On 5 May 2007, at 10:59, Kai U. Wulff wrote:
My point is:
Yu have limited room for infrastructure since the cost is constant and only
increased usage can drop the price. The Government should NOT be a
competitor but a price sensitive user!
You will have enough people now competing for the business of the Government
and the private users .. That forces prices down. Having a state owned cable
or a state owned Telkom is in my opinion not the way forward.
Rgds
Kai
-----Original Message-----
Wainaina Mungai
Sent: Saturday, May 05, 2007 10:35
Subject: Re: [kictanet] Day 5 - Statistics on Affordability-
CCKInternetStudyReport
Kai said;
The problem is when you create the demand and then some World Bank money
starts to compete before you can recover the cost..
...The private sector needs the Government as a user there as well as the
private companies and consumers. [Only then will the prices drop!]
Pricing
I would like to assume that competition from government is as good as
competition from other market players. The beauty of competition is in the
way it forces the private sector to put a smile on the face of every
consumer ;-) so as to guarantee revenue. I am convinced that a significant
drop in prices results only from fierce competition and some degree of
regulation. TESPOK and others fought for years to introduce competition
which resulted in the current lower prices of internet and telephony
services.
The recent intervention of CCK on the pricing of mobile services is a case
that proves that price controls may become necessary to protect consumers.
For internet services, we need many 'small scale' providers whose products
and pricing would be more market-driven and responsive to fluctuations in
consumer needs.
For instance, an internet user paying KShs. 6,000 per month for DSL per
month is actually incurring 14 cents per minute for a 30-day month. This is
a great deal for any 24 hour user who may even make money through such
access to the internet. The same user would be said to incur 28 cents per
minute if s/he were to use the link for an average 12 hours per day at the
same monthly rate. There may be a catch here but there is a high probability
that more businesses can survive on such low rates and pass such rates down
to rural consumer.
---
Wainaina Mungai
SUSTAINABLE DEVELOPMENT is development that meets the needs of the present
without compromising the ability of future generations to meet their own
needs.
Rebecca Wanjiku
SENT: Friday, May 04, 2007 10:23
SUBJECT: [kictanet] Day 5 - Statistics on Affordability -
CCKInternetStudyReport
thanks Kai for the response,
we need many people responding to this issue,
in my opinion, the government should find a way of using the WB money
through the private sector, so that the private sector does not see as if
the government is competing and killing the profit margin,
in this regard, the government could come up with some MOU with the
private sector so that some of the money invested is government's and
some
PS.
that way, part of the profits will be ploughed back (it will be
mandatory)
i remember during the OFC workshop, Kai shared how IFC funded a private
secotor consortium to carry out some survey at USD 300k and a similar
survey carried out by govts was valued at USD 3m
maybe this can help reduce costs and provide a way for govt and PS to
work together and deliver quality market services, develop the content
and
all..
its just an opinion, its not absolute,
lets hear as many voices as possible,
it is at these forums/discussions that great ideas come up,
regards
Hello,
we leave it to the ISPs to create the demand. We were hoping that with
our
rural initiatives, like connecting schools and showing them how to
educate
the parents (and make money with this) will increase the demand on a
natural
way.
What we have seen wit some Rural BTS, it takes about 12 month until it is
break even ...
The problem is when you create the demand and then some World Bank money
starts to compete before you can recover the cost. It is my strong
believe
that wherever a device can be operated, there WILL be a market. The
private
sector needs the Government as a user there as well as the private
companies
and consumers. Only then will the prices drop! We still focus too much on
the INTERNET, what most people need for a start is LOCAL information and
communication .. so I would say: 90% local IP traffic and 10%
international
..
Kai
----- Original Message -----
From: "Joan Walumbe"
To:
Sent: Thursday, May 03, 2007 10:26
Subject: Re: [kictanet] Day 5 - Statistics on Affordability -
CCKInternetStudy Report
Walu,
I agree with you that affordablity is a factor especially for rural
communities when it comes to access to the internet. But I think that
lack
of awareness is an even bigger factor. It's fine for the urban folk
(who
already recognise the benefits to the internet etc.) taking a short
break
in
shags to have the internet access when back home, but it there is no
demand
for the internet among the residents what is the point?
So does KDN enter a market and then hope to create demand or is their a
market that demands the service or is it a little of both?
I understand that Kai would not be venturing into the rural areas if it
did
not make any financial sense. Can anyone provide some info/statistics
on
demand for internet access in rural areas?
Joan Walumbe
----- Original Message -----
From: "John Walubengo"
To:
Sent: Thursday, May 03, 2007 9:01 AM
Subject: [kictanet] Day 5 - Statistics on Affordability - CCK
InternetStudy
Report
Day 5- Statistics on Affordability.
I acknowledge an interesting thread filtering in on Trust relationships
b/w
IGOs/ISPs...feel free to continue contributing on that as well as on
today's theme on affordability (multi-tasking
encouraged by internet technologies ...)
and just to pick up from Kai's projection of KDN fiber hitting Bungoma
in
early August 2007. This would be quite a welcome and timely
development,
but at what cost to the consumer? To what extend will the (internet)
services be affordable to the rural/average communities?
Affordability is a subjective term gven that what is considered cheap
by
the
Bill Gates of this world is probably not so for the average Kenyan on
the
street. In trying to get an objective measurement for affordability,
the
Report pegged it on the national average incomes. In other words, if
the
monthly average income in Kenya is around 100USD and if the average
monthly
cost for internet access is also around 100USD then obviously the
average
Kenyan will not bother with accessing the Internet - it just becomes
way
beyond their means or too expensive or not affordable.
The report indicated that access through the more convenient Internet
Dial-up/Desktop services costed over 200% the average incomes (too
expensive), while the same access through mobile phones was costing
just
8%
of the average incomes (quite affordable). What needs to be done in
order
to make Internet Services more afforable to Kenyans?
1 day deliberation on this one.
walu.
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Rebecca Wanjiku,
journalist,
p.o box 33515,
Nairobi.00600
Kenya.
Tel. 254 720 318 925
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