The much hyped arrival of the fibre optic cables continues to stir debate on the cost of bandwidth as well as issues of open access. Was it a hit or a miss? Zachary Ochieng seeks the answer.The landing of the fibre optic cables has opened doors to competition as providers angle themselves to connect various businesses and homes that are eager to take advantage of the fibre. With each provider striving to stay ahead of the pack, consumers are spoilt for choice as new business opportunities present themselves. LARGEST FIBRE INFRASTRUCTURE IN KENYA
Soliton Telmec, a one-stop shop for Telecommunication Network Building and management, including planning, design, construction and maintenance was the first contractor in Kenya to roll out out metro and long distance fibre optic networks for its customers in 2004.
“We were years ahead of the game then and that is why we have built by far the largest  fibre infrastructure in Kenya, both metropolitan networks in major cities and long distance networks between cities. We are  the only company in the region today that can deliver 20 to 30 Km per day of fibre route due to our production facilities and dedicated and competent staff”, says Abdirahman Sheikh, Group CEO, Soliton Telmec.

Soliton is also rolling out innovative products such as various flavours of FTTH (Fibre to The Home) products, Data Center solutions and Unified Communications Solutions.With the increased penetration of fibre towards the users, new problems will arise due to greater pressure on the core networks.
FIRST TRAINING AND R&D FACILITY
“Soliton is already prepared to help its customers on this front. We have acquired our own offices in Airport North Road where we are putting the first training and R&D facility dedicated to fibre optic and related transmission technologies in cooperation with major industry players”, says an upbeat Abdirahman.
CONNECTED TO KDN
Soliton is connected to Kenya Data Networks (KDN) and therefore most likely  getting services through both SEACOM andTEAMS. With improved bandwidth available, customers are naturally demanding high-speed access and this helps the business.To this end, Soliton is producing innovative products to make it easier for its customers to offer better services to the end-users.
The company is currently expanding into the region and putting a great deal of effort in the export market.
“At home, we are developing products and services that will enable fibre optic services to reach homes. We are deploying systems to enable us support these critical communication links across the entire region. The frantic efforts to build major routes will continue in parts of the region for at least three to four years. After that there will be focus to improve the access networks  - this is already happening in Kenya. We are studying cost effective means of deploying broadband in the rural and sparsely populated areas such as Northern Kenya.”
In five years’ time, the company will still be providing great services and solutions for its customers, according to Abdirahman.
However, the Group CEO acknowledges that many people do not understand the activities of Soliton Telmec.
“Soliton does not trade in bandwidth. We do not provide voice or data services as such.This means that we are not working in the segment where traditional service providers such as Safaricom, Zain or even KDN and similar companies operate. Instead we build and support the networks on which these service providers would carry their services. Our focus has been on optical technology – where we  deploy  fully functioning systems right from concept through construction and support.”
Says Abdirahman: “We also provide network testing and commissioning services for passive network as well as all common protocols. We have always focused on developing local talent and skills. We prefer to import knowledge and skills rather than people. We found that this is not only good for the company bottom line but also provides jobs.”
Vincent Wangombe, Chief Marketing Officer,KDN, says the company will always strive tog ive its best.
WORLD CLASS ICT INFRASTRUCTURE
“We will continue to do what we do best, provide carriers with world class ICT infrastructure and by proactively engaging with our customers to offer solutions to their business needs”, says Wangombe.
As an infrastructure operator, KDN has been able to give its customers more bandwidth at lower prices.
“KDN is the anchor tenant for Seacom, meaning that we are their provider of choice to distribute their capacity inland through our own terrestrial fibre. We are also shareholders of TEAMS so we are also have some capacity on this system. We have set up such that they connect to different areas so that we enjoy the benefit of have two separate routes”.

Since KDN’s capacity on TEAMS and Seacom use different routes, the recent outage on the SEA ME WE 4 cable did not affect its operations adversely. The company isnow looking to have more coverage not only in Kenya but also in the region.
GETTING ONLINE NO LONGER TRENDY
According to Sophia Bekele, Founder and Executive Director of DotConnectAfrica, getting online is no longer trendy, but a must for most businesses. Therefore, fibre optic connectivity to African businesses and consumer experience brings the benefit of a fair competitive market for the international connectivity, as a result of much more affordable and also providing services at a fraction of the usual cost.
DIRECT INTERNATIONAL ROUTING
“This, as you know is because first a direct international routing will be possible with fibre, rather than say current traffic in East and Southern Africa being routed via Middle East or India, which causes transmission delays or high latency issues”, says Bekele.
According to her, African businesses therefore can take advantage of this Internet traffic to roll out high bandwidth-intensive applications. African ISPs can be in a position of delivering direct, affordable and reliable connectivity as a result, and consumers will also benefit from low cost and high performance solutions and services, which will spur economic growth and creations of higher standards of living.
