[kictanet] Internet Service Providers Record Rise in Earnings in Kenya

[alice]

        From Balancing Act



        Internet Service Providers Record Rise in Earnings in Kenya

Local Internet service providers are earning higher revenues signalling 
increased use of the web among consumers, industry statistics show. The 
data indicate that average revenue per user (ARPU), a measure of how 
each user spends on internet access, has risen to an all time high of 
$600 in some segments of the market, up from an average of $500 last year.

Globally, ARPU is used as a measure of how much money a service provider 
makes from the average user and enables the ISPs to make revenue 
projections as well as determine which products are earning most 
revenues. It also provides an accurate picture as to what services and 
products are popular with consumers in certain segments of the market.

"Most ICT firms, however, have indicated application of cost leadership 
strategies, resulting in lower ARPUs with the intention of raking in 
higher subscriber number," said Shida Mutuku, the group head of 
marketing at Africa Online.

The pan-African ISP, which is changing focus from being a pure ISP 
services company to a supplier of comprehensive IT services, says demand 
for ICT products is rising across the board.

ISPs can maximise on their resources by using ARPU data to their 
advantage. ARPU can also be used as a measure of how successful a 
company is in moving users to new services that are regarded as 
strategically important.

Citing steadily increasing revenues from its broadband product, 
AccessKenya Group hopes to realise its projected revenue target from 
customers looking for better speed and capacity from their internet 
connection.

Last week, AccessKenya said it was on track to realising an ARPU average 
of $540 owing to increased number of large customers coming on board and 
many existing customers upgrading their bandwidth.

The ICT company, which recently announced that it had realised its 
customer target of 1,720 four months ahead of schedule, says its current 
ARPU is underpinned by the strength of its Broadband Max 2 leased line 
solution that has become popular with the corporate market.

"Broadband Max 2 offers a quadruple downlink coupled with high 
reliability evidenced by a 99.8 per cent Service Level Agreement," said 
Jonathan Somen, the managing director of AccessKenya.

"We are the only ISP offering this sort of solution in the Kenyan market 
and have realised significant increase in demand over the past six 
months," he said. Somen said AccessKenya had set a new target of 
enrolling a minimum of 1,900 leased line customers by the end of the 
year, and has been reinvesting some of its profits from increased 
customer numbers to build up sales and customer service teams.

Africa Online refused to reveal its current ARPUs but said it was 
targeting ARPU of $1,000 per use by the end of the year. The ambitious 
target is based on increased demand for corporate leased line solutions 
and increased take up in the residential user market of the wireless 
broadband product, Infinet.
(Source: Business Daily)