The entry of two international bandwidth providers has pushed the cost of Internet access in the country significantly downwards, which has resulted in enhanced internet-user experience, B&FT has gathered.

 

 

The price at which people access the Internet now have also dropped considerably on the back of a reduction in the wholesale prices of international bandwidths while at the same time capacity has improved by about 65 times.

About 18 months ago Internet Service Providers (ISPs) bought e1 bandwidth for US$4,500 but now buy the same bandwidth capacity at less than US$1,000, which Internet providers expect to further fall as competition from other carriers such the West Africa Cable System (WACS) is expected to be operational and available for use this year.

The situation has excited Internet providers who have expressed satisfaction at the impact the entry of additional international bandwidth providers have had on the cost of Internet access in the country.

Overseers of two of the country’s biggest Internet service providers, Busy Internet and IS Internet Solutions Ghana, explained in separate interviews to the B&FT on Friday that new entrants Main One Cable and Glo have helped to boost a surge in the capacity requirements and usage of clients due to bandwidth availability and reduced latencies, including an uptake in cloud computing.

“Due to the emergence of these multiple undersea cable systems, we now have the ability to provide multiple redundancies on international links which hitherto was non- existent due to the nation’s reliance on just the SAT-3 capacity,” said Yvette Adounvo Atekpe, Regional Managing Director of IS Internet Solutions Ghana Limited.

“The new bandwidths that have come into the country have created additional capacity and it has given options and redundancy to end-users and service providers,” added Praveen Sadalage, CEO of Busy Internet Ghana.

Some Internet users argue that the drop in the wholesale price at which the ISPs buy international bandwidth has not reflected in the retail price for end-users.

According to the ISPs, though the retail price of Internet access has not gone down in comparison to the percentage decline in wholesale price, Internet users are now having improved experience from Internet usage and more value for their money.

“The reduction in wholesale pricing has affected the retail pricing of Internet services to a considerable extent. Though prices have reduced, it is not as low as previously touted or expected due to the lack of adequate or extensive last-mile infrastructure in-country to link the capacity to the client site.

“Service providers therefore have to incur additional excessive costs to provision last-mile infrastructure via fibre or wireless to enable clients’ access,” explained Mrs. Atekpe.

Mr. Sadalage added: “Yes, prices have dropped and also users are getting increased capacity in the same price category. The important point to note is that while capacity prices have dropped, other costs have gone up significantly. This has a bearing on the final price to customers.

“Internet-user numbers have increased significantly in the last year and are expected to be increasing in the coming years as more and more business and services go online. A lot needs to be done to increase the user numbers further to reach a critical mass for real price drops to be felt at the end user level.

“The biggest hurdle for Internet penetration is end-user devices like PCs and laptops, which even today cost more than GH¢500 in Ghana. If this can be brought down to say GH¢200-250, the demand for connectivity will increase and the end-user connectivity price can come down significantly.”

The National Communications Authority licenced Nigerian-based Main One Cable and Glo as well as West-Africa Cable Systems to bring competition to the international bandwidth market, which has over the years been monopolised by Vodafone’s SAT3.

For ISPs, the coming of the other fibre-optic cable operators is very timely as it falls within the realm of the Ghana Broadband Strategy document which seeks to reduce broadband cost by 80 percent and also help the government to realise its dream of making Internet access available to about 50 percent of the estimated 23 million Ghanaian population over the next five years.

The drop in wholesale prices reflects projections by industry analysts that the price in international bandwidth and broadband cost will keep dropping to a level that will be cheap enough for all Ghanaians to access the Internet at high-speed.

Eric Osiakwan, the Coordinator of Ghana Connect — an advocacy group dedicated to the promotion of affordable broadband Internet access in the country — told the B&FT that competition among the international bandwidth providers will bring the cost of Internet access down to an internationally acceptable level.

“They have generated competition at the beach which has dropped prices significantly to about US$1,000 a month.

“We expect this price to fall further to about US$200 by the end of the year like in East Africa,” he said.

Mr. Osiakwan re-echoed the position of the ISPs that customers are getting more capacity for the same prices in some cases, even though the terrestrial fibre to reach the customer is limited, adding: “Hopefully that should also change this year, and so those prices will also go down.”

 


By Evans Boah-Mensah

 

Source: B&FT

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