New 4G Rules Favour Safaricom Over Other Networks

The government has changed the telecommunication licensing rules in a way that promises to lower the cost of acquiring high-speed delivery platforms and give one operator control of the market.

The new rules that among other things requires those bidding for the 4G spectrum licence is hinged on the Public Private Partnerships (PPP) model and are aimed at avoiding the battle over the pricing that dogged the issuance of the 3G licences.

Tender rules that were published on Tuesday indicate that unlike in the past when the licence was awarded to each operator, the 4G will be controlled by a consortium of players who must have at least 20 per cent local ownership.

The requirement locks out Airtel and Essar's Yu, leaving Safaricom and Telkom Kenya in the race for the tender.

The two are the only holders of the Network Facilities Provider Tier 1 category (the technical reference to mobile phone operators' licence) and with a 20 per cent local shareholding.

The government, through Treasury, has 49 per cent stake in Telkom Kenya while Safaricom is owned 40 per cent by the UK's Vodafone, 35 per cent by the Government of Kenya and 25 per cent by the public through the Nairobi Stock Exchange.

Airtel Kenya has a five per cent local ownership, after businessman Naushad Merali - the sole local partner -- sold 15 per cent of his stake in the firm last year.

Essar's Yu is 100 per cent owned by India's Essar Communications, which bought the 20 per cent stake that local firms Capital Africa, CrossLink and Startnet held last year for an undisclosed sum.

Rene Meza, the Airtel managing director, questioned the transparency of the tendering process and promised that his firm will be seeking clarification, especially on the 20 per cent rule as Airtel intends to fully participate in the tendering process.

"We will seek clarification on the requirement of 20 per cent ownership. We believe it is sufficient that an operator is licensed," said Mr Meza. "Because there is no structure for the tender proposal, evaluation of the bids by the Ministry of Information may be subjective to the extent that undermines transparency and fairness."

4G refers to the fourth generation of wireless telecommunication technology with a larger capacity to deliver data and facilitate high end of market services such as video conferencing and gaming.

Kenya's telecom operators see ownership of the technology as critical to future revenue growth with the continued decline in earnings from the voice business.

Prospective bidders are also questioning the requirement that the government becomes part of the consortia that will be competing for the 4G licence while at the same time participate in evaluation of the tenders. [Read: State to withhold licence for 4G frequency rollout]

On Thursday, the government said it will not bend the 20 per cent local ownership rule, arguing that Yu and Airtel chose to sidestep the local shareholding requirement.

"The two don't meet the 20 per cent rule and do not have national infrastructure that can be upgraded to 4G," said Bitange Ndemo, the Information permanent secretary.

Dr Ndemo said the 20 per cent rule is a policy requirement that Airtel and Yu should make an effort to comply with.

People familiar with the policy position on the matter said the ultimate goal of the tendering is to open a window for the government to ride on operators with national coverage to reduce the cost and time of deploying the 4G network in readiness for use in e-voting in 2012.

"An individual firm will have to spend not less than $4 billion to roll out the infrastructure but the model we have proposed will cost an average of $100 million and take less time," said our source.

Telecoms sector ownership rules require foreign companies to have a 20 per cent local shareholding.

It, however, gives foreign investors three year grace period to look for suitable partners.

Econet Wirelesss International, which held the third mobile license was the first beneficiary of this rule that helped it survive a protracted court battle with its local partners, the Kenya National Federation of Farmers.

Econet ultimately sold its shares to Essar Communication, a subsidiary of India's Essar Global four years ago.

He acquired and immediately sold the Vivendi stake in 2004 at $250 million remaining with his 40 per cent.

Kuwait's MTC then bought Celtel out of 16 African countries in 2005 and three years later, Mr Merali sold half of his stake to Zain putting 80 per cent of the firm in foreign hands.

Last year, Mr Merali sought exemption and was allowed to sell an additional 15 per cent of his stake - a move that has now come back to Bharti Airtel, the current owners.

