The NBI was one of the best ideas that came with the creation of the new Information and Communication technology Ministry. The same project was supposed to facilitate the operations of its other half the Electronic Government Infrastructure (EGI) project.
Now those are very huge initiatives and brought applause to the then ever ICT Minister Dr. Ham Mulira. Now ICT sector stakeholders are suggesting that government should drop the projects (NBI-EGI) and instead use the money to secure capacity from under-sea cables.
The NBI and EGI are supposed to eventually also connect to the rest of the work via the much talked about undersea cables.
Today, a Parliamentary Committee is raffling its feathers on the management of the implementation of these projects, almost making the said projects look like a White Elephant.
The Ministry has accordingly agreed that there were problems in laying the cables and steps are being taken to address the mishaps.
But then another bit of the anger awaits the Ministry. It is the ICT sector stakeholders. There is a growing sense of frustration and in some cases bitter anger among the stakeholders and they are counting each mistake.
SEACOM is a private sector-led initiative that was recently launched. It is expected that there will also be the East African Submarine System (EASSY) not far away from today.
When these projects were first mentioned, it was said telecommunications costs would considerably drop and to some analysts, they made mention of a fall by beyond 50%. The bitterness comes as result of the realisation that even with the coming of SEACOM; Internet prices will not fall so soon.
Today, local players in Uganda's ICT sector are up in arms fearing that the only undersea cable to have arrived in the country so far might be bringing traits that do not favour competition in the country.
The main discussion point among these players is on the I-Network electronic discussion group or mailing list where members freely throw tantrums of disgust at any business initiative tends towards hurting the public. Although ICT Minister, Aggrey Awori, while at the launch of SEACOM in Kampala, had indicated assurances that no one would be tied to a single provider.
Badru Ntege, an authority on the I-Network mailing list made a lengthy analysis of the business model brought into the country by the SEACOM initiative. His thrust was into a discussion on whether Uganda will see a decrease in internet prices when the fiber arrives.
In his submission, Ntege analyses that SEACOM's offer to operators is based on them buying what is called an STM1 which is equivalent to 155MB. The operators are asked to buy a lease on the fiber for prices ranging from $2m to $3.5m to give them a 20 year lease.
He says, "This then comes with an annual maintenance fee of between 4% and 6% depending on who you talk to"
"Broken down, you need to have a spare $2m in the bank or you need to borrow it after building a solid business case. This will come with some financing costs," he says.
Ntege is taking on the bull's horns from the perspective of a local Internet Service Provider (ISP). He adds that, "However, after that you would then have the annual maintenance cost which for example if we took the $3.5m case would be $210,000 per annum which works out to be $17,500 per month for 155Mb of internet access.
He argues that if the business borrowed the $3.5m over a 20 year period with an interest rate of 10% it would attract a payment cost of $34,000 per month; and that a company big enough to afford this undertaking would most probably have a team of engineers, accountants etc attracting another overhead of not less than $100,000 per month.
In his "crude calculations" Ntege says this would end up with a total overhead of about $151,500 per month. And he claims that if he adds a 20% margin of error for unknowns this would end up as a monthly cost of $181,800.
Accordingly, Ntege concludes that such a company that takes up that service will buy the capacity at about $1,173 per Mb per month. With the assumption that they will be able to sell all that capacity and thus at least break even.
With current satellite capacity at $2,600 per Mb it does not look to be a very attractive business case especially when you consider the risk involved in borrowing $3.5m.
As a result of his "crude calculations", Ntege finds it fitting for Government to instead put aside the NBI-EGI project and utilise tax payers' money on securing SEACOMS capacity on a 20 year lease and give this to local ISPs to manage. He asserts that as a result, Ugandans would overnight end up with affordable capacity.
Another member of the I-Network forum, Peter Muhumuza casts doubts on Ntege's idea saying, "But I doubt if ISPs would be comfortable with buying/leasing capacity from government especially given the recent national backbone scandal."
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Autor(en)/Author(s): Davis Weddi
Quelle/Source: AllAfrica, 12.08.2009
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