SimbaNet sees internet tariffs going down

SimbaNet, a price-competitive Internet service provider (ISP), has said retail prices for Internet will soon be affordable following the completion of the $12 million (K8 billion) World Bank project it was implementing called Regional Communications Infrastructure Programme-Malawi Project (RCIPMW).

The project is being supported by the Department of E-Government in the Ministry of Information and Communications Technology through the Public Private Partnership (PPP), to improve Internet connectivity in the country.

SimbaNet cable and plant manager Mark Chikoko in an interview in Lilongwe on Friday asked Internet providers to pass on the benefits of affordable Internet tariffs to their customers.

The pronouncement by SimbaNet comes after the Public Private Partnership Commission (PPPC) said it is puzzled with the high retail tariffs for Internet despite the entry on the market of SimbaNet.

In an earlier interview, PPPC chief executive officer Jimmy Lipunga expressed his frustration, saying although the commission appreciates the high cost of doing business, especially in relation to the delivery of service to rural areas, the high retail Internet prices remains a puzzle.

But Chikoko said: “Before we came in, Internet providers were buying Internet services outside the country, but now with the installation of the aerial cable between Karonga and Mchinji through the lakeshore with a virtual landing point at Capital Hill, we have brought Internet prices down by 75 percent.

“The good thing is that this is a government initiative and we will be glad if Internet providers pass on the benefits to their customers.”

But in a separate interview, Airtel Malawi managing director Ralph Kamoto said Internet costs are still relatively high because providers depend on four routes to the ocean to access Internet.

“I will not agree that Internet is affordable because service providers depend on the four routes, one to Zambia, two to Mozambique and one to Tanzania. So, with four routes, Internet cannot be cheap.

“The reason providers depend on the four routes is because they do not want to be taken unawares in case of eventualities,” he said.

Malawi is one of the countries in the world where Internet penetration is still low.

ICT experts argue that the question of pricing is multifaceted and the expectation was that the entry of more service providers will push prices down due to competitive pressure.

Earlier, Malawi Communications Regulatory Authority (Macra) director general Godfrey Itaye said that their sole responsibility is to regulate the market and not pricing.

“As a regulator, our duty is to regulate the market. If the prices being offered are on the higher side, then you need to engage the operators and find out why they are offering such prices and we will respond to each and every concern,” he said.

The price at the inception of RCIPMW in 2008 was around $3 000 (K2.1 million) per megabyte per second per month (Mbps/month).

When the project was implemented, the price reduced to around $1 000 (K730 000) per Mb per second per month.

Now, wholesale prices being charged by SimbaNet are at around $175 (K127 000) Mbps/month.

However, PPPC says that retail prices remain high at between $300 (K219 000) and $500 (K365 000) Mbps/month. n