[kictanet] Growth in internet subscription-interrogating the CCK report

Sat Apr 20 09:31:43 EAT 2013

Mark and all

You make valid points. I have a few of my own:-

1. I think that the government up to this point is way ahead of the private sector in the broadband space. My question (that I have severally asked) is why can't the players embrace the infrastructure sharing principle? This is a no-brainier in terms of pulling resources together and ultimately reduce the time to Break-even and eventually result in lower prices and hence more customers. Maybe TESPOK could tell us the pro & cons of doing this. Maybe we are being too simplistic and there are other issues that need to be resolved.

2. Fibre or 3G or LTE. I think a combination of wireless and Fibre would be advisable as there will still be places in our country that may not make sense (if we only focus on the profit motive) for fibre or the cost may be too prohibitive. 

The venture of O3b Networks which is a good lesson/venture to bring broadband internet via low orbiting satellites is worth looking at. The network will combine the ubiquitous reach of satellite with the speed of fiber to deliver satellite internet services and mobile backhaul services to emerging markets. The name "O3b" stands for "[The] Other 3 Billion", referring to the population of the world where broadband internet is not available without help. Is this something that the Government can look at through the Universal Access Fund?

3. I'm becoming increasingly convinced that the government through the Universal Access Fund should be playing a more central role improving access to broadband in our country. Like Electricity, broadband cannot (and should not) be confined to the vagaries of profit alone. A mix of both is critical. Value Added Services can then be used to drive profitability. Now that the universal Access Fund Board is in place we expect them to move with the speed required to ensure that broadband at affordable costs is available to all in the counties. It is nonsensical that in 2013 Nyeri, Kilifi, Lamu etc still do not have access to affordable broadband. Lets not even start talking about Lodwar, Wajir etc.

4.  To ensure that we have a proliferation of mini ihubs, Nailabs and other labs in the counties we must revert to the robust and well proven Multi-stakeholder model to ensure universal access of broadband. How otherwise will the laptop/tablet for children work? Do we expect them to be buying bundles every other day from the service providers?

The swahili have a saying - Udongo upatilize ukali maji (to mould clay you must do it while its wet). It is said that we are migrants to the Internet and that our children are natives of the Internet. Is this really true of every child in the country? A thumb suck estimate is that less than 10% of our children across the country have access to the Internet. Is this what we want to confine our country to? In 2013? That our children going forward will be migrants to the net instead of natives?  

I put it to us that sometimes we wallow in so much discourse in our ivory towers that we actually forget what it is like for the rest of the country..

Ali Hussein
CEO | 3mice interactive media Ltd
Principal | Telemedia Africa Ltd

+254 713 601113

"The future belongs to him who knows how to wait." - Russian Proverb

Sent from my iPad

On Apr 19, 2013, at 11:05 PM, Mark Mwangi <mwangy at gmail.com> wrote:

