Kenya Internet users to get lower rates

December 1, 2009

, NAIROBI, Kenya, Dec 1- Internet users can expect to have increased bandwidth capacity at affordable prices in the next six months following the anticipated landing of the East African Submarine System (EASSy) cable.

Chris Wood the Chief Executive Officer of the West Indian Ocean Cable Company (WIOCC) which is the largest investor in the EASSy cable said on Tuesday that the going live of the 1.4 Terabits per second (Tbps) capacity infrastructure will also lead to the uptake of broadband usage in the country.

“Historically we’ve seen high satellite high pricing and that has been used as the reason why prices haven’t come down. When we remove that bottleneck, we should see not only an increase in bandwidth take up but a reduction in pricing as well,” he told a media briefing.

He said the laying of the cable starts on December 3 in Maputo, Mozambique and upon its completion; it would enable them to revolutionalise the internet business model in the country.

Mr Woods added that most products in the market have been offered on a long term leases where a telecommunications service provider would have to pay several million dollars upfront for a large amount of capacity before they can start selling the service.

“The sort of products that we are going to offer next year will be as small as one or two Megabytes on a lease of three months or six months which then totally changes the model because you don’t have to have a lot of money upfront to be able to offer services to the market,” the CEO explained.

He added that they would operate on an open access basis whereby any licensed operator could connect to their cable system with the same access principles as any body else.

“We are not going to be working in a cartel with anybody. It will be open competition and in fact our constitution prevents us from making certain levels of profits so it will force us to reduce the prices every year going forward,” he pledged.

The landing of the EASSy cable which is also passing through eight other African countries will bring to three the number of cables in Kenya (after The East African Marines Systems and SEACOM) and it’s expected to contribute significantly to bridging the digital divide in the country.

Currently, consumers are paying an average of Sh15, 000 per Megabyte but this is widely expected to reduce significantly when the system is ready for use on June 30 2010.
The two fibre-pair 10,000 kilometres EASSy cable has 12 shareholders including Telkom Kenya and the government of Seychelles and will be the first east coast system on a direct link to Europe.

“Whereas other recently launched cables use a longer path to reach Europe via connections in either India or UAE (United Arabs Emirates), we have a direct route making EASSy the lower latency system for traffic to key internet peering points in Europe and North America,” Mr Woods said.

Upon its completion, it would have cost Sh19.7billion ($263 million) to construct with part of the financing coming from the International Finance Corporation (IFC) in partnership with the African Development Bank, the World Bank, the European Investment Bank and the Germany Development Bank (KfW).

IFC Senior Advisor for Global Information and Communication Technologies John Solan expressed satisfaction with the pace of the project and re-affirmed the financiers’ commitment to it.

The financiers have so far provided a Sh5.2 billion loan that is to be repaid in eight years at an interest rate of 3.5 percent.

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