KDN Dials Up Rates Slash as Internet Pricing Wars Intensify in Kenya


Pressure to reduce the price of communication intensified on Tuesday after national data solutions provider, Kenya Data Networks (KDN), lowered its connectivity rates by 90 per cent. But consumers are not yet experiencing cheaper retail rates.

The company became the first to lower its wholesale connectivity rates from the current industry average of $5,000 per megabytes to $400 per megabytes following the highly anticipated arrival of fibre optic connectivity on Seacom last month. Consumers will not notice any significant price falls until the ISPs lower their rates. A number of have satellite contracts that they will wait until they have expired: many of these contracts will expire in the next quarter.

KDN made the announcement that it was lowering its rates after successful trials of Seacom Submarine fiber optic cable capacity on its network, which includes a vast inland fibre optic network, a WiMax or wireless Internet mesh as well as a collection of small Internet 'hot spots' that it hopes to use to expose consumers to the speeds on fibre optic connectivity.

"We will be offering free services on our 'Butterfly' service, which is accessible in hot spots in airports, restaurants and other public areas," said Vincent Wang'ombe, KDN marketing Manager. Wang'ombe said his firm was keen to increase the number of consumers using KDN's Butterfly service from the current 10,000-15,000 to over 200,000 by next year. The firm had already embarked on an ambitious plan to provide hot spot connectivity in universities. After a week of free trials on the service, users will have to pay Sh1,900 to access the hot spots, down from the previous Sh2,999 charged by the firm.

"Video streaming is now much faster and efficient you can actually see a video in real time as opposed to previously waiting for it to buffer for a while before one could view it," said Bhavesh Mistry, KDN's chief technical officer. "Downloading movies and watching live web TV is now much easier and convenient," said Mistry.

"Not one shareholder will want to price themselves out of the market. The first to market with competitive prices will gain the most," said Michael Joseph, Safaricom CEO on Kicatanet, an online discussion group.

Business Daily