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Group of Uganda ISPs to purchase bandwidth together
Uganda Internet Service Providers (ISPs) have agreed to consolidate their purchase of bandwidth in an
effort to cut down Internet costs, writes Balancing Act’s Uganda correspondent Esther Nakkazi.
Officials from ISPs say it is a business strategy which they are working on only awaiting a nod from the
market regulators and other stakeholders which would cut the procurement costs of bandwidth by 25
percent and later push the costs down for the Ugandan Internet users.
“We are trying to bring the cost of the Internet down which we hope will happen in a couple of months.
There is a discount for volume so we shall consolidate the bandwidth and buy it at wholesale price,” said
Badru Ntege, the chairman Uganda ISPs Association.
The price of Internet in Uganda is still very high to everyday users at Shs.25 per minute limiting Internet
use and growth basically affected by expensive bandwidth sold by a few ISPs, which say they too are
buying capacity via satellite and it is very expensive.
A survey for Internet development in Uganda published in October 2005 by the regulator Uganda
Communications Commission (UCC) said at least 80 percent of Internet users in Uganda consider it to be
“The price of the Internet is still high because we are buying capacity via satellite and it is very expensive.
The price of Internet will go down substantially but we have not yet calculated percentage reductions fro
consumers,” said Ntege elaborating that it is only ISPs under the umbrella of Uganda ISPs association that
are in the deal.
According to the regulator, UCC there are 17 ISPs operating in the country. Ntege says only six of these
are under the Uganda ISPs Association that is planning the move- Bushnet, Infocom, Afsat, Africaonline,
One2Net and SpaceNet.
Data available shows that each ISP in Uganda can buy up to 2-3 Meg of bandwidth for small ISPs while the
big ones procure 5-6 Meg per month. Each Meg costs $ 5,000 -$6,000 to be landed in Uganda.
When they consolidate the buying the association is planning to immediately land 50 Meg of bandwidth at
a discount of 25 percent. The price will be affected by volumes and the satellite space segment that would
have been reduced by landing the bandwidth in bulk.
I Meg of bandwidth is carried through a space segment of 1.5 Mhz on the satellite dish. With the merging
of the ISPs the space segment on the satellite used will reduce and affect purchase prices.
According to an ISP operator he can only resell 1 Meg of bandwidth 3 times to the different channels
although he can resell it as many as 10 times to mostly internet cafes.
“This is a matter of contention others resell one Meg up to 4-8 times but this reduces the speed of the
Internet and makes the customers very unhappy,” said the operator. The 2005 UCC survey established that
most Internet café operators were not satisfied with what they pay to the ISPs for interconnection and they
feel it is very expensive.
While the users said the speed in the Internet café is very slow. 80 percent of Ugandans access the Internet
through Internet cafes, the UCC survey said.
However, the ISP operator said the Internet Café operators in Uganda do not seem to understand what they
are buying, ‘they buy very small bandwidth and connect it to over 20 machines’.
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“We are suffering from high costs of bandwidth and the power crisis is making business very unprofitable.
The minimum speed can not be guaranteed and then they tell us bust but we don’t know how it even
works,” said Josephine of Cyberlink Café in Ntinda.
However, the regulator says they support a clear service agreement between the user and the provider
through a Committed Information Rate system.
“The minimum speed should be guaranteed. If the provider does not conform then they can appeal to us
and we mediate,” said Patrick Mwesigwa the technical manager UCC.
Source: Balancing Act's News Update 303 (30th April 2006)