The tender specifications have also locked out infrastructure providers such as Kenya Data Networks, AccessKenya, Jamii and Wananchi Group who do not fall within the licence category specified on the tender notice.

Joshua Chepkwony, the chairman of the Telecommunication Network Operators said that while having an open access 4G network was positive, the manner in which the tender document has been structured shows that the government has a pre-determined candidate.

"There is need to call for a stakeholders meeting to explain the desired composition of the consortium because as it is the tender document locks out operators who are not in the tier 1 category but fall within the telecoms ecosystem," he said.

The LTE -- commonly known as 4G --offers subscribers access to mobile internet at much faster speeds, making it a cutting edge tool for companies offering their services on the medium.

The government says it will offer 4G license to a consortium of players that will implement and manage it to avert disputes encountered with the issuance of the 3G licences to the late entrants.

Safaricom paid $25 million for the 3G license fee, only for the government to lower the fee to $10 million for Airtel and Telkom Kenya or 60 per cent less than Safaricom.

Under the new model, the consortium members will be composed of government (the owner of the national spectrum), equipment suppliers such as Huawei, Nokia Siemens Networks, Alcatel Lucent and Ericsson who must team up with telecommunication firms such as Safaricom, Telkom Kenya for expertise and equipment needed for the rollout.

The move comes as mobile operators shift their focus to data, with competition in the voice segments getting stiff and revenue starting to decline with deep tariff cuts that have since August last year lowered the cost of voice calls by 50 per cent.

Bharti and Vodafone Struggle to Make Money In Africa

For Vodafone Group Plc, Bharti Airtel Ltd. and other phone companies with about $90 billion invested in Africa, making more money from each user in the world’s fastest-growing market is becoming the biggest challenge.

The number of operators is prompting a race to the bottom on call rates. In Tanzania, which has seven phone companies, prices have fallen 90 percent over the past 18 months. Companies also face among the world’s highest “churn” rates, with users frequently changing operators, and patchy infrastructure, all of which make returns on investment difficult.

“It is hard,” said Pieter Uys, chief executive officer of Vodacom Group Ltd., which is controlled by Vodafone and is the largest provider of mobile-phone services in South Africa and Tanzania. “You have to do business in a very different way, you have to build data networks, find other ways to grow revenue.”

Phone operators gathered at Africa’s telecommunications conference that began yesterday in Cape Town want to sell services to the 50 percent of the market that doesn’t have mobile phones. They also want to service current customers more cheaply, without losing user loyalty, while stemming declines in average revenue per user, or ARPU, by offering newer services such as mobile Internet, banking and other money transactions.

“We are now dealing with an ecosystem that’s changing very, very fast,” Andile Ngacaba, chairman of Dimension Data and Convergence Partners, said at the conference. “On the one side, we see this subscriber growth and growth in data and data applications. On the other side, we see this decrease in ARPUs. This requires new models of investment such as infrastructure sharing.”

African Growth

Operators have been lured to the continent by its promise. Africa has a mobile-phone population of about 445 million handsets, according to a McKinsey & Co. report. It took 20 years for the size of the mobile-phone population to reach 200 million, and less than three years to get to the next 200 million, according to the report.

Africa has “become the fastest-growing region in the global cellular market, going from fewer than 2 million mobile phones in 1998 to more than 400 million today,” it said.

The mobile value-added services market in Africa was worth $4.5 billion in 2009, and over the next five years is forecast to grow at a compound annual growth rate of 20 percent, generating $11.5 billion by 2014, Informa Telecoms & Media, a London-based consultant, said in its Rural Connectivity Report in Africa published this month.

Capture Opportunity

About 80 percent of the sales were from messaging, while mobile Internet contributed 14 percent and mobile entertainment such as music and television 3.5 percent, the report showed.

Internet and broadband penetration is still in single digits, Uys said.

