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Tag: 3g

Snapshot: Mobile Data Costs in East Africa

IMG_0073I get asked a lot about mobile data costs in East Africa, so thought I would put it in writing for everyone to find easier.

Mobile data access charges have fallen drastically in the last several years in East Africa, in large part to the SEACOM undersea cable arriving and increased competition between operators. Data connectivity is the new battleground, fighting not just amongst mobile competitors, but also with traditional ISPs.

In the mobile data connectivity space, each country sells either data capped bundles (or time capped bundles in the case of Uganda) that can be loaded onto a SIM card. There are out of bundle charges, priced per Megabyte or Kilobyte, but these rates are exorbitant, so anyone who connects regularly uses a bundle of some sort.

More creative offerings come out each month by the mobile operators, making it more confusing and harder to compare against competing services, but also offering some incredibly low pricing for entry-level users, or consumers who don’t need high speeds.

No doubt, a downward trend of mobile data charges will spur the growth of mobile web usage and publisher forwards.

Kenya
In Kenya, from charging internet usage at 10 shillings a minute just a few years ago, now cyber cafes charge 1 shilling a minute for browsing. The use of mobile data has been made easier by increasingly cheaper rates. For example in Kenya, Safaricom are offering a limited 10MB worth of mobile internet usage at 8 shillings per day. Zain Kenya offers unlimited internet usage for 3,000 shillings per month. Orange Kenya on the other hand are having a 7-day unlimited offer for their 3G network at 1000 shillings.

Uganda
In Uganda costs for mobile data connectivity have been driven down by the SEACOM cable landing in 2009, and led by costs cutting by Orange. Orange was first to the market with cheap, affordable 3G service and has played a major role in driving market prices down. They were the first to institute 5,000Ush/day & 25,000Ush/week packages for Internet – finally making it accessible to the common man. MTN, the larger network in Uganda,

Tanzania
Tanzania boasts some of the most unreliable data networks with the least penetration within East Africa. Zain and Vodacom both offer 3g, while Tigo offers GPRS. Zantel and Sasatel are CDMA networks, with EVDO connectivity. All networks, no matter what the speed of the connection, charge a flat rate of 40,000Tsh for 1gb of data. Data prices have gone down, but not noticeably.

While not possible to do an apples-to-apples comparison of the rates between the three countries, here is a pricing comparison chart for 3g data on 1Gb bundles and 1Mb pay as you go costs for the leading operator in each country:

Kenya
(Safaricom)
Tanzania
(Vodacom)
Uganda
(MTN)
1Gb of 3g data
(bundle)
2500 Ksh 40,000 Tsh 49,000 Ush
USD equivalent 1Gb of 3g data
(bundle)
$30.90 $26.56 $21.63
1Mb of 3g data
(Pay as you go)
8 Ksh 120 Tsh 900 Ush
USD equivalent 1Mb of 3g data
(Pay as you go)
$0.10 $0.08 $0.40

As is true in this hyper competitive market, these numbers will change (hell, I’m probably already off on something). The overriding trend is that the costs are going down for consumers, even if slower than we’d all like to see.

[Picture courtesy of Stefan Magdalinski]

Broadband in Africa Report

Russell Southwood’s Balancing-Act newsletter is one of the best sources for internet and mobile statistics and reports in Africa. If you don’t read it, you should. If you run any type of mobile, web, or ISP-type company in Africa and you can afford it, then you should be buying the reports. Here are some excerpts from the recent one on Broadband Markets in Africa with some opinions thrown in by me.

Every country needs a price wiki

“Confusing range of pricing structures: Different pricing structures are applied to different delivery technologies (DSL, CDMA, WiMax, GPRS, EDGE, 3G, etc) and this makes “like-for-like” comparisons across all African countries an almost impossible task.”

No matter where you go in Africa there is no easy way to find out what types of broadband connections are available. There would be nothing more useful than a wiki-like tool that people could add to and compare against. A place where people who use these tools can put up their experiences and let others know about the “true” bandwidth provided by companies. This is especially true for residential customers.

Geographic broadband penetration

In the world’s most developed OECD countries, 61% of subscribers got their broadband through DSL services by 2007, 29% through Cable TV (CATV), and 8% through Fibre LAN connections. Just 2% of subscribers – some 3.455 million – subscribed to broadband through ‘other’ fixed wireless broadband services. In Africa, some 59% of broadband subscribers use DSL, just 1% use CATV, and the remaining 40% use wireless broadband.

Broadband to OECD countries in Africa by type

By December 2007 terrestrial broadband networks were now available in every capital city in Africa, some 50% of main cities, 10% of secondary cities and 2% of towns.

Traditional media is still king

Users in the more developed broadband markets make the Internet a modest supplement to a diet composed mainly of radio and television. As South African media owner Prakash Desai, CEO, Johnnic has pointed out in October 2007:”99.9% of revenues are offline. The Internet doesn’t feature.”

As elsewhere, the Internet in Africa has a symbiotic relationship with other media, particularly television. After a controversial scene in the second series of Big Brother, there were five million downloads of that scene. Ninety per cent of those downloads came from within Africa and of those 33% were from South Africa and 37% from Nigeria and Uganda. Similar response rates on SMS voting and competitions shows that this will be fertile ground for broadband content development as the subscriber numbers increases.

Mobile providers hold the high ground

On a continent that has a wide variation in the amount of internet access available when moving from urban to rural settings, the hand tips to those that have lower costs in rolling out infrastructure. Land lines, cable and fibre all cost a great deal to deploy. Mobile phone carriers have the ability to do so at a lower cost through towers. It’s a node vs line problem.

The key battle ground in the next five years will be between 3G services (or higher) offered by GSM and CDMA operators and fixed wireless broadband services. The outcome of this battle will shape the broadband experience in Africa, whether customers use mobiles as Internet access devices. …Mobile operators launching 3G networks are offering access speeds which compete with the broadband wireless services.

When that access is just as fast as land lines, then there’s no reason at all to stick with an internet solution that forces you to stay in one place.

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