[Skunkworks] Optics Fibre ugly under-belly revealed?

Isaac Ochieng iochieng at gmail.com
Thu Jul 23 06:21:20 EAT 2009


If you check out AK's financial results, about 50% of the sales price goes
into their admin costs and profits. In an improbable scenario where their
cost of sales (the other 50%)consisted only the international bandwidth,
sales price could therefore only drop about 50%. But guessing that
maintaining their local loop contributes about 50% of their cost of sales,
you're talking of just about 25% reduction on the price you pay. The drop in
cost of international bandwidth will therefore, alone, not contribute to
massive lowering of prices. Unless the ISPs are thinking of a more
mass-market, low cost solution.

But if CCK figures are to go by - latest sector reports indicates there's
only 16,000 internet customers in the country with a *decline* of about 3%
in the past year - it's eons before broadband internet becomes a mass-market
product. Unless some ISP believes such a potential exists and creates a
novel business strategy to tap into that potential ..

And there's also massive headwinds. Like computer penetration. At around
500k computers in the country, perhaps 80% in the hands of companies and
cybers and perhaps only 80% of the remainder in Nairobi (residential),
you're only talking of about 80k potential home-users. And this, perhaps,
is not a great motivation for rethinking their business models.

Isaac.


On 7/22/09, wesley kiriinya <kiriinya2000 at yahoo.com> wrote:
>
>   *sigh*
>
> Anyway if the rest of E.A countries significantly reduce bandwidth (even
> mayb coz of gvmnt insisting), guess where I might b skunkin from...
>
> 8~(
>
>
>
> --- On *Wed, 7/22/09, Gakuru Alex <alexgakuru.lists at gmail.com>* wrote:
>
>
> From: Gakuru Alex <alexgakuru.lists at gmail.com>
> Subject: [Skunkworks] Optics Fibre ugly under-belly revealed?
> To: "Skunkworks forum" <skunkworks at lists.my.co.ke>
> Date: Wednesday, July 22, 2009, 7:05 PM
>
> Hold your speeds horses... a disturbing paragraph on today's Business
> Daily.
>
> '...warned end users not to expect a massive price cuts but anticipate
> faster internet connection and bigger bandwidth capacity at current
> costs or slightly lower...satellite connectivity that charges them
> Sh399, 360 ($5,000) per megabyte per month, but this is expected to be
> reduced to Sh15,974 ($ 200) for the same capacity'
>
>
> http://www.businessdailyafrica.com/-/539552/627720/-/item/2/-/goopo/-/index.html
>
> What's got into them?
>
> Reminded me of an old email (24 October, 2006) from  'prophetic' ( and
> very angry) consumer read, in part,
>
> "..there will be no such thing as cheaper technology in Kenya
> (everything new seems to cost more than the last piece of technology
> we had…) "
>
> Watchfully,,,
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