Safaricom, Liquid Telecom, and Communications Authority Defend Fibre Caps

Lawyers Hub Kenya has conducted an interesting review of ISPs fair usage policy in an online meeting attended by key reps for the Safaricom Home Fibre team, Liquid Telecom, KICTANET, and the Communications Authority of Kenya (CA). The session was moderated by the Hub’s CEO Linda Bonyo.

The discussion was prompted by the recent uproar about Safaricom’s Home Fibre, which introduces fair usage policy (FUP) that goes live on March 1, 2020.

The topic has been highlighted online, and the general conclusion is that customers are not happy. While their disappointment is genuine, it would appear that there are business decisions that led to the development. The bottom line is that FUP is here to benefit the customer and not to punish them because of a few ‘bad actors.’

Franklin Ocharo – Head of Home and Consumer IOT, Safaricom

Franklin says that FUP will be enforced so that the customer has a good experience without the network being hogged.

FUP, according to the operator, is designed to work optimally for a given number of users. Ocharo acknowledges that some customers have been using the product abnormally, including the cited cases of reselling. Some rogue customers have been redistributing the product, particularly over the course of the pandemic, and when the operator doubled Home Fibre speeds.

Besides, FUP is here because Safaricom expects increased traffic in the coming days (could be due to the extended pandemic, more signups and the incoming general elections).

Asked if the FUP was all inclusive, Mr. Ocharo says that many studies were conducted. For instance, students reading from home cannot hit the FUP limit.

“Also, in July 2020, Home Fibre recorded the highest consumption. FUP was then modelled around those peaks,” says Franklin Ocharo.

The team defends the development from the business side of things. For instance, according to the CA, only 3% of Kenya households have access to fixed broadband. That is a small number, probably because other players do not see the incentive to enter the space because they wouldn’t get their investment back in terms of profits.

As a whole, Franklin says, the industry suffers because competition in the Home Fibre business is poor.

Others have asked why Safaricom would introduce the caps in a world where the future will see people use more data. Safaricom answers that it is aware of the query, and acknowledges that more people are working and reading from home. Thus, FUP would ensure that the product is reliable for an overall better experience.

So, should the operator stop calling Home Fibre unlimited? No, Franklin retorts, because customers can still use the product as they want after they have exhausted their cap, albeit in reduced speeds.

Ben Roberts – Group Chief Technology and Innovation Officer at Liquid Telecom

Ben admits that Liquid Telecom focuses on enterprise customers instead of fibre to the home. Nevertheless, the company has FTTH in other markets such as Zimbabwe and Uganda.

He highlights the principles behind reselling fibre products using the Safaricom model, and why it has been reluctant to take part in it. Specifically, in radio networks, the actual bandwidth is linked to the quantity of spectrum available. Telcos such as ISPs sell it by quantity, such as in GBs.

For home broadband, economic factors come into place too. For instance, the companies consider the cost per megabit/s hitting major data centres in Nairobi, among other metrics and places. The other element is the motivation to take part in the home business, and it Liquid is not convinced that it can make a profit from the space.

For instance, each home fibre installation costs north of KES 50000 (refer to Home Fibre stopping free installations, and charging customers for any lost routers). Therefore, when people resell the product/or abuse it by conducting other illegal activities (as the case with Kenya Power connection abuses) that use excessive bandwidth, Liquid, and other players don’t see the motivation to participate in the business.

Ben acknowledges that there are genuine customers that need heavier bandwidth such as large families that have a ton of devices. He says that such customers deserve a product with acceptable caps.

So, is the 1TB cap for the majority of the Home Fibre packages acceptable? Ben Roberts thinks it is quite generous.

Still, he mentions bad actors, and why it is heavy to model an FUP that is acceptable to all customers.

It is why ISPs use a shared connection to keep costs down (find more about this HERE). Dedicated links are expensive, and can cost up to 4 times the most expensive Home Fibre tier.

And, should people suffer because of a handful of bad actors? Ben doesn’t think people are suffering; rather, customers are actually benefitting from a resource that would otherwise be strained if the actors were in play.

Ben’s input revealed one thing: ISPs FUP is not fragmented in Kenya because other global telcos reduce speeds for products, say YouTube, if they are not earning any revenues from them.

Lastly, why is Liquid Telecom letting Zuku and Home Fibre take the cake of home broadband in a market that desperately needs more players?

“It is because FTTH budgets have been dedicated for other countries such as the aforementioned Uganda and Zimbabwe where it can reap additional benefits,” adds Ben Roberts.

Liz Orembo – KICTANET Rep

In her own views, Liz understands that ISPs are here to make profits while providing a service. She also acknowledges that heavy use of bandwidth sometimes leads to outages, which affects the fibre network.

However, Liz states that the cap has not been well thought out. For instance, the Bronze, 8 Mbps package with its 500 GB of data will not be enough for many households.

The issue where Safaricom roped in customers to the product with incentives such as free installation and free routers, and bailing on them at this time is not ethical. In fact, the changes did not receive customer consent (more of this in a second).

According to Liz, customers still need a reasonable time to think about the changes before the caps are enforced (March 1).

“There is no infrastructure in place for heavy bandwidth users in Kenya. And this is a problem for the next phase of internet users,” concludes Liz Orembo.

Robin Busolo – Legal Rep, Communications Authority of Kenya (CA)

Robin states that the CA has legal mandate to protect internet users in Kenya. The CA, which holds a licensing function for telcos, says that it gives the licenses with a given set of terms and conditions, besides enforcing compliance.

In case and ISP needs to adjusts its tariffs, it has to conduct the exercise according to the tariff regulation mandate.

Furthermore, telcos reserve the rights to amend tariffs according to a procedure defined by the Authority.

However, it should be noted that the CA has limited ground to interfere with ISPs.

But in cases where customers are not happy with tariff changes, such as the case with Safaricom’s Home Fibre caps, then customers can submit complaints to the CA.

The Authority would then decide how the complaints are addressed to ensure that the interests of both customers and ISPs are protected.

Nonetheless, Mr. Busolo says that customers should learn to appreciate usage policies such as data caps.

“ISPs also need to do more public awareness about proposed changes,” he concludes.

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TL;DR: The executives agree that data caps are good for bandwidth reliability and robustness.