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Entry of Eassy may lower internet costs

By | March 24th 2010 at 00:00:00 GMT +0300

By Macharia Kamau

After years of waiting and boardroom wars, the East African Submarine System (Eassy) project has finally landed in Mombasa.

Business rivalry among telecommunication operators in East and Southern Africa to control operations of the undersea fibre-optic cable appears to have been resolved.

The cable, first conceptualised in 2002, also renews hopes of a reduction in Internet pricing for local and regional consumers.

The builders of the cable, the West Indian Ocean Cable Company (WIOCC), said its cost base would allow it to hit the market with a lower price compared to the competition — Seacom and East African Marine System (Teams).

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The Government expects the new player to introduce competition in the market.

Price control

However, the Government will not regulate Internet prices, but instead let market forces determine the same.

The Ministry of Information and Communication and the Communications Commission of Kenya (CCK) said that while the reduction in bandwidth costs had not come down to expected levels, they would only look to pricing regulation as a last resort.

Information Minister Samuel Poghisio said there were expectations for a reduction in prices in the coming months, after the operationalisation of Eassy. "We do not see the need for regulation but should instead focus on getting more users on board," he said.

Mr Poghisiso told a press briefing in Mombasa that lower costs would enable majority of the population broader access to Internet, which would reflect on the economy.

CCK said it would only consider the regulation if there was collusion among services providers. "Prices have gone down, but not to the desired levels. We will, however, look at instituting regulation guidelines on the pricing if market forces do not succeed," said CCK Director General Charles Njoroge.

Expectations were high last year that the coming of the undersea cables would bring a price reduction. Close to a year later, costs have only marginally gone down. This has forced the ministry to consider issuing rules that would compel ISPs to lower prices.

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