> Listers,
> 
> Thank you Dr Ndemo for recognising that cheap internet is vital for the young to empower themselves. 
> 
> I however do not agree with the idea that using mobile spectrum is the best way of delivering broadband. Advancements in technology in the radio sector not withstanding, the investment involved in rolling out hundreds of base transceiver stations that will require frequent upgrades with changes in tech is staggering. I still do not have 3G coverage in Nyeri from Orange Kenya or Airtel. The governmnet led national effort is likely to go the NOFBI way. What use has Orange Kenya put it to to date?
> 
> A fiber cable to the homes/offices as a matter of policy or law would ensure the ubiquitous coverage you advocate for. LTE will require me to buy an LTE handset whose standards are debatable and which may be obsolete in a year. Lets not even get started on the power consumption and the interference with other radio services etc. Fiber is Future proof. 
> 
> @walubengo The local internet market is more like our traditional marketplaces with a lot less order. The other day I tried to stream the KTN Live stream only to realize I am downloading the stream fro Europe. So the path is Mombasa road-fiber-seacom/teams/eassy-London IXP-Europe-Seacom/EASSY/TEAMS-Zuku-Mwangi's Laptop. Is this sensible?
> 
> Are we inlove with grand master projects and cant figure out how to encourage local media houses to host their content locally? I understand that the target of internet streaming is the Diaspora but as the report states we barely consume a third of installed international capacity. Shouldn't this no. be higher?
> 
> 
> On Fri, Apr 19, 2013 at 9:17 PM, Bitange Ndemo <bitange at jambo.co.ke> wrote:
>> Walubengo,
>> Thank you for raising these pertinent questions.  I had the privilege of
>> talking to four young Kenyan developers this afternoon.  They had sought
>> an appointment to discuss the increasing difficulty in accessing
>> affordable internet.  Most telcos have moved from their unlimited offers
>> and confined these youth to unaffordable connectivity.
>> 
>> Some have resulted to stealing internet through VPN and anonymzed IP
>> addresses.  They indeed demonstrated how it is done.  They wanted the
>> Government to seek means of providing affordable internet.  They of course
>> do not want to be on the wrong side of the law but they also understand
>> that if this continues, it will undermine growth in the sector.  I made a
>> phone call to two CEOs and indeed they confirmed that there are challenges
>> with broadband thefts.  Although we have agreed to meet next week there
>> points we have raised before that can effectively deal with such issues.
>> 
>> First we must recognize that the growth in internet penetration in Kenya
>> is as a result of availability of broadband in most parts of the country.
>> Efforts to enable widespread access have failed simply because we are not
>> taking enough risk.  Several years after developing infrastructure sharing
>> policy, we still see many players laying their own fibre optic networks.
>> Some parts like Parklands have more than five different fibre cables laid.
>>  We have also failed to take advantage of emerging technologies such as
>> LTE and White Space.  You may recall we were the first in Africa to
>> announce the deployment of LTE under a shared infrastructure framework but
>> because of dillydallying and retrogressive tendencies we still want to
>> wait for the maturity of the technology.  In the mean time Tanzania and
>> South Africa has gone forward.
>> 
>> Our success thus far is born out of taking great risks but this is not
>> happening as technical officers hide behind nonsensical jargon.  It may
>> sound as though I am getting frustrated but I intend to deal with these
>> issues properly in order to revive our march to universal access to
>> internet.  We are so close to realizing universal access to knowledge
>> (especially now when the President has committed to enabling children to
>> access technology) yet so far if we revert to the old public service
>> mentality.
>> 
>> More than 75% of the population in this country is youth.  This is a great
>> resource especially when they leverage on technology to earn a living.  We
>> must therefore facilitate them through enabling policy interventions but
>> not frustrate them to the extent of stealing broadband.  Under a shared
>> infrastructure framework we can attain 100% internet penetration in which
>> case more revenue to MNOs and more well to do people instead stifling
>> growth now.
>> 
>> Ndemo.
>> 
>> 
>> > @Wambua,
>> >
>> > Good report from CCK.  Just a few questions and would appreciate some
>> > answers from CCK and ofcourse any other volunteered sources on this
>> > esteemed list.
>> >
>> > 1. Kenya reported 9.5m Internet subscribers as at Dec 2012 but only 1m are
>> > on broadband (with data rates above 256Kbs up/down).  Shouldn't we be
>> > concerned that only 1m Kenyans can access (lets leave out "afford" for
>> > another day) multimedia content online? I thought 3G licenses were given
>> > out to about 3 operators? Is it that most Operators have not deployed 3G
>> > services and those who have, may be doing so only in selected urban areas?
>> > What is the regulator doing to motivate or bully operators to widely
>> > deploy broadband services?
>> >
>> >
>> > 2.Closely related to the above, I notice we have an impressive (by
>> > regional standards) total size of 906GB International link to the
>> > Internet. However, we are using only 36% of this capacity. Is the lack of
>> > a mature domestic broadband network suppressing demand on the
>> > international links? What exactly is our "domestic" bandwidth capacity and
>> > how much of it are we using? This should be an important statistic in
>> > future since it can show us if there is congestion at domestic level which
>> > in turn maybe suppressing usage/uptake at international level.
>> > Furthermore, it can begin to give interesting statistics like how much of
>> > our internet traffic is local vs international - something the Kenyan IXP
>> > tries to collect but may not have the full picture since not all
>> > operators/asp/isp are on board.
>> >
>> > 3. Finally, I notice the Revenue to Investments ratios in the data market
>> > dropped from 148B/29B in 2011 to 98B/26B in 2012. What are the
>> > implications? It appears investments (read expansion and increased quality
