“We told you so! Internet prices are not coming down soon,” satellite broadband providers are gleefully telling consumers. It was expected that with the switching on of the Sea-com fiber-optic submarine cable connecting East Africa to the rest of the world, broadband speeds would improve and Internet costs would reduce at the same time. Consumers are already experiencing faster connectivity, but this is not applying to costs.
Afsat Communications general manager Job Ndege says
Terrestrial telecommunications infrastructure requires substantial investments that are often unaffordable by the public sector and don’t make economic sense to the private sector.
Some of the costs saved by operators will be eaten up by retention of some bandwidth on satellite for redundancy purposes due to unknown reliability of the cables. "Market competition will eventually bring down the costs, as seen in the mobile sector," said Mr Ndege.
Afsat, through its iWay flagship brand, is the largest satellite-based broadband operator in
Reduced Internet cost will be felt only after the two other submarine cables become operational. These are the
It is evident that Internet consumers will wait much longer to enjoy price reductions. Instead of the much touted 60 to 80 per cent price cuts, key stakeholders are hinting at 20 to 30 percent reduction. Safari-com chief executive Michael Joseph said it will take between six and nine months before Internet costs come down.
And when they do, the reduction will be by about 20 percent. "The issue of costs coming down has been over-hyped. But a 20 percent dip in Internet access costs will make a big difference for consumers," he says. Besides the huge infrastructural costs to be covered, the operator has to pay for transmission costs from the source (Fujaira) onwards, as well as the cable’s maintenance costs. Safari-com has put upwards of $25 million into the Teams cable and an equally substantial amount into buying capacity on Sea-com.
Source: Allafrica.com