Kenyan internet buyers would rather get high-quality technical services from ‘affordable’ providers than pay extra for ‘lavish’ brands.
According to a month-long poll of Kenyan internet buyers commissioned by poa! Internet, consumers prefer low-cost services as their budgets get squeezed by extra taxes and higher costs across multiple goods, including fuel and airtime.
More than four out of five respondents to the social media poll in August 2018 said they did not want to cover the cost of lavish headquarters, executive entertainment, or hefty marketing budgets in their own internet subscription.
“The association that Kenyan consumers typically have between high price and highquality is still there – as we saw in our poll from the 17 per cent who wantedto cover the extra HQ and marketing costs in their Internet subscription. Butit is breaking down, as customers move to viewing home internet as an essentialutility and seek only speed, reliability and service, without paying a premiumfor a grand brand,” said Andy Halsall, CEO of poa! Internet.
For the larger brands offering premium price home connections, hefty brand and glamour budgets are typically adding several hundred shillings a month to customers’ internet bills.
“The cost of dedicated prime-location headquarters and billboards country-wide must necessarily then be built into the prices they charge for their internet, and such advertising isn’t cheap. Each billboard costs in excess of Kshs70,000 a month, while print advertising is typically close to a half million shillings for one page for one day. Add to that parties, maybe at Carnivore or in Nairobi hotels, which typically carry a price tag of over Kshs1m each. Inevitably, consumers must go with their providers’ decisions in funding all these extras out of their own pockets,” said Halsall.
By contrast, poa! Internet, which is Kenya’s most rapidly growing internet provider, has opted for subdued offices and scant marketing in a bid to offer a top-quality technical service at minimal pricing.
“We have relied on word of mouth and a basic process of door-to-door salespeople in selling our Kshs1500-a-month unlimited home internet. Yet our recent upgrades across Kiambu and Kawangware to 4Mbps see us offering the same speeds and reliability as our more expensive competitors – in a model that is clearly working based on our growth, which is now far faster than every premium-priced model,” added Halsall.
This faster growth for low-cost suppliers has also been found globally, with Harvard Professor Nirmalya Kumar concluding that low budget companies tend to pull ahead of the
In the UK, for example, 2017 research by GlobalData, a market intelligence company, shows the country’s retail market will be dominated by discount retailers by 2022, with low-cost sellers set to gain £9bn (Sh1,215bn) in sales over the next five years as consumers look for bargains.
In Kenya, this same model has seen poa! Internet offering home connections that are 20 per cent to 70 per cent cheaper than its competitors as part of its strategy to connect consumers in urban low-income areas and rural Kenya.
poa!Internet is an Internet Service Provider that develops and delivers unlimited, affordable Internet to low-income communities in Nairobi and Kiambu counties inKenya, with the aim of contributing to local, social and economic growth.
Asone of Kenya’s fastest growing ISPs, poa! Internet currently operates in Kibera, Kawangware, Jamhuri and Kabiria in Nairobi, and now in areas of Kiambu and Ting’ang’a.