>> > of our networks) is slowing down - yet usage/uptake of broadband networks
>> > remains extremely low ( 1m users).  Looks like Operators have local
>> > capacities but no one to use them? Is this a Price issue? Or maybe a
>> > content issue? - e.g. why should a farmer in Bungoma get online? Or
>> > perhaps - what Safaricom does not like to hear - a market failure arising
>> > from the dominant position that Safaricom has successfully worked itself
>> > into?
>> >
>> > I hope these are not too many questions to handle...
>> >
>> > walu.
>> >
>> >
>> >
>> >
>> >
>> > ________________________________
>> >  From: "Wambua, Christopher" <Wambua at cck.go.ke>
>> > To: jwalu at yahoo.com
>> > Cc: Consumer and Public Affairs <CPA at cck.go.ke>; KICTAnet ICT Policy
>> > Discussions <kictanet at lists.kictanet.or.ke>
>> > Sent: Thursday, April 18, 2013 5:28 PM
>> > Subject: Re: [kictanet] FW: Growth in internet subscription outpaces
>> > voice.doc
>> >
>> >
>> >
>> >
>> > Ali,
>> >  
>> > The report is available on our website at
>> > http://www.cck.go.ke/resc/downloads/Sector_statistics_for_Quarter_2_-_2012-2013.pdf 
>> >  
>> > Thanks for the compliment.
>> >  
>> > Best regards
>> > Christopher Wambua
>> > Manager/Communications
>> > Consumer and Public Affairs Division
>> > Communications Commission of Kenya
>> > P.O. Box 14448, NAIROBI 00800
>> > KENYA
>> >  
>> >  
>> >  
>> > From:Ali Hussein [mailto:ali at hussein.me.ke]
>> > Sent: Thursday, April 18, 2013 3:53 PM
>> > To: Wambua, Christopher
>> > Cc: Consumer and Public Affairs; KICTAnet ICT Policy Discussions
>> > Subject: Re: [kictanet] FW: Growth in internet subscription outpaces
>> > voice.doc
>> >  
>> > Wambua
>> >
>> > Great statistics! The country is moving forward.
>> >
>> > Please send us a link where we can access the full report.
>> >
>> > Regards
>> >
>> >
>> > Ali Hussein
>> > CEO, 3mice interactive media ltd
>> > Partner, Telemedia Africa Ltd
>> >  
>> > Tel: +254713601113
>> > Twitter: @AliHKassim
>> > Skype: abu-jomo
>> > LinkedIn: http://ke.linkedin.com/in/alihkassim
>> > Blog: www.alyhussein.com
>> >
>> >
>> > Any information of a personal nature expressed in this email are purely
>> > mine and do not necessarily reflect the official positions of the
>> > organizations that I work with.
>> >  
>> > On Thu, Apr 18, 2013 at 3:31 PM, Wambua, Christopher <Wambua at cck.go.ke>
>> > wrote:
>> >  
>> > Listers,
>> >  
>> >   P  R  E  S  S   R  E  L  E  A  S E E
>> >  
>> >  
>> >  
>> > 18th April 2013
>> >  
>> >  
>> > Growth rate of internet/data surpasses voice
>> >  
>> > The number of internet users in Kenya increased to 16.2 million in the
>> > period between October 1 and December 31 last year, representing a growth
>> > of 11.6 %.
>> >  
>> > According to the CCK Sector Quarterly Statistical Report (2nd Quarter of
>> > 2012/13 FY) released today, the number of Internet subscribers in the
>> > country rose from 8.5million in the 1st quarter of this financial year to
>> > 9.4 million by the end of December 2012, posting an increase of 11.5%. 
>> > The number of Internet subscribers increased by 75.1% compared to same
>> > period in the previous year.
>> >  
>> > Mobile data/internet continued to dominate the Internet market
>> > contributing 99% of the total internet/data subscriptions in the country.
>> >  
>> >  
>> > Internet penetration went up by 4.3% to reach 41.1% up from 36.8% recorded
>> > during the previous period. However, the number of broadband subscribers
>> > declined to 1,002,701 from 1,006,071 posted during the previous period
>> > mainly due to a reduction in the number of fixed terrestrial broadband
>> > subscribers.
>> >  
>> > The report attributes the growth in the Internet/data market segment to
>> > international internet connectivity (used) bandwidth that has continued to
>> > spiral upwards. During the quarter under review the international internet
>> > used bandwidth rose to 328,641 Mbps from 278,329 Mbps posted during the
>> > previous period, representing an increase of 18.1 percent.
>> >  
>> > Meanwhile, the total number of mobile subscribers in Kenya rose to 30.7
>> > million, representing a marginal growth of 1.0 percent from the previous
>> > quarter. As observed during the previous period, the rate of growth has
>> > slowed down as the market appears saturated and tending towards maturity.
>> > Pre-paid subscribers continued to dominate the mobile sub-sector
>> > contributing 99% of the total number of subscribers. 
>> >  
>> > Mobile penetration on the other hand increased to 78% during the same
>> > period up from 77.2% recorded during the first quarter. All mobile
>> > operators recorded positive growth in service subscription beside Telkom
>> > (Orange) which lost a total of 609,321 customers, representing a decline
>> > of 19.7% during the quarter under review.
>> >  
>> > The number of letters sent locally declined by 2.0 percent to reach 17.3
>> > million down from 17.7 million letters sent during the previous period.
>> > Compared to the same period of the previous year, a decline of 11.8
>> > percent was recorded.
>> >  
>> > The number of international incoming letters grew by 20.9 percent during
>> > the period to reach 191,672 letters from 158,549 received during the
>> > previous period. Similarly international outgoing letters reached 1.9
>> > million from 1.6 million during the previous period, representing 18.1
>> > percent increase.
>> >  
>> > The full report is attached.
>> >  
>> >  
>> > Christopher Wambua
>> > Manager/Communications
>> > Consumer and Public Affairs Division
>> > Communications Commission of Kenya
>> > P.O. Box 14448, NAIROBI 00800
>> > KENYA
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>> > _______________________________________________
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>> > for people and institutions interested and involved in ICT policy and
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>> > sector in support of the national aim of ICT enabled growth and
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>> 
>> 
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>> 
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> 
> 
> 
> -- 
> Regards,
> 
> Mark Mwangi
> 
> markmwangi.me.ke
> 
> 
> 
> 
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> 
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