“So the possibilities are still there but it’s what you pay for it to get it, the investment in infrastructure,” he said. “If the tariffs are driven too low for whatever reason then it might also not make sense.”

In order for mobile operators to “capture this opportunity,” the market needs consolidation, McKinsey said. “The industry structure should be rationalized, for example, because many markets, even smaller ones, have four or more players.”

Competition on the continent is fiercer now than it has ever been. In the Democratic Republic of Congo and Tanzania, mobile-phone tariffs plunged between 50 percent and 60 percent in the six months through September.

Tumbling Prices

Prices in Kenya have been slashed to such an extent that Safaricom Ltd. Chief Executive Officer Bob Collymore said India’s Bharti, which bought most of Zain’s African operations last year for $9 billion, is losing money on as much as 50 percent of its voice traffic.

Safaricom has an 86 percent share of the market and is 40 percent held by Newbury, England-based Vodafone. Bharti’s head of African operations, Manoj Kohli, declined to comment on Safaricom’s remarks. “We can’t comment on our competitors’ claims,” Kohli said.

On Aug. 18, Bharti halved tariffs in Kenya to 3 shillings, Les Baillie, a spokesman for Safaricom said. Safaricom “knew that voice was always going to become a commodity,” Baillie said. “It was not expected that it would happen so rapidly though.”

Companies are scrambling to adapt their operations to the new climate.

“We have to review our business model and make it leaner and compete on price and have more quality in our network and to have more data,” said Mickael Ghossein, chief executive officer of Orange Telkom Kenya, which is 51 percent held by France Telecom SA. “We have to enhance our quality of networks.”

Sharing Towers

In South Africa, Vodacom, which is 65 percent owned by Vodafone, is investing in data networks. Data now accounts for more than 50 percent of its traffic and is growing at more than 50 percent a year, Uys said.

The company is also pushing smart devices that are able to browse the Internet to low-end segments with touchscreen phones that retail at 499 rand ($73). Once users have an improved mobile-browsing experience, data consumption increases, Uys said

Operators are also sharing infrastructure, especially to reach sparsely populated rural areas where returns on capital invested in infrastructure are low.

Infrastructure sharing and outsourcing of towers has been punted for years. Now, faced with greater competitive pressure, companies are beginning to act.

‘Good Industry’

Last month, Vodafone signed an agreement with Eaton Towers to manage its 750 towers in Ghana. On Nov. 5, American Tower Corp. agreed to buy 3,200 towers from Cell C Ltd., South Africa’s third-largest mobile phone services provider, in a deal worth $430 million.

“We are going to see more and more of those type of deals happening,” said David Lerche, a telecoms analyst at Johannesburg-based Avior Research. “There are lots of little tower companies running around trying to position themselves as tower outsourcers. It’s quite an interesting development.”

For all its challenges, the market is still attractive, Marc Rennard, vice president of Orange Mobile for Africa, Middle East and Asia, said in an interview.

While investor interest has waned a little, “we are profitable, the big players, the five, six main players are profitable,” he said. “It’s still a good industry.”

-Bloomberg

MTN Rebrands UUNet As It Takes On Kenya Market

South African telecoms giant MTN has formally announced its presence in the Kenyan broadband market, two years after acquiring a 60% stake in ailing corporate operator UUNet.

The re-branding of UUNet to MTN Business Kenya looks set to renew rivalry in the corporate data market, a marketplace in which UUNet’s fortunes have declined drastically in recent years.

Internet service providers AccessKenya and Kenya Data Networks have absorbed much of UUNet’s corporate business since 2008, whilst wireless operators Telkom Kenya and Safaricom have both embraced the relatively untapped residential broadband market in a bid to offset declining wireless revenues.

Tom Omariba, managing director of MTN Business Kenya commented: ‘An array of key structures and network transitions has been implemented to deliver standardised service and seamless integration for customers culminating in the official name-change, MTN Business Kenya’.

