Entelek IT Services is targeting growth with an advertising-driven model for cheap and free Wi-Fi in underserved communities, having emerged as one of the few South African hotspot operators to survive a multiyear shakeout of the market.
The company, which provides Wi-Fi coverage in train stations, taxi ranks, shopping centres, spaza shops and other venues, has developed a proprietary digital marketing system that allows it to generate sustainable revenues while providing cheap or free Wi-Fi connectivity to consumers.
Johan van Wyk, CEO and founder at Entelek IT Services, says that millions of South Africans still depend on expensive mobile broadband data to access the Internet because operators have struggled to come to market with a commercially viable model for affordable Wi-Fi. With many major hotspot operators downscaling or disappearing from the market, consumers in some townships and other underserved areas have fewer options for fast, cheap and reliable Internet than they did before.
“Over the past decade, hotspot operators have struggled to deliver Wi-Fi in underserved communities in a financially sustainable manner,” says Van Wyk. “Consumers’ unwillingness or inability to pay for connectivity, paired with high infrastructure costs, have made it difficult to address the need for reliable and accessible Internet access in transport hubs, townships and other sites.”
Cracking the code
Van Wyk says Entelek IT Services believes it has cracked the code for sustainable public Wi-Fi by leveraging operator network infrastructure rather than laying down its own, as well as using a multitude of advertising models to subsidise the cost of the service to the consumer. It partners with retailers, transport operators and other companies to roll out hotspots, supporting them with wireless network installation, maintenance and management services, media sales, ad server integration, and solar and electricity provisioning.
Says Van Wyk: “We have developed our programmatic and premium advertising solution over the past seven years, and the technical challenges we faced in integrating it with a hotspot platform were substantial. However, now that this platform has matured and broadband costs have fallen 10-fold over the past decade, we can offer free or cheap Wi-Fi in a commercially sustainable model. We have an impression capacity in the tens of millions monthly.
The solution has attracted many of South Africa’s leading retail and financial services brands as advertisers
Entelek IT Services follows a hub-and-spoke approach to hotspot deployment, running free Wi-Fi services at large sites such as taxi ranks and train services, and partnering with merchants to offer cheap Wi-Fi at spaza shops and other retail sites.
The solution has attracted many of South Africa’s leading retail and financial services brands as advertisers as well as the support of major digital buying agencies. In the next phase of its growth, Entelek will be focusing on growing consumer adoption and reaching new merchant partners.
Driving consumer adoption
“We believe there is scope to drive much higher consumer adoption at our macro sites by educating consumers about the offering,” Van Wyk says. “We have focused on removing as much friction from connecting as possible; now we want to provide more consumers with access to the economic, educational and social benefits of the Internet.
“We are also excited by the opportunity to help micro-entrepreneurs generate revenue from Wi-Fi services as well as to help sites with existing hotspots to monetise them and drive down costs.”
He adds: “Capital investment in Wi-Fi hotspots has fallen over the years because the business case was always tricky for dedicated hotspot operators, while the incentives for mobile operators are tilted towards selling data directly to consumers rather than providing free or cheap Wi-Fi.
“Yet Wi-Fi still has an important role to play as a last-metre solution to bridging the digital divide and improving inclusion. With the right business model, hotspots could play a key role in allowing more people to gain access to the Internet and to help those with limited budgets for mobile data to do more online.”
About Entelek
Entelek is an ICT solution provider offering turnkey managed services, connectivity, Wi-Fi and automation solutions to enterprises across South Africa. Over the past seven years, Entelek has embraced a mission of connecting unserved and underserved consumers to the Internet via advertising-subsidised free and low-cost Wi-Fi services. The company has developed a proprietary digital marketing system that enables it to generate sustainable revenues while providing cheap or free Wi-Fi connectivity. Over the past seven years, millions of users have logged into Entelek’s hotspots at taxi ranks, train stations, shops and other venues.
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