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State turns heat on ISPs over high Internet prices

By | February 4th 2010

By Macharia Kamau and James Ratemo

The Government has accused Internet Service Providers (ISPs) of colluding to keep prices high, and threatened to take action against them.

Information and Communication PS Bitange Ndemo said the drop in prices was marginal, and eroded the essence of heavy investments made in the undersea fibre optic cables, an undertaking that the Government was involved in, and whose aim was to increase Internet speeds, and cut connectivity costs.

Ndemo also said the persistent fibre cable vandalism the industry has been experiencing amounts to sabotage among operators, adding that the disconnections occur at strategic points, giving one operator undue advantage over others. He said the ministry is in the process of investigating the issues, and would take action against some of the operators in another two months.

"We are investigating to establish whether there is a collusion among the players, but from the onset it is evident that there are oligopolistic tendencies, and we will be taking radical actions against some of the players in the course of the next two months," he said.

Similar pricing

He said despite the presence of over ten major Internet providers, curiously all have similar pricing structure pointing at possible collusion.

The Ministry has on several occasions threatened to take action, even regulate Internet prices, but nothing has come of it, and consumers continue paying high prices. Ndemo, who spoke yesterday when he opened a mobile web and applications conference in Nairobi, however said Communication Commission of Kenya (CCK) has power to take action against players colluding to fix prices through regulations that came into force at the start this year.

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