Written by Jean Dennis, Traffic Intergrated Marketing

Cape Town – The somewhat one million tourists and soccer revellers visiting the country during the 2010 Soccer World Cup led to a significant surge in the demand for high quality bandwidth when many of them flocked to popular social networking sites like Facebook and Twitter and local news site Sports24.co.za, which saw over 1 million unique users during this period.

“Users on the micro-blogging site, Twitter, set a new record on June 14 posting 940 tweets per second in the 30 seconds following Japan’s World Cup win against African team, Cameroon. This is about 200 tweets per second more than the average,” says Henk Kleynhans, CEO and co-founder of premium Wi-Fi hotpot provider, Skyrove.

“At Skyrove, we saw a significant increase in bandwidth demand from our hospitality venue clients as many of the international visitors not only engaged on social networking sites, but communicated with loved ones in their home countries via email and instant messaging and uploaded photos of their fan experience in South Africa.”

“Usage at restaurants, cafes and hotels using Skyrove’s Business-Class Wi-Fi solution was 78% higher during the World Cup. We recently started delivering free Wi-Fi vouchers to users via SMS and ensured that payment with credit card was quick and easy for end-users and hassle-free for busy location owners.”

While emailing and social networking remain the mainstay of web usage, tourists used the internet for sharing photos, swapping music, uploading videos and making Skype calls to their friends and family.

As a result, these tourists were far more demanding of their wireless connectivity and expected Wi-Fi hotspot providers to cope with the increase in bandwidth usage. Skyrove’s hospitality venues were prepared for this by ensuring they offered wireless connectivity that was easy to access, reliable and consistent across the entire property and did not leave guests feeling frustrated with slow, unreliable internet and inconsistent coverage.

Says Kleynhans, “We are confident that Skyrove’s offering for hospitality venues will be able to cope with the ever increasing demand for high-quality Wi-Fi hotspot service following the positive feedback from guests and venue owners during the 2010 World Cup.”

Published in ChinAfrica Magazine December 2009

Positive aspects of China’s involvement in Africa on display at 2009 China Africa Business Summit

Take the positive effects of Chinese companies coming into Africa. Use that as an example so that African governments and policy makers will say, “Hey, these kinds of partnerships do work.” Henk Kleynhans, Wireless Access Providers Association.

It seems the relationship between China and Africa has become an irresistible force in recent years. The desire to strengthen cooperation and understanding between the two is bringing people together to talk, listen and act. This phenomenon was on display in October when business and political leaders from China and Africa came together in Cape Town, South Africa for the 2009 China Africa Business Summit, hosted by Corporate Africa. “My view is that the summit was actually the beginning,” said Motsepe Matlala from the Southern African Confederation of Agricultural Unions. “I think it was able to paint a map of where we must go [with the China-Africa relationship.]” Matlala said the networking was extremely useful and he was encouraged to see how the people came together.

The summit’s aim was to encourage the flow of ideas and expertise and included six panel discussions and six group workshops spread over three days. These sessions covered specific topics crucial to the development of Africa and the audience of national delegates and business leaders were able to benefit from a wealth of knowledge. One of the most exciting workshops at the summit was “Wireless Partnerships.”

Getting wired

There is a communications revolution going on in Africa and it seems to be moving faster than anyone could have predicted. The Wireless Partnerships workshop mainly focused on the radical changes seen in Africa as a result of the surge in cell phone ownership, as well as the direction this sector should be heading and the potential for Chinese companies to play a role.

Henk Kleynhans, from the Wireless Access Providers Association, chaired the session. He told the audience that by the end of 2009 there are expected to be 450 million cell phone subscribers in Africa, a huge increase from just 280 million in 2007. This is the fastest rate of growth in the world and the social benefits have been enormous. Poorer Africans are now using their phones to perform important, daily tasks; mobile banking, money transfers, checking agricultural information, access to health information – the list goes on.

