TEAMS shareholders are getting different prices for bandwidth and still no link to Europe

Internet

Shareholders in the Kenyan-Government sponsored TEAMS fibre consortium are getting different prices for their bandwidth, giving some a clear price edge over others. The variations arise from the fact that shareholders in the government-fronted cable agreed to individually negotiate and pay for the cost of onward connectivity from Fujairah in the United Arab Emirates as opposed to the single price offered by rival Seacom.

Details of the TEAMS pricing were unravelled by Safaricom Chief Executive, Michael Joseph, who is also the chairman of the TEAMS board. Joseph had told journalists that TEAMS could not immediately offer fibre optic bandwidth because there is no link between Kenya and Europe.

"There is no onward connectivity between Europe and Dubai, where TEAMS ends. Rates for that connectivity are still being negotiated, and we do not anticipate that prices will drop as drastically as initially indicated or within a short time-frame," he said.

Other shareholders in the TEAMS consortium however told the Business Daily that each operator had been left to negotiate and pay for onward capacity with the owners of the global networks and many had secured significantly low pricing deals that should enable them to cut connectivity prices significantly.

The landing of the fibre optic cables in Mombasa has sparked a raging debate on the right pricing of downstream Internet and voice services. While some operators have insisted that the fibre cables offer Internet service providers enough room to significantly reduce prices, others have maintained that prices would only fall marginally.

This debate is somewhat hard to credit as wholesale bandwidth prices are now 8% of what they were formerly. Most of the arguments for keeping retail Internet prices the same or only slightly lower are specious and will fail because there are those in the market who are already moving prices down. The key question is: have they moved them down far enough?

In less than a week since the tests began, over 4 STM1s (620 mbps) was used by one customer on TEAMS. Bitange Ndemo, Information PS, said the on-going tests will be over between the August 15 and 21.

A cable cut on Seacom two days ago revealed that several businesses stood to be affected by down times if they relied on a single fibre link. Safaricom CEO Joseph said the cut has exposed the companies who did not have redundancy built into their systems and said Safaricom was currently negotiating new redundant routes within Kenya to minimise downtimes.

Business Daily