[kictanet] [www.eThinkTankTz.org] Internet Services more expensive in .KE than .TZ & .UG

Thu Nov 3 11:36:26 EAT 2011

Walu,
I'd want to look at two things
- if we look at absolute values, kenya is still cheaper (but when making a
composite from GNI which itself is based on population, etc) then things
get a little skewed.

- the 2008 data vis a vis the 2010 data - a span of 3 years.   And perhaps
we should question the accuracy of the data here vis a vis what we know
happened in terms of infrastructure developments.   For Tz and Ug their
costs have almost halved in that period  from 57 and 61 respectively.
 Kenya during the same period was 49.8.    Yet we were among the first to
see much lower costs from 2H 2009 when two  cables landed here.  In tz one
cable landed (i.e. less competition) in the same year ergo costs could not
have dropped that much and perhaps the terrestrial network for backbone and
last mile was not as well propagated as ke had (telkom, kdn, NOFBI, etc).
 And to repeat, just one cable that year in Tz.

So I'd question the accuracy of the historical period but also issue a
caveat abt looking at how GNI, population, etc may skew the absolute values
somewhat.

On that note, I hear from RSA friends their internet costs are pretty high
yet this index shows it at 5.3 currently - an INCREASE from 4.5 in 2008?
 We know in 2008 RSA only had satellite and a thin strand of fibre
controlled by Telkom SA - so again the distortions thanks to looking at GNI
and population.

On 3 November 2011 11:09, Walubengo J <jwalu at yahoo.com> wrote:

> True that Anders,
>
> the biggest component in the internet price equation is the cost of local
> access.
> But that still begs the question: Does .UG and .TZ enjoy a better domestic
> infrastructure/ better business environment/better tax regimes/etc (just to
> quote some of your variables) than .KE?
>
> Why are the costs in the neighbourhood lower than in .Ke?
>
> walu.
>
> --- On *Thu, 11/3/11, Anders Comstedt <anders at ssvl.kth.se>* wrote:
>
>
> From: Anders Comstedt <anders at ssvl.kth.se>
> Subject: SV: [www.eThinkTankTz.org] Internet Services more expensive in
> .KE than .TZ & .UG
> To: "'Walubengo J'" <jwalu at yahoo.com>, "'KICTAnet ICT Policy
> Discussions'" <kictanet at lists.kictanet.or.ke>
> Cc: eThinkTankTz at yahoogroups.com, "'I-Network Uganda'" <
> i-network at dgroups.org>
> Date: Thursday, November 3, 2011, 10:26 AM
>
> On your last comment , UG vs KE, and UG being “supplied” with bandwidth
> from KE, you live in a past mindset. The majority of the cost driver is
> local networks, and to some extent national backbones, not international
> connectivity. The VSAT days obscuring this are gone after the landing of
> fiber cables. This has become even more apparent after transit prices has
> plummeted, also in East Africa.
>
>
>
> Try Telegeography for some data on commercial conditions on Internet
> transit. Below USD 10 /Mb/month at global nodes. The price to get there on
> any global fiber system is USD 50-150 or less. Mombasa to London was
> expected to fall from USD 3000-5000 to USD 500 by the most optimistic
> pundits as cables arrive. It is now more like USD 100-150.
>
>
>
> Several deals include backbone transport to Kampala and other major
> landlocked nodes in that price. Just check what EASSy partners, like WIOCC,
> and SEACOM are into in their wholesale business.
>
>
>
> So the big cost element is the access network. In East Africa that is more
> or less the same as 3G mobile for Internet access but for some services in
> major cities. The second cost driver, far more expensive per Mb than
> international connectivity,  is the national backbone, but it is (or should
> be) anyway just a few percent of the total.
>
> What is then the economics for 85-90% of the cost, local access, in
> various countries? Good business or bad business? Provider efficiency? What
> may drive or prevent competitive pressure? Taxes and license costs?
> Customer density? (covering sparsely populated areas is a financial
> disaster for telcos globally). Lots of things to benchmark. ITU statistics
> not very helpful here.
>
>
>
> Having more than a casual opinion about end-user prices begins with having
> knowledge about cost drivers.
>
>
>
> Cheers
>
> Anders
>
>
>
>
>
>
>
> *Från:* eThinkTankTz at yahoogroups.com [mailto:eThinkTankTz at yahoogroups.com]
> *För *Walubengo J
> *Skickat:* den 3 november 2011 07:05
> *Till:* KICTAnet ICT Policy Discussions
> *Kopia:* eThinkTankTz at yahoogroups.com; I-Network Uganda
> *Ämne:* [www.eThinkTankTz.org] Internet Services more expensive in .KE
> than .TZ & .UG
>
>
>
>
>
> Contrary to popular belief, ITU's recent statistics @
>
>
> http://www.itu.int/ITU-D/ict/publications/idi/2011/Material/MIS2011-ExceSum-E.pdf
>
> indicates that ICT services (internet, voice, video) are generally more
> expensive in Kenya than in our neighbourhood. Specifically, the cost of ICT
> services as compared to average national incomes is at 30% for .UG, 31% for
> .TZ and 33% for Kenya.
>
> In layman terms, Kenyans have to fork out 33% of their average monthly
> income  if they want to enjoy decent access (e.g. 20hrs of internet) per
> month.
>
> So PS Dr. Ndemo, it looks like before you become President, what are you
> doing to make sure we catch up and bypass our neighbours as far as pricing
> of ICT services is concerned?
>
> walu.
> nb: incidentally, we are the ones supplying .UG the bandwidth - so how
> comes its cheaper in Kampala?
>
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