Saturday, March 20, 2010

And here comes the EASSY undersea fiber..

The imminent arrival of Kenya's third international fibre optic this weekend is set to renew debate on the pricing of communication. The East African Submarine System (EASSy) will dock in Mombasa this weekend, two weeks earlier than initially scheduled. Although capacity offered on EASSy will only be available for commercial use in June after it undergoes a mandatory testing period, the cable's physical arrival promises to set off major realignments in the Internet sector over the next three months.

Industry analysts view the entry of EASSy as the catalyst that the local data market needs to effect significantly lower pricing for communications. "Having three or more players in the market inevitably leads to lower prices as competitive market forces come into play," said Joe Sloan, International Finance Corporation (IFC). A recent study on Internet trends in Kenya by TNS Research reveals that while 77 per cent of Kenyans want to get online more frequently, many are often put off by the high cost and low speeds currently offered by the market. EASSy hopes to jolt pricing in the market with its unique costing model, which does not require its customers —typically Internet service providers —to sign long-term contracts in order to access connectivity, unlike other operators. While prices on both Seacom and TEAMS are pegged to long-term, 20 year contracts, EASSy's pricing model will feature short-term leases that offer the smaller Internet service provider cheaper options than those currently in the market.

"This will allow for more flexibility for our customers. The key differentiation between our offering and the others is that we allow our customers to buy capacity in the amounts they can afford, which opens up our service to smaller players," said Chris Wood, CEO of the West Indian Ocean Cable Company (WIOCC).