The audience also heard a presentation from Chen Junhua, representing the Chinese telecommunications company Huawei. Huawei has brought cell phones to Africa at a price that makes them accessible to whole new sections of the population. As Chen explained, the company is not simply dumping truckloads of phones on the continent. They have set up about 20 training centers around the continent, training 10,000 staff each year. They have also established research and development centers at Johannesburg, South Africa and Lagos, Nigeria.

“One of Huawei’s main objectives is to improve the efficiency of society and bridge the digital divide between rich and poor in the African continent and the rest of the world,” he said. Kleynhans said the Huawei example provides a useful way of looking at Chinese investment in Africa. “I do think that’s actually a phenomenal case study, in the sense that there was this opportunity for a Chinese communications infrastructure provider to sell goods in Africa. They realized the challenges but they came in and did what they needed to.”

Keeping right perspective

Kleyhans said Huawei should be seen in the proper perspective. He said that if the positive effects of Chinese companies coming into Africa are highlighted, they could be used as an example to show African governments and policymakers.

He told the audience that in his opinion this initiative would only work if Chinese companies are not restricted when coming into Africa. Kleynhans pointed out that Africa’s healthy communications revolution is partly due to the fact that governments have avoided protectionist policies in this sector. “There hasn’t really been any import tariffs that I know of [on communications equipment]. I think most African companies realize that what’s more important right now is to get more people connected. It’s not about the manufacturing of cellular equipment in Africa.”

Jumping the gun?

Another point of contention arose when Chen explained that Huawei was actively investing in LTE technology for Africa. LTE is the next generation of cell phone network technology that will eventually overtake the current 3G networks. “Over the years, Africa has been seen as a ‘Technology Follower.’ We believe it is high time that Africa be technologically on par with other global markets,” said Chen. This prospect has industry insiders chomping at the bit, but some in the workshop audience suggested the focus for now should be on getting a current 3G phone to every African possible, rather than prioritizing on LTE. “I challenged that [suggestion],” said Kleynhans. “[We should be] leapfrogging the old technologies. Don’t slow down technology, because you probably will then get a situation where every single person in Africa has a normal 3G handset, but you find that the later applications for mobile money and educational tools will not be developed for the 3G technology. So you probably won’t be giving them access to what would be most beneficial to them.” Both Kleynhans and Chen said the summit was an outstanding networking opportunity. “I’ve been contacted already by a number of potential clients and partners,” said Kleynhans.

Workshops and panel discussions at the Summit:

* Agricultural self-sustainability

* Banking and finance

* Tourism

* Power and energy

* Wireless communication

* Developing partnerships with Chinese investors

* Mining

* Health

China Africa Business Summit at a glance

* Organized by Corporate Africa, backed by China Africa Business Council

* Held in Cape Town, South Africa October 21-23

* Dedicated to building partnerships and trade between China and Africa

* 12 nations represented

* According to business and political figures, the summit was a networking extravaganza

* 12 workshops/discussion panels on crucial African sectors

* Summit to become an annual event

For an initial six months only, Capetonians can enjoy free wireless internet at South Africa’s oldest public space, Greenmarket Square. In a unique collaboration between Cape Town Partnership and Skyrove, the premium Wi-Fi hotspot provider, locals will now have access to 10MB’s of free internet daily.

The free wireless internet will be a welcome addition to Greenmarket Square’s newly developed residential community; their revamped retail area; and their outdoor marketplace. “Businesses on Greenmarket Square will see a significant increase in the number of people lingering in their establishments, as more locals will schedule meetings outside of the office – or linger over coffee – while they enjoy wireless internet in the cosmopolitan bustle of this 300-year old heritage space,” says Henk Kleynhans, CEO of Skyrove.

Says Kleynhans, “The influx of visitors to popular tourist locations during the 2010 World Cup will be significant and we wanted to ensure that we could accommodate even the most tech-savvy soccer revellers and possibly enhance the attractiveness of the precinct.”

“As we constantly strive to make Cape Town a valuable resource for both cultural and creative inspiration, Skyrove’s proposition has assisted us to strengthen our positioning as a creative hub,” says Cape Town Partnership Senior Project Manager Terri Carter. She continues, “We hope to roll out similar projects around the city very soon.”

