Kenya: Tata Banks On Fibre Optic Cable to Grow Revenue


Tata Communications in Kenya hopes to cash in on the expected surge in Internet traffic as a result of the new undersea fibre cables to grow its revenues. The Indian firm anticipates that with the completion of laying of fibre-optic cables throughout the country and the supporting infrastructure, applications such as movie, video downloads and online gaming will be possible and it is betting on this premise to grow its income.

Relying on past experience from emerging markets where such applications have been the key revenue drivers in the telecommunication industry, the firm is expanding its operations in Kenya. The firm has been in the country for 10 years through its subsidiary Novatel.

But the growth depends on the ability of its customers, such as ISPs, to offer quality service at an affordable price to end users. "Supported by high-performance voice and data services we believe our customers will be able to build on their businesses," said Claude Sassoulas, Europe and Africa managing director during a media briefing in Nairobi last week.

Tata Communications, which is one of the largest telecommunication companies in the world and handles 17 per cent of the world's ISP traffic, says that soon it will be able to reduce latency time from 500 to 170 milliseconds.

But there were no promises of cost reductions for end-users because Tata Communications does not deal with them directly as telecommunication operators and Internet service providers are the ones who will determine the prices. "There is still infrastructure to be built, but we expect competitive pricing by ISPs and this could lower costs to end users," Sassoulas said.

Business Daily