[kictanet] ISP providers cry foul over bandwidth prices

[Kai Wulff]

I think there is some confusion!

The international capacity is not transported to Nairobi by the fiber cable 
in the ground! We transport the capacity that comes by SAt with the fiber to 
Mombasa! So the fiber will not affect this.

As for Trunk costs, they have dropped already substantially and are a 
function of capacity uptake. You see, Maintenance costs and Capex for the 
cable is constant, capacity is unlimeted, so the only factor that brings 
down price is higher uptake and vice versa.

Rgds

Kai

----- Original Message ----- 
From: "A. Wanjira Munyua" <alice at apc.org>
To: <kai.wulff at kdn.co.ke>
Sent: Thursday, March 29, 2007 10:50
Subject: [kictanet] ISP providers cry foul over bandwidth prices


A thought-provoking piece here Listers: ISPs in Kenya say their hopes that
they would pay significantly lower costs for bandwidth once providers
Telkom and Kenya Data Networks unleashed cable, are yet to materialise.
They wonder why. The thinking was that once these two providers replaced
satellite links with fibre between the two cities of Mombasa and Nairobi,
they would see a sizeable cut in prices they pay for their bandwidth.

Worth noting is that these networks which KDN and Telkom have built, and
which ISPs say have failed to deliver the expected fall in prices,
represent a key link in Africa's fibre. The two companies are extending
theis fibre towards the Ugandan border, where it will link up with the
fibre owned by Uganda telecom and MTN Uganda, then run through Uganda to
the Rwandan border to link up with MTN Rwandacell's fibre.

KDN and Telkom Kenya are frontrunners in more than one venture to connect
the eastern coast of Africa to international fibre, and no doubt this
Mombasa-Nairobi link which Kenyan ISPs are grumbling about will play a
pivotal role - regardless of which marine cable goes live first. Question:
If the KDN and Telkom Kenya's Nairobi-Mombasa fibre has not resulted in
the benefits the industry expected, should we be optimistic that once they
hook onto international fibre we shall get the 60% or greater falls in
prices? What's to be done to assure the benefits are forthcoming?

Wakabi

ISP providers cry foul over bandwidth prices
By Okuttah Mark, Business Daily, March 29, 2007

 Defying predictions of cheap online access, Internet Service Providers
(ISPs) are yet to experience significant price reductions on bandwidth
charges since Telkom Kenya and Kenya Data Networks laid terrestrial optic
fibre  between Mombasa and  Nairobi.

Mr Sammy Buruchara, the managing director of ISP NairobiNet, said charges
levied by the two operators remain prohibitive, thus hindering their
expansion.

"There is no difference from what they are charging now to what we used to
pay for the satellite link," said Mr Buruchara, while referring to the
VSAT links which have been used in the absence of cable.

For a 2Mbps broadband link from Nairobi to Mombasa, Mr Buruchara said he
pays over Sh500,000 (US$7,142.) per month. Kenya has 23 ISPs with an
estimated 1.5 million Internet users. Most are in Nairobi and Mombasa.

But an official at Telecoms disputed the charge.

Mr Patrick Njagi, a data service manager, said a combination of increased
competition and the fibre optic cables have reduced broadband prices by
almost 40 per cent since last October. "The price has drastically reduced,
especially in Nairobi because of stiff competition since the licensing of
various Public Data Network Operators (PDNOs) by the Communications
Commission of Kenya," he said.

So far CCK has licensed more than 14 PDNOs to build and operate
telecommunication Infrastructure such as fibre optic cables.
Advertisements Telkom Kenya has been running since the launch of its
Mombasa-Nairobi cable claim that its bandwidth prices have reduced by
half. Telkom Kenya's website states that rending a 2Mbps line from Nairobi
to Mombasa costs Sh700,000 (US$10,000) per month, exclusive of VAT.

"The prices are still quite high even if they say they have reduced them,"
said Mr Buruchara. "It is still impossible to do video-conferencing. Who
can raise the Sh1.8 million for 10 Mbps per month currently being charged
by Telkom Kenya?" he asked.

But Telkom's Mr Njagi blamed the high Internet connection fee on
International prices. "Our subsidiary company JamboNet has very little to
do with the Internet bandwidth pricing," he said. "Those are determined by
the international satellite operators."


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