The City of Cape Town has spent over R18 million on the upgrade of Greenmarket Square. The first phase saw the granite cobbles, laid in 1965, lifted and cleaned before being rearranged at new levels to accommodate surrounding restaurants. In addition, CCTV cameras and pedestrian lights were installed; new bollards, benches and signs were added; as well as the sidewalks paved. The roof of the ablution facility is being transformed into a stage which will allow for special events such as lunchtime concerts which will further enhance business in the Square.

Article published on the Cape Town Partnership website.

Today we had a problem at one of our Wi-Fi Hotspots, the Fat Cactus, in Cape Town. We recently upgraded their equipment. Free Skyrove vouchers are registered so that they can only be used at a particular hotspot, and because of the upgrade, there were some vouchers still registered to the old Wi-Fi routers.

Unfortunately, the Fat Cactus still had a handful of old vouchers which weren’t working with the new equipment. One of our customers, Anthony, phoned us after not being able to log in at the hotspot. Fortunately we were able to quickly diagnose and solve the problem.

Anthony later wrote the following feedback on our customer forum:

Examplary Service

Today I had issues with establishing a connection to Skyrove’s hotspot at a local restaurant in Gardens. Firstly, the free vouchers I received from the venue did not work, then I could not surf the net through my pre-paid account. A frustrating experience indeed.

I contacted Skyrove support by email and promptly received a telephone call from Robert from Support, who went through the issues with me. He soon discovered the problems, addressed them in a friendly manner, and arranged the issue to be resolved. I then received a follow-up email encapsulating the discussion we had prior on the phone and even received some Skyrove credit in the form of a voucher number.

This is what I call ’service’.

May Skyrove go from strength to strength. I’m a happy customer

I think there are 2 key learnings out of this:

First, proper communication with your customers. We use Zendesk to track all customer support queries. It makes a BIG difference to your customers when you keep them in the loop.

Secondly, have a customer forum. It’s always a bit scary to have a section of your website that might point out weaknesses in your product/service. But it’s also very transparent and engenders trust from customers. And of course now and then a happy customer might just make some time to thank you for solving their problems.

This article first appeared in FinWeek English Edition 21 January 2010. It is written by Simon Dingle.

HENK KLEYNHANS is on a mission. Internet access in South Africa is expensive and beyond the reach of most of the country’s citizens and he plans to change that. While the realities about telecommunications are changing, challenges still abound. Kleynhans’s company – Skyrove – is focused on empowering people to not only get connected but also use their collective strength to overcome high prices and other challenges. The company hasn’t only been successful in doing so but recently attracted millions in international funding.

Kleynhans founded Skyrove while at the University of Cape Town to enable students staying in digs to share the costs of Internet connectivity. It was at the time wireless net- working was becoming commonplace and he realised it would be a good way for him to share an Internet connection with other students.

“So I installed an ADSL line and wire- less router and started collecting money at the end of every month from other students who wanted to use it. But that wasn’t an equitable way of doing it, because some students would be away for holidays and not want to pay for that month, while others would download larger amounts of data than anyone else while paying the same rates.

“So I looked at billing systems for hotspots overseas. There were some good ones, but they were all time-based – allowing you to bill by the hour, for example. That wasn’t ideal for SA, where bandwidth is expensive and limited,” says Kleynhans. “Some people would go berserk with the connection while others were just checking their email: it didn’t make sense to charge them all the same amount.”

Kleynhans and a business partner developed their own system for billing hotspot users based on usage, not time. It was a new concept and a first of its kind worldwide. “It would allow us to get the Internet to more people at a cheaper price. And the hotspot owners – be it students at res, restaurant owners or anybody really – can then easily sell bandwidth and become entrepreneurs themselves.”

The business soon attracted the attention of investors in San Francisco in the United States, who provided the company with money to get going. Skyrove started supplying its own routers running dedicated software. Anyone can buy one of those, plug it into their Internet connection and begin selling bandwidth, or using the system to connect a group of people. It now has more than 500 hotspots in SA and over 20 000 registered users.

