CEO Interview: 4G and MiFi keeping Busy busy in Ghana

Written by on March 24, 2016 in Features with 0 Comments

Praveen SadalageAfter receiving a tip-off about a very interesting mobile data operator in Ghana called Busy, formerly BusyInternet, I persuaded the CEO, Praveen Sadalage (PS) to tell me about the company and its unique approach.

Tony Poulos (TP): Praveen, thank you for your time today, can you start by telling me how Busy began?

PS: It started in 2001, with Mark Davies, a British tech entrepreneur from the US who was looking for opportunities in Africa. Africa was on the dark side as far as the internet was concerned at that point. Ghana was the country he chose. He wanted to get people on to the internet and the best way to do that was through a large Internet Café, since connectivity and PCs among the populace was non-existent. He wanted to do it on the same basis as ‘Fedex-Kinkos model as in the Western world. He had around  1,400 square meters of prime air-conditioned space where people could browse, meet and talk to each other. It very soon became a popular meeting point and started to develop a culture of start-ups and Entrepreneurs. There is a large pool of educated young people, but few opportunities. The economy was manufacturing and trading based. The general public needed a platform to engage with the outside world. That was how Busy started.

TP: It is a big jump from internet café to ISP, how did that happen?

PS: Mark saw the opportunity for incubating start-ups, and started an incubation centre with seed funding from IFC. Incubation  requires constant funding. Start ups started using the space as their permanent space/office, and not just a place for incubation for a short period. So that stopped. Customers were using the café, but they were looking to use internet at home or in offices. So, Busy secured an ISP license and launched internet services   using unlicensed spectrum. This was 2006, and it started picking up pretty quickly, the service was good, the customer service and reliability was good. Ghana Telecom was the only alternative, and the service came with its own issues.

In 2009, I came on board to join Busy, I come from the internet industry background, in India. At that time, Busy was under pressure with a growing market on one side, with technology and cash constraints on the other side. But I could sense opportunity to turn this around and I asked for a free hand to run it and turn it around, which was given.

We started with a ‘ground up’ approach. Instead of talking to end users, we went to the CEOs and decision makers talked about how we could bring connectivity to improve their business. The decisions came faster, CEOs understood the benefits. For better and a reliable business connectivity, we could charge a little extra. With this approach we increased the customer base by up to 300 percent in about a years time. As we started growing, the existing unlicensed platform was giving us issues and we realised it would not be sustainable in the long run. The need for a stable technology platform like WiMAX, which needed licensed spectrum was becoming crucial. We started exploring and eventually secured licensed spectrum and deployed WiMAX 16e platform, this helped us reach to a larger potential market, with a much more reliable connectivity. We knew that our after sales service quality was excellent, so we wanted to leverage that to increase our market share .

TP: How were you delivering the service, by fixed line?

PS: No, we were using point-to-multi point, wireless connectivity, near line of sight base stations. With WiMAX we increased our customer base further by around 600 percent, with this revenues started increasing and cash flows were looking better and that gave us a solid base.

WiMax was fine to a certain extent, but the technology landscape was changing, customers demand for more bandwidth was ever-increasing. 4G was on the horizon, we wanted to get on to high-speed platform fast,  but it required an incredible amount of investment. The debt route was not feasible, as interest rates in the country are so high. You end up earning money for the bank. Rates are as high as 25 percent.

We needed to get equity funding, which the board approved. After a long hunt and many months, we identified the right partner, they came on board and here we are, we have launched 4G services.

TP: Ghana must be a unique market, and it seems it has jumped from 2G to 4G. And supported by Chinese vendors, I believe.

PS: That is true. Ghana moved from 2G to 3G to 4G very quickly. We negotiated good terms with them.

TP: You are obviously doing well in the market, but what are the drivers behind Busy now? How do you see it growing?

PS: Ghana is a relatively small country, with a population of around  25 million, but the beauty is that the majority of the population is around the age of 30 years. They are young, energetic, data hungry and looking out for new opportunities and technology. Also, as an emerging economy, Ghana is better off than most African countries, the political situation is stable, the currency off late is stable. So we have the young generation and their need for data along with the business segments being online as the key drivers for Busy. Like in other markets, we see the need for connectivity in Ghana is growing and we have created the right infrastructure to capitalise on the growth in data connectivity.

