Fibre cables to boost BPO growth

March 18, 2009
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, NAIROBI, Kenya, Mar 18- Kenya is now poised for accelerated growth in the Business Process Outsourcing (BPO) sector after revelations that the cost of bandwidth in the country had started to come down with the anticipated arrival of the undersea fibre optic cables.

Data carrier Kenya Data Networks (KDN) confirmed on Wednesday that the prices had already started dipping after reports that the SEACOM cable would land in the country’s coastal town of Mombasa in the first week of April.

“I’d like to reveal that we are already selling capacity (to those connected on their fibre network) at reduced prices. Our range of bandwidth will be from $400 to $600 (per megabyte) depending on the capacity that you buy from us,” disclosed KDN Marketing Manager Vincent Wang’ombe.

He told reporters that currently they were selling satellite capacity at $2,500 per megabyte simplex but with the arrival of the cables, this figure would be significantly reduced.

“We will not be having that on the fibre system so the most it will cost you for one megabyte (of bandwidth) will be $600,” he assured.

Local Internet Service Providers (ISPs) pay between Sh250, 000 to 470,000 for one megabyte of bandwidth per month and the high cost has been blamed for the low internet penetration and usage in the country.

It is estimated that the outsourcing industry has the potential to earn between Sh6 and Sh12 billion in the next five years and create 500,000 jobs if affordable technology solutions are developed. The lowered costs thus unlock the potential of local entrepreneurs who would want to venture into the call center business.

The development also puts to rest debates on whether the cables would immediately affect internet pricing in the market and result to a reduction in the broadband costs.

Some players had argued that the cost would not be drastically lowered unless the government was fully involved in the running of the cables as Kenya lacks enough consumers of this capacity.

Mr Wang’ombe spoke at a press briefing which was also attended by SEACOM’s Senior Vice President of the Kenya Office Jean-Pierre de Leu who expressed optimism that their cable would be fully operational by the end of June.

He said internet users would get efficient and increased capacity that would help them to access all the new technologies in the market.

“SEACOM and TEAMs (The East African Marine System) cables are 90 percent cheaper than the satellite links and they will change the way people live their lives. SEACOM’s cable capacity is 1.2 terabyte and that will give you efficient capacity for the next 15 years,” he bragged.

The two spoke at a press conference to announce the first East African WiMAX conference and expo to be held next week where the government said it was working with the Communication Commission of Kenya (CCK) to free up frequencies which would then be allocated to broadband wireless operators.

Information Assistant Director for ICT Esther Wanjau said the several WiMAX licenses that hadbeen issued by the CCK offer little spectrum which cannot satisfy customer demands.

“This is why we are working with CCK to open it up to commercial operators who can now provide broadband services in the rural areas,” she relayed.

WiMAX, which is the wireless broadband connectivity technology, has been touted as the last mile in the efforts to bridge the digital divide in the rural areas and Africa.

The three-day conference is expected to bring together a wide array of experts involved in the promotion of WiMAX technologies as well as demonstrate capacity and showcase players in the sub sector.

It will also serve as the launch of the East African WiMAX network which is intended to stimulate interest and networking among the WiMAX market providers in the region.

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