Internet costs in the region will remain high despite the expected landing of two new undersea fibre optic cables at the Kenyan coast this year, a new study says.

Bank of America Merrill Lynch said in a research note this week that while the landing of additional cables will increase the region’s bandwidth capacity, it may not necessarily have a significant impact on the reduction of internet costs because of the high cost of inland fibre network.

“The planned landing of the fifth fibre-optic cable is expected to double the nation’s bandwidth from the current 8.6 Tbps to 15 Tbps. But with the nation using just 6 per cent of the currently available bandwidth, and the high cost of the inland fibre network, future price reductions may not be as high as in the past,” the study says.

Sources at Kenya’s Ministry of Information and Communications last week told The EastAfrican that two international telecommunication companies, China Telecom and Saudi Telecom, have independently launched plans to lay undersea fibre optic cables to Mombasa as demand for higher bandwidth continues.

The investments by the two telecom giants will bring to six the number of undersea cables linking the East African region to the outside world, and more than double the local Internet capacity.

Consumers are looking forward to improved browsing speeds and reduced cost of connectivity.

According to Merrill Lynch, Kenya is among the top African countries in the uptake of data services. In the past, voice services in Africa have accounted for over 90 per cent of total revenues, compared with the 75-80 per cent global average.

“The uptake of data is increasing rapidly with Kenya seeing a 67 per cent compounded annual growth rate in data revenues over the past four years. South Africa posted 25 per cent growth, with MTN in Nigeria and Ghana delivering 37 per cent and 116 per cent respectively,” the study says.

The proliferation of affordable smartphones and data-enabled feature phones, according to the report, is placing additional demands on carrier networks and accelerating the trend of data traffic moving to mobile networks.

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A survey by industry body GSMA indicates that Africa has risen to become the fastest growing market for smartphones in the world as more subscribers access the internet from their phones than the traditional PC.

A study by technology firm Cisco showed that smartphones have surpassed desktops and laptops as the preferred devices for completing work.

The report indicated that 90 per cent of global youth check their mobile phones before eating, dressing or brushing their teeth in the morning.

“Due to little fixed-line broadband infrastructure to carry the rising data traffic on the continent, the growing data demand can only be delivered through mobile networks. More than half of internet activity is already on handsets.

High demand

The demand is there, smartphones are becoming more affordable, and so are the telco equipment kits.

“Increased wholesale competition and lower international connectivity costs are the first visible steps in the right direction,” said analysts at the bank of America.

Mobile operators have already begun fighting for the data market as they aim to increase their earnings from the segment.

All the countries in East Africa are at different stages of launching a 4G network, with Kenya adopting a public-private partnership approach for the roll out.

Ugandans are set to take the lead in accessing 4G technology in coming months, while Tanzania hopes to rollout in April.

In a report, World Bank estimates that a 10 per cent growth in broadband penetration leads African economies to grow by a corresponding 1.4 per cent.