What Future Holds for Satellite Internet in Kenya?

Kenyans tend to be a very optimistic lot. This was probably most evident after the 2002 election when we were widely regarded as the “most optimistic citizens” in the world. This sense of expectancy is here again, and this time it’s around the arrival of terrestrial fiber optic cables to the country.

And with good reason because there are at least three undersea fiber projects are at various stages of development, with (a) the SEACOM project with a 1.28Tbps capacity being first-to-market, then (b) TEAMS to follow in a few short weeks with initial capacity of 120Gbps, upgradeable up to 1.2Tbps in the future, and finally (c) EASSy with a 30Gbps capacity initially and up to 320Gbps in the future.

The capacity on offer here is no joke. By the end of 2010, ISP’s, corporations and individuals with have at their disposal bandwidth upwards of 1.5Tbps, eventually up to 2.8Tbps!

For some perspective, consider the present international gateway bandwidth utilization that stands at 1.4Gbps [1]. To make use of even half the immediately available bandwidth would require a 500-fold increase in traffic.

But before there were undersea fiber cables, satellite internet antennas dotted the Kenyan terrain. Jambonet, a Telkom Kenya subsidiary, was the only internet backbone and gateway operator since the country was first hooked up to the internet, circa 1993. In 2005 when the Telkom 5-year monopoly expired, Kenya Data Networks, Jamii Telecoms and AFSAT Communications were added to the list. Indeed, they were fruitful and multiplied. Now, according to the CCK, there are eight licensed operators and service providers.

So with the advent of super-fast, super-cheap terrestrial fiber, what future holds for satellite internet?

For ISP’s and organizations in rural, peri-urban areas and other places not blanketed by fiber optic infrastructure, there’s no other option but to retain satellite for now. However, my sense is that in the next few years the size of these under-served areas will continue to shrink as the national fiber optic backbone is laid out, the plummet taking revenues with it.

Other ISP’s and organizations may elect to retain satellite as a backup internet access link, although this option is largely mitigated by the fact that there will be multiple terrestrial fiber offerings, with any other one capable of serving as the backup route in case the primary link goes offline. For the ultra-paranoid administrators, you know who you are, perhaps there might be a place for this option as an on-demand access route.

Technomads and media correspondents reporting from remote locations will probably be the constants in this market, because they are mobile and have a need to always be online. Throw in military personnel too, although they probably maintain their own proprietary systems, so I guess they don’t really count.

Whatever the reason to retain satellite is still overshadowed by the fact that it costs upwards of $5000 per MB to maintain service level agreements with satellite internet providers, while terrestrial fiber is projected to conform to the global rates of under $500 per MB in a few short years.

While the need for satellite internet access will always remain, what is certain is that satellite’s best years in East Africa are behind them and it’s commercial future looks ominously bleak.

[1] See CCK’s Q2 08/09 report.