SEACOM: Connecting Africa To The World
So, it looks like this under-sea cable is finally going to get to Kenya and people are excited about it. According to the SEACOM site, it will own 65% of the company while a local partner (who might that be?) will own 35% of the company. Everyone thinks this cable line is going to drastically drop internet costs in Kenya, but I’m not so sure about that.
It took years for internet charges to go down in America and even today, your discount only comes if you sign up for a package that includes high speed broadband, cable tv and phone service — what their calling a “bundle” service. For this service, you’ll pay about $150 dollars a month (with everything included). The company that introduced this discounted bundle service has been acccused of giving away a Ferrari for the price of Toyota: In other words, they spent millions to get their technology up and people are still not sure if they’ll make all their money back.
Essentially, my point is, the owners of SEACOM (whoever they are) are not doing this for charity. They are doing it for profit and if only a few people sign up for this service, their prices are not going to go down.
The other point I want to make is that in my own personal use of the internet (as a business medium) is that the people who make money with it, fall into certain categories, namely:
So, I’m just curious as to why people think this cable line is going to produce miracle business opportunities in a country that still doesn’t have all of it’s infrastructure in place (e.g. an honest mail system, quality software engineers, an open & fair economy, respect for people’s inventions, etc, etc, ).
Who owns the local 35% of SEACOM anyway? and are they going to allow fair competition to take place? Everyone keeps saying that now we’ll be able to compete with India, but in the 1990s, when India started liberalizing its economy, it did three things: it cut taxes, liberalized trade, and deregulated business. It became much easier to start a business and people were allowed to compete fairly.
I’m not skeptical about the competence of the Kenyans themselves, I’m skeptical about the government because I can see them interfering with everything and just scuttling the creativity and innovation of young people. If those ministers start seeing people making money, they’ll bring them down.
Your thoughts……
KE,
Its a good Investment but obviously its a little late. The west and many other countries are the main beneficiaries to this set up.
With the state Kenya is right now, its a welcome move. Domestic beneficiaries will be established local companies and The IT Industry.
It will also open up Kenya to the rest of the world. I mean Kenya is going to improve …. But its going to take ages to build a solid Middle class there.
You see KE… Every developed country has a solid middle class. The government needs to make serious moves in reducing Inflation cutting taxes and improving overall Infrastructure.
I see opportunities there. I see improvement but I still don’t have faith in Kenyan Institutions, a lot more needs to be done to gain Investor confidence.
With broad band available- I don’t think the government should have any excuse in disseminating all the required information to the Kenyan people via web. I’m still looking for that report by UN special rapporteur on human rights, Professor Philip Alston and I can’t find it on the web.
Instead of Keeping people in the dark… The government needs to clearly say what it can do and what it cannot do and admit mistakes…. This is how we can all participate in helping improve Kenya.
“honest mail system, quality software engineers, an open & fair economy, respect for people’s inventions, etc, etc, )”
mail system? Who cares about snail mail… it is as bad as it gets… but e-mail will cut out mail. Heck, you can get your electricity bill by sms and soon pay by Zap or M-Pesa. KPLC will cut down on mailing bills.
Same for annual reports.
Kenya has quality software engineers. Or do what USA does… import them. And life goes on. The USA did not suffer from the imports esp India, Russia, Phillipines.
Open & fair economy: The internet helps broaden minds and ideas. Research is much easier. Connections are formed. All this helps bring down the current barriers.
“your discount only comes if you sign up for a package that includes high speed broadband, cable tv and phone service — what their calling a “bundle” service. For this service, you’ll pay about $150 dollars a month (with everything included). The company that introduced this discounted bundle service has been acccused of giving away a Ferrari for the price of Toyota:”
I do not necessary agree with your statement. Zuku is already offering the bundle service in Kenya for about 4500 KES. Thats less than 100 dollars.
I think this seacom will reduce the prices not because it is unique but because of competition (Zain, Safaricom, Telkom, Swiftglobal, IwayAfrica, AccessKenya etc are all competing and this competition has brought prices down significantly.
I remember I used to pay $45 for cable, telephone and internet in ATL…I think we can get close to that price in a few years.
I don’t know why I said “cutting taxes”… I guess i’ve been following the cable tv too much.
I meant “broaden their tax base”.
coldtusker:
When I talk about having an honest and mail system, I’m not talking about email. I’m talking about being able to deliver goods that were purchased on-line. So, for example, if I purchase something from Amazon.com, I am assured that:
1) My transaction will be completed in an honest way (i.e. amazon won’t overcharge me)
2) I will receive my items within 3 days because of the efficient and honest postal service.
These things are essential for ecommerce sites. It’s not about email.
Also, on importing engineers: how many people around the world would consider moving to Kenya? seriously. America can import workers because everyone in the world wants to come to their country( even with the recession, people would grab the chance to live in america). Not so for kenya. Engineers are not NGO workers
If you are into innovation, they’re only a few cities in the world, where you should really be;
First Tier:
San Francisco’s silicon valley
Boston
new york city
Second Tier (maybe):
Singapore City
Beijing
Bangalore
Nairobi is not where you’d relocate to.
