Kenya’s mass market yet to access affordable Internet

Poor spectrum policies and lack of terrestrial data infrastructure to support mass market connections have hindered availability of affordable Internet connections to low-end segments in Kenya.

Two years after the entry of fiber-optic cables, the cost of wholesale and corporate Internet costs have fallen, but small and medium-size enterprises and homes that may be willing to pay US$50 or less have been unable to enjoy connectivity as service providers pursue high returns.

“The challenge with delivering connectivity to the mass market at low prices is the last-mile solution; even though Safaricom has direct undersea connectivity, this cannot be distributed to customers as cheaply as they might expect because our last-mile connectivity solution is not in place or is still developing,” said Bob Collymore, Safaricom CEO.

When the government and other providers were drumming up support and uptake of connectivity, the public was under the impression that connectivity would become affordable to the lower end of the economic bracket, but the promise has been hard to realize.

“Kenya currently has around 20,000 kilometers of inland fiber-optic capacity of which almost 90 percent is backhaul, and the balance represents metro fiber used to connect BTS sites, meaning that Fiber To The Home (FTTH) solutions do not readily exist,” added Collymore. “To deliver FTTH connections providers must undertake trenching and laying of fiber direct to homes, which necessarily adds to the cost of the service.”

Because some of the home users are not willing to pay more given they have connections in the office, operators are offering solutions via 3G; and in some cases like Access Kenya, their defense is that the mass market has never been their core business focus.

“We have never focused on the mass market for Internet, we started with corporate and then when we launched residential, we focused on the high end to start with. Our entry product is kshs 4,000 [US$45], which we don’t believe is the mass market,” said Jonathan Somen, Access Kenya CEO. “Mass market by our definition is the mass market who spend less than that each month.”

Apart from the lack of high concentration of residential users, operators cite the high costs of civil works and government red tape in getting approvals as part of the reasons getting fiber to homes will take longer. Safaricom owns 22.5 percent, while Access Kenya owns 2 percent of TEAMS fiber-optic cable.

Access to the national fiber backbone has also been restricted, even though a committee of government and private sector has been constituted to explore ways to access the terrestrial infrastructure. The backbone was put up by the government and is currently managed by Telkom Kenya.

In the absence of fiber connectivity, operators have resorted to WiMax, even though access to spectrum is still expensive and Safaricom was forced to acquire three companies just for the spectrum. Safaricom estimates it has 6,000 connections on WiMax, while Access Kenya has 4,000.

“The major challenge with delivering a robust data network on WiMax is based on the manner in which the Communications Commission of Kenya initially divided the band into economically unviable portions of 7Mhz per operator as opposed to about 30Mhz per operator, leading to the lack of sufficient contiguous bandwidth necessary to deliver high-speed Internet wirelessly on this technology,” Collymore said.

While access to cheaper connectivity for small enterprises and homes still poses challenges, Google and Wananchi Group have launched a Wi-Fi service targeting shopping malls. The service was launched in Nairobi last month and is expected to be launched in other East African cities next year.

Dubbed “Wazi Wi-Fi,” the service offers high-speed Internet access. It is free for the first 10 minutes of use per day on each device, and users can then purchase a single day pass for KShs.50 per device and Shs.500 for one month per device. According to a press release issued by Wazi Wi-Fi partners, customers can pay for the service online using credit cards or local mobile money solutions including M-PESA, Airtel Money and PesaPal, a local payment gateway.

“We are having discussions with local businesses to explore expansion plans. We see big opportunities in using Wi-Fi technology for mobile data offloading and providing high-speed, unmetered access away from home,” said Richard Bell, Wananchi Group CEO. “The African region has always been ahead with mobile data services, and the rapid uptake of newer, affordable smartphones and tablets keeps driving up the demand for data capacity on the move.”

The Wi-Fi service is likely to benefit individuals in shopping malls or living near shopping malls, who would normally use 3G modems. Wazi Wi-Fi is not planning to venture into homes, because Wananchi is rolling its fiber to the home in up-market residential areas in Nairobi.

Would you recommend this article?


Thanks for taking the time to let us know what you think of this article!
We'd love to hear your opinion about this or any other story you read in our publication.

Jim Love, Chief Content Officer, IT World Canada

Featured Download

Featured Articles

Cybersecurity in 2024: Priorities and challenges for Canadian organizations 

By Derek Manky As predictions for 2024 point to the continued expansion...

Survey shows generative AI is a top priority for Canadian corporate leaders.

Leaders are devoting significant budget to generative AI for 2024 Canadian corporate...

Related Tech News

Tech Jobs

Our experienced team of journalists and bloggers bring you engaging in-depth interviews, videos and content targeted to IT professionals and line-of-business executives.

Tech Companies Hiring Right Now