Inside Surf’s plan to provide high quality & affordable Internet to Kenyans

Mark Summer - Surf CEO
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Surf launched the Express Wi-Fi service in Kenya late last month, in partnership with Facebook and Internet Solutions. Express Wi-Fi is a public wi-fi hotspot service which has been rolled out to more than 100 spots in towns surrounding Nairobi.

We recently had a chat with CEO Mark Summer about Surf’s Wi-Fi product and its future plans.

Tell me about Surf.

We launched Surf about a year and a half ago and our goal is to provide high quality and affordable internet to the general Kenyan consumer. What we really care about is that people have a good experience getting online and in an affordable way. If you look at the Kenyan market, you’ll realize that the high-end is served quite well. The middle to low end category, which is where the vast majority of consumers are, is not really served that well and they have limited options.

So we want to provide quality internet at reasonable rates to serve that user base because we believe that the more choices users have, they can pick whatever choice serves their need.

Why Kenya?

Our approach was that we were looking for a market where this type of thing made sense. The Kenyan consumers are very much aware that they want more internet access so you don’t​ really have to make a case in Kenya because people already want to be online.

Kenya is also a place where you can set up a business and move quickly. It has a good regulatory environment and the internet space is also very well defined so we could easily set up partnerships with Internet solutions which made sense for both of us. On top of that, it’s a really good place to live.

Tell me about your partners, Facebook and Internet​ Solutions. How did that come about?

Lets start with the Facebook side of things. Facebook, as you probably know has a pretty significant initiative within the company that is aimed at providing internet in emerging markets in places like Kenya. And they’re going about it in different ways. There’s some technology being developed, hardware and also experimentation with different business models. One of those things is called Express Wi-Fi.

One of the things in that partnership is that Facebook is looking to partner with local companies in those markets who are close to the users and understand their needs and challenges. On the other hand, one of the things that we at Surf looked at when we wanted to get into the Kenyan market is that Kenya already has a strong Internet Service Provider community. There’s a lot of investment already happening so it doesn’t make sense to do the same thing over and over again. So rather than build a whole network from scratch we looked at a partner who already has a lot of network assets already and we can provide additional servers to that partner which makes sense for them.

Internet Solutions is a more business focused service provider so it made sense for them to partner with us because they’d be tapping into a customer base that they aren’t providing for​ right now. They’re leveraging their infrastructure for more users.

By partnering with them, we would reduce costs and ultimately for the user. We were also able to demonstrate this business model where you share infrastructure rather than digging up your own fiber or setting up your own towers.

Tell me about the product.

The full product name is something like Surf Express Wi-Fi by Facebook which is a mouthful so let’s just stick to Express Wi-Fi. It’s a Wi-Fi hotspot product. We have locations in what we call greater Nairobi area so that’s from Ongata Rongai, Kiambu, Thika, Limuru, Mlolongo, Athi River and Kiserian​. These hotspots are located in existing business like hair salons, restaurants, pizza shops etc and once you are within the vicinity you’ll see the WiFi signal on your phone. So you’d need a smartphone and sign in onto the network and it will ask you to register with your phone number and​ once you’ve registered, we’ll give you 100Mbs per day for ten days as a starter pack for you to get to know the service and if you want more you can purchase a data bundle from one of those retailers at those locations.

So once you have a data plan you can use any those Wi-Fi hotspots in any of those locations.

Express Wi-Fi Data Prices

Daily
40 mb – KES.10
100 mb – KES.20

Weekly
300 mb – KES.50
500 mb – KES.100

Monthly
1.25GB – KES.200
3GB – KES.500

Facebook via Internet.org have certain features that are zero rated like Facebook, Twitter and WhatsApp. If I purchase your bundle and it gets depleted, will I be able to access those services?

The service is called Free Basics and it’s enabled on our network and we’re trying to see how people are using that. It has quite a number of websites and resources available. You could enable your blog, for instance, to be available on it. So you’d send your blog URL to the Free Basics team and they’d give you insights on how to reduce your data usage and it becomes on of the sites that are available on Free Basics.

It’s open to anyone we provide services to and so if your data bundle is depleted, you’d still be able to use the Free Basics service. It’s typically without images or with very little images so that it’s doesn’t have a huge load for the Internet Service Provider and then people can buy the bundle to have the high bandwidth experience.

You’ve said that the Surf hotspots are usually hosted by existing businesses. What is the relationship between Surf and them?

So basically, they become like a retailer to us. They sell data bundles to customers and it becomes another revenue generating​ service and they would also like to get online themselves.

To us, it’s also the first point of contact with the customer. So if customers have any sign up questions, they can be addressed there. It’s also our way of growing the network because these are already places where people typically go making us more efficient. We can also reduce cost on things like land acquisition and pass on to our customers a very affordable service.

Tell me about the bundle experience on Surf.

We’ve modelled the pricing to what is people are already used to based on the current market options and people can compare and contrast with what is there. It’s a set price and the bundle expires after a certain period of time depending on whether it’s a daily, weekly or monthly data bundle purchase.

We’re definitely going to experiment with different types of pricing over time but we see this as something that the user understands what they’re getting.

Currently, you have to purchase it cash from one of the retailers but we are going to add M-Pesa very soon.

Are there plans to add unlimited internet?

We currently don’t have an unlimited plan in here and what we see is people have a certain amount that they like to spend. We have seen that most of our customers buy the lower end plan.

From the customer behaviour, we try to keep the plan as cost effective as possible. I think the unlimited plan may need up being much more costly very quickly but we are constantly looking at other options as well.

