Firm targets SMEs with cheaper Internet service

Internet users are set to experience high speed connections at lower prices following Kenya Data Network’s (KDN) launch of a service, which is eight times cheaper compared to what other providers offer.

The move comes barely a week after Information Permanent Secretary, Dr Bitange Ndemo, said the government was investigating whether internet providers were colluding to keep prices high despite being connected to the undersea optical fibre cables which were supposed to make the service affordable to end users.

Internet services providers have only increased their bandwidth capacities to their clients but are still charging the exorbitantly.

Last Friday, KDN unveiled a high speed Internet product dubbed Butterfly Optic Xpress (Box) targeting small and medium enterprises which it says are still underserved due to high prices, a step experts say may herald a new dawn which will see end users experiencing high speed internet at lower prices and also push the competition to the next level.

The move along with the ongoing campaign by Safaricom, Telkom Kenya and KDN to offer subsidised computers and laptops to the public is bound to increase internet usage.

In the deal, KDN is offering an internet bandwidth capacity of 256 kilobytes per second for Sh999 and five megabytes per second for Sh7,999 One megabyte will cost Sh3,999 per month.

AccessKenya, which currently controls more than 42 per cent of corporate Internet customers, charges Sh8,500 for one megabyte per month and Sh4,000 for a 64/128 megabytes per month.

Wananchi Online through Zuku charges Sh1,499 for a 256 Kbps, Sh2, 999 for a 512 Kbps and Sh4,999 for a 1 Megabyte per second per month.

Mr Kai Wulff, the chief executive officer of KDN, says SMEs consider the cost and quality of the of services as key when selecting a broadband solution.

“The only way to pay for fibre is not by putting high prices but targeting a mass market” said Mr Wulff.

“SMEs will now be able to save on their communication costs and still maintain high standards by the use of integrated communication such as VoIP, email and data storage capacity to increase their business reach and grow their market share.”

Other than high speed internet capacity, the clients will be guaranteed connectivity with refunds on downtime.

KDN, does not charge installation or equipment fee.

However there is a catch, as one has to pay a refundable deposit of Sh15,000.

The fee is refundable after two years upon request but is forfeited to the company if one chooses to cancel the contract before the two-year period elapses.

Kenya Data Networks’ new product will enable the transfer of large files, the use of the voice over internet services, streaming and download of videos on demand, thus benefiting from the huge capacity available locally through KDN terrestrial fibre infrastructure.

Download speed is a key factor for people applying for Internet subscription for-- depending on what they intend to use the bandwidth for.

Before the deployment of terrestrial fibre cables across major towns in the country, internet speeds were very slow, especially when downloading bigger files.

It was extremely difficult for one to use the internet to transfer such large files and many people found it more convenient to use courier services to transport documents.

However, the situation is changing with providers not only focusing on faster Internet speeds but also coming up with service level agreement contracts for their clients.

This is critical in an area where competition is picking up and with providers coming up with offers which almost look similar.

KDN will make Internet installations for free in all buildings where it is has connections.

The company has already connected over 400 buildings in Nairobi and across the country with terrestrial fibre cables.

Other benefits include a free number that allows users to call through the Voice over Internet Protocol (VoIP).

The company will also guarantee 98 per cent uptime for the SMEs.

SMEs will be able to connect between 1 and 20 computers at minimal costs.

Largely ignored by the internet service providers, market growth forecasts in the enterprises sector have predicted an increased penetration of the consumer markets by SMEs in the coming years.

AccessKenya currently has 3,250 clients for its access at home offering and over 3,100 corporate clients and is targeting 30,000 clients within a period of one year.

There are over 300,000 households in the mid to high end market category.