Thursday, January 07, 2010

Kenya - Satellites still popular despite arrival of undersea cables

[business daily] The number of new contracts signed for satellite connectivity continue to grow despite the arrival of the undersea fibre optic cable last year, indicating that pricing may remain stagnant as sector players continue to enjoy dual connectivity.

The recent signing of a second long term contract between satellite provider ASTRA2Connect and service distributor Intersat Africa, is the latest in a string of deals that aim to strengthen Kenya's dependence on satellite connectivity.

It was envisaged that the arrival of fibre would lead to a ten-fold drop in the price of communications and kick off a weaning process that would see less dependence on satellite connectivity."There are many regions where a reliable terrestrial broadband network is not affordable, or is absent. Satellite technology is therefore an ideal solution for all households without access to other networks," said Norbert Willems, Managing Director of ASTRA Broadband Services.

Anticipated demand

Industry sources say Kenya will need to maintain its satellite connectivity for the next five years if it is to meet anticipated demand for internet services.

The development goes against the conventional wisdom in the internet sector, where players have indicated they intend to turn to full dependence on undersea fibre connectivity within the same period.

But analysts say it could also translate to more costs being passed down to consumers, who have been anxiously awaiting for a reprieve in high internet pricing linked to satellite connections.

Another satellite firm, Avanti Communications, has announced plans to launch an entire satellite system in the next two years that will target Kenya.

The company held a board meeting yesterday to approve the placement of 21,500,000 new ordinary shares to raise £86 million to fund the procurement, launch and operation of a satellite system, called HYLAS 2.

Avanti sells satellite broadband services to telecoms companies which use them to supply homes and businesses. Avanti's first satellite, called HYLAS 1 is under construction for launch in the second quarter of 2010 and will be the first superfast broadband satellite launched in Europe.

Kenya: Satellites Still Popular Despite Fibre Arrival

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