Your plan is cheaper than what your competitors have but on the other hand, they have a wider reach. What plans do you have to increase your reach so that your buyers can be able to use this service wherever they are?

Wi-Fi by it’s nature is very location specific. It is unlike mobile data which by it’s nature, allows more coverage and you can move around. I think there are different use cases for each and you’ll find when people are in motion they tend to use less data but when they are static, they start to use heavy data. So our desire is to have our hotspots which are very specific to certain locations in those places where people are static. It could be at home, at work, at the salon or at the bus stage as they are waiting for a matatu.

For that reason, it’s different services for different needs. In this way then we’re not really competing with mobile data service providers but we are giving end users more options so that we can grow usage. We are giving the consumer affordable internet based on specific use cases.

When you are sitting somewhere and you want to watch a video or to upload or download something, a WiFi network is an affordable option. Mobile data is good for sending messages or looking up things online and a mobile network provides that service in a better way.

In other markets, it’s normal to hop from one network to another. So when you’re at home, you use your home Wi-Fi, when you’re heading to work you use your mobile network, in the office you use the office Wi-Fi and then you use the Wi-Fi in a restaurant or a bar. Most Kenyans don’t have those options in front of them and that’s what we’re trying to provide.

What are the speeds for your service?

We currently cap the speeds at 10MBps (download and upload) because that is a very good experience both for laptops and mobile devices and anything in between. Of course Wi-Fi depends on how far away you are from the location, interference but typically, you should get a 5-10Mbps experience on your phone for both upload and download speeds.

We think that is very important to have very good upload speeds as well because it encourages people to be producers of content rather than consumers of content.

How many locations are you in now?

We’re growing very quickly so we keep the daily counter open and those locations are in the greater Nairobi area and we are expanding to Nairobi and Kisumu so the first locations will be online next week in both of those locations.

Which location that has the greatest uptake and why do you think is the reason for it?

We have only been around about 6-8 weeks so all our locations are growing fairly quickly and I think we’ll have to come back and look at what areas are doing better than others when we have more information.

We focused on areas where they have limited options available like Mlolongo and Ongata Rongai. All those places have a lot of people and in Ongata Rongai, we have about 18-20 locations. It doesn’t really matter where you are, people are always looking for options to get online.

What plans do you have as far as connecting other towns is concerned?

We have plans to grow out of those three areas very quickly, (Nairobi, Mombasa, Kisumu) and move out to other locations which we are still experimenting but you’ll see us throughout the year in other places.

You’ve talked about an existing gap in a certain demographic so what do you think should be done in terms of investment in internet connectivity since internet is both a game changer and an income earner.

The biggest challenge for service providers is to make that reach into as many areas as possible and​ it makes a lot of sense where investment can be made to increase reach for all service providers so ultimately, you’re wasting a lot of money if you’re having the same internet service provider do the same investment over and over again in terms of infrastructure.

Our belief is to let service providers compete on the service they’re offering and have investors provide the environment where you have infrastructure that is utilised by multiple ISPs. That type of collaboration will allow the ISPs to make more creative solutions and give the end user more options. It also allows​ for a faster roll out phase since you have to build a network from scratch.

What we’re your first impressions on the reception of your product on the market.

We’ve been very excited, it’s​ been amazing to see that people are signing up quickly and testing the service and I think one of the biggest feedback we get is how fast can we get into other places where people also spend some time.

We’re working on seeing the service in more places and we’re just beginning to scratch the surface on what’s possible in that regard and we’ll need to go on from there and we’re​ excited about getting feedback from our customers and working on that.

Right now you’re using WiFi but is Fiber anywhere in the near future

I think fiber is important but I look at fiber slightly different.

If you look at a market like the US where Google has made a huge effort to roll out fiber to homes and you’ll realise that fiber is quite expensive to roll out. You’d have to charge $ 50-70 a month or more to provide​ a service, something which works well for certain markets. However, I think an efficient way in many parts and not just Kenya, but the UK and US as well, is taking fiber into a neighbourhood or a market. You’d then use the last mile wireless which is much quicker and you don’t have to dig up all the streets. Wireless technology is moving very quickly in terms of higher bandwidth and more effective use of spectrum an unlicensed space such as Wi-Fi where we as a service provider have to buy a certain frequency and that opens up a huge potential for service roll out and that’s what we’re doing as well. We’re using fiber as far as we can and then the last mile of the service is wireless and I think that’s a model which works really well in many places where the cost of putting up infrastructure on the​ ground is expensive. So we use one fiber trench for many services instead of thousands of trenches to every building.

What methods do you think ISPs can use to push uptake of their services?

One of the things that we are looking for is innovation in the business world. I think a lot of things are being tried but we have a long way to go in terms of business models.

So we are experimenting with a free trial period and there’s Free Basics option. All these things we need to experiment more with in general as service providers and I think what we are doing at Surf is very innovative and trying to be ahead of that change because the business models are going to change in the future.

Where do you see Surf and the internet landscape in Kenya in the next 5 years?

I think we’re going to see the amount of time and data that people spend online is going to grow and in 3-5 years, you’re going to see a lot more online usage. Kenya has a great internet penetration rate but the amount of internet per user is still very low.

So hopefully we will see that usage grow and what we are working on at Surf is to give people more options for access of internet.

Where Surf wants to go? We’ll see, we’re focusing on what’s in front of us right now. We don’t have a five year plan. We’re very entrepreneurial so we want to see what we can achieve in the next 3-6 months and then move from there.

Right now we are very focused on getting the service out and getting feedback and expanding the range in terms of locations.

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