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@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@gmail.com> wrote:

From: Gakuru Alex <alexgakuru.lists@gmail.com>
Subject: [Skunkworks] Optics Fibre ugly under-belly revealed?
To: "Skunkworks forum" <skunkworks@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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