Kleynhans is a serial entrepreneur. His mind tills over the problems we all face and ways we can solve them together. I once attended a conference where he used the group of delegates to brainstorm problems in SA’s electricity supply. He’s also outspoken about the way bureaucracy limits business.

“South African businesses are mired in bureaucracy, with some of it – such as the 1961 Exchange Control Act – being borne of solid apartheid era protective thinking and preventing companies from selling goods in foreign currency to foreign buyers on the Internet – which is the world’s biggest marketplace.”

He says another barrier for businesses in SA is funding. “But I believe once you remove the red tape it will also become much easier for money to flow into this country and thus for entrepreneurs to raise funds,” he says.

Skyrove has been highly successful in that department, having recently signed a multi-million rand investment deal with Jersey-based 4Di Capital. Skyrove also recently closed an investment deal with Internet service provider Cybersmart.

“The most important part of investment in a start-up is the relationship you have with the investor and not just the money he’ll invest,” says Kleynhans. “Our investors ‘get it’. They understand Skyrove’s business model and how critical it will be to connectivity in Africa. Second, my investors are entrepreneurs them- selves. They know what it takes to start a business and how incredibly hard it can be at times.”

However, Kleynhans suggests companies shouldn’t get caught up in funding. “Raising funds is great – but don’t be afraid to bootstrap either. Before we got funding for Skyrove my co-founder – Allister Kreft – and I were selling computers, conducting market research for corporates, teaching students and living on Provitas – literally,” he says. “I rented a five bedroom house and then sublet four of them, with my wife and I staying in the fifth (just married and just graduated) while we started the business in the attic. We didn’t have to pay any rent – either for our room or for the business.”

Those days are long gone for Kleynhans and the company. Skyrove goes from strength to strength and he believes it will remain relevant, even once Internet connectivity in SA is sorted out.

“Skyrove’s primary focus is providing the convenience of fast and stable Internet connectivity without the need of contracts or line rentals. Right now we’re able to do this at much cheaper rates because we’re able to split an expensive Telkom line with many people and bring the cost down. As the price of bandwidth comes down in the future, you’ll see more users using more bandwidth for video, VoIP, social networking and web applications,” he says.

SIMON DINGLE simond@finweek.co.za

Business Day - PUBLISHED: 2009/11/24 06:24:08 AM

TELKOM ’S monopoly over landline communications may officially be over, but its continued control of the “last mile” of copper leading to most customers’ homes will remain a stumbling block to affordable internet access in SA for some time to come.

That means even the prospect of a huge increase in the amount of available international bandwidth in the coming few years, as various new undersea fibre-optic cables are linked up to an upgraded national network, does not necessarily mean that every home in the country will have instant access to cheap and fast internet services.

For existing home internet users that is an annoyance, and for the poor it is one of many bricks in the wall that constitutes the digital divide.

But for Cape-based internet entrepreneur Henk Kleynhans it is a virtual guarantee that the company he founded in 2004 will have a large pool of potential customers for the foreseeable future.

Skyrove enables small businesses such as coffee shops and guesthouses — or entrepreneurs wanting to on-sell wireless internet access — to set up WiFi “hotspots” with a radius of about 50m, and either hand out vouchers as a service to customers or take a share of the fee that can then be charged for bandwidth.

“We realise that there’s nothing we can do about Telkom’s monopoly over the last mile of copper,” says Kleynhans. “But we can stake a claim to the last 50m by helping people set up their own hotspots and gain access to the internet wirelessly and cost-effectively.”

Potential hotspot providers must have an ADSL line in place before signing up with Skyrove and paying a once-off amount of about R1000 for a high-speed modem and wireless router.

That part of the service is unremarkable since there is nothing stopping anyone from setting up a hotspot for their own or customers’ benefit — indeed, many coffee shop franchisees already do.

But keeping tabs on who is tapping into your hotspot is difficult in such circumstances, as is preventing a few individuals from hogging all the bandwidth. And it is impossible to set up a viable business selling internet access if you can’t control usage and bill accordingly.

