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<DIV><FONT face=Verdana size=2>Sure,</FONT></DIV>
<DIV><FONT face=Verdana size=2></FONT> </DIV>
<DIV><FONT face=Verdana size=2>you see we have a detailed price list which gives
distances and prices. </FONT></DIV>
<DIV><FONT face=Verdana size=2></FONT> </DIV>
<DIV><FONT face=Verdana size=2>This does NOT include International capacity
since this would be bundling of services.</FONT></DIV>
<DIV><FONT face=Verdana size=2></FONT> </DIV>
<DIV><FONT face=Verdana size=2>International capacity starts from 1750 USD per M
1:1 (KDN does ONLY sell dedicated capacity, not diluted one).</FONT></DIV>
<DIV><FONT face=Verdana size=2></FONT> </DIV>
<DIV><FONT face=Verdana size=2>Fiber price depends on volume uptake but is in
the region of KSH 70,- per month and KM for a single link (again, depending on
service levels ..). So that is around 30.000 to Mombasa for 64K?</FONT></DIV>
<DIV><FONT face=Verdana size=2></FONT> </DIV>
<DIV><FONT face=Verdana size=2>10M are in the region of KSH 1M to Mombasa. As I
said, it depends on the solution, contract period, SLA, backhaul technology
....</FONT></DIV>
<DIV><FONT face=Verdana size=2></FONT> </DIV>
<DIV><FONT face=Verdana size=2>You see, we try to sell a solution that caters
for all the needs of the customer, so you will have a diverse pricing structure.
The question is like: How much is a house ... it depends on size and design
..</FONT></DIV>
<DIV><FONT face=Verdana size=2></FONT> </DIV>
<DIV><FONT face=Verdana size=2>Kai</FONT></DIV>
<DIV><FONT face=Verdana size=2></FONT> </DIV>
<DIV><FONT face=Verdana size=2>Besides the pricelist there is the business
sense:</FONT></DIV>
<DIV><FONT face=Verdana size=2></FONT> </DIV>
<DIV><FONT face=Verdana size=2>Let's assume the cable to Mombasa with all the
equipments and shelters and generators and project overheads costs 1B KSH.
Monthly O&M (protecting the cable, rent, power, AC ..) is about 5M KSH. An
investor wants his money back after 8 years. Interest per month on 1B KSH = 10M
KSH:</FONT></DIV>
<DIV><FONT face=Verdana size=2></FONT> </DIV>
<DIV><FONT face=Verdana size=2>Let's say in scenario 1 you are selling 100Mbps
with an average price of 1M per 10M = 10M per month</FONT></DIV>
<DIV><FONT face=Verdana size=2>GOP = 5M per month (excluding
interest)</FONT></DIV>
<DIV><FONT face=Verdana size=2>Booking interest costs for the paid capital (with
12%) the monthly loss is 5M .. so this does not work</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Verdana size=2>Now you can double the price .. then you make GOP
of KSH 5M per month, 60M per year and your billion is paid back in little less
than 17 years .....</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Verdana size=2>OR ...</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Verdana size=2>You double uptake and keep the price like in 1
... 17 years</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Verdana size=2>OR ...</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Verdana size=2>You take business of 1Gbps and reduce the price
average by 70%, then you make 15M per month and you pay back over 8 years
...</FONT></DIV>
<DIV><FONT face=Verdana size=2></FONT> </DIV>
<DIV><FONT face=Verdana size=2>You see, I prefer the last scenario or even the
case whereby we sell 10Gbps and the average price per 10M is only 30 000 KSH per
month .... or 100Gbps and 3000 per M or 1Tb and 300 per 10M .. the cost to the
operator does not change!</FONT></DIV>
<DIV><FONT face=Verdana size=2></FONT> </DIV>
<DIV><FONT face=Verdana size=2>Get my point? We need more demand = local
content! Then it will fly VERY </FONT> <FONT face=Verdana
size=2>easily.</FONT> </DIV>
<DIV><FONT face=Verdana size=2></FONT> </DIV>
<DIV><FONT face=Verdana size=2></FONT> </DIV>
<BLOCKQUOTE
style="PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<DIV style="FONT: 10pt arial">----- Original Message ----- </DIV>
<DIV
style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black"><B>From:</B>
<A title=alex.gakuru@yahoo.com href="mailto:alex.gakuru@yahoo.com">Alex
Gakuru</A> </DIV>
<DIV style="FONT: 10pt arial"><B>To:</B> <A title=kai.wulff@kdn.co.ke
href="mailto:kai.wulff@kdn.co.ke">kai.wulff@kdn.co.ke</A> </DIV>
<DIV style="FONT: 10pt arial"><B>Sent:</B> Friday, March 30, 2007 08:56</DIV>
<DIV style="FONT: 10pt arial"><B>Subject:</B> Re: [kictanet] ISP providers cry
foul over bandwidth prices</DIV>
<DIV><BR></DIV>Why not give the fibre link cost figures simply like e.g. 256k
shillings (a).. 512k shillings (b). etc... Add if you need our bandwidth 256k
at contention ratio x:y shillings add shillings (z)
etc..<BR><BR>Application, my earlier example, a firm just wants to connect
their Nairobi- Mombasa branches to run an application and they don't satellite
bandwidth. <BR>Another (an ISP) needs the link to supply internet to their
Mombasa clients.<BR><BR>CCK recently stated "information must be given
in simple and plain English"<BR><BR><B><I>Kai Wulff
<kai.wulff@kdn.co.ke></I></B> wrote:
<BLOCKQUOTE class=replbq