Dismissing speculation that MTN would try to insinuate itself into the residential market, Omariba continued: ‘You cannot be everything to all customers. We have to look at our strengths and choose which area we can serve. If you try and serve both markets, you will suffer ... that is the experience elsewhere’. MTN Business Kenya’s strategy is expected to involve a substantial cash injection, as well as providing the necessary technical expertise to strengthen its data business and grow its meagre corporate subscriber base, which MTN reported has dwindled to just 700 customers.

Access Kenya extends WiMAX To Nyer, Nanyuki

AccessKenya has announced that it has expanded its WiMAX network to the towns of Nyeri, Nanyuki and Mukurwe-ini in central Kenya.

The company said that there have been numerous requests for its services in these areas, with AccessKenya identifying sufficient commercial potential in the region. New customers will benefit from Layer 2 and Layer 3 Virtual Private Networks (VPNs), inter-branch connectivity, MPLS and other value-added services, all of which will be linked to AccessKenya's backbone. In 2009 AccessKenya expanded its WiMAX network from Nairobi and Mombasa to Nakuru, Eldoret and Kisumu in order to meet the growing demand for its services.

AccessKenya had signed up 3,000 residential customers during 2009, and is expecting to reach 7,000 by end-2010. Corporate leased-line connections increased from 2,550 to 3,150 during 2009. In August 2010 AccessKenya claimed that it had a 42% share of corporate customers.

Access Increases Internet Speeds As it Reacts to Telkom Kenya Action

ISP AccessKenya has announced that it has doubled its residential broadband speeds for all subscribers to its Access@Home service; the speeds apply to subscribers of its Value, Premium and Elite packages.

Further, AccessKenya has confirmed that for the last quarter of 2010, any new customers signing up to Access@Home for a three month period will receive an additional month for free. As previously reported on CommsUpdate, AccessKenya recently announced that its turnover dropped by 17.5% to KES876 million (USD10.38 million) in 1H10, after its strategy of increasing bandwidth but freezing prices severely affected its bottom line.

This week rival telco Telkom Kenya doubled customers download limits, as part of a month-long promotion.

Jonathan Somen, managing director of AccessKenya commented: ‘As we grow and get more subscribers, we will continue to work on offering them more value and more speed. The market told us that they wanted a guaranteed service but with more bandwidth. Our new improved offerings keep the basic benefits of buying guaranteed speeds, while at the same time offering customers much more speed for the same money. Access@Home offers a service to our customers completely unlike any other residential internet offering in the market. Firstly, we offer customers a guaranteed high speed at a very affordable and fixed price. This is backed up with excellent levels of service and absolutely no data caps - effectively a corporate-style guaranteed service for users at home. Our new speeds come with glad tidings for our 4,000 residential clients. They shall enjoy these increased speeds at no extra cost from the comfort of their homes’.

Telkom Kenya Cuts Broadband Rates By 50%

Telkom Kenya has announced that it has reduced broadband costs by 50% as part of a one-month promotion. The telco claims that the new promotion has been informed by market research pointing to an increase in demand amongst students and young professionals. Telkom Kenya CEO Mickael Ghossein commented: ‘If you were spending KES150 (USD1.78) to buy an internet bundle of 50MB you will now be able to get 100MB for the same amount; for KES850, you will get 1000MB instead of the 500MB that you got previously’. Industry insiders view the move as an attempt to secure its leadership in the burgeoning broadband market. Based on retaliatory trends exhibited in the past, rival Safaricom, which recently entered the Kenyan broadband market, is expected to announce a similar move in the near future.

