[AfrICANN-discuss] Kenya : consumers to wait longer for lower
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Thu Jul 22 13:52:48 SAST 2010
Consumers to wait longer for lower internet charges
Internet users will have to wait for two years before they enjoy lower connection rates when competition between the three fibre optic cables gain steam.
West Indian Ocean Cable Company chief executive officer, Chris Wood said the companies will balance between recouping their investment and competition in the short term.
The other cables are Seacom and Teams which were completed last year.
The entry of The Eastern Africa Submarine Cable System (Eassy), which has a direct connection to Europe and a lower cost structure ($265 million) is expected to give it a competitive edge over the others.
He was speaking during the handing over of Eassy cable to WIOCC by Alcatel submarine networks, the sub contractors, at Windsor hotel on Wednesday evening.
WIOCC is the single largest investor in Eassy cable with 29 per cent shareholding. Telkom -Orange is also a WIOCC shareholder.
“There has already been impact on the connections at international level, which have gone down by between 50 to 60 per cent. In the next two to three years we shall experience much lower rates with increased competition,” he said.
Mr Wood said it would take between eight and 10 years to recover the amounts invested in the Eassy cable.
He said in the next one year, the competition will be more about the quality and the speed of the services, adding that Eassy would improve on the downtime, saving the investors from losses experienced when other cables are not operational.
Investors have lost income in the past due to vandalism of the fibre optic cables.
Information minister, Samwel Phogisio said the government expected the connection charges to reduce as the competition picks up.
“The entry of three fibre optic cables, and a fourth on the way are expected to benefit the consumers. This must translate into lower rates. If you have not seen lower rates, its coming. That’s what competition is about,” the minister said.
He said the Eassy cable, which is owned by 12 African telecom operators would increase connection between states in the continent and facilitate more business.
The cable, which is in nine states will offer transit connection through backhaul networks to at least 12 land-locked countries.
Telkom Kenya chief executive officer, Mr Michael Ghossein said the next challenge will be to develop content that was relevant to the consumers.
Source : http://www.nation.co.ke/business/news/Consumers%20to%20wait%20longer%20for%20lower%20internet%20charges/-/1006/962516/-/b2jin5z/-/
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