SEACOM, Cheap Internet, and ISP Middlemen in Uganda

Kato Mivule | July 27, 2009

This past week saw SEACOM launch High Speed internet across East Africa, an event that will forever change the course Information Technology History in Uganda.

However, SEACOM’s launch comes a week after a British company ‘The Broadband Company’ “launched” services in Kampala Uganda, claiming that it was offering cheap prices for Broadband services in Uganda.

The difference however, is that SEACOM has heavily invested in High Speed Internet Infrastructure by laying undersea fiber optic cable all the way from the UK, to Uganda.

Yet the “Broadband Company’ headed by Arvin Knutsen is a middleman company with no infrastructure investments but only seeking to make quick profit in Africa.

Mr. Arvin Knutsen’s ISP Broadband Company claims that it will offer Internet Services to Ugandans between 70 to 140 US Dollars per month for just 64k to 512k… Yet on the other hand SEACOM will charge ISP companies 400 US Dollars per month to access their Fiber Optic Cable Services.

According to Press Reports in Uganda, this will be 6000 US Dollars Cheaper than the current 6500 US Dollars per month that ISPs pay to connect through satellite connectivity.

Despite the celebrations in the IT community in Kampala, Uganda’s Government needs to watch out for business middlemen who are out to hijack the current High Speed Internet infrastructure and set outrageous prices that will not benefit anyone.

SEACOM should force the likes of Arvin Knutsen and his ‘Broadband Company’ to offer cheaper prices as Africa will not benefit from the High Speed Internet and instead the Digital Divide that SEACOM has worked to close will only widen.

It seems that Arvin Knutsen somehow “got insider” information that SEACOM was about to launch in Uganda and flew ahead of the SEACOM Launch to hurriedly setup and launch his company.

Arvin Knutsen should pay his dues to SEACOM and charge Ugandans a fair reasonable price for Broadband Services.

Local Ugandan ISP Companies to rise to the occasion and invest in providing Broadband Services at cheaper prices and give very stiff competition to the likes of Mr. Arvin Knutsen.

Lastly since 75 percent of SEACOM is owned by local African Governments, African Governments should set price controls and dictate what ISPs can charge locals.

There is absolutely no reason why foreign companies like ‘The Broadband Company’ should come to Uganda and simply exploit the locals, make a big profit yet African Governments heavily invested in the SEACOM Infrastructure.

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“Ugandans’ thirst to get connected to the world through faster data transfer and website updates without leaving the comfort zone has been quenched by the launch of broadband Internet service in the country. Seacom’s fibre optic cable that links East and Southern Africa to Asia and Europe through the Middle East, was intended at providing the East and South Africans access to the whole world through fast, affordable and reliable Internet services. Speaking at the Seacom launch in Kampala on Thursday, the company representative in Uganda, Mr Fred Moturi, said the undersea cable has a bandwidith which encourages volume discounts and large bandwidth growth unlike the satellite connections that have been dominating the country for the past years. It is expected that broadband will reduce the cost of Internet connection by more than 80 per cent lower than satellite connection with a capacity of 1.28TB per second, to provide the much needed Internet connection capacity… Seacom broadband Internet which will be sold to the Internet service providers (ISPs) at $400… “

Daily Monitor | Uganda gets cheaper Internet

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“…The first undersea cable to bring high-speed internet access to East Africa has gone live. The fibre-optic cable, operated by African-owned firm Seacom, connects South Africa, Tanzania, Kenya, Uganda and Mozambique to Europe and Asia. The firm says the cable will help to boost the prospects of the region’s industry and commerce. The cable – which is 17,000km long – took two years to lay and cost more than $650m…”

BBC | East Africa gets high-speed web

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“…SEACOM, the cable provider company, opened its 17,000 kilometer submarine cable, capable of 1.28 terabytes per second, allowing the region true connectivity. Most Africans rely on expensive and slow satellite connections, which make the use of applications such as YouTube and Facebook extremely trying…”

CNN | The cable links southern Africa to Europe and Asia.|

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Uganda Needs Tough Broadband Price Regulations

Kato Mivule | July 20, 2009

Ugandan Press has been reporting of ‘The Broadband Company’ that claims that they will offer faster affordable internet services to Ugandans. The British company headed by Arvind Knutsen has not invested in any infrastructure but rather is a ‘middle man’ type of company looking to make ‘fraud’ profits in Uganda.

