[Kictanet] Day 6 of 10: Best Business & Regulatory Model forprovisioning OFC(EASsy, TEAMs, etc)
Kai Wulff
kai.wulff at kdn.co.ke
Tue Jan 30 07:51:29 EAT 2007
Dear Alex,
at cost can be very expensive if not driven by a classical private sector aim of efficiency!
The money in a market is limited, capacity on a cable unlimited. The amount you sell is therefore a function of the cost you are operating and only secondary a function of the sales price.
We as KDN have invested TOP Dollar in infrastructure and do of for sure intend to make a profit! The only way for us to make a profit is to grow the market by forcing down the cost of operation.
Profits we make are reinvested in more infrastructure to reach more Kenyans, the more Kenyans are reached, the lower the prices get ......
If a cable is socialistic, where are the profits to be reinvested? A private company pays taxes back to the Government, not a bad principle. I don't want to go into political discussions but the socialistic model was not too successful lately?
2-3 more years and KDN goes public, then every Kenyan can own a piece of KDN. As for the submarine capacity, as mentioned, I don't think an infrastructure company should own capacity, neither should a service company own infrastructure ... = no monopoly blocks!
Rgds
Kai
----- Original Message -----
From: Alex Gakuru
To: kai.wulff at kdn.co.ke
Sent: Monday, January 29, 2007 20:53
Subject: Re: [Kictanet] Day 6 of 10: Best Business & Regulatory Model forprovisioning OFC(EASsy, TEAMs, etc)
Cable is cheap and consumers will build their own infrastructure and operate on cost recovery basis. Both of you private sector and government have long let us down and in any case when government and private sector agree 100% Enrons (or is it "Kenlons" ) surface and consumers suffer endlessly.
We need a "socialist" cable run by nuns and monks to transition from the "open and shut" internet in Kenya today. The rest are just turf wars (govt, telecos, "experts " et al) protecting hitherto imagined markets in perpetuity.
The only question inour mind now is, will CCK allow us to connect to their national backbone also at cost? Losts of services (SOA) are waiting....
Those with lots of cash can build their own parallel cables because nobody is stopping them, is there? And we need the redudancy anyways.
/Alex
John Walubengo <jwalu at yahoo.com> wrote:
Alan,
I think what Eric meant was that even though the fiber
cable infrastructure would be operated at cost - it would
still be open to competition i.e. the Regulatory framework
should allow for multiple, complimentary as well as
competing submarine fiber cable.
In other words, lets have the EASsy, TEAMs and Flag running
accross E.Africa, as long as each one of them Operates
their cable at cost and allowing other SERVICE/APPLICATION
providers equal access...
Unfortunately, this model is not quite easy to execute
because it demands a total overhaul of the existing Telco
market strutures. The current regulatory and business
structures in most of the regional countries allow and
probably encourage Operators to own the backbone
(essential) infrastructure and still operate accross all
the service layers.
For example Telkom Kenya, owns the country-wide Backbone
infrastructure as well as the International Gateway and is
licensed to compete in all the Service areas i.e through
its ISP subsidiary, its Wireless Subsidiary, etc.
Safaricom, Celltel (the 2 mobile operators) have also
joined into the fray along the same-principles i.e. owning
the Backbone infrastructures and continuing to compete
accross the SERVICE/APPLICATION layers or sectors.
And the (good/bad?)news is that the prevailing situations
seem to have served quite well if seen in terms of
accelerated growth it has brought to the Industry. So the
question would be, why try and change all that? Why should
the provisioning of the submarine OFC disrupt the
comfortable status quo within the national telecoms market
structures? I see this as the biggest obstacle towards an
otherwise good Open Access model...
walu.
--- Alan Finlay wrote:
> Hi Eric
>
> Earlier John said that the Open Access model put forward
> that access to the
> fibre optic should be at cost, and the money made at the
> service end only.
>
> Your version says that access to the cable can be
> competitive - or that
> entities that invest in the cable's infrastructure must
> be allowed to make a
> profit out of the cable.
