Google invests an estimated US$14 million in a Metronet in Kampala to open up the market

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Google has a global ambition to get Internet access available more widely (see Brett St Clair video link on access at the bottom of this story). This week it announced the launch of a Metronet in Kampala designed to open up the market. Russell Southwood spoke to Google’s Access Field Director, Kai Wulff about what it’s setting out to achieve.

Google has been looking at the supply chain in Sub-Saharan Africa and wanting to find a way of intervening that would break down market blockages and ultimately reduce retail prices for users. However, it’s always been very clear that it did not want to get into direct provision of retail bandwidth:”We wanted to do something where we put our money where our mouth was that could really influence the ecosystem of the Internet.”

So why did they choose Uganda and Kampala in particular?:”We wanted to start somewhere where other problems had been sorted. Uganda has an international fibre connection and vibrant competition and I have to express my own bias. I love Kampala.”

Google will probably invest somewhere between US$12-14 million in a 6-700 kilometre fibre Metronet that covers most of Greater Kampala, stretching from Entebbe towards Jinja across one axis.

“The aim is to connect every building or base station ISPs or operators want to get to. The number of kilometres laid increases every day as we keep extending the network.” The network is being built by a local sub-contractor and supervised by a regional partner familiar with building fibre networks.

The network is being operated by a 100% Google owned subsidiary that is either selling capacity or dark fibre:” We want to be profitable but we are not extracting the most we could out of the asset.” The capacity offer is very different from buying by the Mbps. You buy a connection and according to Wulff, the amount of capacity on that connection will grow as the customer’s demand grows but there will be no extra payment. Also, the connections provide uncontended wholesale capacity.

That said, Google is being a little cagey about the exact price of the connection port:”I can say that it is substantially cheaper than doing it on a cheap microwave network and we expect it to go lower. It’s important to understand it’s not a retail play. It’s a high capacity Metronet network designed to ensure that CAPEX is not an issue for Internet providers.” It says that it has sold thousands of connection ports, some where Google is providing the connection equipment and others where it is dark fibre. The clients for the network are a mixture of new entrants, existing large operators and ISPs.

But isn’t this competing directly with things like MTN’s own Metronet?:”Our proposition is totally different. We’re only selling to other operators and we try and avoid unnecessary duplication. We look at how we can achieve synergy with other networks. Where we can, we make use of existing infrastructure that is available at the right cost and quality.”

So will we see Google building more of these kinds of Metronets?:”We’re very busy with the project here in Kampala and we have to prove it first. Also there are different groups in Google looking at other forms of access.”

From our own work on Internet value chains last year, it is clear that three significant market blockages remain, even in very liberalised countries: local access (including metronets), national access and quite often transit access for landlocked countries. It will be interesting to see whether Google’s Metronet in Kampala delivers the magic combination of both faster and cheaper bandwidth for end-users.

Kanpala Map

 

Video Briefings this week:

Everything You Wanted To Know About You Tube in Africa But Were Afraid To Ask
Brett St Clair, Google on what You Tube is doing in Africa and what content is successful
Brett St Clair, Google on what kind of revenues film-makers and broadcasters can get from You Tube
Brett St Clair on Google's different Internet access initiatives, including Project Loon

New videos this week:

Chike Maduegbuna, Afrinolly on its deal with MTN to distribute this mobile content platform
Francis Mugane and Peter Gakure-Mwangi on the low cost mobile money payment system Kopo Kopo
George Kimani on his new online film and TV platform Afriflix with low prices to beat pirates
Martin Nielsen on Mdundo, a mobile music platform for Kenya and East Africa
Susan Oguya, MFarm on helping Kenyan small-scale farmers sell their crops using mobile

A video briefing on mobile music and film platforms in Africa:
Chike Maduegbuna on Afrinolly, a Pan-African film and music mobile platform
Ghana's Juliet Asante on launching a new mobile content platform Mobilefliks
Tim Rimbui, Innovative Music on the launch of online music platform Waabeh.com

Start-up video briefings this week:
Kahenya Kamunyu, Able Wireless on his low-cost Kenyan video streaming service using a Raspberry Pi
John Paul Barreto talks about Tanzanian ICT co-creation space Kinu

Delivering Rural Broadband – Models that work:

Kobus Roux, CSIR on getting rural schools connected using Wi-Fi mesh
Osama Manzar, Digital Empowerment Foundation on delivering broadband in rural India

Think before you launch an app – User-based research essential:
Mark Kamau, UX Lab on how research with users can overcome barriers to mobile apps adoption

TV White Spaces Briefing from Dakar event sponsored by Google and Microsoft:
Paul Mitchell explains Microsoft's TV White Spaces pilots and why it thinks TVWS is important
Kai Wulff on Google's TV White Spaces pilots and why they are important for developing countries

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