Kenya’s Jamii Telecom to launch Sub-Saharan Africa’s first Fibre-To-The-Home offering
Jamii Telecom is breaking the mould by launching a GPON network that will deliver Fibre-To-The-Home for the first time in Sub-Saharan African. It plans to deliver a host of services on it including, VoIP, Internet, video and security applications. This will give the Kenyan market two players at the high-bandwidth end of the market: Jamii Telecom and Wananchi. On a recent trip Russell Southwood spoke to Jamii’s General Manager John Kamau and Wananchi’s CEO Richard Bell about their respective ambitions.
Five years ago it would have been hard to imagine that there would be two high-bandwidth players vying for consumers attention in Kenya. You would have assumed that Telkom Kenya or Kenya Data Networks (KDN) would have been the natural players to emerge in this part of the market. But Telkom Kenya’s management from Orange is struggling with getting it right in the mobile market and KDN which seemed to have the wind in its sails, now seems becalmed.
Jamii Telecom has steadily built itself a set of fibre metronets and connecting pieces of national backbone. So why Fibre-To-The-Home (FTTH)? According to General Manager John Kamau:”We asked ourselves what is the next big application? We can’t go for more spectrum (to deliver wirelessly). The mobile operators already have an edge there. So we though a GPON network enabling FTTH would draw new excitement.”
The network will be able to deliver 2.4 Gbps downstream and 1.25 Gbps upstream. The residential or SME customer will get a CPE that has 5-6 ports, delivering video content, VoIP, Internet, and a Wi-Fi hot-spot (just for your own house or flat):”It will enable the user to have massive bandwidth of over 100 mbps. It will deliver Video On Demand and be able to power 3-4 TVs, offering HD delivery. It will offer things like plug-and-play VoIP, video conferencing and security cameras. The network can provide an ecosystem for IPTV and this presents a considerably opportunity. Also you can do things like remote teleworking.” Many of these services and applications are things that WiMAX simply cannot support.
Jamii Telecom’s stated aim is to “bulletproof the future” and it has been doing trials for 18 months with 200 households, all in Nairobi:”These people are so happy with the service that they don’t want to be cut off as we put up the new network.” The vendor for the project is Chinese-owned ZTE. The aim is to invest US$15 million in stages, targeting 100,000 households and to have the service ready to launch in Q2, 2011. It will cost between US$100-150 to connect each household. Rates will be benchmarked against prevailing rates which are currently between US$5,000-7,000 for between 512 kbps to 1 mbps:”The most expensive component of building the network is the civil works.”
It sees itself as a “transport company” carrying other people’s signals, rather than a vertically integrated company offering content as well as networks. It is in discussion with DStv and others on the content side and has a relationship with Safaricom to deliver data that is causing some nervousness in the market. But Kamau says:”Our philosophy is open access. It’s a whole new market and it needs a new philosophy. It’s a mass market that needs a head-end, a call centre and a web portal to deliver.”
In the other corner of this particular ring is Wananchi led by long-time industry veteran Richard Bell. It has rolled out an HFC cable network which will has already passed 45,000 households in Nairobi and the this figure will rise to 100,000 in three years time. The ultimate target is a million households by 2015. According to Bell:”The HFC network can deliver 250 channels, 50 in HD and 120 mbps into every household.”
In technology terms, the strategy also has two other prongs to reach those beyond the cable network: WiMAX for voice and data and DTH satellite for television:”Half our channels will be in HD and we’re enhancing HD on our satellite platform.”
Wananchi’s strategy differs from Jamii in that it sees content as the cornerstone for its success and has its own content division:”We will be offering 10 new channels for general African entertainment, documentary and sports. These will be launched between September and December of this year. We’re offering the first multi-channel African content since M-Net. Our strategy is around localizing content and we have a platform to produce our own content and it won’t be copied in a hurry. So our mission is both to find and make rich local content”.
“We’ve made a decision not to go after premium sports rights as we believe the market will always want alternatives. We’re going to go out of our way to be strong in the family and childrens’ space. South Africa’s Top TV is making significant inroads into that market and Nigeria’s HiTV is still getting subs on a different positioning. Women are the decision-makers and the education of children is the biggest draw.”
The Programming Group is headed up by Hannelei Bekker, a South African who formerly worked for Telkom Media and the Retail Group is headed by Peter Reinertz who used to be at Orange Kenya:”Currently we’re doing double play (voice and Internet) and triple play (adding television) will come on stream in Q3 this year.” It also plans to roll out a similar networks in Dar es Salaam and Kampala. So far it has invested US$120 million:”It’s an infrastructure business with a need for continuous additional investment.”
It is a sign of how fast the market is changing that two seasoned independents have seized the initiative by investing in the high bandwidth space.
FTTH in Southern African << Comment and Vodacom