style="PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: rgb(16,16,255) 2px solid">I
think there is some confusion!<BR><BR>The international capacity is not
transported to Nairobi by the fiber cable <BR>in the ground! We transport
the capacity that comes by SAt with the fiber to <BR>Mombasa! So the fiber
will not affect this.<BR><BR>As for Trunk costs, they have dropped already
substantially and are a <BR>function of capacity uptake. You see,
Maintenance costs and Capex for the <BR>cable is constant, capacity is
unlimited, so the only factor that brings <BR>down price is higher uptake
and vice versa.<BR><BR>Rgds<BR><BR>Kai<BR><BR>----- Original Message -----
<BR>From: "A. Wanjira Munyua" <ALICE@APC.ORG><BR>To:
<KAI.WULFF@KDN.CO.KE><BR>Sent: Thursday, March 29, 2007 10:50<BR>Subject:
[kictanet] ISP providers cry foul over bandwidth prices<BR><BR><BR>A
thought-provoking piece here Listers: ISPs in Kenya say their hopes
that<BR>they would pay significantly lower costs for bandwidth once
providers<BR>Telkom and Kenya Data Networks unleashed cable, are yet to
materialise.<BR>They wonder why. The thinking was that once these two
providers replaced<BR>satellite links with fibre between the two cities of
Mombasa and Nairobi,<BR>they would see a sizeable cut in prices they pay for
their bandwidth.<BR><BR>Worth noting is that these networks which KDN and
Telkom have built, and<BR>which ISPs say have failed to deliver the expected
fall in prices,<BR>represent a key link in Africa's fibre. The two companies
are extending<BR>theis fibre towards the Ugandan border, where it will link
up with the<BR>fibre owned by Uganda telecom and MTN Uganda, then run
through Uganda to<BR>the Rwandan border to link up with MTN Rwandacell's
fibre.<BR><BR>KDN and Telkom Kenya are frontrunners in more than one venture
to connect<BR>the eastern coast of Africa to international fibre, and no
doubt this<BR>Mombasa-Nairobi link which Kenyan ISPs are grumbling about
will play a<BR>pivotal role - regardless of which marine cable goes live
first. Question:<BR>If the KDN and Telkom Kenya's Nairobi-Mombasa fibre has
not resulted in<BR>the benefits the industry expected, should we be
optimistic that once they<BR>hook onto international fibre we shall get the
60% or greater falls in<BR>prices? What's to be done to assure the benefits
are forthcoming?<BR><BR>Wakabi<BR><BR>ISP providers cry foul over bandwidth
prices<BR>By Okuttah Mark, Business Daily, March 29, 2007<BR><BR>Defying
predictions of cheap online access, Internet Service Providers<BR>(ISPs) are
yet to experience significant price reductions on bandwidth<BR>charges since
Telkom Kenya and Kenya Data Networks laid terrestrial optic<BR>fibre between
Mombasa and Nairobi.<BR><BR>Mr Sammy Buruchara, the managing director of ISP
NairobiNet, said charges<BR>levied by the two operators remain prohibitive,
thus hindering their<BR>expansion.<BR><BR>"There is no difference from what
they are charging now to what we used to<BR>pay for the satellite link,"
said Mr Buruchara, while referring to the<BR>VSAT links which have been used
in the absence of cable.<BR><BR>For a 2Mbps broadband link from Nairobi to
Mombasa, Mr Buruchara said he<BR>pays over Sh500,000 (US$7,142.) per month.
Kenya has 23 ISPs with an<BR>estimated 1.5 million Internet users. Most are
in Nairobi and Mombasa.<BR><BR>But an official at Telecoms disputed the
charge.<BR><BR>Mr Patrick Njagi, a data service manager, said a combination
of increased<BR>competition and the fibre optic cables have reduced
broadband prices by<BR>almost 40 per cent since last October. "The price has
drastically reduced,<BR>especially in Nairobi because of stiff competition
since the licensing of<BR>various Public Data Network Operators (PDNOs) by
the Communications<BR>Commission of Kenya," he said.<BR><BR>So far CCK has
licensed more than 14 PDNOs to build and operate<BR>telecommunication
Infrastructure such as fibre optic cables.<BR>Advertisements Telkom Kenya
has been running since the launch of its<BR>Mombasa-Nairobi cable claim that
its bandwidth prices have reduced by<BR>half. Telkom Kenya's website states
that rending a 2Mbps line from Nairobi<BR>to Mombasa costs Sh700,000
(US$10,000) per month, exclusive of VAT.<BR><BR>"The prices are still quite
high even if they say they have reduced them,"<BR>said Mr Buruchara. "It is
still impossible to do video-conferencing. Who<BR>can raise the Sh1.8
million for 10 Mbps per month currently being charged<BR>by Telkom Kenya?"
he asked.<BR><BR>But Telkom's Mr Njagi blamed the high Internet connection
fee on<BR>International prices. "Our subsidiary company JamboNet has very
little to<BR>do with the Internet bandwidth pricing," he said. "Those are
determined by<BR>the international satellite
operators."<BR><BR><BR>_______________________________________________<BR>kictanet
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list<BR>kictanet@kictanet.or.ke<BR>http://kictanet.or.ke/mailman/listinfo/kictanet<BR><BR>Please
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