In general, the arrival of a high speed, high performance international connectivity with these fibre landings will have a dramatic impact on  existing communication capabilities of particularly small businesses as well as provide opportunities to access to global markets, creating new business models, such as outsourcing, marketing via social media etc.
The notion that most Africans have to continuously leave school, university to “tarmac” for jobs, changes completely. Fibre connectivity allows for development of SOHO (Small Office Home Office) businesses that can now be incorporated to offer outsourced services backwards to both big corporations or small medium sized companies. Online commerce is now a real opportunity and a great one for those with great minds and have the potential for becoming entrepreneurs overnight.  
For big business the occasion to reach global markets using the rich Internet resource is now an opportunity as well as a treat.
“If your product and service has been a novelty for years, using the old business models, chances are that most people can now duplicate your business online using ICTs and take over market share if you are not paying attention”.
DEVELOPMENT OF TRAVEL AND TOUR PORTALS
According to Bekele, a good case in point is the development of interesting travel and tour portals that give travellers the option to determine their travel destinations, accommodation and transport methods worldwide without contacting their travel agents.
“On the other hand, you equally have the opportunity to grow your market share by embracing online strategies that include e-commerce by creating the supporting organizational structure for success. For consumers, there will be an easy and open access to information within Africa and globally to allow for personal development associated with the knowledge economy”, says Bekele.
There is no gainsaying the fact that the quality of services offered to customers by various companies has improved tremendously.Telkom Kenya, which has been providing both voice and data services through PSTN and CDMA networks for several years, now provides quality voice, data and video services to their customers to meet their ever changing business and leisure requirements.
“Our strength in having four robust  networks i.e PSTN, CDMA and GSM and fibre lies in our ability to offer value added services across all our platforms that are reliable , easily accessible and hence the best value for money.In the past two years since rebranding into Orange we have acheived impressive market growth from a subscriber base of about half a million customers to a base with approximately 2.5 million subscribers  which is formidable growth considering that the company has also been undergoing alot of transformation from a public entity to a fully commercial and private entity”, syas Mickael Ghossein,the company CEO.
SHAREHOLDING IN TEAMS AND EASSy
Telkom Kenya has shareholding in TEAMs nd EASSy submarine cables and also has over 4,000 kms of terrestrial fibre infratstructure across the country. This capacity enable it to offer its individual and corporate customers reliable high speed broadband at the most affordable price. Following the commisioning of the TEAMs undersea cable, Telkom Kenya took the lead in offering both its individual and coprate customers double the (bandwidth) capacity for the same price.
“Specifically for corprates we are able to offer more secure and reliable voice and data services through our IP/MPLS network, services such as teleconference and videoconferencing are now available and much more.  As an example, we recently provided the Directorate of e-Government  with 80MBps capacity that is to be shared among governement ministries through the Governement Common Core Network (GCCN) which is a Multi Protocol Label Switch (MPLS) based network  that was also set up by Telkom Kenya”, says Ghossein, adding: “Through this high speed capacity we can expect a significant improvement in publc service delivery through efficient information management and improved communication accross and within all governemnt agencies.”
Telkom Kenya had received the information of the pending maintenance work on the SEA ME WE 4 cable earlier that week and this gave it sufficient time to transfer its traffic to other networks  that it has (mainly satellite) in good time causing very minimal distruption of service to its customers.
“We also proactively advised our customers directly and through the media to alert them of the impact of the maintenance work that helped us manage their expectations. All our voice and data services remained optimal throughout the period”, says Ghossein.
COMPETITION IS THE NAME OF THE GAME
For UUNET Kenya, competition is the name of the game.
“Competition is healthy and expected in a sector like ours. It helps every player keep their eye on the customer and the customer is ultimately the beneficiary.  We have enhanced our capabilities to provide pan-African and worldwide business solutions that are unmatched. This is through our PanAfrican MPLS service, International Private Leased Circuits and our storage solutions”, says Tom Omariba, UUNET Kenya Managing Director.
The company subscribed to SEACOM as well as TEAMS and will subscribe to EASSy too when it goes live in Q3.
“The abundance of bandwidth means that we can offer all the solutions that we could not offer before due to cost  and bandwidth quality limitations”, says Omariba, adding: “With our related parties/shareholders, we have exciting plans and new solutions for the region. Top among this is mobile-to-fixed convergence.” 
According to Omariba, the maintenance of the SEA-ME-WE4 cable  took longer than initially planned and the turbulent weather conditions did not help. He acknowledges the inconvenience this caused to their customers.
“We switched over to our back-up link. The customer experience was not as great since we were going through a longer route through Asia as opposed to our PoPs in Europe.”
