Thursday, August 27, 2015

Budding Africa Telecom Entrepeneur

Spotlight On Alan Knott-Craig Jr: He Wants To Be A HeroTel

By Dana Sanchez Published: August 27, 2015, 10:05 am
Alan Knott-Craig Jr Alan Knott-Craig Jr in 2011, Johannesburg. Photo: Hetty Zantman/Getty Images
Alan Knott-Craig Jr is the former CEO of Mxit — once Africa’s largest social network — and now he wants to consolidate South Africa’s fragmented wireless Internet market in a new company and run it like a successful Silicon Valley startup, Quartz reports.
Instead of building a company from scratch, Knott-Craig Jr is enticing 200 small wireless Internet service providers across South Africa to join HeroTel—his new company launched Aug. 25. The goal is to bring together South Africa’s small and fragmented wireless Internet providers to build a single national wireless provider by April.
As small wireless Internet providers join, HeroTel will buy in bulk to drive down costs. HeroTel will provide cohesive branding for the individual wireless Internet service providers, according to Quartz.
Knott-Craig Jr is the brains behind Project Isizwe, a social enterprise he started three years ago to help South African municipalities build free Wi-Fi zones in low-income communities. Check out this AFKInsider interview with him talking about Project Isizwe.
He is probably best-known as CEO of the social network Mxit, bought in 2011 by his investment company, World of Avatar. He stepped down less than a year later due to disagreements with shareholders, according to HowWeMadeItInAfrica.
Now Knott-Craig Jr blogs about what he has learned, giving advice to entrepreneurs and startups on a no-frills blog, TheBigAlmanack. He blogs on how to find partners you can trust, how to pitch to a South African angel investor, and why titles are not important.
South Africa’s wireless Internet sector— 200 small companies bringing in combined annual revenues of 700 million rand ($53.43 million)—has grown as a result of unreliable service by fixed-line operators, Knott-Craig Jr told Quartz. He hopes these small companies can come together in time for an April launch of HeroTel.
With Knott-Craig Jr as its chairman, HeroTel has already started building the national Wi-Fi network by acquiring two Western Cape companies, Snowball and Cloudconnect.
“We don’t have to buy every wireless Internet provider in the country to make this work, but we will need a critical mass,” Knott-Craig Jr told Quartz. “Wireless Internet providers will join the HeroTel Alliance, which will work like a franchise, providing them with the benefits to help them generate more revenue.”
HeroTel has some impressive investors including Michael Jordaan, former CEO of FNB, one of South Africa’s largest banks; and Mike Pfaff and Derek Prout-Jones, CEO and CIO of Rand Merchant Bank.
It doesn’t hurt that Knott-Craig Jr is the son of Alan Knott-Craig Sr, former CEO of Vodacom and Cell C. Senior has experience in the Internet business.
Fixed-line connections continue to be a choice for some households and businesses, but mobile broadband is huge and growing in South African Internet connectivity: 41.3 percent of South Africans connect to the Internet through mobile devices including 3G cards and Internet dongle devices — many used at home and work — according to South Africa’s statistical agency, StatsSA, Quartz reports.
Mobile data providers will be not be HeroTel’s competitors, Knott-Craig insists. Fixed-line operators will.
“We’re competing with fixed-line operators: the old-school connect-through-a-copper-line guys… they are at a disadvantage because they charge exorbitant out-of-bundle rates to their customers,” Knott-Craig Jr said.
Demand for fixed-data lines in South Africa seems to be increasing. Telkom—a semi-private national telco which owns 80 percent of South Africa’s fiber network—grew its fixed-line subscribers from 932,000 in March 2014, to over 1 million subscribers in March 2015, according to Quartz.
While Telkom has a monopoly over the fixed-line data business, HeroTel will have the chance to compete directly by being nimble, something the large company struggles with, according to Quartz. By providing better wireless technology than Telkom’s popular ADSL copper line service, HeroTel could be an alternative to fixed-data lines for households and businesses in South Africa.
“I’ve been looking at the way in which some of the most successful start-ups in Silicon Valley are run—lean and mean. I think its time that telcos started to operate like this. You cannot wait for 1 billion rand to make it happen, you just have to get on with it,” Knott-Craig Jr told Quartz.
This blog, entitled “What rental cars taught me about product innovation,” says a lot about Knott-Craig Jr’s character:
“Every time I fly to Jhb I get a new rental. Cheapest car with aircon. I’ve driven the Chevy Spark, Hyundai i10, Datsun, Nissan Micra, Peugeot, Toyota, Ford, all of them.
“I’ve noticed that the worse the car, the more innovative the dashboard. For instance, the Peugeot has a truly inventive aircon setup. But it’s also the worst car I’ve driven, ever. Even worse than the Datsun.
“Dashboard innovation is inversely proportional to car quality. When I see a clever speedometer I feel a premonition of dread. That’s what happens when the product is shit. People start scrambling for lipstick. If your product is great you don’t need lipstick. A standard dashboard is fine.”
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