In other news, Telkom’s move has increased the pressure on Kenya’s long-standing internet provider AccessKenya, which has focused on corporate leased lines and high-end residential customers since its inception. AccessKenya announced this week that its turnover dropped by 17.5% to KES876 million at the end of 1H10; this year the firm opted to increase bandwidth capacity to its customers but freeze its prices. A company spokesperson said that growth of the firm's revenues would depend on ‘strong growth in both the corporate and residential customer base, driven by higher speeds and lower costs offered to customers’. However, Telkom’s move suggests that if AccessKenya does lower its charges, its income may well be diminished even further. According to AccessKernya, the corporate leased line segment is currently its core source of income, accounting for 92% of the firm's revenues in 1H10.

Zain Introduces Low Price Vouchers As Price war rages On

After reducing its calling rate by 50% just a fortnight ago, Zain Kenya, the second largest mobile telephony operator in Kenya, has introduced Sh5 and Sh10 denomination airtime vouchers to the market.


Zain Kenya Managing Director Rene Meza said the move was aimed at complementing its recent 50% reduction on call charges.

“We are offering a wide range of scratch card denominations to suit the needs of all individuals. Access to telecommunication services is no longer a luxury but an integral part of each Kenyan’s socio-economic needs,” said Meza.

Meza said the lowering of tariffs was only the first ace up Zain’s sleeve, adding that the operator would be able to match any move its competitors made.

The Kenyan mobile telephony industry is currently experiencing cutthroat competition, with networks introducing various incentives to lure customers.

According to the Communications Commission of Kenya’s latest statistics, Zain was closing in on the two million-subscriber mark.

Zain becomes the second operator to introduce the Sh5 and Sh10 vouchers after Safaricom made a similar move in November 2009.

“We would like to enable our subscribers to enjoy our new low calling rates without hindrance. The low denomination scratch cards that we have introduced onto the market underpin our continued commitment to make access to telecommunication services in Kenya more affordable,” he said.

Meza said Zain Kenya would continue enriching the customer experience through providing affordable and flexible services in line with changing market needs.

“We are very happy with the way the Kenyan market has received our new approach to business. We are confident that we will be able to reclaim a significant portion of the market share as we pursue our goal of attaining market leadership,” he said.

He revealed that Zain had embarked on an upgrading programme for its infrastructure to cope with growing call traffic.

Last month Bharti Airtel announced that it had released Sh24 billion in capital investment into the Kenyan operation following acquisition of the company.

Safaricom Choses Huawei For 4G Technology

Safaricom, Kenya’s largest cellco by subscribers, has announced that it will begin technical trials of 4G Long Term Evolution (LTE) technology across its network within the next two months.

Safaricom has selected Chinese firm Huawei Technologies to supply its core network requirements, and to facilitate the rollout itself.

The two companies have signed a three-year strategic partnership worth KES12 billion (USD141.2 million). Speaking during the signing ceremony at Huawei’s headquarters in China, Safaricom's CEO Michael Joseph told the Kenyan Broadcasting Corporation: ‘We are going to do a technical LTE trial on our spectrum to see if it suits the Kenyan market and its commercial viability.

This is completely a technical trial and not a commercial trial and we are going to do the trials within our spectrum in the next two months’. Joseph also said that Safaricom is keen to overhaul its billing system and core network, whilst expanding its 3G network coverage across the country. These upgrades are expected to begin within the next six months and will be completed in two phases.

Societe Generale Introduces Mobile Banking In Senegal

Financial service group, Societe Generale, in partnership with Obopay, a leading mobile banking and payment provider, have launched a new mobile banking service in Senegal for anyone with access to a mobile phone.
The service christened “Yoban’tel by Obopay”, is a carrier-agnostic, mobile money transfer and bill payment service that is available to all the people of Senegal with a mobile phone. Using SGBL’s wide spread branch network in the country and other dedicated outlets, users can enrol for a mobile payment service and load or pick up cash throughout Senegal. They can also use the service to send money to anyone throughout the country, or to pay a bill.

“In Senegal, traditional banking services are typically very limited; people can spend an entire day each month standing in line to pay for things like their utility services in cash,” said Richard Hababou, managing director of Societe Generale Innovations Group. “Yoban’tel by Obopay allows us to establish innovative and convenient mobile money transfer and payments for those Senegalese who have previously not had access to such services.”