Kris Senanu, Managing Director, Internet Division, Accesskenya Group, says competition is something they saw coming.
MARKET HAS GROWN
“One thing to understand very carefully is that obviously the market has also grown, a lot of people who would not have taken data services in the past are now buying in, so really it’s about product development. Two weeks ago we launched a product known as smart access, which will address the needs of SMEs”, says Senanu.
AccessKenya Group is also bundling IT services,  such as monitoring of people’s networks,as well as coming up with new product innovations.
A MYRIAD OF CHALLENGES
But as the providers strive to give the best services to their customers, a myriad of challenges come their way. Soliton Telmec, for instance,is primarily a service provider for service providers. With most of its business targeted toward telcos, larger companies and governmental institutions, the well known problems of corruption and nepotism are some of the major challenges it has to grapple with everyday.
“In addition, there is the general belief that local companies cannot perform – a misguided belief trumpeted by many and reinforced unfortunately by the Government of Kenya through its purchasing decisions”, says Abdirahman.
According to him, another major challenge is the source of funding for the projects it undertakes.  Many projects come complete with supplier credit or funding by a foreign government thus shutting out those who do not have the capacity to mobilize funds from their countries. 
For AccessKenya Group, the key challenges especially on the bundling or putting IT services to get on to the Internet packages is that, a lot of the environments are not standardized; you might go to a network with five computers, one is running windows XP, another on Vista and so on.
“The second is licences. A lot of people may not have original Microsoft licences or the software licence of what you are running. When you need to monitor, you also have to check on the issue of licensing to make sure the people actually are running the right licence”, says Senanu.
REGULATORY IMPEDIMENTS
For Telkom Kenya, regulatory impediments top the list.
“Though we commend the recent activity by the regulator CCK in publishing the Fair Competition Act, there are several other recommendations/submissions that we, in conjunction with other operators have tabled which we believe will go a long way to spur growth of the telecommunication sector in this country alongside providing much needed communication services to more Kenyans across the country”, says Ghossein.
Some of these concerns Telkom has raised include the high cost of access fee particularly for the 3G licence.
“We have appealed to CCK for possible reconsideration of the currently applicable 3G licensing fee of US$ 25 million to enable us roll out this technology. We have already undergone 3G trials for the past 6 months awaiting feedback from CCK to determine further roll out plans”.
Notably, Telkom Kenya has made various presentations to CCK directly and at other forums on the need for a clear and concise frequency spectrum policy. This policy would ideally address the pricing mechanism for GSM and microwave frequency spectrum in a manner as to encourage efficient usage of the same.
“We are aware that CCK hired a consultant in 2008 to review the existing pricing methodology and to propose a new charging regime based on international practice. Sadly to date no outcome has been shared with operators in this regard. Frequency is obviously a key element to the success of any Telco and pricing therefore a fundamental issue with a direct impact on Opex and therefore profitability.”
RAMPANT CABLE VANDALISM
Telkom Kenya has also to grapple with rampant cable vandalism. At present,the company experiences close to 40 vandalism incidences monthly, with more than 50 per cent directly affecting major fibre optic lines. Destruction of the company’s copper and fibre optic cables also affects customers who have to endure service interruptions, economic losses and frustration. Given the amount of resources telecommunication companies have put in infrastructure in the last few years, Telkom Kenya is of the opinion that the Government needs to play a more proactive role to stamp out the growing vice through interventions such as provision of security for the infrastructure and amendment to the Communications Act to make vandalism a capital offence equal to economic treason.
In the meantime, to ensure full redundancy for damaged copper cables, Telkom Kenya has established a robust backup system for fixed line customers that enables a redundancy connection either through a CDMA or GSM connection that allows for the forwarding of calls from a fixed line that may be out of service or vandalized to up to four other telephone numbers.The desktops and handsets for the redundancy plan are offered to post-paid customers at no cost and the service comes at no additional call cost to the customer and once the service is restored, calls revert back to the line immediately.
SUBJECT OF GREAT DEBATE
Still, the regulatory environment is a subject of great debate among the operators. Telkom Kenya argues that there is still alot that can be done in the regulatory environment to make it more conducive for Telcos to operate and thrive in the market place. The penetration numbers for both voice and data are still considerably low despite the vast infrastructure and technologies deployed by the various market players.
“The regulator needs to open up the market to ensure fair competition practices by all operators and most importantly protect the consumers by ensuring quality and pricing models adapted by the operators are realistic, accessible by many and sustainable in the long run”,says Ghossein.
According to Soliton’s Abdirahman, the regulatory environment in the country is good but with a large room for improvement.
“Twelve years ago, the major regulatory issues facing the Telecommunications industry in Kenya was to create an open and free environment to do business. The argument then was to liberalize this, liberalize that. This has been sorted out quite well to the credit of the CCK”, says Abdirahman.
