[kictanet] Day 1 of 10: CCK Internet Study-Background Concepts/Overview

[John Walubengo]

Morning all,

Today is Day 1 of our deliberation and would like to give a
general overview that would constitute our working document
for the rest of the deliberations.  Please go through it
and I welcome general reactions, comments, clarifications
or objections as we set the background for the rest of the
workshop.

We have 24hrs on this before tomorrow when we shall go
deeper into the issues of International and Domestic
bandwidth.  My (personal) summary of the report based on
the official copy @
http://www.cck.go.ke/internet_market_study/ follows:-
~~~~00000~~~~~~~~~~

CCK commissioned Netcomm Information Systems (the
Consultant) to undertake a study to establish amongst
others, the following Internet indicators within the Kenyan
Market:

1.	The Internet service diffusion and usage patterns in
different sectors of the Kenyan economy 
2.	The general Internet service costing mechanisms employed
by operators and service providers 
3.	The key factors that hinder Internet market development 
4.	The vertical and horizontal relationships of the
Internet market in the country 

In carrying out its terms of reference, the Consultant held
several roundtable meetings with key stakeholders selected
from the Government, Telco-operators, Internet Service
providers and Consumers.  The Consultant administered
questionnaires which revealed the following key findings
-categorised under Network Infrastructure, Internet
Affordability and Dispersion as described below:

Network Infrastructure: This indicator establishes the
structure and quality of the International and National
(domestic) internet backbone across the country.  It was
found that following the liberation of the telecom sector
to allow more players at the International Internet Gateway
Operator (IGO) level, there has been a steady increase in
the International Bandwidth capacity-currently at 1G  and
representing over 10% growth since 2004. However, the
domestic Internet capacity continued to register limited
growth, despite the availability of the local Internet
Exchange Point (KIXP). 

Internet Tariffs & Affordability: This indicator
establishes the capacity of consumers to afford the
Internet Services.  It is taken as a factor of the gross
national income, in other words, the average cost of 1
month Internet access measured against the average monthly
salaries. It was found that internet service via mobile
phone was much more affordable (costing 8% of average
monthly incomes) as compared to via fixed lines (costing
200% of the average monthly incomes). This was despite the
falling rates of International Internet Bandwidth
occasioned by competition at that level.

Dispersion: This indicator establishes geographic reach and
sectoral absorption of the Intenet Service.  In essence it
describes the e-Readiness status of the economy or for the
Country.  It was found that even though ISPs were present
in all the 8 Provinces, they were hardly present at the
districts level – covering only 30% of the districts in
Kenya.  In addition, of the three key stakeholders,
Government, Educational and Commercial, the Commercial
sector had the bulk of the existing Internet Connectivity
(80%) while the Education Sector had the lowest (less than
2%).  Finally, of the estimated 2.8 Million Internet users
in the country, 80% are in the capital city Nairobi, 9% in
Mombasa and the rest (11%) are spread across the country.
 

In attempting to improve the above bleak indicators, the
Consultant made the following key recommendations:

Network Infrastructure:  That the Government and the
Operators make a deliberate effort to extend the domestic
Internet backbone through out the country.  In addition,
that the current license separation between the Internet
Gateway Operators (IGOs) and Internet Service Providers
(ISPs) be dissolved by combining their services into one
license-the Data Communication Network Operator (DCNO)
license.  Finally, that the Regulator should publish and
enforce quality standards in the provision of the Internet
Services.

Internet Tariffs & Affordability: That the Regulator,
introduces competition in the Fixed Telephone line service
and a flat-rate tariff or volume-based model for dial-up
internet services. Also, that despite the relatively
cheaper Mobile internet services, further competition be
introduce within the sub-sector to further drive down the
rates.

Dispersion:  That the Regulator reviews and implements the
Universal Access strategy, enabling Operators to extend
Internet Broadband services to ‘non-economical’ rural areas
in order to serve in particular educational and health
institutions. That the Universal Access fund be utilised in
promoting and creating local content in order to stimulate
demand and usage. Finally, that the Regulator promotes
Consumer Awareness programmes while the Government
concludes and enacts the necessary legislative framework
for supporting eCommerce uptake.

-summary ends---
Plse, the floor is open for your reactions and a copy of
the  10 day program is copied here as a reminder.
•	Internet Study-Background Concepts/Overview – 1day
•	Internet Study-International & Domestic Bandwidth Usage –
1day
•	Internet Study-Hierarchy of Providers (IBP,ISP)  – 1day
•	Internet Study-The Statistics on Infrastructure – 1day
•	Internet Study-The Statistics on Affordability – 1day
•	Internet Study-The Statistics on Dispersion – 1day
•	Internet Study-The Impact of the Recommendations-3days
•	What is the way forward/Conclusions – 1day

walu.




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