ICTworks

This is a screenshot of an Internet bandwidth speed test I did at a hotel in Dar es Salaam. At 1.65 Mbs, that’s the fastest speed I’ve ever recorded in my Africa travels, and it compares favorably to what most American Internet users get in their homes and workplaces. This is the sign that SEACOM, TEAMS, EASSy, GLO-1, MainOne are having real impact on the cost and speed of bandwidth available to ISPs and end consumers.

But what are Internet Service Providers doing to capitalize on this near-glut of bandwidth? That is the question that should be keeping them, and you, up at night. Here is a great opportunity to make money as Africa goes digital. But how? Russell Southwood offers 7 strategies for ISPs (and all ICT businesses, really) to increase market share and profitability in this changing landscape in his post, Going from shortage to abundance – strategies to target Africa’s broadband consumers.

Below, I’ve condensed the post and each point for your quick review. Be sure to visit the original post for the full story.

Going from shortage to abundance – strategies to target Africa’s broadband consumersCurrently, there are three broad types of operators who are in this market: firstly, Africa’s traditional independent ISPs who have lived largely on corporate subscribers and a small number of wealthy individual; the mobile operators who have come in and expanded the market with mobile Internet; and alternative insurgent challengers like Wananchi with its Zuku brand. The African consumer broadband market is still just being born so no-one has yet got a full grip on the market. Consumers are fickle and go where price and bandwidth seem most advantageous.

In the interests of creating a strong and vibrant African broadband consumer market, here are our seven tips on making this market work:

1. Be honest and straightforward

The operator that is consistently honest and straightforward has every chance of winning this game. If you say to your customers, you have two choices, price and bandwidth speed: which do you want? For those budget customers, set a much higher provisioning (2 mbps as a minimum) but clearly indicate that this speed may be considerably less during busy periods. For those who need higher speeds, charge more and give them a demonstrably better service (perhaps 8 mbps as a minimum). Set up bandwidth speed comparison tests internally first and then allow your customers to use them. Use the information gathered to drive out bottlenecks at the national and local level.

2. Service – Making things work

The mass broadband market in Africa needs to work on a “plug-and-play” basis. The household consumer needs to be able to open the box, plug in a limited number of cables and then follow the on-screen prompts to get things working. Household broadband needs to be cheap, well-supported and reliable equipment so that CPE costs are kept as low as possible.

3. Branding, character and use

When they took off, African mobile operators were selling aspiration. If you had a phone, you were somebody. Africa’s broadband Internet brands desperately need some “character”, something that will mark them out and make their customers smile and remember them. They need to be able to convey a different version of the aspiration message. There won’t be necessarily the same level of Internet users so the aspiration message has to be more finely honed.

4. Encouraging maximum use by offering maximum capacity

The strongest way to promote the largest “critical mass” is not by dealing it out in “penny packets” but by offering the maximum available capacity at prices that will encourage young and old to do the kind of things on the Internet that people do the world over: things like social media (Facebook, Facebook and Facebook), Twitter and You Tube are giving some idea of where things can go. If there were 1.7 million Nigerian Facebook users in August 2010, imagine how many more there will be in a year’s time.

5. Expanding the potential market

To expand the potential market, you need to expand the number of devices that can handle interesting Internet applications. You need to be offering ever-cheaper smartphones with the prize going to the first to offer one for US$50. You need to offer even cheaper feature-rich phones (with a i-Phone-style interface from someone like Snaptu) to the less well-off at below this price point. In this way, the existing basic phones in the market will shrink and the number of customers with Internet access will increase.

6. Building the device pyramid

The challenge with this device ownership pyramid is the same as for the handset pyramid. Mobile phones that can access the Internet are a great thing but they have their limitations. Therefore how do you get all those people who might have access to a PC at work and/or have a feature rich phone to get some sort of wider PC usability? (The main barrier to greater use is size and use of keyboard functions but there are other issues.) Somewhere around the netbook/tablet area is a device that long-term may cost between US$75-100 that will broaden this part of the pyramid and give PC-like abilities to a much wider number of broadband users.

7. Spreading everyday usage

The lesson of the success of Facebook is obvious in hindsight. The average African professional organizing his or her social life on a Friday afternoon is the “human equivalent of Facebook”. So the insight is really a very obvious one for operators. They need to introduce apps and services that drive everyday use. These might come from elsewhere but in time there will be local variants. In places like India and Brazil, the local variants stamped out their own ground by not being in English. Watch for local variants and see whether they can be marketed successfully to create new, local social media.

Operators need to keep coming up with ways to weave the Internet into everyday use so that it becomes as natural as….well, picking up your mobile to make a call.