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

[Eric Osiakwan]

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)

Eric M.K Osiakwan
Executive Secretary
AfrISPA (www.afrispa.org)
Tel: + 233.21.258800 ext 2031
Fax: + 233.21.258811
Cell: + 233.244.386792
Handle: eosiakwan
Snail Mail: Pmb 208, Accra-North
Office: BusyInternet - 42 Ring Road Central, Accra-North
Blog: http://blogs.law.harvard.edu/eric/
Slang: "Tomorrow Now"




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