
But has larger geographic reach bought problems with uptime?:"We achieving the high 90s. The service needs to be a 24/7 always on service. We build in redundancy, particularly with power in Kenya and redundant network links. There are tricky areas where there are not full fibre rings but the providers are good at fixing things."
Users are buying more data as they grow to trust the service:"What you see with more hot-spots is that there is more access across the day in many more locations. The new users start with small amounts, builds trust and the spend starts increasing." 95-98% access the internet using a mobile phone: "They are tied into apps on their phone. If Facebook or WhatsApp doesn't work, someone will ring us, as well as about issues with internet access.
Interesting anecdotes about user behavior include a taxi driver who uses WhatsApp to keep in touch with his clients and store holders who use the internet to communicate with suppliers. The majority of users are on either Facebook or WhatsApp and often go online to get ideas or tips:"It's great to see that impact."
"Facebook has become the go-to place and there are big groups. The Kenyan Dairy Farmers group has 20,000 members, all of whom want to know how to increase their yields, combat diseases and look after their animals better. These groups play a huge role."
And what about heavier data users?:"One of the things we see happening is when there are events - like the two elections and the recent Raila swearing-in - lots of people are spending lots of time on real-time information. People really want to be connected. Twitter is big from an information perspective. They also use a lot of the local media sites."
"At the top-end they are also much heavier into video watching. They download from You Tube and watch at home. This includes informational and educational content and entertainment content like music and movies. They both want to keep up with the global entertainment world and the thriving local music scene. These days artists get their name known through You Tube.
Over the next 12-18 months, Surf has ambitious expansion plans:"We're looking to expand reach further in Kenya. We want more locations where users are and would like to double or triple the locations."
"We're also expanding the business model with the advertising/free data offer and we want to get the platforms right for this, especially for asking users questions."
But there are also plans to expand to another country:"We want to start replicating the business in the second half of this year. It will definitely be in either East Africa or Southern Africa."
Source : http://allafrica.com/stories/201802050717.html