Last year in March, How we made it in Africa spoke to Henri Nyakarundi, founder of African Renewable Energy Distributor (ARED), about the company’s mobile solar kiosk, which offers customers a convenient, low-cost solution to charge their phones. It works on a franchise model, giving budding entrepreneurs the opportunity to run their own phone-recharging businesses.
Since then, the company has broadened its offering and now labels itself as a connectivity solutions provider looking to “build the largest wifi network in Africa” and provide bottom-of-the-pyramid users with digital content through its revamped mobile solar kiosk, called the Shiriki Hub.
Aside from having a better design compared to the older product, the new kiosk – in addition to offering charging and virtual top-up services for mobile phones – has a Bluetooth printer, bigger solar panel capacity, speakers and wifi.
The cost of internet varies depending on how long users wish to browse the web. But what’s unique is that each kiosk has stored digital content on board – such as music, news, and information on health and education – which passersby can access for free.
“Now, we are the only one, in East Africa at least, where you can access digital content without having to pay for it, which is huge because we are dealing with people that make less than US$5 a day… We want to cater to those people and give them the opportunity to also be part of this digital revolution without having to break their pockets… The charging, the other services, are secondary to what we do, ” Nyakarundi says.
To keep costs for users as low as possible, ARED is to looking to generate a significant portion of its profit from advertising on the mobile interface people use to access the internet, and by providing a platform for businesses to conduct surveys.
The kiosk functions under a micro-franchising model – where operators, if they meet certain criteria, can pay a once-off fee and manage the kiosk.
‘Hard tech’ is hard business
Nyakarundi explained ARED is now a ‘hard tech’ company – a combination of hardware and technology. According to him, these products are not common in Africa, as they take a long time to develop and are prohibitively expensive.
“This kiosk development cost us over US$500,000 just on the development side,” he noted.
What helps, according to Nyakarundi, is that ARED has been in business for four years already, and has proved the viability of its model. “We know based on the previous kiosks that we have had what is working and what isn’t working.”
Another challenge that comes with hard tech as opposed to, say software, is the difficulty of entering or expanding in a market, Nyakarundi says.
“You have to finish the hardware before you enter a market. With software, even if it doesn’t work properly, you can still launch it in the market just to get feedback and all those things. You can’t do that with hardware – and that’s why you don’t see a lot of people getting into hard tech, which is good for us because there is almost no competition – at least as of yet. So it is a good and bad thing.”
ARED’s hardware is currently being made in Germany, but in the long run Nyakarundi wishes to move manufacturing to Africa and China.
More Uganda, less Rwanda
Right now there are five Shiriki Hub prototypes. Three are currently operating in Rwanda and the remaining two Nyakarundi wishes to deploy in neighbouring Uganda in the next two months. Depending on demand, ARED aims to introduce up to 500 more over the coming year.
Despite being based in Rwanda, Nyakarundi sees the bulk of the opportunity in Uganda. One of the reasons for this is because of Rwanda’s opposition to outdoor, kiosk-type businesses. In the capital Kigali, authorities have started to clamp down on illegal street vendors and those who buy from them. Even though his kiosks are above board, Nyakarundi is worried how this might affect his business if the trend continues. “We are just cautious for the future that is all. We had an aggressive expansion plan but with this ordinance we decided to scale back.”
Besides, he says, “Uganda is a much bigger market”.
“They have a huge unemployment problem, they are looking for solutions to solve those problems and they really like our technology because it solves a lot of their problems under one umbrella.”