[kictanet] Week 1 Online Discussion Summaries- CCK Internet Report

Thu May 3 09:16:40 EAT 2007

True Kai,

KDN is an exception not the rule :-) .... I am avoiding an operator debate
on who is doing right or wrong. Am sure those in the industry surely
understand what am saying.

> Mucheru,
>
> you know my position: KDN has never done the ISP part and we stayed clean
> with the IBGO and PDNO license serving 30+ ISPs. We are covering 68 towns
> and cities with Wimax (as far as Loki, Mara, Kakamega, Meru ..) and this
> was
> ONLY possible because the ISPs trusted us and used us. The main reason for
> the ISPs to run to infrastructure is an attitude that is still prevailing
> after having a raw deal with a monopoly a long time and the fact that from
> the face value the "black sheep" who were bundling services are doing
> fine.
>
> We will stick to the separation of infrastructure and services as long as
> we
> can, the question is, how long this is possible in the light of EVERYBODY
> SEEMINGLY BEING ALLOWED TO DO EVERYTHING.
>
> Rgds
>
> Kai
>
>
>
> ----- Original Message -----
> From: <mucheru at wananchi.com>
> To: <kai.wulff at kdn.co.ke>
> Sent: Wednesday, May 02, 2007 23:20
> Subject: Re: [kictanet] Week 1 Online Discussion Summaries- CCK Internet
> Report
>
>
>> Walu,
>>
>> I think in my view the Internet study clearly showed that the market
>> structure promoted by CCK has not worked! Why are many ISPs building
>> their
>> own infrastructure through either PDNOs or IBGOs? The study clearly
>> showed
>> that there is no TRUST!! In the Internet market. What do I mean?
>>
>> The Market structure is clear ISPs do not build infrastructure, they buy
>> from licensed infrastructure providers. This would eliminate the need
>> for
>> building multiple networks and ensure we are more dispersed in the
>> country. This is not been the case, we now have about  8 IBGO's in
>> Nairobi
>> and and two operating out of Nairobi why? Trust me if all ISPs were
>> buying
>> capacity through two providers the price would be significantly lower.
>> But
>> since there are all these competing gateway operators the country does
>> not
>> get the necessary economies of scale. That is on the international part
>> ...
>>
>> The local loop, we have approximately 7 operating PDNOs in Nairobi and
>> they too are competing for the same clients in the same space instead of
>> utilising the economies of scale!! Where are they in the rural areas ...
>>
>> My view is the regulator did not do enough to ensure the market
>> structure
>> was fully followed and therefore some people took advantage today there
>> is
>> NO TRUST! in the internet market and most ISPs have opted to build their
>> own networks.
>>
>> I personally believe with a good competition framework and regulation we
>> could begin to see some TRUST between operators and service providers
>> and
>> we could solve this Internet problem once and for all.
>>
>> Further to this, the consumers and the service providers too are going
>> to
>> be the next fighters if the lack of a competitive framework continues.
>> TRUST!!! Again will be lost (if not already).
>>
>> We lost an opportunity and I think and know the problem is TRUST!! How
>> do
>> we build the trust? Is it already too late to do so?
>>
>>
>> --
>> Joseph Mucheru
>> mucheru at wananchi.com
>>
>>
>>> From: John Walubengo <jwalu at yahoo.com>
>>> Reply-To: Kenya ICT Action Network - KICTANet <kictanet at kictanet.or.ke>
>>> Date: Tue, 1 May 2007 23:26:27 -0700 (PDT)
>>> To: <mucheru at wananchi.com>
>>> Subject: [kictanet] Week 1 Online Discussion Summaries- CCK Internet
>>> Report
>>>
>>> Hi all,
>>>
>>> I went off-air for a while - actually I travelled upcountry
>>> to my parents home in Bungoma -its a remote town from
>>> NRB(450Km away) but the 2nd largest town in Western
>>> Province and yes, Internet access in those parts of the
>>> world is quite a challenge.  But that's a story for another
>>> day...
>>>
>>> Today, I thought it would be nice to reflect on last weeks
>>> contributions before we move into the this final week's
>>> discussion.  Tomorrow we start on the theme 'The Statistics
>>> on Affordability', but below I have put together what I
>>> think was last weeks summary contribution and hope you can
>>> go through it and raise  final (if any) comments on last
>>> weeks themes.  These were International Bandwidth,
>>> Heirarchy of Providers(ISP/IGO) and the Statistics on
>>> Infrastructure.
>>>
>>> ---Last weeks summary begin-----
>>> Week 1 Summary.
>>>
>>> Day 1:Background Concepts/Overview
>>>
>>> Mr. J. Walubengo gave an overview of the Internet Study
>>> report saying that it aimed to establish the status of
>>> Internet Infrastructure, Internet Affordability and
>>> Internet Use & Dispersion in Kenya.  He reported that the
>>> study had various recommendations aimed at improving on the
>>> above internet indicators.  This included amongst others;
>>> getting the government intervention in extending the
>>> domestic internet infrastructure, introducing further
>>> competition both within the Fixed Line and Mobile
>>> subsectors, utilizing the Universal access fund to extend
>>> Internet reach, promoting creation and use of local content
>>> as well as supporting Consumer Awareness initiatives.
>>>
