Alan Knott-Craig’s latest project is the provision of free Wi-Fi to low-income households in Tshwane. Knott-Craig’s organisation Isizwe is supplying the Wi-Fi in partnership with the Tshwane municipality, and according to Knott-Craig, by the end of April the programme should have close to 500,000 people online. It’s a really exciting project, and one that Knott-Craig plans to roll out to other cities, starting in the Western Cape.
However, while I love the idea, I also wonder how effective it will be at empowering low-income folks. Using the internet requires a lot of skills, and for people with little education or knowledge, the internet can be quite a risky place. Unless you know what kinds of things are safe to do online, and where to find useful sites and so on, having free access to the internet may be useless to poor families. – FD
ALEC HOGG: With less than ten million landlines across Africa, a continent of one billion people, mobile operators have led the revolution by bringing 3G coverage to the farthest corners. Joining us now to discuss Africa’s Internet penetration, is Alan Knott-Craig Jr. Alan, off-air, and I also picked it up on LinkedIn, it was a year on Saturday – that Project Isizwe celebrated its first anniversary. The last time we spoke was in Davos, where you were wowing the people at the World Economic Forum about the progress you’ve been making on Project Isizwe. Can you give us an update on how things are going there?
ALAN KNOTT-CRAIG: Yes, thanks. It was a miracle we managed to get this far. It’s been a year since we officially set up with the NGO and August last year is when we announced the City of Tshwane Phase One. Miraculously, we’re still going. I think that by the end of this month, the City of Tshwane should have almost half a million people connected.
ALEC HOGG: Half a million people connected through the Wi-Fi network, and most of them not being people with great income earning potential, until now.
ALAN KNOTT-CRAIG: Yes, the focus is very much on the low-income communities. Right now, we have the capacity for twenty-five thousand people. Every day we hit a new record. With the next phase going live in the next three or so weeks, it’s a big number. By this time next year, with any luck we’ll have the capacity for three million people in Tshwane.
ALEC HOGG: Just in Tshwane itself. Alan, where are we in the snow? I was so impressed with you not having a jacket on or certainly, not a big jacket like the rest of us because you are still young and strong. You were telling us about Swaziland, Zimbabwe, Botswana, Mozambique, and East Africa. This is all in your plans into the future. Have you made much progress there since January?
ALAN KNOTT-CRAIG: Yes, we’ve made hell of a lot. Firstly, I just want to say that on that snow situation, I was freezing to death. I think I’m still suffering from the effects. The Western Cape funnily enough, are the next big priority. They’ve issued a tender to roll our free Wi-Fi in Atlantis and Robertson. That’s good. I think the rural areas are a big priority, too. We are engaging with the government of Botswana as well as Lesotho and Swaziland etcetera. In terms of real traction, the only real ‘on the ground’ rollouts that are happening right now are in Tshwane and the Western Cape. I’ve learned from my past experiences that it’s more important to get things done than to talk about things.
ALEC HOGG: It’s interesting about the Western Cape. I had a chat yesterday with the head of Stonehage, which is a firm that only concentrates on people who have US$20m plus. In South Africa, they have three offices: Johannesburg, Cape Town (which you’d understand), and the third one is your hometown of Stellenbosch. Do you bump into these super-rich people in Stellenbosch where you now live?
ALAN KNOTT-CRAIG: Firstly, it’s not my hometown. My hometown is Pretoria.
ALEC HOGG: Have you moved back to Pretoria?
ALAN KNOTT-CRAIG: No, I grew up in Pretoria. My current place and home is Stellenbosch. Yes, I guess you do bump into the odd wealthy guy or girl.
ALEC HOGG: Why are they migrating to that place – to that town?
ALAN KNOTT-CRAIG: I’m not a wealthy guy, so I can’t really speak for them or their motivations. I moved there because I want my kids to go to a decent school and my wife said we should go there. For the most part, when you visit Stellenbosch you see for yourself that it’s not a bad place to live.
ALEC HOGG: All right. Well, getting back to your Wi-Fi and your hometown of Tshwane, to go from an initial base of twenty-five thousand, to half a million, to three million in a year’s time: what kind of investment does that take?
