South African firms jolt Kenya’s internet market

After the merger, each will continue with its operations, but will be managed from the head office to be based in Nairobi.

The aim of the merger is to bring satellite and fibre into a one-stop shop.

“This will enable us harness hybrid solutions and allow us to provide connectivity solutions irrespective of whether it is VSAT or terrestrial,” said Mr Shah, who has already moved to the Africa Online office at Landmark Plaza in Nairobi in readiness for the restructuring, said.

“At the moment we are learning from each other as we wait for regulatory approvals,” he added.

Afsat has been predominantly a satellite broadband provider and according to Mr Shah, satellite still has a critical role in internet.

“Satellite is much more for people and companies who want high reliability, consistency, speed, availability, and strong support. And with cable vandalism all over, companies in which internet is critical cannot retire satellite easily,” he says.

The arrival of fibre optic cables has not eliminated all connectivity problems.

Connectivity in East Africa was disrupted recently by damage to the SEA-ME-WE 4 cable in the Mediterranean.

“We know fibre can carry a lot more capacity in terrabytes compared to the limited satellite; however that does not mean satellite has no place,” Mr Shah said.

However, he reveals that satellite broadband uptake has been slower.

He says since the entry of fibre optic cables, they have seen about 10 to 12 per cent of clients in satellite moving to other technologies.

Even in the US, the most wired country in the world, satellite is growing by 19 per cent annually while terrestrial links grow at 0.5 per cent.

Telkom South Africa is focusing on achieving strong growth through both organic and acquisitive business development strategies, as well as by utilising synergies across the group.