TP: You certainly seem to have unique problems.

Yes, utilities like electricity are very expensive. Also, students coming out of high school and tertiary education are not at the same competency level, we would expect in developed markets. So it is difficult, but the opportunities to develop are there.

This market is very sensitive to customer service. But Busy has always been ahead of the curve here. We have been very proactive in communicating with our customers. If there is a power outage, or cable or batteries are stolen, then we communicate the problem and tell customers when service will be back.

PS: Customers are sympathetic and they understand these problems. For the big players providing that level of support is next to impossible.

TP: I understand the customer service side, but what are the challenges to get new customers, the cost of handsets? With 4G you need a smartphone, presumably.

PS: Well, that is exactly why we have gone down the MiFi route. So does not matter which handset or a tablet you have, with a MiFi, you can connect your existing multiple devices wirelessly.

TP: That is very clever.

PS: Customers are particular about their devices, so we avoided the issue by addressing that area in a different way and said ‘buy this little device and take it with you.’ It is a box slightly larger than the size of a credit card. I am speaking to you now on my MiFi device.

TP: That is great for loyalty too I would imagine.

PS: Yes. It gives tremendous flexibility. There is the SME opportunity too, which we address. Our devices can connect to companies corporate ’LAN. And Busy pricing suits the budget of small companies.

TP: What about the future, what services are you planning?

PS: Data is what we are offering now, but there will soon be video on demand, among other initiatives, we will develop products that drive ‘stickiness.’

TP: One of the challenges, surely, as you grow from Internet Café to ISP, is getting the processes such as Governance in place.

PS: Yes. We addressed it from several levels. First is the technology, next are the people. We got the right technology and then right people to manage the operations. Plus we had support from external agencies. I get daily reports on the different functions, what products are moving well, what are our customers are preferring, and we adapt accordingly.

TP: Ghana gets bad press around fraud, particularly SIMbox fraud, are you able to manage that, or can you build security in to prevent it?

PS: SIMboxing is an issue and it happens when incoming international voice calls are terminated using the Internet and SIMs for the last mile locally, causing the losses by way of lost termination charges. Since we are a data only operator, we are not impacted. Additionally, we have stringent KYC policies in place and capture customer information.

TP: How much of the country do you have covered at this point and what are your objectives for coverage?

PS: Most of the potential is around the capital Accra and the port city of Tema. If you have the capital, you have covered 60-70 percent of the potential. We also have plans for the two other major regions, but right now our focus is on customer acquisition.

TP: How do you manage the relationships with your vendors and suppliers, as a small operator it must take up a lot of your time?

PS: It does. What we have done is selected a partner who is new to the market, and their success is based on ours, and vice versa. In rolling out such a complex network, it is important to understand the terrian and the technical aspects. It is like a marriage, everything has to work. As far the Regulator is concerned, we are completely engaged. Fortunately, the Regulator is very forward-looking, and have good policies in place. Operators are free to choose whichever technology that is best for the business, they will not restrict you. as long as you are meeting the license conditions.

TP: Your experience with Tata must have stood you in good stead.

PS: My Tata experience has definitely helped, coming from India, it’s all about scale and processes

TP: Did you say there are six operators in Ghana?

PS: Yes, six mobile operators, and quite a few small ISPs. The ISP scene is become tougher, as mobile operators are offering all services under the Universal license.

TP: There are a lot of people putting fibre into the country.

PS: The cost of international bandwidth has dropped significantly and this will benefit the country. We have five undersea cable operators bringing international connectivity.

Challenge is the terrestrial capacity which is limited and expensive. Google is on the ground and is deploying a metro fibre network, very soon the terrestrial connectivity scenario will change dramatically and the connectivity is going to get only better and cheaper for the consumer.

And I think that our focus and investment in customer service will stand us in good stead in the years to come.

TP: That is a great story, thank you for telling us about Busy.

PS: A pleasure. Thanks Tony.

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About the Author

About the Author: Tony is a freelance writer, regular speaker, MC and chairman for the telecoms and digital services industries worldwide. He has founded and managed software and services companies, acts a market strategist and is now Editor of DisruptiveViews. In June 2011, Tony was recognized as one of the 25 most influential people in telecom software worldwide. .

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