Firms Put on Notice Over High Internet Charges in Kenya

Internet

The government has given Internet Service Providers a stern warning: Cut your charges or risk an official price cap. It has slapped a March 2010 deadline on the firms to reduce costs on bandwidth and retail prices to allow more Kenyans to access the Internet.

ISPs were paying as high as $6,000 per megabyte per month for satellite capacity before the onset of the fibre optic cables, which allow for high speed Internet, but are currently paying $200 for the same capacity in addition to maintenance costs. This has not translated into cheaper internet costs for end users although two cables --Seacom and Teams -- have been activated.

Consumers are instead getting a higher bandwidth capacity, which they might not need or use, and receiving the same bill as before the arrival of the cables. Assistant information minister George Khaniri said the government believes the charges should go down substantially.

"Indeed the government is concerned that landing of the two cables has not had a profound impact on bandwidth costs and extension on retail internet prices" he said. "If we do not see any changes in retail prices for internet, the government through the Communication Commission of Kenya will consider introducing price caps for bandwidth."

The number of internet users currently stands at 3.6 million 90 per cent of whom are in Nairobi and Mombasa, according to CCK, which says most ISPs are not keen on investing in remote areas because of the high cost of satellite bandwidth.

CCK boss Charles Njoroge said they were conducting another price cap study to capture the Internet market, which was left out when a price ceiling was introduced in the telecommunication sector three years ago. "In March next year we will be giving new guidelines for the sector and will be very keen on internet accessibility and pricing," said Mr Njoroge.

The telecommunications price cap put the maximum a mobile phone operator can charge for calls to other networks at Sh30 per minute to as high as Sh48. It's not clear at what level the price ceiling will be introduced because unlike in the mobile phone sector, the internet has multiple layers of providers who buy the bandwidth capacity at different prices.

More widespread Internet use is critical to the government as it starts offering some of its service online through the e-government programme. Apart from pricing, other factors such as access to laptops and electricity besides low computer literacy levels may hold up the e-government ambition.

But a host of projects such as deploying a mobile computer lab in each constituency, the setting up of digital villages (Pasha) and the one million laptop campaign are lined up to overcome the challenges.

Business Daily