“Partnering with one of the world’s leading banks, Societe Generale, enables them to put mobile money at the heart of their accounts,” said Obopay CEO Carol Realini. “Their reach will bring new mobile money access to millions. Furthermore, this latest offering extends our experience in meeting the needs of four different sets of regulatory environments and market dynamics – including the US, India, Kenya and now Senegal – and gives us the expertise, robust platform and service offering needed to expand into new markets very quickly.”

Orange Money Launched in Senegal, Mali & Madagascar

Orange has launched its mobile payment service, Orange Money, in three additional African countries - Senegal, Mali and Madagascar - in recent weeks. These launches mark a turning point in the Group's ambition to launch Orange Money across its footprint in Africa. Orange Money is an innovative, mobile phone-based payment system that allows customers to carry out simple banking operations and transactions in total security. Such services offer a huge potential in Africa where less than 10% of the population have access to a bank account and yet over a third have a mobile phone.

The service allows mobile customers to deposit and withdraw money, to transfer money, to easily buy call credit, to pay for goods at certain retail partners and to pay bills. The service is available for all Orange customers whether or not they have a bank account. The Orange Money account is activated free of charge and without any minimum deposit. Orange Money is built around a system that guarantees transactions against the risk of theft or fraud and that is fully compliant with the regulations.

The launch of Orange Money in Senegal, Mali and Madagascar follows on from the launch of the service in the Cote d'Ivoire in December 2008 after extensive trials. Commenting on this launch, Marc Rennard, Orange’s executive director for the Africa, Middle East and Asia Pacific Region, said: ‘Orange Money is a very important part our strategy in Africa and emerging markets.

Mobile payment services have the potential to bring cost-effective and secure access to banking services to people with low-incomes, who often live in rural or remote areas. By providing our customers with the means to save money, pay bills and run their businesses, we are not only reinforcing customer fidelity but we are also able to play an active role in the economic development of the country’.

Orange Money will also be launched in Niger and Kenya in the coming months, and will eventually be extended across the Group's entire footprint in Africa and the Middle East.

EASSy Lands In Tanzania

According to a report in the Tanzanian Daily News, the ship laying a 5000km long submarine fibre-optic component of the East Africa Submarine Cable System (EASSy) landed in Tanzania, at Msasani Peninsula, on 6 April. Once completed the EASSy cable will be capable of delivering data transmission of 1.4Tbps.

West Indian Ocean Cable Company CEO, Chriss Wood, who was present at the landing site, said: ‘Interconnection with other undersea international cable systems will enable traffic on EASSy to seamlessly connect to Europe, North and South America, the Middle East and Asia, thereby enhancing the east coast of Africa’s connectivity to the global telecommunications network.’ The new submarine cable has landing points in nine African countries and will provide backhaul for a further dozen landlocked countries, enabling improved connectivity for the East African region. EASSy comprises of a 10,000km submarine cable system along the east coast of Africa, with landing stations in Sudan, Djibouti, Somalia, Kenya, Tanzania, Comoros, Madagascar, Mozambique and South Africa.

Safaricom to Begin Testing 4G System

Kenya's largest cellco by subscribers, Safaricom, plans to start testing Long Term Evolution (LTE) services on its network later this year. ‘The reason why we are looking at testing 4G is because it is a natural technology growth from 3G to 4G,’ CEO Michael Joseph told Citizen Television.

Joseph did not give a timeframe for when Safaricom hopes to start tests. In an interview with Reuters earlier this month, Joseph said he hoped to obtain some 4G spectrum this year, although he added it might be insufficient to launch a commercial service immediately.

KPLC Signs Pacts With Safaricom, Janii and Wananchi

Kenya Power and Lighting Company (KPLC) has announced that it has reached agreements with three local telcos to lease fibre-optic cable capacity across its national network, Bloomberg reports.