These were precisely the problems Kleynhans encountered when he was living in a student digs while studying at the University of Cape Town in the early 2000s and couldn’t afford the R1200 a month it then cost to have an ADSL line installed. He realised it would only be viable if he could share the costs with his housemates and students in nearby digs, but in those days the technology to do so wirelessly was not only primitive but using it for commercial gain was illegal.

Kleynhans, who is now 31 and recently became a father for the first time, recalls that he wrote the business model for a service that would allow him to bill people for the megabytes they used in a sudden burst of inspiration at 4am on the night before a maths exam.

“I felt that breaking the law was justified under the circumstances,” he says.

The following year, his last of a four-year computer engineering degree, lecturers and fellow students were roped in to help Kleynhans refine the business plan, and Skyrove was launched at the end of 2004, shortly after he graduated.

The first outside investor came on board the following year, which allowed the company to hire a programmer and go to market with the world’s first prepaid per- megabyte WiFi billing solution. Skyrove now has more than 500 hotspots in operation around SA, and is adding about 20 new ones to the list each month.

Skyrove won the Enablis Business Report Competition in 2005, and the Technology Top 100 Award for Most Promising Emerging Enterprise in 2006. In July this year internet service provider (ISP) Cybersmart took a stake in the company, and in October a multimillion-rand investment deal was signed with US-based 4Di Capital, a venture capital group that is trying to establish Cape Town as SA’s Silicon Valley.

Kleynhans says the injection of cash in exchange for equity, which has left him with a stake in the business of about 25%, will allow Skyrove to invest in a proper marketing strategy for the first time as well as take advantage of 4Di’s experience in taking technology startups to the next level. The goal is to triple the size of the Skyrove network over the coming 12 months, which means creating at least 1000 new hotspots.

The key to achieving this, he says, is the simplicity of the process. “I call it the dad test: would my dad be comfortable using the system?” To gain access to a Skyrove hotspot, users — be they casual coffee shop customers or B&B guests making use of free vouchers or residents of apartment blocks serviced by hotspot entrepreneurs — log onto the company’s website from their laptops and either enter the voucher number and password, or buy bandwidth credits using their credit card.

The amount charged per megabyte, if anything, is entirely at the discretion of the hotspot owner or “Skyrover”. Kleynhans says the average currently is a little over 30c, which seems high compared with the 7c most home ADSL users are paying their ISPs. But that fails to take into account the line rental fee demanded by Telkom, which comes to well over R400 a month for a high-speed line.

So Skyrove’s value proposition remains attractive for casual internet users in particular, at least until they start using more than two or three gigabytes of bandwidth a month. And that will not change much even when bandwidth costs start coming down.

In fact, Kleynhans believes lower line rentals — but not too much lower — would be to Skyrove’s advantage as more potential hotspot entrepreneurs would be able to afford to become Skyrovers.

So far, there has been little penetration in the townships, which he puts down to the difficulty in getting an ADSL line installed and a too-low concentration of laptops, rather than the cost of bandwidth.

The revenue generated by each hotspot varies widely depending on the pricing model being followed, the highest being one serving an 80-room hotel that brings in about R30000 a month. But Kleynhans says many Skyrovers are not in it for the money; they want to be able to offer free internet access to guests or customers while retaining control of their bandwidth usage.

His immediate goal is to ramp up the marketing of the Skyrove concept and get many more hotspots up and running before the World Cup. “Guest houses used to see WiFi as a nice-to-have value add to attract guests, but now they’re realising that it’s an absolute necessity. Foreign visitors expect internet access, and those that come here for the World Cup are going to want to be able to take photographs and share them with their families back home.”

Kleynhans believes Skyrove’s potential SA market is still “absolutely massive”, but the next stage in the company’s strategy is to test the waters in other developing countries in sub-Saharan Africa and South America, where large parts of the population have similar hassles accessing the internet.

The key … is the simplicity of the process. I call it the dad test: would my dad be comfortable using the system?