Broadband war lowers internet cost

AS broadband internet dream come true in East African region, Kenya internet services providers are locked up in a blockbuster crusade to woo customers, with low cost internet as other market players are betting on a massive investments plan to set up WiMAX base stations.

The crusade has been contributed by the government directive in 2008/9 budget that saw the removal of import tax on telecom equipment such as mobile phone and those required for putting up base stations. The directive is now a relief to service providers and consumers.

WiMAX is an acronym of Worldwide Interoperability for Microwave Access, which is a telecommunications technology that provides the wireless transmission of data using a variety of transmission modes, from point-to-point links to full mobile cellular-type access.

The technology provides up to 70 Mb/sec symmetric broadband speeds without the need for cables.
According to Access Kenya Brand Manager Bernard Muteti, broadband business is specifically targeted at call centers operators who are driving Kenya into global outsourcing business but are being shackled by high bandwidth cost.

Broadband is referred to data transmission where multiple pieces of data are sent simultaneously to increase the effective rate of transmission, regardless of data signaling rate.
But as old adage goes, finer things in life always come at a cost. Deep pockets will be the first leveler that will determine who among Kenyans largest ICT companies, will gain an edge over the others in the provision of data service.

Considering that there is a telecommunication boom in Africa. East Africa is counting on the undersea cable which is due to be completed in June 2009, which will link the continent with India and Europe. This cable is expected to change the region by reducing cost, increasing investments, and ultimately alleviating poverty.
However, the competition has been hyped with the entry of foreign companies. Players like Safaricom, Zain, Africa Online Limited, Kenya Data Network, Access Kenya, Telkom Kenya, UUNET, and Swift Global have begun envisaging the space to be very competitive.
In the last one month there have been increased activities in ICT industry with Access Kenya introducing broadband services to home users.

In his statement David Somen the company Managing Director said that they are focused on Kenyan market because of the enormous untapped potential for both corporate and residential broadband services particularly with TEAMS arrival next year.
He explained that home broadband services by the company was driven by the research from the Africa Analysis which found that over 320,000 household in Kenya could spend US$100 a month on home broadband.

Already companies have begun intensive alignment in partnerships and acquisitions as players reposition themselves to lower the cost of bandwidth.
Last year, France Telcom a company that acquired a 51 percent stake in Telkom Kenya pledged to invest at least Sh 1.4 billion to upgrade the company broadband infrastructure.

So far, several telecom companies have formed partnership wth technology firms with Safaricom a mobile phone service provider in the country acquiring a majority stake in a local data service provider company, One Communication Limited in preparation of controlling the sector.
Safaricom Chief Executive Officer Michael Joseph explained that data sector is hugely untapped with only two percent of the potential market served, currently implying vast growth and earning for players who get the quality speed and pricing right.

“Broadband internet access services allow individuals to have high speed data access both for external and internal networks through the data modems or 3G routers”, Mr. Joseph said.
One Communication has five WiMAX base and it provides various data communication services that is WiMAX services a fixed and wireless broadband internet services.
“WiMAX allow companies to get into areas that they could not be in before with consistent services”, Mr. Joseph said.

Going by the fact that France Telcom has a global partnership with Apple the manufacturer of 3G phones, this little element will bring in value, competencies, class of service and quality of service.
However, Michael Foley Chief Executive Officer Econet told Sunday Express in an interview that Econet will hit the market as a global brand, banking on low mobile penetration in the country to make an impact in a market dominated by Safaricom. Econet wireless which is set to roll out its services on 28th of this month, announced that they will be rolling out 3G services.

Currently, Wananchi Online has cut it prices to make internet solutions affordable. The company says it is to invest close to US$50 million in the next two years.
“Our plan is to address the broadband agenda by rolling WiMAX network with about 130 base stations largely focused in the first year. Wananchi will be rolling out WiMAX platform for broadband next year”, the company MD said.
He further disclosed that Wananchi online is to build out a cable plant covering at least 300,000 homes as well as roll out of WiMAX network broadband.
Swift global control 31 per cent of the data business in Kenya, AFSAT 13 per cent, UUNet 12 per cent, Wananchi online 7 per cent, Iconet 7 per cent while the rest of the players held 15 per cent together.
Analysts predict that the blockbuster will bring lower pricing for both home and business customers or bring broadband access to places where it has been economically unavailable.

By ITnewsAfrica.com