London — Before the Covid-19 lockdown in South Africa, low-cost challenger ISP TooMuchWifi had been in pilot mode, getting its business model right for its low income customers. During the lockdown a funder has given it the opportunity to give away free data in exchange for the user answering a quiz on Covid-19. Russell Southwood talks to Ian Thomson, CEO, TooMuchWi about the before, during and after Covid-19.
Our conversation starts with what's happening in the middle of the Covid-19 outbreak in South Africa. The Centre for Communications Impact identified TooMuchWi as the perfect vehicle for Covid-19 awareness raising and USAID agreed to fund the initiative.
The proposition was simple: the user answers some basic questions on Covid-19 (particularly an all important one on hand washing) and if they get the questions right , they get R5 in a TooMuchWifi wallet, that gives them 500 MB of free data.
As Thomson sees it:"South Africa has some of the most expensive data rates. Although this is a persistent challenge for these communities, access to affordable internet is particularly important during these times as people need to stay connected for entertainment and education."
23,000 customers successfully took the quiz and by 4 May it had handed out 6.6 GB of free data in a week: "Every time there is an outbreak in the township, we get the Spaza shops to push the free data offer with the quiz". This health quiz initiative was part of a larger free data initiative from TooMuchWifi that has seen it hand out 100,000 GBs since the lockdown began on 16 March.
The broader data giveaway works on the basis that TooMuchWifi created a data package that didn't rely on selling cheaper by volume:"We thought what if we offered a big deal. So we offered a flat-line deal, not offering a bulk buying advantage. There might be some cannibalization but let's see if users take advantage of it. We doubled our data value and didn't cannibalize at all. It proves the elasticity argument (that lower prices produce higher volumes) because people are stuck at home."
Alongside the new offer, the demand for new installations has trebled and they are getting requests in the 'hundreds':"But you're talking about internet, which for many on these communities is a luxury next to the need for food. Money is running out for many of them." And what is all the data being used for?:"Anecdotally, people are watching a lot of Netflix and other entertainment stuff, like You Tube. DStv has free stuff to stream and sometimes they use a friend's password. They want sports content" Overall active users are in the tens of thousands.
Before all this started, TooMuchWifi was a small pilot start-up that was in the process of achieving 'product-market fit':"We've taken a very conservative approach and not taken on investment and expanded too fast."
And after the Covid-19 lockdown finishes?:"What we're doing is not sustainable post Covid-19. It's grown our revenue significantly, produced much better customer engagement and we hope they will be loyal in the future."
So what of that future?:"First off, we want to do a better job where we are but we also want to be in Johannesburg, KZN and other provinces next year. We've been very focused on getting high hot-spot utilization. We weren't so focused on network except for the last 250 metres. Initially we bought surplus capacity from WISPs but we now need better contention rates upstream. We will be finding some network engineers and begin building out our network. "