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The East African : Apr 27th 2015
BANKED POPULATION Kenya tops the list of African countries. Page 42 BUSINESS APRIL 25 - MAY 1, 2015 FAST INTERNET By SCOLA KAMAU Special Correspondent T he pricing of the fourth generation (4G)-enabled phones will keep East Africa’s mass market yearning for fast Internet downloads — at speeds of up to 100 megabits per second (mbps) — that the corporate segments in urban areas will be enjoying with the new technology. The 4G-enabled phones are retailing for between $815 and $978, a price that market analysts say is steep considering that the majority of East Africans make less than $2 per day. “We expect sales to pick up from 2018 as prices come down, and infrastructure reaches closer to the rural areas,” said Barrack Ambiyo, a research analyst at IPDS & Handsets-IDC East Africa. Take the example of Jane Ngare, a vegetable vendor at Nairobi’s City Market who uses Nokia smartphone that cost her Ksh2,000 ($21.36) in 2009. She says she is comfortable with her “cheap phone” as it serves her basic needs of sending and receiving text messages, making and receiving calls, and transacting on the mobile money platform. “I can hardly make any savings at the end of the month after meeting my basic needs, not unless I win a supply tender,” said the mother of three. Sam Gibuchi, a meat vendor at the same market expressed similar sentiments. But manufacturers see a ready market in the region, saying that “4G is the next level of technological advancement that East African countries are rallying to achieve.” “The corporate segment is buying the 4G-enabled phones because they want to spend the least time possible on Internet downloads, thereby cutting down on costs,” said Simon Njogu, business leader Internet and mobile, Samsung East Africa. Samsung recently launched the 4G-enabled S6 and S6 Edge phones in the East African market, which cost $815 and $978 respectively, to compete with Apple’s iPhone6 and iPhone 6 Plus, which cost $1,080 and $1,206 respectively. Microsoft said it is adding the Lumia 640 and Lumia 640 XL to its stable of 4G-enabled devices at the end of the month. The devices cost between $815 and $978, a p≥ice ma≥ket analysts say is steep conside≥ing that the majo≥ity of people make less than $2 pe≥ day According to Lilian Nganda, communications manager at Nokia East Africa, a subsidiary of Microsoft Mobile Oy, technology becomes more and more affordable over time due to demand. “The industry is already talking about 5G by 2018,” said Ms Nganda. “That shows how fast 4G will be rolled out globally and locally to consumers.” While manufacturers are lining up 4G-compatible phones across the region, operators are launching 4G services. Kenya is in the pilot stage of laying out the 4G network, led by Safaricom Ltd and Airtel Kenya. Safaricom said it had registered success in Nairobi and Mombasa since the launch of the trial phase in December, with most areas of both cities covered by the network. “To enjoy the services, users must have 4G- enabled phones and a 4G SIM card,” said Nzioka Waita, Safaricom’s outgoing corporate affairs manager. Rwanda rolled out 4G in October last year through a public-private partnership between the government and Korea Telecom, and plans to cover 95 per cent of Rwandans by 2017. MTN is offering voice and data services in Kampala and Entebbe, with plans to expand the 4G network to other cities. Initially, the target was enterprise and upper-end customers with a premium connectivity service. However, after the industry regulator recently revised the spectrum band — from TDD-time division duplex to FDD-frequency division duplex, which boosts compatibility — the service is usable on a much wider range of devices. In an e-mail, MTN said: “Devices featuring a 5-inch screen and 4G LTE in multiple bands are now available in the region of $100 and we expect the prices will continue to fall.” In Tanzania, Tigo customers in parts of Dar es Salaam can access the high-speed network, with plans to extend it to cover other towns later in the year. FASTER AND MORE STABLE 4G offers more bandwidth and greater speeds for everyday mobile device operations such as messaging, video calling and mobile TV. It follows on from 2G and 3G, but is faster and more stable. This means surfing the web and video streaming on the go, downloading a movie or retrieving app updates are significantly faster when using a 4G network. For example, when video calling, image quality is better on a 4G connection while delays in getting responses are lessened. Surfing the web is at least four times faster than on a 3G connection. Apps will be more efficient, whether Facebook, Twitter, Netflix or YouTube. A 4G connection gives you quicker status updates, picture uploading and page loading. In short, 4G will benefit anyone who uses their phone for anything more than phone calls, texts and taking pictures. 4G-enabled phones here, but EA mass market locked out DAR PORT FACELIFT $600M project to double capacity of the facility Page 45 41 Plans by undersea fibre optic cables to connect rural areas are expected to boost 4G rollout. “In the next year in Kenya alone, Liquid Telecom will invest over $20 million on connecting the 47 counties to fibre optic, satellite and wireless technologies,” said Paul Statham, chief commercial officer at Liquid Telecom Kenya. “We will also look at expanding our geographic coverage through partnerships and acquisitions across Africa.” Overambitious? But experts feel the device manufacturers are overambitious because governments and telecoms are still rolling out infrastructure to enhance 4G across the individual countries. “In the Kenyan market, the commercialisation stage for the frequencies that enable 4G is still far off, and there is no clear model to divide the frequencies; none of the other countries are up to 50 per cent covered,” said Thomas Makau, an information technology and telecoms analyst, adding that it would take at least two years for the 4G-enabled phones to attract a sizeable market. The Communications Authority of Kenya has, however, said it is in the final stages of formulating policy that will guide the allocation of some 700-800 Megahertz frequencies to telecoms, with Safaricom enjoying the biggest chunk. “Safaricom is the only operator utilising the 800 Mhz frequencies in the trial stage, but it will share at least 30 per cent of the frequencies with the other operators in the commercial stage,” said CA director general, Francis Wangusi. Safaricom is already selling 4G-enhanced devices and the trial stage is registering success ahead of the commercialisation of the technology in June. When the operator started 4G trials in December last year, there were claims of unfairness by other operators. Experts said that any allocation that is not transparent and does not give equal opportunity to operators would not be considered fair. “Any unfair process can be challenged through the Communications Appeals Tribunal or the courts,” said Francis Kariuki of the Competition Authority of Kenya (CAK). International Finance Corporation will play an advisory role to CA and CAK in developing a pro-competition framework.
Apr 19th 2015
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