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Telkom, Google clash over network fee demand

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Telkom Kenya CEO Mickael Ghossein (centre) shakes hands with Google Kenya country manager Joseph Mucheru. On the left is Matt Reed of Informa Telecoms & Media. Photo/Correspondent

Telkom Kenya has locked horns with Google over sharing of revenues generated from content provided by the Internet search giant through the network of the local operator.

Telkom Kenya reckons that Google should pitch in to help pay for the billions of shillings invested in networks for the services that consume huge bandwidths like videos.

Mickael Ghossein, the CEO of Telkom Kenya executive Tuesday said it will lobby rivals Safaricom, Airtel, and Essar as well as the Communication Commission of Kenya (CCK) to make content providers like Google pay fees linked to usage.

Network operators globally say that Google’s search engine and You Tube video service generate huge amounts of traffic but do not compensate for using their networks.

Google has also been faced with demands for compensation from content providers such as newspapers, that say the search giant makes lots of advertising revenue from referencing their material.

“Google has to pay us.  We have invested heavily on the infrastructure yet they just want to use it for free of charge,” said Mr Ghossein at a regional IT conference that was also attended by Joe Mucheru, Kenya country manager for Google.

“Some of the applications of videos on YouTube are Internet capacity hungry and we have been forced to increase our speeds, but the revenue we get from consumers doesn’t match our investments.”  

Mobile phone operators in Africa are increasingly upgrading their networks that support high-speed wireless services as consumers use tablets and smartphones to surf the web.

The telcos have moved to 3G networks, spending billions of shillings, and are looking at 4G to help operators ease network congestion and deliver fast connections for users of tablet computers and smartphones, a lucrative and fast-growing market.

Kenya has many lower-end users who only make calls and send text messages, but its increasingly young and tech-savvy population is buying higher-end handsets that are increasing data usage across the continent.

This has seen the number of Internet users in Kenya jump to 16.2 million last year from 7.8 million in 2008.

On Tuesday, Mr Mucheru denied that Google was getting a free ride on the operators’ networks, arguing that the telcos and the search giant should focus on partnerships that will lift their earnings.

“This is a debate that has been going on for a while and nowhere in the world does Google pay the operators any such fee,” said Mr Mucheru.

“Consumers are already paying the operators to access Google so why would they want us to pay again?”

He added that the mobile operators hugely depend on content providers such as Google and Facebook to drive their Internet usage and that the search engine operators have not asked for a share of Internet revenues.

Kenya’s mobile operators are focusing their efforts on data business to reduce reliance on voice that is fraught to price war and is approaching saturation levels.

Safaricom Tuesday said that data usage driven by players like Google and Facebook is making it difficult for the telecom operators to meet quality standards set by regulators. 

“We have not yet been approached by Telkom Kenya on the specific subject of revenue share with over the top players such as Google,” said Nzioka Waita, regulatory affairs director at Safaricom.

“Judging from global developments it goes without saying that the debate will eventually find its way to Kenya as the data traffic grows to a point where demand exceeds the operator’s capability to provide a seamless experience to customers within existing pricing structures.”

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