Internet Charges still to high in Tanzania

Internet

Despite the landing of submarine optic cables at the shores of the Indian Ocean almost two years ago, Tanzania's Internet access charges have not decreased to levels that end-users initially hoped to enjoy.

Seacom, which was the first submarine cable to arrive at the Dar es Salaam shores in July 2009, says bandwidth wholesale prices have fallen but retailers were still charging relatively high prices to access Internet.

This is done to cushion the transportation and value-addition costs.The East African Submarine Cable System (EASSy) landed a year later. Seacom sells one Megabyte per second (Mbs) of bandwidth at $230 per month at its landing point in Dar es Salaam. If an Internet service provider wants to use another bandwidth provider, it is possible to get the service for as low as $175 for 1 Mbs per month at the Seacom landing point.

"Companies that connected their networks to Seacom dropped prices and increased bandwidth speeds," Seacom Tanzania managing director Anna Kahama-Rupia said in a telephone interview.However, the Tanzania Communications Regulatory Authority says there has been a drop in voice and data tariffs by operators connected to fibre optical cables.

The government is in talks to invite other gateways such as Kenya's Uhuru One and TEAMS. The Tanzania Telecommunications Company Limited (TTCL), which has a 20-year agreement with Seacom for a bandwidth of less than $65 Mbs per month, charges a flat rate of $180,000 per year to transport Internet bandwidth across the country.

TTCL was the first company to join the submarine fibre optic by Seacom for transporting Internet and data. Later Internet service providers (ISPs) such as SimbaNet and other telecom firms followed suit.

In addition, to connect to the backbone requires custom Huawei routers. These specialised routers cost $18,000 and take six months to manufacture. By comparison, a similar Cisco router for standard network architecture is $8,000.

ISPs that want to buy the bandwidth from TTCL rather than transmitting it on their own will pay $700 for 1Mbs per month in Dar es Salaam and $900 in Arusha.

Tanzania Communications Regulatory Authority managing director John Nkoma said: "The connectivity charges in the country have not gone down partly because some players have not finished their contracts with satellite companies. But for the few ones already connected to the optic cables, their charges have dropped significantly."

The deputy managing director of the University of Dar es Salaam Computing Centre, Dr Respickius Casmir, said: "Actually, there is not any provider that has reviewed the invoices that they were giving their clients since the arrival of the cable [Seacom], most providers have doubled the bandwidth but with same prices, giving customers more benefits than what they need."

However, telecom companies argue that the arrival of the submarine infrastructure has prompted them to cut mobile Internet service prices by nearly 100 per cent.

TTCL Solutions integrator Thomas Lemunge said the dedicated Internet product for corporate customers, which the company used to charge Sh900,000 for leasing 64Mbps a month two years ago, had fallen to Sh250,000 per month since the arrival of the Seacom. Speed was also high.

"The cable is like a super highway. The issue is what layers of services are there to encourage growth. We need more people to develop mechanisms that will stimulate more connectivity usage that will create economies of scale to providers," Airtel marketing director Kelvin Twissa said.

He said such mechanisms could be attracting learning institutions to access e-books and lecturers as well. However, WiA Group CEO Erick Mwenda said the arrival of the cables and the activation of the national ICT broadband backbone might not reduce Internet access charges significantly because the bandwidth uptake was still low. Currently, they're about 500,000 broadband users in the country, a slight increase of the people that were accessing Internet in the last two years.