The country’s monopoly power firm will sign contracts with Safaricom, Jamii Telecom and Wananchi Group in the next few days to seal the deal which will allow the operators to access the 1,500km transport network, which connects Mombasa to Nakuru, Eldoret, Kisumu, Kiganjo and Nanyuki. As reported by CommsUpdate on 30 November 2009, Kenya has a burgeoning fibre market, with Telkom, KDN, Jamii Telecom, Wananchi, Access Kenya and the government all owning their own optical infrastructure.

East Africans Await to "Feel" Effects of Seacom

Consumers in East Africa are anxiously waiting for a new high-speed fiber-optic cable to finally be switched on for general public use. The cable is expected to usher in a new era of faster, cheaper internet access. As VOA reports from its Nairobi bureau, the new fiber-optic cable and the planned addition of other cables, are anxiously awaited in the last major region in the world to rely on satellite internet.

For more than a year now potential customers in East Africa have heard of the Seacom cable with a mix of wary caution and hopeful relief. In a country like Kenya, where citizens have been disappointed by undelivered political promises and an undeveloped infrastructure, much of the public took a wait-and-see approach to the reports that high-speed internet would soon be available.

Although the cable is now "live," the public is still awaiting the broadband revolution to reach their computers. Now that the question of "if" has been answered, the question of "when" is still hanging in the air.

According to a regional spokesman for Seacom, Solomon Mahindi, as of the end of last week only three Internet service providers in Kenya could be confirmed to have finished negotiations with Seacom to get connected to the cable.

Managing Director of Internet Services Chris Senanu of Access Kenya, one of the country's major internet service providers, said although his company has finalized access to the cable, it will probably be another two weeks or so before the high-speed fiber optic line will be available to its consumers.

"If during the tests we have some major issues, then obviously we are not going to put it right to the public," Senanu said. "But if it goes well, if we have steady links for a week, then we will put it through."

Seacom's Mahindi said that for most service providers it would likely be another two to three months before access to the cable could be passed on to its clients.

When the cable does come online, some of the promised effects will be more immediate than others.

According to Mahindi, the upfront investment needed for each service provider to hook up to the Seacom cable will mean that the estimated 80 to 90 percent reduction in internet costs the cable offers will not likely be passed on at once to costumers.

"Realistically, these ISPs have to somehow recoup their investment costs and any other infrastructure costs - because it is quite an investment to get in terms of the personnel, in terms of the infrastructure, in terms of the equipment," Mahindi said.

Senanu says that although he expects some of his customers to maintain their current bandwidth and switch to a lower-priced package, he predicts that most will instead choose to keep the same-priced package with the increased speed.

"Some customers are going to prefer to have a price discount, because the economic times here are a bit tough. But most people in Kenya are not buying what they need, they have been buying what they can afford," Senanu adds. "So what you are going to see is that a lot of people maintaining budgets for Internet and just taking up more capacity - two times more, three times more, four times more - in order for them to actually be able to leverage the technology to be able what they need to do."

For many clients, the additional speed will not be readily available soon either. While the undersea cable does offer much greater capacity, local providers will have to build broadband capability within the local loops that bring the service to clients. If a service provider has not upgraded its local infrastructure, its clients will be severely limited in the capacity they can access.

Although depending on the service provider the additional cables will not necessarily increase internet speed greatly beyond what Seacom can provide, experts say the greater significance of the other cables lies in the extra connection stability they will give the region. Until the other cables are operational, any issue with the Seacom cable will cause problems across all of connected East Africa.

For now, though, East Africans are still waiting to see what changes the new high speed cable will bring to their homes and businesses.

For those who have never known anything other than unreliable, very slow Internet connections at often unaffordable rates, the revolution most of the rest of the world has already undergone is still a bit of a mystery.

 

--Voice of America.