Outlay costs drive up Kenya Internet charges

July 22, 2010
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, NAIROBI, Kenya Jul 22 – It is emerging that the pursuit of return on investment is the main reason why Internet costs remain high, despite presence of three submarine fibre optic cables in the country.

West Indian Ocean Cable Company (WIOCC) Chief Executive Officer Chris Wood revealed on Thursday that it would take between two and three years before customers are able benefit from low connection rates.

“If operators are able to sell a lot of capacity to consumers we could see the prices coming down even faster, but that remains to be seen,” Mr Wood said. 

WIOCC is the largest investor in the Eastern Africa Submarine Cable System cable (EASSy) that went live last week with a direct connection to Europe.

The EASSy cable has the capability to deliver 1.4 Terabytes and is present in nine countries offering transit connection to 12 landlocked countries.

Mr Wood however argues that Internet speeds had gone up over the last 18 months lowering costs to an extent. He highlighted connection fees could go down faster as more investments are made in fibre optics.

“We have already seen costs come down. The impact of EASSy coming in has already been felt in the market, prices both at the end user level and the wholesale level have dropped by 50 to 60 percent over the past year,” Mr Wood said.

He is of the opinion that the next level of competition will be around the quality and the speed of the services.

The country has over the last three weeks experienced slow Internet speeds due to faults on the Seacom cable whose repairs are expected to be complete by end of the week.

Information and Communication Minister Samuel Poghisio said the entry of a third cable with a potential fourth, sits well for the country as it provides various options to consumers should one cable experience downtime.

Kenya has fibre optic connectivity on the government-led TEAMS and privately owned Seacom.

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