Kenya and Tanzania are to get high-speed fibre-to-the-home connections offering a triple-play bundle of broadband, telephony and cable television thanks to a US$200m investment from the private sector.
The company behind the project, Wananchi — which is backed by Cisco Capital and East Africa Capital Partners — says it would love to do the same in SA, but the regulatory environment here precludes it from doing so.
The company enjoys the backing of Kenya Data Networks founder Richard Bell and Mark Schneider, the founder of US-based Liberty Global, an $8,7bn-revenue triple-play service provider.
Wananchi is extending a backhaul and last-mile fibre network across Nairobi and Mombasa in Kenya and Dar es Salaam in Tanzania. It’s also building a WiMax wireless network in to provide uncapped Internet access in the cities and smaller urban centres in Kenya.
The cost of the services, marketed under the Zuku brand, start at about R137/month for an uncapped, 256kbit/s Internet service. The top-end package costs about R500/month and offers an uncapped 1Mbit/s service and more than 100 English-language television channels.
Wananchi is also partnering with a local television production house to develop programming specific to the Kenyan market.
Scheinder, who chairs Wananchi’s board, says the company expect to have an annual operating income of between $150m and $200m within the next five to six years.
He says the company is supplementing its WiMax and fibre offerings with Vsat (satellite) services for small and medium businesses, especially those in remote locations in East Africa. But the plan, eventually, is to take fibre to even the small towns in the region.
Wananchi’s investment comes on the back of three new submarine cable systems that have been deployed in the region in the past year.
Wananchi and Cisco executives say the cost of international bandwidth in the region — thanks to Eassy, Seacom and Teams — is now as cheap as it is anywhere in the world. This is driving big investment in telecommunications infrastructure and services.
“It’s Africa’s turn to get this type of technology,” says Schneider. “The wireless business has become a powerful driver but there are lots of things it can’t do that we want to bring to Africa [like] video entertainment, [which] needs very high-speed broadband connectivity.”
He says Wananchi plans to offer residential consumers in Kenya access speeds of up to 150Mbit/s over time. Businesses will be offered even higher-speed connections. “We will reach hundreds of thousands of homes in Kenya with fibre.”
The company says it is keen to develop a network in SA, too, but East Africa Capital Partners’ Bell says the problem is “SA is still a very closed and regulated market”.
“East Africa has leapfrogged ahead of SA,” Bell says. “If we could get a licence to build a cable network in SA, we’d be there in a second.” — Duncan McLeod, TechCentral