He says we now have a market so open, hence at a stage where sophisticated tools and methods of regulation are required.
“The regulator is now up against more powerful forces and greater fluidity in technology. The government still has a large commercial  stake in the industry. The government’s conflict of interest can and does result in unfair practices and create regulatory headaches.”
He adds: “It is also important for the regulator to manage communication so that there is no confusion in the market. An example is this argument about 3G licensing. We do not know what it is, who has it and who does not! The facts might be known to a few but the public remains confused.”
In so far as the regulator in not intrusive – yes the regulatory environment is conducive to doing business. However, Abdirahman says, in some areas such as the contracting side, the enforcement is so poor that you can do pretty much anything you want without a valid licence.
“The regulatory environment in the region is quite similar. I think they are more or less at par. On the side of fibre construction, Kenya, Uganda and Rwanda are miles ahead due to a more open environment regarding the acquisition of rights of way. Tanzania is now quickly sorting out the hurdles.”
UUNET’s Omariba concurs: “The regulatory environment has been  robust and ahead of other countries in the region and indeed the rest of Africa.Take number portability for example, we are way ahead of everyone else. However, the recent regulation specifically on abuse of market dorminance need to be relooked.”
AccessKenya Group’s Senanu shares similar sentiments.
“I believe its favourable, very favourable, apart from the latest issues of monopoly regulations”, says Senanu.
KDN’s Wangombe also echoes similar sentiments. It cannot be gainsaid that the regulatory environment is good and has allowed the setting up of different service providers in the country. There have however been some oversights with there being no distinction between service providers and infrastructure operators.
“If we continue allowing everyone to do everything, then there will come a time when we will have only large operators and kill the small enterprises that want to venture into the space of service provision”, Wangombe argues.
One more challenge that KDN faces is the fact that there is a lot more competition in the infrastructure space and its differentiation can no longer be on the fact that it has infrastructure. The cost of setting up infrastructure is also high and with more players, it is becoming more difficult to get a decent return on investment.
As is the case with Telkom Kenya, UUNET also faces infrastructure vandalism and frequency interference, which affects service delivery.
“We have put in place measures to minimise this but sometimes you will find that both the primary route and the back up are affected at the same time. This causes a real challenge as it sometimes happens when the customer wants to send a document or access an ERP application that is most critical to their business”, says Omariba.
With these challenges, it is little wonder then that the cost of bandwidth remains high despite the landing of the fibre optic cables. While price per Mbps has actually drastically gone down, What is happening is that service providers have lots of bandwidth on their back and they would rather sell more bandwidth than reduce prices.
“Also, one must consider that there are other factors at play in pricing – access networks must be developed, investments in backhaul must also be considered. There will be continuous pressure on prices to reduce  with increased competition from TEAMS and soon EASSy on the ‘blue sea’side”, observes Abdirahman.
According to Wangombe, the prices have dropped significantly.
“From US$ 5,000 per Mbps per month to US$ 350 for the same capacity on fibre we are definitely enjoying some great savings. This figure would even be lower if we as Kenyans were able to adopt the use of ICTs faster by creating more local content.”
But Omariba says most customers took up more capacity in order to do a lot more; the so called triple play or quadruple play. The customer may therefore be paying the same amount but there is a good chance they are taking up four or five times the capacity they had before. Effectively, the cost of bandwidth has reduced.
BROADBAND REVOLUTION
In the final analysis, the region is poised for a broadband revolution, the challenges notwithstanding.Broadband being an enabler of many activities,there is need for more widespread access.
“You will find that the more ubiquitous broadband becomes, the more prices will reduce. This will increase demand, putting further pressure on price”, says Abdirahman.
There will also be increased and growing demand for broadband for at least the next ten years, according to Omariba.
“For the next five years, we expect that the uptake/growth in broadband will be exponential.”
BETTER EFFICIENCIES
Real broadband enables better efficiencies all round and so as the country has already three submarine cables that will be operational by the third quarter of the year it can be a clear pillar that can stimulate further economic growth not only in Kenya but in the region.Sectors such as the banking industry, manufacturing and the BPO sector could thrive increasingly well if this capacity is utilised well.
“Telkom Kenya is already carrying traffic on its fibre optic links to the neighbouring countries of Uganda, Tanzania and Ethiopia among others”, says Ghossein.
According to Senanu, the future of broad band in the region is very bright in terms of applications.
“Right now what’s happening is that as opposed to people buying Internet just for the sake of Internet, people are buying internet to help them leverage their business processes and communication in order to make profit”, says Senanu.
Organisations will also save on travel and accommodation costs as video conferencing will be possible with the availability of bandwidth. E-Govenment will also become a reality, including e-voting.