>>> Mr. A. Gakuru lauded the study as well as its
>>> recommendations but noted that a similar study would be
>>> required that focused on the demand-side rather than the
>>> Supply-side of the internet market.  He was glad that the
>>> Regulator was finally making deliberate efforts to support
>>> consumer awareness initiatives.  He wondered if naming and
>>> shaming those ISPs that failed to route traffic through the
>>> local internet exchange point (KIXP) would help in
>>> enhancing the use of KIXP.
>>>
>>> Day 2: International & Domestic Bandwidth Usage
>>>
>>> In his opening remarks, Mr. Walubengo said that the report
>>> indicated that the International Internet Traffic was
>>> skewed (90%) towards external  sources (content).  Kenya
>>> was a net importer of Internet content and was therefore a
>>> consumer rather than a creator of Internet content. Value
>>> (economic or otherwise) goes to the creators of Internet
>>> Content and Kenya should aim to be a generator rather than
>>> just consumers of Internet Content.
>>>
>>> Mr. M. Michuki observed that most Kenyans visited external
>>> sources due to lack of local content. He suggested that
>>> ISPs should come up with pricing smodels that encouraged
>>> the creation of and access to local content. For example,
>>> geo-specific tariffs could be designed that would
>>> deliberately make it cheaper to access local (.KE) conent
>>> i.e. users could be charged less if and when they accessed
>>> or used local  services(local websites, emails, etc) as
>>> opposed to foreign services. In addition, ISPs could come
>>> up with time-based tariffs that took advantage of the
>>> traffic models registered on the KIXP i.e. provide even
>>> lower rates for local content during evenings and
>>> weekends.He however conceded that Online Government
>>> Services, eHealth, eBanking, eLearning, etc would have to
>>> be in place in order to make such pricing models
>>> successful. Mr. J. Ngunjiri added that training or capacity
>>> building initiatives must also be supported to further
>>> gaurantee the success of the initiative.
>>>
>>> Day 3:  Hierarchy of Internet Service Providers (IGO,ISP)
>>>
>>> The Internet Study Report recommended that the seperation
>>> between Internet Gateway Operators (IGO) and Internet
>>> Service Providers be dissolved with expected results being
>>> cheaper and higher quality services.  In his opening
>>> remarks, Mr. Walubengo asked members to react to this
>>> recommendation.
>>>
>>> Lucy Kimani wondered if IGO would be able to cope with the
>>> technical and administrative overheads experienced by ISPs
>>> such as a larger number of customer accounts, increased
>>> need for support services, etc.  She added that the cost of
>>> services may not come necessarily  come down as expected
>>> due to the need to cover such overheads.  Mr. Walubengo
>>> cited the case of TKL (Telkom Kenya) who are currently
>>> operating at both the Gateway and the ISP level without
>>> significant cost reductions in their Internet Service.
>>>
>>> Mr. S. Buruchara felt that historically, ISPs have had a
>>> rough time in trying to set up their own Internet Gateway
>>> Operations - having been forced by regulation to route
>>> their traffic through expensive and monopolistic Internet
>>> Gateways.  He argued that if the upstream providers (IGO)
>>> were expensive, it was only natural that these costs would
>>> be passed downstream to the consumers.  In addition, he
>>> noted that even todate the Licensing requirements were
>>> still prohibitive (expensive) for ISPs to move into the IGO
>>> level and if they did, they may need to recoup their
>>> (Licensing & other) investments at the expense of offering
>>> cheaper Internet Access rates.  Mr. Kai Wulff commented
>>> that giving ISPs the IGO facilities may not necessarily
>>> reduce prices, citing case of Uganda where internet costs
>>> are still high despite many ISPs having IGO facilities.
>>>
>>> Day 4: Statistics on Infrastructure
>>>
>>> The report indicated that ISPs (internet services) were
>>> only operating in 30% of the districts in Kenya. The leased
>>> line services were mainly concentrated in urban centers
>>> (NRB & MSA) meaning that Internet Infrastructure was
>>> clearly challenged and the Report urges Government to
>>> intervene by leading the build-up of Internet/Network
>>> infrastructure accross the country.
>>>
>>> In her reaction, Alice Munyua, said that a comprehensive,
>>> multi-pronged approach must be made to avoid having
>>> infrastructure that would eventually serve no purpose.
>>> Aggressive infrastructure build up without content would be
>>> an exercise in futility since the internet pipes would be
>>> idle and underutilised most of the time.  She added that
>>> additional initiatives such as Construction and Supply of
>>> Electrical Power, Literacy Initiatives, Local Content and
>>> 'Demand-side' Internet Requirements must move side by side
>>> with the infrastructure roll-out.
>>>
>>> Day 5- Statistics on Affordability will be on tomorrow
>>> (thrs 3rd May) morning. Today is open for final comments on
>>> the Day 1, 2, 3 & 4 Themes.
>>>
>>> walu.
>>>
>>>
>>>
>>>
>>>
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>>
>>
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