Arvin Knutsen claims that his company will charge Ugandans about 70 US Dollars to 140 US Dollars per month for a 64k to 512k Internet Connection. One wonders what the goal and purpose of the Ministry of ICT is.

If the Ugandan Government has heavily invested in the Fiber Optic Broadband Infrastructure, then why allow unknown “investors” to set outrageous prices for internet access and deny Ugandans a chance to access information on the net?

On the other hand in the USA the new Chairman of the Federal Communications Commission – FCC, Julius Genachowski is seeking to make Broadband accessible and available to all Americans and that means lower prices. Americans have seen economic development with High Speed Internet.

“WASHINGTON — Julius Genachowski has laid out a major mission for the Federal Communications Commission: making affordable high-speed Internet available to all Americans. But how the agency’s new chairman goes about achieving that goal has Internet providers watching nervously. Mr. Genachowski, in an interview with The Wall Street Journal, confirmed his commitment to widespread Internet access, saying the Web has been perhaps “the most successful driver of economic growth” in the country…”
The Wall Street Journal |JULY 20, 2009
| New FCC Chairman’s Agenda Includes Broader Internet Access, More Transparency

On the other side of the Atlantic in Uganda, Broadband is being hijack by avid middlemen who have invested nothing in the nations fiber optic infrastructure but fly from Europe to come and set exploitative prices.

The Ugandan ICT Ministry has done nothing to challenge such companies as the British ‘The Broadband Company’. What will result is that development will be impended and Ugandans will never benefit from High Speed Internet.

Uganda’s government ought to take tougher regulations to protect its Internet Infrastructure from insatiable businessmen. Uganda’s High Speed internet should cater for schools, hospitals, and farmers in villages. Tougher Prices regulations should be a welcome so as to speed up economic development that comes with Broadband Internet Connection.

Notes

The Independent | July 20, 2009 | The benefits of fast Internet in Uganda

The Observer | July 8, 2009 | INTERVIEW: Broadband company to offer faster internet

British Broadband Company Debuts in Uganda with Outrageous Prices

By Kato Mivule
A British Broadband Internet Service Company launched services in Kampala and will be offering services at a price range of about 73 US Dollars to 750 US Dollars for 64 kb to 512 kb, per month, while offering 3G to 2G services for a prices range of about 140 US Dollars per month. One wonders where Ugandans will get such money to have access to the internet.

This is outrageous and any Ugandan who loves free flow of information will no doubt see this as a ‘gate keeping ‘process in which some ‘elite’ western companies seek to place impediments before Africans as they endeavor to access information on the web. This will not only stifle the free flow of developmental information to millions of Africans but will act as a setback to I.T development in Uganda.

Ugandan Government and especially the Ministry of Information Technology should come out and set prices controls for the interest of Ugandans and not some companies looking for a ‘kill’ in Africa. Such outrageous prices for internet services are higher than in some Western Nations… Take for instance, with the same Broadband infrastructure, the USA offers relatively lower prices than what the “New” British company is offering in Uganda.

The interview and Press Report of this “new” ISP Company in Uganda made it sound like they will offer cheap prices yet the facts are the “new” ISP Company will offer very unaffordable prices for their services. Uganda’s Government invested in infrastructure for High-speed Internet by laying hundreds of miles of Fiber Optic Cable, Ugandans should hold the ICT ministry accountable to stop the outrageous prices hikes.

It would not be a surprise that even with the latest High-speed Fiber Optic Broadband infrastructure in Uganda, Prices might continue to widen the Digital Divide in Africa.