>
> Is this correct? Can you elaborate a bit on the
> differences between these
> two 'open access' positions as you understand them?
>
> Thanks
> Alan
>
>
> ----- Original Message -----
> From: "Eric Osiakwan"
> To:
> Sent: Monday, January 29, 2007 11:42 AM
> Subject: Re: [Kictanet] Day 4 of 10: What are the
> Existing/Sugested
>
>
> > Dear All,
> >
> > The Open Access Model makes two important distinctions
> which the
> regulatory policy
> > environment must capture and enforce;
> > 1. the distinction between infrastructure and services
> so that
> infrastructure providers are
> > NOT allowed to also provide SERVICES and vice versa.
> >
> > 2. owership of the infrastructure (in layer 1) should
> not guarantee any
> form of fair or unfair
> > access to capacity for the provision of service (in
> layer 2).
> >
> > 2. that there is no discrimination within and between
> both camps so that
> infrastructure
> > providers are able to establish clear and transparent
> trading
> relationships with all service
> > providers and vice versa. Within the infrastructure or
> service layer there
> should be no
> > restriction on COMPETITION and SERVICE DELIVERY.
> >
> > This creates an ecosystem of various operators
> interconnecting seemlessly
> and ensuring
> > there is interoperability.
> >
> > Eric here
> >
> >
> > NB: Becuase my preference is for the "first"
> infrastructure entity to be
> owned in a multi-
> > stakeholder approach, the financial mechansims that are
> employed may also
> impose some
> > regulations from the financial market that can only be
> detailed on a case
> by case basis.
--- John Walubengo wrote:
> Hi All, following the w/end, it maybe appropriate to
> recollect and review how far we have gone in this online
> discussion.
>
> Themes Reminder
> 1) Why OFC (1day)
> *it is cheaper(than Satellite option), it is faster, more
> reliable, more secure, has unlimited bandwidth capacity.
>
> 2) Existing Business Models for OFC provisioning (2days)
> *Privately provisioned
> *Consortium provisioned
> *Open Access provisioned
>
> 3) Existing/Appropriate Regulatory Models for OFC (2days)
> *No-Regulation
> *Some Regulation
> *Full Regulation
>
> 4) Best Model (Business+Regulatory) for E. Africans
> (2days)
>
>
> 5) Projected Impact on Stakeholders (2days)
>
>
> 6) Reconciling Stakeholder interests/Conclusions (2days)
>
>
> So today we start of on Point 4, and wish to hear views
> on
> what would be the preferred Business and Regulatory model
> for provisioning the Optical Fiber Cable on the E.African
> Coast. Feel free to comment on a previous theme as well.
>
> walu.
> --- Alex Gakuru wrote:
>
> > Walu,
> >
> > I dug this interesting read off google search a while
> > back (78 page)
> >
> > Open Access Models
> > Options for Improving Backbone Access in Developing
> > Countries (with a Focus on Sub-Saharan Africa)
> > Final Draft
> > August 2005
> > An infoDev Technical Report
> > prepared by
> > S P I N T R A C K A B
> > DROTTNINGGATAN 99,
> > 113 60 STOCKHOLM, SWEDEN
> > PHONE: +46-8-528 00 310 FAX: +46-8-528 00 315
> > WWW.SPINTRACK.COM INFO at SPINTRACK.COM
> >
> > <
> >
>
http://www.infodev.org/files/2569_file_OPEN_ACCESS_REPORT.pdf
> > >
> >
> > /Alex
> >
> > John Walubengo wrote: Found an answer
> > to my own question <
> > talked about emailing instead of talking to oneself?>>
> -
> > anyway...The proposed regulatory framework for EASsy
> > (which
> > purportedly is going the Open Access way) seems to be
> > covered here....
