Govt warns Internet providers over prices

The government could introduce price controls for Internet services if providers do not reduce prices, it warned Tuesday.

“The Government is very concerned that the landing of two cables has not had a profound impact on bandwidth costs and by extension on retail Internet prices.

“This explains why the penetration of the Internet still lags behind all other ICT services. If we do not see any changes in the retail prices for the internet, the Government, through the Communications Commission of Kenya, will have to consider introducing price caps for bandwidth,” Information and Communications Assistant minister George Khaniri said.

The Hamisi MP spoke during the Stakeholders Consultative Forum on the Draft Kenya Communications Regulations 2009 at the Kenya School of Monetary Studies.

He was accompanied by Communications Commission of Kenya director-general Charles Njoroge, chairman Philip Okundi, Postmaster General Hussein Ali and director of communications Ezekiel Mutua.

Mr Njoroge said the caps were not meant to control prices as Kenya is a free market nor punish investors but for “guidance.”

The assistant minister said he was concerned that while enhancement of competition has had a remarkable impact on the reduction of tariffs, particularly in the mobile telecommunications sub-sector “the Government still believes that there is still ample room for access charges for ICT services to go down further.”

Mr Khaniri said in the developed world, national and international trade was now done over the Internet and warned that Kenya cannot survive as a country if it does not scale-up its commercial interactions and presence online.

He said the government plans to establish a Universal Service Fund to finance the roll out of services to the undeserved and unserved areas of the country.

“The kitty will benefit the undeserved as well as the licensed operators with respect to underwriting the costs that militate against infrastructure development in rural and other high cost areas,” the minister said.

The Fund, he added, will also be used to finance the creation of local content to promote the utility of the Internet especially in rural areas.

The Fund is also critical in implementation of e-government services to promote efficiency and transparency and free citizens from travelling long distances to access government services.

He said the impending migration to digital TV broadcasting is expected to create 133 additional TV channels in the country which will stimulate substantial demand of local content.

In a speech read on his behalf, Information and Communications permanent secretary Bitange Ndemo said the mobile telephony subsector has grown from 15,000 lines in 1999 to the current 18 million subscribers.

“The population coverage of the signal also spans 80 per cent,” he said.