Below is the interview that the CEO did with a local Ugandan daily on the launching of his company in Uganda…

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Business Power | July 14, 2009
Broadband for good speed, customer care

Broadband Company, a new internet service provider and subsidiary of PME Infrastructure, a London-based firm, unveiled its services in Uganda last week. Walter Wafula interviewed Mr Arvid Knutsen the managing director about the company’s strategy.

What drew the Broadband Company to Uganda?
Broadband Company is owned primarily by PME Infrastructure, which is a United Kingdom- based Fund. They have explored and checked out the market in East Africa, and in that process, several countries have been evaluated and many projects have been considered. The conclusion has been that Uganda has good market possibilities in the broadband area. The market drew us to Uganda.

What is broadband because many Ugandans don’t know what it is?
I suppose most people know what internet connection is. You can have fast or slow internet, low or high capacity internet. The definition of broadband can be internet connection with good, fast, and sufficient capacity to make a user happy, as a working tool in a job or private use.
The speed of bandwidth or internet offers here are very slow compared to other markets.

Consumers are hungry for fast and high capacity broadband what is the state of your service?
If you were at our media launch you can tell how good the speeds are. That is what we consider a broadband solution. People must try it out and see what we offer. However, we can deliver any capacity or speed on our lines whether you are a private or corporate customer. Our technology allows us to deliver any speed.
braodband.jpg

GEARED FOR NUMBER ONE POSITION: Mr Knusten. Photo BY EMOJONG OSERE - Daily Monitor

Can you break it down into figures?
Normally, the broadband solutions start at 128kilobits or 256kilobits (Kb) per second. We can deliver below that but we have preferred to start at 128kilobits. The company currently offers up-to 512 kilobits but plans to provide 2,045 kilobits. The 128Kb costs Shs147,000 when shared and Shs483,000 for a single user.

And what have you done to ensure that you sustain the fast speeds and high capacity, no matter how many clients subscribe to your service?

We are a specialised broadband operator. We only deal with internet and broadband. We don’t mix with voice or with other solutions. Our WiMAX technology enables us to monitor, control and send whatever we do for our customers and we are producing our services ourselves. We have our own satellite gateway and ISP platform, so we control our value chain. This guarantees that customers will get what they are paying for.

Your company’s vision is “to serve customers beyond their expectations.” Many firms have come up with almost similar taglines but delivered below expectations in the end. How will you do it?
More than you expect, does not only refer to the speed. It also refers to the way we are going to treat and handle our services. We are going to provide the best customer service we can.

When I compare your pricing to that of other players, I notice a slight reduction in rates. Shall we see the rates go further down with the launch of the submarine cables?
We are not a high price company. We are in the middle, we try to be affordable and I think the market deserves some competition on the pricing side. Yes, you will definitely see a downward trend on the prices.

How soon will this be?
I am not quite sure if we will see any effect this year. May be late this year but I assume we will see considerable reduction in the prices of broadband next year.

Do you intend to deliver mobile phone call services similar to what is offered by GSM operators like Zain and MTN?
We are strictly a broadband service provider but we are also providing the Voice over Internet Protocol (VoIP) service, which has limitations compared to GSM. However, it has huge advantages if deployed correctly and it is extremely cheap – I don’t want to mention prices right now but I can be a fraction of Shs50.

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Business | July 9, 2009
Broadband firm to offer cheaper internet
Walter Wafula | Kampala

The BroadBand Company, a new Internet Service Provider, is expected to unveil its services to Ugandans at prices lower than what most of the current players in the market are offering this Friday.

According to the Managing Director, Arvid Knutsen, the Kampala-based firm will be formally launched by the Vice President Gilbert Bukenya at the Kampala Serena Hotel tomorrow.

