Drop in Internet cost to be gradual, says Joseph

By Macharia Kamau

The undersea fibre optic cable might not result in drastic reduction in Internet costs as widely expected.

Safaricom Chief Executive Michael Joseph said it will take between six and nine months before costs come down and even then, it will be about 20 per cent cheaper than it is today.

However, even a 20 per cent dip in Internet access costs per year will still make a huge difference for consumers.

"I am afraid the issue of costs coming down has been over hyped," explained Joseph while speaking on KTN’s Financial Market Live programme

on Monday afternoon.

"There is a huge infrastructural cost to recover and we have to pay for transmission costs from Fujairah

onwards as well as the cable’s maintenance costs." This is in contrast to the 90 per cent decline in costs the local ICT industry had projected. He, however, said Internet users would experience increased connection speeds after the commercial launch

of Seacom.

Increase in speed

Currently, he said, Safaricom’s data subscribers are experiencing up to 50 per cent increase in speed when surfing the net.

Safaricom stands to greatly benefit when the fibre optic cable goes live having invested Sh1.925 billion

($25 million) to purchase capacity in Seacom.

This is in addition to a 22.5 per cent shareholding in the East African Marine System (Teams) that is also

expected in the course of the year.

Joseph, who is also the chairman for Teams, said the Government fronted cable would go live next

month.

"It is currently undergoing a period of intensive testing and should go live towards the end of August," he said.

Joseph also ruled out engaging other providers in price wars.

"We have a responsibility to shareholders and hence need to make money. With wars nobody wins... I do not think it is the way to go," he said.

He also reckons that the number portability for mobile phone subscribers may not be the best way

for the sector to go, citing the complexity and cost implications.

The idea advocated by the Communication

Commission of Kenya (CCK) and backed by other telecoms players like Telkom Kenya would allow

subscribers to retain their numbers in case they choose to change mobile network. Joseph, however, said it is costly for operators and subscribers.