Rip off: Why you are paying exorbitantly for internet

By Steve Umidha

Kenyan home and broadband customers are paying more to use the internet, according to new findings which show that just 38.2 percent of those connected are able to pay for such services.

The latest GSMA survey in its global State of Mobile Internet Connectivity Report 2021, further found that high taxes, at 44.3 percent slapped on the internet services were constraining Kenyans from using the now an essential need.

“While more people than ever are now using the mobile internet, some fundamental barriers stop far too many people from using mobile internet. To close this usage gap, all of us – government and industry – need to do more,” says the GSMA’s Chief Regulatory Officer, John Giusti.

High taxation regime on mobile money and internet users in Kenya was first put forward in 2018 when President Uhuru Kenyatta through a memorandum to parliament recommended a 15 percent excise tax on internet services and 20 percent on mobile money transfers after the House passed the Finance Bill 2018.

The move, at the time, saw service providers across the country pass on the pain to consumers in what has lingered since. Telecommunication and internet providers were forced to increase the cost of the services to factor in the taxes.

Safaricom for instance raised the cost of calls by 30 cents, and short message services (SMS0 by 10 cents, the firm also increased the cost of their fibre services.

Wananachi owned, Zuku also increased the cost of its 10mbps package to Sh3, 999 from Sh3, 500 while those who were paying for the Sh4, and 198 package had to part with a staggering Sh4, 598.

The increase in the cost of calls and now internet has increased the burden to Kenyans who are still reeling from the economic effects of Covid-19, and ironically spending more time browsing and working online compared to pre-Covid era.

And while the East African market is ranked superior to its regional peers in terms of infrastructure, the GSMA Mobile Connectivity Index which ranked Kenya at 49.6, felt that Kenya needs to also improve on its content and services delivery.

The telecoms regulator, Communications Authority of Kenya (CA) has continuously claimed that Kenya’s phone and broadband market is one of the most competitive and keenly priced not only at the continental level, but also globally.

However, following a raft of corporate mergers and a series of inflation-busting price hikes and the impact of Coronavirus, consumers are now beginning to ask if they are receiving a fair deal.

“In 2019 for instance we would charge Sh 50 Cents to browse for one minute at our cyber café, but it now costs Sh1 to browse for the same amount of time,” says Prisca Adhiambo, who runs a chain of Cyber Café in Nairobi and Mombasa, adding that such increases have prevented more consumers from walking through their doors. “We have been forced to live with it,” she quips.

Indeed, CA’s fourth quarter sector statistics report for three months to June this year shows that the volume of mobile data consumed during the period under review rose by 18.0 percent to stand at 192.9 million GB from 163.6 million GB recorded in the preceding quarter, which is a jump of 45.8 percent in the previous quarter last year.

The total available bandwidth capacity recorded a growth of 4.0 percent to stand at 10,217.46Gbps from 9,820.46Gbps recorded last quarter compared to a similar period last year, a 38.2 percent growth.

That growth was attributed to the increased demand for Internet services with most daily activities moving online following the COVID-19 pandemic.

African countries with the lowest internet prices include Sudan – where a gig of broadband data costs $0.9 – followed by Egypt ($1.3), Morocco ($2), Rwanda ($2.1) and Cameroon ($2.2).

ReplyReply allForward