The firm will start off its services by offering internet at speeds between 64 Kilobits (Kb) per second and 512Kb per second at between Shs147, 000 and Shs1.5 million per month on its shared packages. For internet that is not shared with other users, the prices range between Shs483, 000 and Shs3.4 million. For individual use, the firm will offer the 3G portable modems with internet at Shs283,500 compared to the average of Shs320,000 offered by other service providers with the exception of Warid Telecom, which offers 2G devices at about Shs240,000. The cost of accessing the internet and voice services is expected to drop further this year, with the launch of the three submarine cables that are under construction from the coast of Mombasa in Kenya.

Speaking at the media launch held at T1 Club, Mr Knutsen said the Broadband Company is the first Internet provider in Uganda to offer services under the latest wireless internet platform called WIMAX E going beyond the current offerings of WiMAX.

“This ensures a faster and more reliable connection and ultimately a more satisfactory Internet surfing experience for our customers,” he said, adding that the company is committed to giving customers “more than what they expect”.
“BroadBand Company will be taking you into a world of increased accessibility and endless possibilities,” he told the press on Tuesday.

BroadBand Company, which was licensed by the Uganda Communications Commission over a year ago, operates under mother company TMP Uganda Ltd, whose majority shareholder is PME Investment Fund, a London based company. The other shareholders are TMP Management, a Norway based company, and a local consortium, Suubi Services Uganda Limited.

Currently, the company’s services are only in Kampala. The company is, however, rolling out its infrastructure to the districts of Jinja and Entebbe. Mr Knusten said their services will be available in the districts in the coming months. According to Mr Knutsen, the company also plans to introduce Voice Over IP service, which will reduce the cost of making calls, as well as offer IP video conferencing, Data Warehousing, Domain Name servicing and more.

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Google’s “War on Info Poverty” in Africa

By Kato Mivule | July 6, 2009

With Google’s launch of an Information Supply Blitz in Uganda combined with recent developments of Uganda getting connected to the Undersea Fiber Optic Cable Network, Africa is readying itself for an information revolution never seen before.

Google's Logo

Google recently launched a new Mobile Phone Service – Google SMS involving the users in Uganda accessing a wide range of information on the web tailored to Uganda. This is a remarkable development and one that has the potential to transform Ugandan society.

“…Google SMS Tips provides health information and clinic location assistance to mobile phone users. It also provides agricultural and weather information to farmers… Google worked with the Grameen Foundation, MTN Uganda and several local organizations to develop and test these applications. “We believe it’s important to reach users wherever they are, with the information they need most, and in areas with the greatest information poverty,” said Payne…”
Google Fights Information Poverty In Africa |Informationweek | June 29, 2009

In a continent that surpassing both Europe and the USA is Mobile Phone subscription, it makes sense to have mobile phone users in Africa have access to the internet yet tailored around their needs.

However, Google’s goal is a little too ambitious in the “fight against information poverty” in Africa. The trouble with Africa’s telecom growth is that mobile phones are simply seen as devices to make phone calls.

It is Africa’s Middle Class that goes beyond the ‘phone calls’, yet many of the poor who can now afford a Mobile Phone find no other use for the mobile phone they carry. The Internet is still seen as something ‘exotic’ and ‘a thing for the wealthy’.

However, Google in her ‘war on Information poverty’ can actually borrow a leaf from the success of Telecom companies in Africa in hopes to drive the point home to many in Africa that Information Access is as important and useful as making the ‘phone calls’.

What Google has done in her ‘War on Information Poverty’ in Africa is flood Africans with ‘lots of info money’ only to be spent on nothing…too much unutilized technology…

This is the biggest challenge that Uganda’s Information Technology ministry faces…how to get folks to actually use this technology and then measure ‘success’ in whatever form it is deemed.

One of the best places to start would be Universities in Uganda. Universities would demand that every student own a Mobile Phone (Laptops are still too expensive), which almost all University students in Uganda own anyway.

The goal would be that Students would access educational information and communicate using their hand held devices with professors on various research projects. The next level would be High School Students and then on and on…