> >
> > ~~~~00-copied below---
> >
> > East Africa: EASSy Project Model Approved
> > Thursday, 22 June 2006
> > All countries participating in the development of the
> > East
> > African Sub Marine Cable System (EASSy) have now agreed
> > to
> > implement the project on an 'open access basis,'
> > overcoming
> > a hurdle that had initially threatened to derail the
> > project.
> > The Policy and Regulatory Adviser of Nepad e-Africa
> > Commission, Dr Edmund Katiti said that the South
> African
> > government and Nepad's ICT experts had persuaded the
> > countries that were objecting to the change in the
> > project
> > to realise the limitations of the consortium model
> which
> > they had preferred.
> >
> > The EASSy project involves laying of a fibre optic
> cable
> > from Mtunzini north of Durban, through landing stations
> > along East Africa to Port Sudan. The cable will link
> with
> > the countries' national networks at the landing
> stations.
> > Others would subsequently be interconnected through the
> > networks of landlocked countries like Uganda, Rwanda,
> > Burundi and D.R Congo.
> >
> > When the project was first conceived, it was to be
> > primarily a private sector project. The core investors
> in
> > the cable infrastructure would determine the retail
> > prices
> > of bandwidth. The project was to be owned and operated
> by
> > a
> > group of companies that would generate financing; an
> > arrangement known as the consortium model. The South
> > African government and Nepad have recently argued that
> > the
> > consortium model would not achieve the objective of the
> > project - bringing down the costs of
communication in
> > the region. They suggested that the model be altered to
> > "open access", where any operator or institution in the
> > participating countries would be allowed to acquire
> > equity
> > if it can afford the agreed contribution.
> >
> > In the open access model, the cable would be owned and
> > operated by the Special Purpose Vehicle (SPV), a
> company
> > created to manage the network and establish the price
> of
> > bandwidth. An Intergovernmental Assembly is to be
> formed
> > to
> > regulate the costs that the SPV would charge operators.
> > Rwanda will host the headquarters of the SPV in part as
> > recognition of their commitment to the development and
> > promotion of ICTs in the country.
> >
> > After the agreement reached earlier in June, the Nepad
> > e-Africa Commission is working towards the signing of a
> > protocol that would form the legal framework of the
> EASSy
> > project. The Commission has already prepared a project
> > plan, which it has sent to the member governments to
> > review
> > and comment, a process that take until August, when the
> > protocol signing is anticipated. Construction is
> expected
> > to commence by the end of 2006.
> >
> > Katiti said they hope to raise a quarter of the funding
> > from equity acquisition payments by companies from the
> > region and then raise the remainder from African
> > financial
> > institutions: African Development Bank, Comesa's PTA
> > Bank,
> > East African Development Bank and others.
> >
> > Source: The Monitor - WDR/Intelecon Regulatory News
> >
>
http://www.regulateonline.org/index.php?option=content&task=view&id=780&Itemid=32&relaItemid=877
> >
> > walu.
> >
> > --- John Walubengo wrote:
> >
> > > What form/level of regulation would be required? Eric
> > > plse
> > > on Open Access, plse elaborate maybe in three
> > paragraphs.
> > > And maybe also Kai would have a comment on Regulation
> > > with
> > > regard to a Private sector submarine OFC
> > > provisioning....oh
> > > yes, Kihanya (the learned one) may have a point
> too...
> > >
> > >
> > > walu.
> > > nb: Govt officials are also encouraged to say
> something
> > -
> > > members are informed to treat their comments as their
> > > personal and not official postions ;-).
> > >
> > > --- Lucy Kimani wrote:
> > >
> > > > Regulation is definately required as even the big
> > boys
> > > of
> > > > the west are
> > > > regulated, in a capitalistic environment (read
> > > > cat-throat) self-regulation
> > > > has not worked, and is sure a recipe for disaster.
> > > >
> > > > LK
> > > > > OK. Looks like Fridays are still fridays -even
> > > online.
> > > > Very
> > > > > little activity. Heard from only Harry and
> > Alex...is
>
=== message truncated ===
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