Telcos push for price cuts to spur use of high speed Internet

Mobile phone firms are demanding a review of the pricing system for high speed internet, saying the current model discourages users from connectivity.

They said the scarcity of internet spectrum frequency and lack of a clear policy on how they are issued has blocked end users from tapping into the vast high speed infrastructure such as Wimax.

The mobile phone operators are calling on the Communications Commission of Kenya (CCK) to unbundle the access of connectivity (last mile) and come up with a pricing policy that encourages efficient usage.

“CCK should work towards breaking any existing monopoly on access to last mile and also to ensure the local authorities do not impose prohibitive rates for setting up the infrastructure,” said Essar’s country managing director, Mr Atul Chaturvedi.

He said when coming up with the new pricing model, CCK should consider to set a ceiling price taking into account cost and also to unbundle the access of last mile so that everyone can use.

CCK reports indicate that despite Kenya being connected to three undersea cables and having a high number of internet users, few are using high speed internet technologies.

A report released last week notes that the usage of high speed broadband in the country is promising with 6,529 broadband subscribers by March this year up from 2,601 the previous quarter.

Although the number of internet users has risen to 6.4 million representing a 59.8 per cent increase compared to the previous quarter, majority of these users use the internet for leisure such as accessing the social networks or sending and receiving e-mails as opposed to using it for tasks that demand high broadband connectivity such as sending heavy files across.

Telkom Kenya chief executive, Mr Michael Ghossein said the CCK needs to come up with a policy that should address the pricing mechanism for GSM and microwave frequency spectrumto encourage usage.

“The policy should also address the need for the future treatment of frequency whether by way of auction, beauty contest or indeed first come first served applications in view of the quickly diminishing scarce resource that is spectrum,” said Mr Ghossein.

“We are aware that a consultant was hired in 2008 to review the existing pricing methodology and to propose a new charging regime based on international practice. Sadly no outcome has been shared with the operators in this regard.”

Currently operators providing their high-speed internet services through technologies such as Wimax have to pay the regulator Sh45,000 monthly per an antenna on each masts, this means the more the antennas the more the operator will be required to pay, a cost they say they pass on to the consumers.

CCK says the increase in the number of internet subscribers is accelerated by the provision of data services through GPRS/EDGE and 3G networks of mobile operators.

“Mobile service contributed 99 per cent of the total internet subscriptions during the period under review.”

“The increase in the number of internet users could also be attributed to innovative offerings such as connectivity to social networking sites through the mobile phones, a service that has gained popularity among young people in the country.”

The number of internet users representes16.4 per cent of the total population, a figure that is it is still way below the world average of 25.9 per cent according to world telecommunication/ICT development report 2010.