Monday, June 2, 2014

Despite low uptake of 3G internet, mobile companies want to roll out 4G

By JOHN WALUBENGO
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At the turn of the century, Safaricom and what was then Kencell brought us mobile technology that allowed us to communicate in more convenient ways than what fixed-line telephones were capable of.

The national fixed telephone network had grown since independence, but got stuck at just about 200, 000 lines for the then 30 million Kenyans at the turn of the millennium.

However, thanks to mobile networks, Kenyans have reached 30 million lines in just 15 years, and the number is still growing. Mobile operators are providing necessary connectivity over the second generation (2G) and third generation (3G) mobile technologies in selected urban areas.

Notwithstanding, even before the 3G signal is widely deployed across the country, mobile operators are gearing up to launch fourth generation (4G) mobile networks.

Even without knowing the technical differences between all these technologies, it is obvious to the consumer that the higher the number, the better the technology; better in terms of speed, reliability and quality. At first glance, that should be a good thing for us all, but is it really?

It is true that as a country we cannot afford to be left behind. Sometimes, however, we must ask ourselves a few questions about this technological rat-race, to be the “first to deploy”.  The first question would be: why do we need 4G when we are barely maximizing the use of 3G technology? 

Yes, 4G technologies can theoretically give users internet broadband speeds that range between 10-100mbs while 3G tends to get capped at 2mbs. But how many of us are actually connecting to the internet at broadband speeds of 2mbs? 

The latest regulatory report shows that only one million of the 21 million internet users are currently using broadband internet. In other words, Kenyans are barely hitting the limits of the current 3G technology, but mobile operators are already talking about upgrading to 4G.

It is like expanding a one-lane road into a four-lane highway, way before the one-lane road gets congested. There is something definitely wrong with such a situation, particularly because the cost of expansion is not free but will eventually be recovered from users.

Is it not better to explore why the one-lane road is not being utilized? Chances are very high that whatever is suppressing utilization of the earlier road (3G) will still suppress usage in the newer road (4G).

One obvious suspect for suppressed utilization is the pricing of 3G broadband internet services.  The latest statistics from the International Telecomms Union (ITU) still show that broadband internet costs are still around 50 per cent of average incomes – making our broadband internet economy one of the least affordable in the world.

UNAFFORDABLE BROADBAND

In fact, the report which considers 169 economies, places Uganda at position 139 and Tanzania at position 143, considering them cheaper internet broadband destinations than Kenya at position 149.

4G technologies cost more money to deploy compared to 3G , implying that the cost of connecting customers online through them is going to be higher.  Rolling out 4G networks, without addressing why uptake of 3G broadband internet services is low may be good for operators but not necessarily for the citizens.

This is because telecom operators will simply concentrate their 4G networks in selected urban areas, where they know they can charge exorbitant prices from the lucky 1 per cent of Kenyans who will afford the services.

The other 99 per cent will enjoy misplaced pride in having deployed the latest technologies, which they will never afford to use.

This is well known behavior from operators, who are licensed to make money and are not charitable organizations.  If ten out of a hundred customers can pay for a service and make good returns for shareholders, so be it. There is little or no incentive to bother with the remaining ninety customers. 

Put differently, the cost of maintaining and servicing a large customer base would eat into their otherwise healthy profits. 

So what should the solution be? Should licensing of 4G services be delayed because of these challenges?  Not exactly, but the regulator must figure out how we can get the latest technologies at the most affordable rates, while exploiting existing technologies in order to serve the majority rather than just a few Kenyans. 

It’s not an easy challenge, but that is why we taxpayers pay the regulator top-dollar salaries, to find us the answers.

Mr Walubengo is a lecturer at the Multimedia University of Kenya, Faculty of Computing and IT. Twitter:@jwalu