Continue the great work. Your buddy here from New York City

Chifu

The US has gone through all the issues from monopoly to duopolies to a relatively competitive telecoms market while African countries for the most part are just getting started when it comes to infrastructure.

Either way the returns have to be there to justify the investment whether it is in the US or in Africa.

In terms of bandwidth beyond returns it might be a good idea to change the ownership structure of the fibre cables. Cables like SAT-3 are highly priced not only because of the ROI built into them but also because of monopoly ownership.

Reducing prices may be achieved by requiring monopoly owners to resell bandwidth competitively to service providers. But it has to be determined whether prices are higher than they should be in the absence of regulation and with investment returns taken into account.

About Kenya’s link with the UAE. I think EASSY, SAT-3 are good initiatives from the standpoint of providing access for the continent as a WHOLE. I think they would make intra-African communications cheaper in the LONG RUN not just for Kenya but for other countries on the East African coast and the interior. I think that they would help African telcos get into the game of MANAGING international network infrastructure instead of just outsourcing it to an external party. These objectives should be kept in mind over and above the debates over access.

But the emphasis should not be on access models at the start but getting the infrastructure built first and foremost.

Access is a secondary issue for regulators to deal with and SAT-3 is where the focus should be placed to explore alternative ways of bringing down prices whether its through bringing in new longer-term capital or competition or what not.

Thank you very much for taking the time to answer all the questions that I posted up here and sharing some of the work that you are doing with us. You have given me lots of stuff to think about.

thanks,
- Steve

I may be wrong but….

I re-read my comments and now see the ambiguity in my last post: when I talked about “vaporware”, I was talking about KDN’s proposed link, not EASSy.

EASSy can and will have a $125/mbps/month price point but that would be under the “Open Access/Common Good” model that you are proposing , not a commercial one. On the other hand, it now seems to me that KDN cannot price at $150/mbps/month with making significant losses. Even US educational institutions which have the best rates possible (aside from wholesale buyers like search engine services and consumers in Far East nations like Korea) are only just able to get this type of pricing.

The question I was really asking is if you think that the KDN proposal is realistic giving the economies of supplying bandwidth in Africa.

- Steve

2. I told you of the EARPTO crossboarder link which essentially means they are going to link a regional carrier to connect one country’s traffic to the other. Until the regulatory policy framework allows’s that the ISPs and operators can operate illegally.

3. Very very cheap communication even in the rural areas.

Thanks for clearing up many issues and questions (some of which I had not even gotten to posting) in your reply. I like many of the ideas that you have passed across including the concept of “public common good”, the building of a continental hybrid network and the need/how-tos of raising private funding for African communications infrastructure projects.

Some more quick questions that bear asking while I think about your last round of comments if I may. You will note that my outlook on all of this is so East-African centric as to seem myopic: please forgive me for that.

1. On the issue of KDN’s announcement of a plan to build a competing link to Oman. Looking at the financials for EASSy, this proposed link more and more begins to look like “vaporware” at the $150/mbps/month pricing they claim to be aiming at (0.14 US$/kbps which is pretty much what academics are paying the US according to your slides). I cannot figure out how it would be possible to price at this point and still have a commercially viable project.

What are your thoughts (if any) on this?

2. Switching of intra-African telecomm traffic – this is currently an $500 sinkhole on African resources which makes EASSy and the rest of the projects that you listed in the pipeline commercially appealing even without a link to the rest of the internet backbone. Bearing this in mind, why isn’t more progress being made on this interconnectivity front on a smaller private level by ISPs and telcos with gateway licensing?

3. What do you think that the future of VoIP is in Africa in the short term (