ALAN KNOTT-CRAIG: In Telco terms it’s a pittance, but in real world terms, it’s quite a lot of money. I think it will cost about R150m to get the capacity for three million, and it’s an annual type of cost. They want to keep rolling it out. I think the mayor and the executive…their ambition is pretty big. They want it to be exactly as you’d consider water or electricity. Everybody should have access to it, regardless of whether they can afford it – of course, not uncapped. It’s not necessary to give worse service than you’d get if you were living in Stellenbosch, for argument’s sake, so the quality of the Internet is excellent. The average speeds right now in places like Soshanguve…we’re doing 7mpbs.
ALEC HOGG: What would you pay for 7mbs in a commercial environment?
ALAN KNOTT-CRAIG: Well, I lose track of what the pricing is nowadays. You need a PhD to figure out what the pricing is from the retail side. I guess 7mb would probably set you back about R400.00. Let’s put it this way: for a line that can give you 7mbps, and you’re going to download seven-and-a-half gigs per month, which is what the monthly cap for Tshwane is, you’re probably going to spend between R500.00 and R1000.00 per month – that’s in the commercial environment. What Tshwane’s paying is R1.00 per user per month for that cap and that speed, so it’s an order of magnitude cheaper. The only way a municipality can justify providing free Internet is if we can get the numbers to a point where it’s sustainable.
ALEC HOGG: Why is there such a big difference?
ALAN KNOTT-CRAIG: Well, there are three big reasons. 1. We have some great partners who come to the party with discounted bandwidth etcetera. Neotel in particular, made a hell of a contribution and one of your downstream costs is always going to be bandwidth. 2. We use a local wireless ISP, so we cut out all these corporate middlemen who put big mark-ups on things. These guys are really excited and they do things in really frugal way. We also use really low-cost equipment from America. It’s not low quality. It’s just much cheaper than normal 3G equipment. 3. We work hand-in-glove with the municipality. We’re using their buildings. We’re using their electricity. When you’re working with the government instead of reinventing the wheel all the time, you can save a lot of money.
ALEC HOGG: The word ‘disruption’ gets overused Alan, but this looks like a massive disruption opportunity in this field, given the differences in the pricing between the commercial field and what the municipalities are able to offer. Is there not a threat here to the existing providers of bandwidth?
ALAN KNOTT-CRAIG: I don’t think there’s a threat. In many ways – provided that you keep thinking about it as a basic service, predominantly for low-income communities – it’s quite a bonus for the mobile operators in particular. I don’t think 3G is the future when it comes to fixed connectivity. If you’re going to be sitting at your desk all day long trying to get on the Internet, 3G is not going to be the solution for you, both from a product as well as a cost perspective. Wi-Fi in that respect is the future. What we’re doing is really just providing a complimentary access layout that the mobile operators can use in future in areas where quite honestly, their priority is not necessarily to go and roll out the latest and greatest LTE network in the middle of Soshanguve.
ALEC HOGG: If you were a municipality elsewhere in the country looking at Tshwane now and seeing the successes that are being achieved there, I would certainly be knocking on your door. Have you had enquiries from elsewhere?
ALAN KNOTT-CRAIG: Absolutely. We’re engaging with the City of Johannesburg and the KwaZulu Natal Provincial Government. We’re engaging with quite a few. As you say, when the guys hear about it there’s no reason why they shouldn’t go for it. I think many people are sitting on the sidelines watching to see whether it pans out and whether we keep our promises. We’ve been lucky so far. We’ve managed to keep our promises. It’s mostly thanks to the Municipality of Tshwane. They’ve completely outperformed my expectations around what municipalities are able to do. We also take a lot of financial risk on this stuff, so if it doesn’t work the municipality doesn’t pay us and that’s pretty risky for us, as well. Provided we have these first couple of steps through and we have this meaningful size, there’s a lot less risk for a municipality to follow and then, it’s not a question of ‘if’. It’s a question of ‘when’.
ALEC HOGG: Are you getting support from your pals at the World Economic Forum?
ALAN KNOTT-CRAIG: Look, everybody loves free Wi-Fi. If you show me a guy who doesn’t love free Wi-Fi, I’ll show you a liar. Wherever we go, we find guys who are willing to throw I their hat, whether it’s WISP, whether it’s Neotel, or whether it’s guys who give us free t-shirts to hand out. This is a very rewarding project.
