Kenyan Telecom Uses Free Wi-Fi on Minibuses to Get Consumers Hooked on Mobile Internet

By Heidi Vogt 

NAIROBI, Kenya--As young pitchmen shout to potential passengers over blaring music, a graffiti-covered private minibus fills up more quickly than the other dozen in the scrum. It has free Wi-Fi.

The specially outfitted matatu, as the minibuses are known in Swahili, is part of an experiment by Safaricom Ltd. to connect Africa's unconnected, offering a glimpse of what it takes to bring some of the world's most price-sensitive users online.

Once on board, Mwenda Kanyange updates his Facebook status and browses the Web for his hourlong trip home through Nairobi's traffic-clogged streets.

"It gets kind of boring," the 23-year-old college student says, "Wi-Fi is good for that."

Tech companies world-wide are trying to reach billions of people just beyond the middle class, and many of them are in Africa. Only about 16% of Africa's one billion people use the Internet, according to the International Telecommunication Union industry group. That is well behind Asia, with 32%, and Arab states, with 38%.

But Africa is the fastest-growing region for accessing the Internet by phone. Mobile-broadband penetration on the continent rose to 11% last year from 2% in 2010, the group says.

"The numbers can only move in one direction," says Erik Hersman, who founded a Kenyan crowdsourcing site and a tech incubator here in the capital.

The key to unlocking that growth is discovering ways to bring the Internet to people for whom even phone calls can be too expensive.

Google Inc., Facebook Inc. and other companies are funding groups like the Alliance for Affordable Internet, which work to bring down the cost of getting online globally. Intel Corp. is working in Africa with phone manufacturers to bring down the price of smartphones running on Intel processors. International Business Machines Corp. has opened a research center on the continent.

There are few better places in Africa than Kenya to start a technology venture. A half-dozen tech incubators dot Nairobi. And nearly half the country's population of 40.7 million people use the Internet in some form, according to the government. But Wi-Fi in Kenya tends to be at upscale establishments, such as airports or high-price restaurants.

On Mr. Kanyange's matatu, only half the roughly 20 passengers appear to be jumping online. A 24-year-old housekeeper a few seats away from him says she doesn't have an email address, let alone a Facebook account. Neither does anyone in her family.

Reaching people like the housekeeper is the goal of Safaricom's Vuma Online program, borrowing a Swahili word for "blowing strong and fast."

The Kenya-based company hopes that putting free Wi-Fi in places where tech novices and tech aficionados meet will coax more people to the company's paid service. Safaricom says it is willing to absorb losses for the time being but declines to say what it is spending.

"We looked at where our [potential] customers were, and they were in the matatus. Most of our customers spend two or three hours commuting every day," says Gideon Karimi, who oversees Internet marketing for Safaricom. The program has expanded to about 3,000 matatus and buses nationwide from about 20 in 2012.

The telecom gives matatu owners the equipment free and charges them 2,000 shillings ($23) a month for data, 30% off the retail price. It is money well-spent to attract riders. Every time Wi-Fi matatus reach their stops, says bus owner Vincent Swaleh, there is "a group of people waiting for them."

Rival Airtel Kenya takes a different approach. The unit of India's Bharti Airtel Ltd. is focusing on people who know they want Internet access, but are scared away by price. The telecom gives free airtime for a few popular applications, such as Facebook, hoping they will serve as gateways for broader online use.

Safaricom, meanwhile, is airing television and radio commercials and distributing flyers to explain what is available on the Internet, like soccer scores and advice on farming. Some ads explain that Gmail and Facebook accounts are free.

The idea is to start conversations among consumers about going online, Mr. Karimi says. Safaricom staff have seen matatu passengers explain the Internet to each other, he says. Drivers explain smartphones to riders who don't understand why their basic handsets won't connect.

The Vuma Online program is expanding to other gathering spots, too. SafariSHYcom is installing Wi-Fi routers at city train stations and small-town barber shops. The company also takes a router-laden bus to rural areas on market days to create a temporary Wi-Fi hot spot. Staff use a loudspeaker to announce that free Internet is available and help shoppers set up free email accounts.

"We're trying to create a culture of Internet here," Mr. Karimi says.

Write to Heidi Vogt at [e-mail]

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