In the past five years, AfPIF participants have identified local availability of Content Delivery Networks (CDN) as one of the ways to lower connectivity cost and increase the level of local content within the country.
Global CDNs have strict requirements before deploying in a country, which has led investors and techies to explore other ways to deliver content to their users. In many African countries, there are business opportunities in connecting low-income areas that provide the numbers but lower monthly premiums.
We look at one initiative of a Kenyan Over The Top operator (OTT) that has also built its own CDN to carry the traffic. Able Wireless is betting on reducing latency for the consumer since the content is readily available and for content developers who can take advantage of the cost benefit from Local Caches.
Able Wireless is tapping to an unfulfilled market by providing Over The Top Traffic on its own network for as little as $5 a month and is currently seeking participation from local ISPs keen on making internet access more affordable.
Kahenya Kamunyu, founder of Able Wireless discusses with AfPIF about the company and availing affordable connectivity
1. Tell us about Able Wireless?
Able Wireless is a pure Over the Top Public Common Carrier and the first fully Kenyan owned Content Network Operator .The goal being to offer affordable content service riding on a contiguous WiFi network. The network consists of physical fiber and copper mesh network inter-linked between apartments in residential areas, eliminating a single point of failure and creating multiple alternative data transport routes.
The Platform is a carrier for low cost content distribution targeted at the low and middle income segments of the population who have a huge appetite for content but have been locked out of other digital platforms by prohibitive costs. We’re currently providing access to a large pool of content over an unlimited internet connection to over 3,000 homes at Ksh.500 ($5) per month. Connection to the service is either through Wi-Fi, FTTH and WiFi or a Blackbox Streaming device that Able wireless provides.
2. What are some of the legal issues arising from content distribution?
Everyone from the ISPs to Pay TV service providers, consider Able Wireless a threat. As an OTT that runs our own CDN the model reduces actual data consumption by 85% from traffic exchange since traffic travels only once which enables us deliver a large pool of content at a fraction of the costs charged by other players.
By viewing the Able platform as competition, we are simply missing out on localizing substantial amounts of traffic.
There is lot of untapped opportunity in the connected consumer demanding media and broadband and this is the value brought on by a pure carrier.A lot of ISPs have invested in thousands of kilometers of unlit fiber and unconsumed bandwidth while thousands of consumers are ready to consume content on demand, but only if it is affordable.
3. What of the legal and regulatory framework?
Although we are licensed by the Communications Authority of Kenya, as a carrier, the cost of licensing remains prohibitive for small operators. For example we have to pay 0.4% of our annual Gross turnover or Ksh. ~100,000 ($1,000) per license whichever is higher annually, which in some cases is the difference between survival and failure. There are also actual license fees and taxes, which can easily discourage investors.
To recoup our investment, we are banking on the quality of service, wide choice of content available to consumers at an affordable cost and extensive infrastructure that delivers 1Gbps.
4. How can CDNs take advantage of Peering?
Instead of CDNs building their own closed networks which are expensive to setup and maintain, they need to cooperate in delivering content to end-users in a scalable manner. In this case, we need to look at the economics of exchanging and therefore monetize the high capacity fiber links from ISPs.
5. On Financing?
I walked to 56 banks, including investment banks to raise capital and it only took a “proxy” loan to get us going. Nobody was interested in talking to us – You say startup and the best I got was a cup of coffee. The potential financiers made me structure and restructure proposals or send me to different branches, but nobody was interested in financing an ICT business.