‘Crazy idea’ turns into big business

Gabriel Ng’ang’a, founder and CEO, AfriNet Telecom Limited at his Ruiru office on August 2, 2022. PHOTO | DIANA NGILA | NMG

Nine years ago, people would ask Gabriel Ng’ang’a what business he did and then look surprised, baffled by what sounded like a crazy idea.

“I would tell them that I sold bulk SMS services for 90 or 80 cents each and they would ask; then how do you make money?” he says. “At first, it was frustrating but everything is now making sense.”

Mr Ng’ang’a is among techpreneurs who support big businesses by sending bulk SMSs to clients. “We type a single SMS on the portal then it is released to all members at a go,” says the 38-year-old.

In 2013, Mr Ng’ang’a started his company called Afrinet, bought a bulk SMS system and went ahead to sign up clients like schools whose traffic was 100 texts or 500 texts.

At the time, Afrinet would send 5,000 texts in a month. However, the company has now pulled in saccos, co-operative societies for coffee and milk supplies, and manufacturing companies. The portal enables the institutions to send a text on delivery quantities, and the total pay or dividends payment date.

“We have integrated with their systems such that every time a farmer delivers milk at the collection points and the weight is taken, they get an SMS alert. For instance, the SMS can read ‘you have delivered five litres today.’ This could happen three times a day and every time they deliver they get an SMS. It brings a lot of convenience to the whole chain,” Mr Ngángá says.

“When a company is dealing with 1,000 farmers, it needs to find a way of communicating with them. They cannot do phone calls or the traditional letters because is tedious and costly.”

With more than 30 saccos under its base, the Afrinet portal has integrated with their core banking systems such that any transaction done on the account triggers an SMS.

“A sacco with 1,000 or 100,000 members cannot call all of them when paying dividends. So we do a simple text which is broadcasted to all of them at the same time,” he adds.

He also has private schools and universities as his clients who pay for bulk SMSs to be sent to students once they pay fees, to alert them of fee balances, closing, opening, and graduation dates.

Competition

With the advent of WhatsApp and other free social media platforms, does he fear that Afrinet may soon be edged out of business?

Mr Ngángá says despite SMSs being an old technology, it is unlikely to die because it is convenient and does not require the internet, meaning that farmers in rural areas can receive messages. The 38-year-old is betting on the growth of the SMS traffic which has now grown to almost three million per month.

Charges are borne by the companies, running on tiered pricing where one text to 10,000 texts costs Sh0.80, between 10,000 texts and 100,000 texts is Sh0.70, and above that Sh0.60.

“SMS is a volume business. If you are doing huge volumes you can lower charges and get more clients. You make money if you have more clients,” he says.

His smallest client is a school pushing 1,000 SMS per term, and the largest, a manufacturing company pushing 700,000 SMSs in a month.

How it is done

Through solution architecture, once a business pushes a message from the SMS online portal they go to the mobile operators messaging centres, for example, Safaricom, Telkom and Airtel, where they are then pushed to the mobile operators’ infrastructure and delivered to the recipients.

It runs under a content service provider (CSP) licence issued by the Communication Authority of Kenya which gives them a contract with mobile operators through which it can push SMS traffic to their messaging centres.

In 2019, he built a customer feedback solution. Mr Ng’ang’a who studied Mathematics and Economics at the university says at first, this segment did not pick well because companies were yet to appreciate the importance of customer feedback. Afrinet sees this as its next frontier for revenue growth.

“In Kenya, customer feedback is not something some businesses take seriously,” he says.

The customer feedback solution through the online portal allows organisations to create a survey and send the questions in form of a link to their customers which is then sent via SMS. The organisation has a dashboard where they see the responses coming in.

“We are in a very competitive world. The market is very dynamic and it’s not easy to get customers. If you have one customer onboard, the best thing you can do is to try to keep them. The way to do this is to know what they think about your product. Are they happy about the turnaround time?” He poses.

For saccos, the Afrinet system is also integrated with the banking systems. “If you go to your sacco and withdraw money, they send an automatic SMS that carries a survey or questionnaire link. “It’s like the traditional suggestion box in banking halls converted into an online link,” he says.

One lesson he has learned along the way? “When I started, it was not making sense particularly because you look at the cost for a single SMS, it is in cents. The secret is one; if you know what the customer wants if you know the problem you can solve any problem,” he says.

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