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Internet bandwidth prices cut to half

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The National Communication Backbone Company (NCBC) has reduced the wholesale prices at which it sells international and national bandwidth capacity to Internet Service Providers (ISP) by half as other international bandwidth providers enter the market, B&FT has gathered.

NCBC, which manages the SAT3 on behalf of Vodafone and the national broadband fibre-optic cable, has since the beginning of this month dropped the US$4,500 price tag at which it sells el (2megabites) to ISPs to US$2,100.

Additionally, the average national bandwidth price has also dropped by about 53% amidst fears the existing carriers may lose customers ahead of the new cables landing in the country.

The reductions follow an announcement by Main One Cable, a new entrant to the international bandwidth market, that it sells the same capacity of el for US$1,050.

The National Communications Authority has licensed 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.

“The real competition and growth is going to be at the customer access point. By the end of September, people should see the current cost of accessing the Internet go down by half.

“Our expectations are that by the last quarter of the year, broadband prices will reduce. However, the rate of reduction is expected to be greater in the long-term.

“The major contributors to this expected fall in price are GlobaCom, which will roll out its data services via their undersea and terrestrial cable and MainOne, which has begun the sale of international capacity to operators. There is also the expansion of terrestrial fibre currently by NCBC, MTN, GLO and some local operators,” said Eric Osiakwan, the Coordinator of Ghana Connect, an advocacy group dedicated to the promotion of affordable broadband Internet access in the country.

Mr. Osiakwan, who was contacted to react to the drop in prices of international bandwidth, is confident the Internet industry holds great promise in the development of the country.

“Ghana’s emerging oil sector should receive a boost if the proposed collaborative offshore broadband project between MTN Ghana and PARD Energy of Norway takes off. The project is expected to be ready in six to nine months time.

“In December, Ghana is expected to be become an oil producing country and such an initiative by the private sector is expected to boost growth in the oil sector as well as the ICT industry. In line with this, the government has started a review of its ICT4D policy to accommodate the broadband policy, digital mapping, cyber security and green ICT,” he said.

The fears, however, is that even as the wholesale prices of both international and national bandwidth drop, ISPs, who provide internet services to homes and offices, will keep their prices still high in an attempt to milk the consumer as cut down prices may not reflect at the retail level.

“Customers must now demand from their ISPs to reduce their prices,” stressed Mr. Osiakwan.

Broadband cost is between US$500 and US$1,000 in Ghana today to the end-user either on a shared or dedicated basis. This does not include the Customer Premise Equipment (CPE), which ranges between US$200 and US$10,000.

And for a country with an estimated per capita income of US$600, broadband access is not affordable to the majority of Ghanaians; besides, PCs costing more than US$1,000 plus taxes, deters many potential users.

The International Telecommunication Union (IRU) last week called for emerging markets to lower their broadband prices, noting that increased broadband penetration will improve a country’s potential competitiveness in the global market. It will also have an impact on health, education and standard of living, the three main indicators in the UNDP Human Development Index (HDI).

Source: B&FT

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