ICTworks by Inveneo

As mobile phone data plans drop in cost and more cheap smartphones flood the African market, what is the future of the Internet cafe? Could mobile data kill off cybercafés completely? Or are cybercafes still viable businesses?

Isabelle Gross recently interviewed Gregory Eid, CEO of Teledata ICT to ask him about his Internet cafe business and how Teledata ICT is countering this new competitive threat, and even expanding from 500 cybercafes running under its brand “Cafes Club” to 1,000 cafes in one year time.

Bandwidth

As mobile data plans drive down bandwidth prices, Teledata has responded with an interesting (and cheap) sales model:

In Teledata’s “Cafes Club”, Gregory Eid explains “every Internet user gets 1MB/s and is charged 1Ghanaian Cedi per hour (US$0.65). Teledata charges in turn a wholesale price of 0.40 Ghanaian Cedi per hour (US$0.26) to cybercafé owners”. This translates into a 60% margin for the cybercafé owner while the end users are assured of getting 1MB capacity which allows for quality browsing and acts further as a customer retainer for cybercafés. Giving end users more speed doesn’t necessarily translate into in heavy downloads. At the start Teledata forecasted peak bandwidth usage around 100MB but data feeding back from the cybercafés indicates more a peak bandwidth usage around 7MB.

The 1MB Internet bandwidth is certainly a market differentiator. While mobile data is widespread, it's also rather slow. 3G is rare outside city centers, and even then, 3G data is not reliable. In Dar es Salaam, the mobile operator Airtel can only offer EDGE data consistently.

Value Added Services

Teledata is also offering Internet services that will help create repeat customers. Just think of all the other services a cybercafe can offer someone who buys a domain (hosting, website design, etc)

Anyone can come to a Cafes Club cybercafé and buy an annual domain registration for 25 Ghanaian Cedi (US$16). Teledata also provides to cybercafés owners an integrated billing platform allowing them to issue pre-paid vouchers to Internet customers and to monitor properly their sales. The billing platform with its printed vouchers has the potential to evolve into an e-payment platform enabling customers to purchase vouchers for topping up their pre-paid electricity meter, to buy top-ups for their mobile phone or any other e-commerce services.

I wonder if Teledat is using Mkahawa, the Open Source Internet cafe billing and management software?

Non-Internet Services

What was surprising to me was the lack of any discussion around the non-Internet related services that are usually the main income generator for Internet cafes. ICT training, document copying, international calls, and even typing and basic graphic designing usually bring in an equal or greater revenue than pure Internet access.

Business Training

I was happy to hear that Teledata ICT is focusing on building the business acumen of cybercafe owners. This is usually the weakest link, especially when NGOs or IT technicians run cafes instead of entrepreneurs.

Cybercafés closing at 6pm, charging less than the cost of paper and ink for copies, not accounting for depreciation, these are but a few of the common business mistakes made by inexperienced cafe owners that can lead to quick bankruptcy.

More Business Models

There are several efforts to increase the sustainability of Internet cafes around the world. Teledata would be good to see the work of Telecenter.org and the Business Growth Initiative. Also, Internet kiosks are a new alternative as well.

Raila Odinga registering to vote in 4 minutes flat

Regardless of their political affiliations, ICT firms should be pushing electronic voter registration and voting in every country of Africa. Why? Not only does it increase participation in the elections process, and make it more transparent, it also makes great business sense.

Here's an example from Business Daily Africa: the Kenyan constitutional referendum earned several suppliers of technology goods and Internet services millions of shillings when the Interim Independent Electoral Commission (IIEC) used electronic registration and voting in 18 constituencies.

Nokia, the largest handset manufacturer, supplied IIEC with 18,000 mid-tier mobiles worth Sh38 million, according to documents seen by Business Daily. Listed telecom firm Safaricom provided 100 megabytes (MB) of data for each of the mobiles, earning it over Sh2 million in the two-day process.

Apart from handsets, the IIEC staff used laptops and other peripheral devices to conduct voter registration, voting, and tallying of results. The electoral body has said it plans to spend about Sh32 billion in a step by step process to build the infrastructure that would see Kenyans vote electronically in 20,000 polling centres around the country by 2012.

Now that's a political change I think every ICT company can vote for!

The Kenyan Government is trying to consolidate and reduce its spending on computer hardware and software by centralizing purchasing within certain ministries - so reports Business Daily in Tender rule change raises stakes in ICT vending.

The switch to the single IT platform will mean that government ministries or departments will no longer have to procure computer hardware, such as computers and servers and software independently as is the case currently. This will in turn reduce the number of the computers or servers it buys annually and also the accompanying software.