Empower Kenya:
The bundle service I was talking about wasn’t just about the savings. It’s verizon’s fios service, which they claim, is using much better technology and which cost them millions of dollars to implement and which they are hoping to make a profit from down the line. So, the point was that they invested millions of dollars into this technology and it’s something that happened recently. This is still new, even here.
the bank raiders did relocate to sierra leone, climate good, living cheap, long way from police, downside can’t wnjoy the money plundered.
SEACOM to launch Africa undersea cable June 2009 August 15, 2008
Posted by ismailimail in Africa, Fund for Economic Development.
trackback
Mauritius-registered private equity venture SEACOM said on Thursday a fibre optic undersea cable linking east Africa to Europe and Asia would be launched in June 2009, in time for the 2010 soccer World Cup.
SEACOM said last year investors in the venture included an arm of the Aga Khan Fund for Economic Development, Venfin Ltd. and Herakles Telecom LLC, each with a 25 percent stake, and Convergence Partners with a 12.5 percent shareholding.
http://www.guardian.co.uk/foot.....le/7724932
KE,
Your mind is so rigid you see other cultures through the narrow teleescope of your own culture. You’re the kind of person who thinks, “if he doesnt speak my language he’s probably dumb” or “if they dont do it like they do it in America then it wont work”.
Who says an efficient mail system is a showstopper for ecommerce. How did Mamamikes go round that even without Fibre optics?
Open up your mind!
Also the blanket condemnation of African businesses is sickening to say the least. You suggest that they are not as honest as western businesses.. yet the media is currently full of stories of western thieves who robbed their fellow citizens with ponzi schemes, predatory mortgages etc…
Why not remove the big chunk of rotten wood in your eye before you look at the speck of dust in Africa’s eye?
Just an observation about the innovation, depends on the innovation. If it is software in the U.S, then I am sorry New York is not it. New York is only if you are into financial services software, (maybe). Try Austin, Texas, Charlotte NC.
Austin, Texas, Charlotte (actually the research triangle) is choke full of people doing interesting technical/business challenges, AND a big AND, if it does not work out, you dust yourself off, go to the next venture and bring a “lessons learned” expertise to the table. Infact, a company failure does not count against execs, if they can admit what went wrong, or even against engineers.
Nairobi, could draw diaspora Africans. I am old enough to remember when the idea of Bangalore came about in company meetings people would suppress laughter. I think that was a good thing, gave the companies in Bangalore time to refine their product offerings under the radar.
If we had an involved leadership in Kenya, they would focus on education, education, education. Improve the number of students choosing the sciences in Kenya, and then focus on developing and strengthening engineering depts in Kenya.
KE: I misunderstood your ‘mail’ comment. You are right BUT this is where innovation comes in – if the GoK does not interfere.
There are multitudes of small errand runners – future Kenyan UPS – in Kenya esp Nairobi. Let’s admit that – for now – Nairobi & Mombasa will provide the bulk of e-business. If the Amazon of nairobi hooks up with a reliable carrier then it could work.
Even with a relatively efficient US Postal Service, UPS & Fedex grew from strength to strength. I expect the same in Kenya in a few years.
Who comes to Kenya?
There are lots of Indians & Chinese – maybe not all are in IT & some are here illegally but I am sure the right package will attract the best & brightest. Kenya has high-paid European & American expats. Pay the Indian IT guy and he will relocate!
Michael Joseph (Safaricom) is American, Segman of Kenol is Israeli, KQ’s COO (among other management folks) are European, Bill Lay (GM) is American, Citibank’s CEO is a Nigerian, Adan (Barclays) & Mahinda (EABL) are Kenyan but get paid on an ‘international’ scale.
Why do they come here? The money & challenge… so Kenya can attract the best & brightest… Show me the money!
http://www.terabitconsulting.c.....loads.html
Simple Math, KE, will show you that indeed Internet will become cheaper after the cable lands. Why so? Kenya currently accesses the Internet via Satellite. What does it take to get a satellite into place? Rockets and space engineering. How many countries are capable of launching a satellite? Very few countries. What does this mean? Some kind of monopoly by the owners of the satellites. Moreover, the satellites have little bandwidth which makes the little bandwidth available expensive due to a scramble for the same. He who pays the biggest, gets the best. Come in fiber, if you ever did computers and learnt about the mediums of communication, you should know that fiber consists of tiny strands of glass cable which relay data through streams of light which makes it fast and also allows the single strand to relay alot of content. How many institutions can lay down fiber? numerous, brings in competition and drives down cost.
Even without doing all this analysis, just compare the cost of Internet in Asian countries which are at about the same distance from Europe as African countries. The cost of Internet in these countries is like 0.01 the cost of what we currently pay in Kenya and all because of fiber. Now I don’t think it can come any black and white more than that. The infrastructure will drive down the cost of access, the cost of content will come later and that doesn’t necessarily have any connection with the cost of access.
finally matandao umefika ,its been a long time kamin .Now kenyans can join the rest of the civilisation it terms of affordable and speedy broadband.