[AfrICANN-discuss] Uganda: Country Internet Costs Drop

Mamadou LO alfamamadou at hotmail.com
Tue Jul 20 15:29:53 SAST 2010

Uganda: Country Internet Costs Drop
Mark Muhumuza
19 July 2010

Kampala — UGANDA. Uganda's internet costs are beginning to drop at a low pace as new players come into the market. The new Internet Service Providers (ISPs) have created competition because of the availability of high speed fibre optic internet.

The reduction in these rates are not anywhere near the promised cheap rates.

"With more fibre optic providers, quality will improve and this will push down the price. But the ISPs usually keep their costs high because of the infrastructure that remains expensive," SEACOM Head of Business development Aidan Baigrie told East African Business Week.

In Uganda today the mobile telecom companies have become the main ISPs. They provide both wireless and cable internet. However they have maintained significantly high rates. The other ISPs like Infocom, Africa Online and The Broadband Company among others have not reduced rates to penetrate the market further.

MTN, Zain, UTL,Orange and Warid have all gone into mobile internet as the competition from just voice calls has entered the internet and data service provision. Mobile Internet has become the better option for middle income earners in the country as the costs continue to reduce.

By the end of June 2009, there were 310,058 mobile wireless subscribers in Uganda, a figure that is increasing due to the affordability of the internet rates at the moment.

Some experts predict that the oversight concerns, haggles and infighting over especially on the National Fibre Optic Backbone, a country like Uganda may not benefit from the broadband brought through the undersea cables through TEAMS, ESSAY and SEACOM.

Mobile internet modems now range from Ushs200,000 ($87) to Ushs50,000($22) depending on the service provider. Orange Telecom that has aligned and focused on reaping more revenue providing Internet currently has the most reliable service in this area according to various ICT experts. Orange has struggled to penetrate the market especially in provision of voice calls and this explains its change of strategy.

This was after the current price was reduced through cutthroat pricing that has seen Orange Telecom fail to fully penetrate the market with its Ushs1000 ($0.5) for 24 hours of free calls.

"It is a crowded market and some operators have been in operations for 10 or more years. It is not easy, especially for the new players, to grow because there are no new customers. Multimedia and data services will remain key engines for growth in the future," Says Philip Luxcey the Orange Telecom Chief Executive.

The number of internet users however is not increasing but the growth is significant. ISPs are now also looking into providing Local Area Internet (LAN) at lower rates. Offices have been grabbling with the unreliable and expensive internet.

Despite the reducing rates, the internet by some ISPs remains largely unreliable. MTNs unlimited mobile internet is usually slow during the day with speeds of less of than 15kilobytes per second. Warids' Wireless LAN has had technical glitches and customer complaints have shown it's also unreliable. Zains' Mobile Internet is also unreliable as the charge per kilobyte is very high yet the internet is slow. UTL's whose internet coverage is countrywide and very dependable has seen its market share reduce. Uganda Telecom's internet is still expensive and there have been customer complaints about their LAN.

New players in the ISP market Foris Telecom, Warid Telecom and Orange Telecom have all begun a wireless router for relatively smaller businesses that wish to share the internet services using a single modem and also wish to create a Local Area Network (LAN). This can accommodate at least 20 computers in the workplace.



Source : East African Business Week (Kampala) 
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