Internet price reductions take time to trickle down to the end users in Uganda


The arrival of high-speed Internet in Uganda has finally been matched by price reductions to Internet service providers. By last week, some ISPs were purchasing capacity at $650-$700 per Mbps, a sharp drop from the $2,000 for the same quantity of bandwidth from satellite. But this price is for short-term contracts. For clients who signed long term contracts of up to 20 years, like Infocom, the price is much lower at $150 per Mbps. Infocom is the sole capacity reseller for Seacom and Uganda Telecom. Infocom chief executive Hans Haerdtle said the 20-year contracts involve IRUs.

Internet users are optimistic that as more ISPs connect to Seacom the price will go down for customers who are currently experiencing high speeds but at previous high rates. According to Mountbatten Ltd director Reinier Battenberg, once ISPs sign up with Seacom, the competition would be similar to the telecoms war for customers, which would see prices go down. "We are waiting for competition. After that, it will just be a matter of time before prices are slashed," said Battenberg.

“We have started migrating our customers to fibre. The price will not change but we shall double the connection speed," said Mark Kaheru, Uganda Telecom public relations manager. This is the trend with all companies that have migrated their customers to fibre so far.

"We have been on broadband fibre connection for a month now. The speeds have gone from 64/64 to 512/512 which is sustained for 24 hours in a week with limited outages," said Simon Vass technical manager E-Tech Uganda Ltd, also a customer of Infocom.

Though the speeds have doubled, ISPs have stuck with the previous rates, only promising reductions in months. "I am sure all ISPs are reworking their pricing to bring benefits to customers as much as possible. But at times the IT industry is like the oil business, where price reductions take time to trickle down to the end users," said Samuel Sentongo, an IT expert.

Most ISPs are saying that they have to maintain some satellite capacity, which is tried and tested, for redundancy and to guard against any problems that Seacom may face as a new operating fibre cable.

The East African