Africa Business Featured News

Internet Price Wars Loom as Capacity Becomes Idle


More than two-thirds of Kenya’s internet supply remained idle in the quarter to March, laying ground for vicious price wars as more firms stepped up investment to add their capacities.

The latest data by the Communications Authority of Kenya (CA) shows that between January 1 and March 31, the country only used 3,386.19 billion bits per second (Gbps) of internet bandwidth out of the total available capacity of 10,891.65 Gbps —indicating an oversupply that is likely to trigger price competition among service providers.

This leaves unutilised bandwidth within the country at 7,505.46 Gbps, even as organisations, including multinationals, local firms, and some state firms scramble for the internet market, deploying more internet infrastructure.

“During the review period, leased/available international internet bandwidth remained unchanged whereas bandwidth capacity utilised within the country increased by 15.2 percent to stand at 3,386.19 Gbps,” the CA report stated.

Undersea bandwidth

The report showed that between January and March, undersea bandwidth capacity sold in Kenya was 3,383.3 Gbps while that sold in other countries was 1,875.82 Gbps, with 2.89 Gbps satellite internet capacity sold overall.

This was a growth from the 2,938.61 Gbps undersea bandwidth capacity sold in Kenya between October and December 2021 and 1,875.82 Gbps sold in other countries during the same period.

The low sales are, however, against heavy investments made by organisations, including multinationals such as Airtel, Google, and Facebook which committed hundreds of billions last year, to lay down internet infrastructure across Africa, with Kenya being a key target.

An infrastructure oversupply could lead to price wars among investors in the sector that could reduce internet prices in the country, something the multinationals had foreseen.

“These investments will support the continent’s digital transformation in enabling affordable access and building products for every African user, helping businesses with their digital transformation, investing in entrepreneurs to spur next-generation technologies and supporting non-profits working to improve lives across Africa,” Google and Alphabet CEO Sundra Pichai said last year.

So far, cables multinationals and other companies invested to benefit Kenya include a 15,000-kilometre submarine cable in Mombasa landed by Telkom Kenya and Pakistan and East Africa Connecting Europe (Peace) Cable Company in March, connecting Africa, Asia, and Europe.


Source : Nation