Internet Providers Must Innovate To Address ‘Kadogo’ Market Needs

In the last five years, Kenya’s Internet access has grown, anchored by increased investments and awareness on the importance of connectivity in education and development.

This growth in the user base has led to pricing to cater for all economic levels. For the users who cannot afford the cost of monthly packages, there are time bound Internet bundles.

For instance, 1GB for an hour or 5 B valid for 24 hours. This can still end up being expensive for some families and businesses with homework, online streaming and orders to fulfil.

This has led to the emergence of “kadogo” Internet connectivity solutions, allowing families to pay Sh10 or Sh20 a day, and access Wi-Fi within their homes.

This allows families to connect more than two gadgets and still access decent Internet. The services are mainly provided in specific localities such as Kware, Githurai, Kibra, Huruma, Korogocho, Kawangware and Pipeline, among others.

This has forced large Internet providers to contemplate how to address this market, given the rising population and the business opportunities it provides.

Services such as fibre-to-the-home have had to be rolled out in more unconventional areas, because the younger generation leads in installation of the services.

For instance, in some areas with town houses and a rented servants quarter, the person living in the servant quarters buys the home Internet faster than the one in the main house.

At the same time, people living in low income areas are likely to adopt the Internet because of the economic opportunities, much faster than the person in the upmarket areas, who do not have pressing economic needs.

The Wi-Fi providers have found a niche that will force the high-end Internet firms to explore technologies that allow them to slice their big pie to smaller bites for the “kadogo” users.

A mesh of fixed monthly users and a wifi proposition that caters to all costs will help. This is similar to the change from per minute to per second billing during the early days of mobile phone calls, which proved to be the turning point.

By the time operators were providing calling cards from as low as Sh5, operators had learnt the best way to increase the average revenue per user.

Internet connectivity has come to a similar moment, where mainstream providers can no longer focus on upmarket as the source of revenue. Low end users will provide their share of income, if they are provided with unique solutions.

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