For example, the 42 ministries will not have to invest on an accounting software individually, but will instead access and use one installed at the Ministry of Finance. The same will happen with the human resource and procurement-related software.

While the article quotes representatives of Accenture, Deloitte, IBM, HP, and Microsoft all saying that this change will be good for the IT industry, I believe it will only be good for the big companies in the IT industry (like Accenture, Deloitte, IBM, HP, and Microsoft).

For the smaller IT vendors, this purchasing consolidation will be very uncompetitive. The Kenyan government will only buy large lots of computers & software - too big for the smaller vendors to win or finance. In addition, the one-size-fits-all centralized purchasing doesn't take into account different computing environments or allow for experimentation by different ministries.

Yet I am not too worried by this announcement. I have confidence that individual ministries are sufficiently Balkanized to allow small vendors the opportunity to sell specific, customized solutions outside of this purchasing consolidation.

What do you think?

Black Friday is a uniquely American tradition - the day after a major holiday we all go shopping. But not just any type of shopping, Black Friday has become a frenzy of consumerism. Every year people are trampled to death or shot over a sale item. Crazy.

Yet, I'd love to have the same enthusiasm for shopping come to Africa. Not the consumerism blood sport, but the ability of the majority of Africans to buy the goods and services they need in a quick and efficient manner. So that makes me wonder - can you buy online and ship to Africa?

Somewhat to my surprise, Amazon.com does ship to Africa and if you're lucky with customs, you can even get it by Christmas. TigerDirect.com also does international shipping, though you will need to call them directly to place an order. But alas, you'll need a valid US credit card or bank account to make a purchase with either company.

Yet Office Depot, Staples, and even NewEgg only ship to US addresses. To get around this, you could set up a mail forwarding service that sends on your packages. This is not usually a cheap option. Last but not least, you may void warranties and have a trouble getting your purchases services outside the USA.

Luckily for Inveneo's Certified ICT Partners, we offer an equipment purchasing service that allows our local partners to access all these sites and more at competitive rates. Our small part in bringing Black Friday to Africa.

By Keith Rosen, MCC
The Executive Sales Coach™

If you're calling on a prospect with the intent to follow up with them rather than calling on them cold or for the first time (example: following up after sending them a brochure, press kit, product/service information, an initial conversation at a networking event, etc.), consider the following points:

1. Deliver Value in Every Call. When following up, don't simply call to "follow up." In other words, stay away from calling with the intention to see if they've received your information or to "check in" to ask if they have any immediate needs for your product/service. Take some extra time and weave in a compelling reason for your call. How can you deliver value to them? Is there something timely that you can share with them about your product/service or about their industry? Is there something newsworthy that you can discuss that applies to them? Perhaps a success story with a client you've worked with?

Below are some examples that you can use when making follow-up calls:
"After reflecting back upon our conversation, I have some new ideas that I'd like to share with you regarding how our [product/service] may actually complement and enhance what you're currently doing, especially when it comes to [state benefit/end result they could realize]."

"I was thinking about another client who was in a similar situation as yours and thought that you might be interested in hearing about how we were able to eliminate the challenges they had, such as [state some problems your product/service could eliminate]."

"We've made some interesting changes to our [product line/service/programs/packages] and thought of you and the results you were looking to achieve. There may be a great fit here worth exploring in more detail so that you can [state compelling benefit]."

2. Bridge Each Conversation. Bridge any previous conversation or contact with your follow-up call. Refer back to your initial conversation and remind the prospect why they need to continue that conversation with you. What initially piqued their interest? Use phrases like, "I'd like to continue the conversation we began about …"; "Let's continue our discussion about how we can …"; "As we discussed last week when we met, let's see if there's a way for us to …"; or "Based on our prior conversation, I'm calling to continue our discussion about …."  If you happen to send them literature, rather than asking if they received it, weave it into the intention of the call. For example: "Let's take a moment to discuss what I had sent you and see if it makes sense for us to proceed further/explore working together."

3. Keep the Fire Alive. If you let your dinner sit too long, it's bound to get cold. The same rule applies to your prospects. Even the warmest of prospects who initiate first contact can turn to ice. If you don't continually remind the prospect why they are investing their time in talking with you (WIIFM? — "What's in it for me?") and why this is a priority, something else will always take precedent.

This process must continue all the way up until the point when the prospect can finally realize the benefits on their own. This only occurs after the sale is made and the prospect (who has since become a client) is actually using your product or service. Now, they don't need any additional prompting, since they get to experience the benefits firsthand rather than hearing about them from you.