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Internet caf? operators will not pass low fibre capacity prices to users soon PDF Print E-mail
By Bernard Busuulwa              
 
Local Internet cafe operators are still sceptical about the impact high speed broadband will have on the cyber café business now that bandwidth capacity is available by cables like SEACOM, one of three undersea fibre optic cables coming to East Africa.
 
Internet café owners and operators however like Internet Service Providers (ISPs) say even with cheap fibre they would not cut user fees but double capacity for faster speeds.
 
“ At the moment, it is hard to increase my charges from Ush20 per minute to Ush30 per minute because my clients are mainly low income earners,” said Tony Mukwasi, an Internet café manager at Kireka, a Kampala suburb.
 
“I hope to utilize the benefits of reduced costs of fibre capacity by acquiring more to boost Internet speeds other than cutting user costs.”  Moses Katurunga of Click Café at Uganda House said there is need to spend more money on installation of fibre in wireless Internet cafes. Café owners are also worried about potential damage to such networks caused by routine civil works.
 
“It might take at least 3 months of testing the new fibre optic Internet connections before we consider reducing our prices,” said Katurunga.
 
A cross section of internet café managers that spoke to the I-network newsletter recently claim minimum charges for connection to SEACOM through Infocom (who hold the point of presence tenancy agreement) are apparently very high and might not be affordable for most of them.
 
This many said is as a result of limited working capital, low income clients and a lack of access to credit or indeed access is limited by the high interest rates on loans and the short repayment schedules.
 
The majority of Internet owners are small investors and operate in low-income areas that hinder the ability of such businesses to raise prices whenever need arises. Though the move away from satellite connectivity by Internet service providers (ISPs) to fibre optics is widely expected to slash costs of Internet connectivity up to 90 percent, the trickledown effect in terms of reduced prices for users is likely to take longer because of cost recovery pressures among investors and internal market constraints.
 
As a result, some investors claim that costs might initially go down by only 20-30 percent. Internet café operators on the other hand claim that current costs of preferred satellite bandwidth is already prohibitive and those of fibre optic access are said to be similarly high.
 
The other challenge for cafes outside Kampala is the inferior connectivity attributed to crowded structures and disruptive trees that usually interfere with wireless connections. Though local ISPs are already testing the new fibre optic links, user charges are yet to be determined but indications are that their fees might be out of reach for many Internet café owners.

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