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East Africa’s largest economy unveils $399m internet cable hoped to unlock digital economy

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Thirteen years since Kenya welcomed its first ever fibre optic cable, the country has now unveiled a sixth submarine internet cable.

That promises to offer higher speeds, lower latency and broader bandwidth. The launch of the Pakistan and East Africa Connecting Europe (Peace) cable on Tuesday comes at a time when the country’s internet economy is rapidly growing.

Thanks to digital transformation acceleration occasioned by the Covid-19 pandemic.

Demand for cloud storage

As demand rises for cloud storage, heavy internet content streaming, e-commerce platforms, e-learning apps, telehealth systems, fintech innovation and online businesses.

The new cable is expected to offer additional broadband to the national fiber backbone network.

The $399.9 million cable connects Africa to France and Pakistan through the Europe-Asia route.

Connectivity to Asia

Providing a direct connectivity to Asia which is expected to reduce communication delays between Africa and Asia.

The launch is a partnership between Peace and Kenya’s most affordable mobile internet data provider Telkom.

Which creates optimism that mobile data could soon be more affordable. Kenya has the most expensive mobile data in East Africa according to the global Mobile Data Index.

The 15, 000 kilometer cable

But the 15,000 kilometer cable is expected to create more flexible digital connection options, including high-speeds of 200 Gbps per single wavelength.

With a total capacity of 192 Terabits per second, as well as stable and secure data access possibilities.

Speaking during the launch at Nyali, Mombasa, ICT and Youth Affairs Cabinet Secretary Joe Mucheru said Kenya was right inside the Fourth Industrial Revolution (4IR) where demand for fast internet is at an all-time high.

5G data speeds at Uhuru Gardens

 “Right now, you can enjoy 5G data speeds at Uhuru Gardens. This will revolutionise how Kenyans consume the internet.

“5G smartphone penetration in Kenya is growing. More online business opportunities will be unlocked by this cable,” he said.

Further, the continued growth in consumer demand for connectivity and data could unlock new markets for co-location data centers.

Content development

Content development networks and Over-the-Top service providers in the country, Peace Cable’s Chief Operating Officer, SUN Xiaohua said.

“Peace will bring more diversified digital connection options and provide high-speed, large-capacity and stable data access opportunities to Kenya,” he said. 

Fiber optics or optical fibers, are long, thin strands of carefully drawn glass about the diameter of a human hair. The strands are arranged in bundles called optical cables.

Peace and Telkom

Peace and Telkom are relying on them to transmit light signals over long distances. But at the transmitting source, the light signals are encoded with data.

So, the optical fiber transmits this data by light to a receiving end, where the light signal is decoded as internet. Therefore, fiber optics is a pipe to carry signals over long distances at very high speeds.

Telkom said the investment in submarine cables is of strategic importance to its business, where it views access to the Internet as a fundamental human right.

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Mugo Kibati

Chief executive of the telco Mugo Kibati said contributing to Kenya’s strategic evolution to become a digital economy is critical, especially through using the internet to improve peoples’ lives.

 “This ultra-high capacity cable will assist Kenya and the region in meeting its current and future broadband capacity requirements as well as assist carriers in providing affordable services to Kenyans,” he said.

Mr Mugo added that the operator will create a future smart landing hub for the majority of the submarine cables in East Africa as it continues to provide cross-connections to all data, entering and exiting Kenya.

4G capacity in the coast region

Telkom currently operates and maintains five of the six submarine cables that have landed in Kenya.

 “We’re upgrading and expanding our 4G capacity in the Coast region, before moving into other areas across the country. This Sh14 billion nationwide rollout is part of our long- term network expansion strategy,” said Mr Kibati.

Former ICT Principal Secretary and chair of the Blockchain and Artificial Intelligence taskforce Prof Bitange Ndemo – who has witnessed all six cables land in Mombasa – said Kenya is now ready to take on global tech heavyweights in the digital economy.

Broadband access

 “Broadband access is a human right. With these steps, we will even witness the launch of a seventh and eighth internet cable,” he said.

Peace, a Hong Kong-based cable network founded in 2018, said its second phase will see the cable extend to Singapore and Southern Africa.

Boosting bandwidth and connectivity from its current African landing point in Mombasa, all the way to South Africa.

New markets

Consequently opening new markets in the Southern African Development Community (SADC).

The East African Marine System (TEAMS) internet cable launched in June 2009, set the stage for the digital transformation.

That ‘Silicon Savannah’ now enjoys but the laying of more cables now places the country at the apex of internet penetration in Africa.

Other cables

Since then, other internet cables landing in Mombasa have been the Eastern Africa Submarine Cable System (EASSy), the Lower Indian Ocean Network (LION), Seacom and the Djibouti Africa Regional Express 1 (DARE1).

Their respective speeds are 5.2 Tbps, 12.3 Tbps, 18.6 Tbps, 12 Tbps and 36 Tbps, and all serve to deliver an unprecedented amount of internet bandwidth in East Africa.

Kenya Power also uses internet cables to manage the national electricity grid and leases the excess capacity to Safaricom, Airtel, Liquid Telecom and Jamii Telecommunications.

Kenya power

Since launch in 2010, Kenya Power has cumulatively earned Sh3.02 billion from the fibre leasing business, in its 4,000-kilometre long cables.

The International Finance Corporation (IFC) estimates a total of 1.1 million kilometers of fibre cables.

Have been laid in Africa with 50 per cent of them being deployed by private Mobile Network Operators (MNOs).

450, 000 kilometers

MNOs are granted licenses to offer mobile communications services and have the right to deploy fiber to connect their towers and base stations for their backbone and backhaul needs.

About 40 per cent of all fiber optic cable in Africa, a staggering 450,000 kilometers, is publicly-owned according to IFC.

This includes government networks, state-owned enterprises and utilities.

Read more at https://thebigissue.co.ke

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Three Global Firms Signed By Nairobi Financial Hub On Its Launch

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Three companies were signed by Nairobi’s international financial centre on the day of its launch. The three include Prudential plc, ARC Ride Kenya and AirCarbon Exchange (ACX).

The Nairobi International Financial Centre (NIFC) is a special economic zone for financial firms.

Prudential, one of the world’s biggest insurers and asset managers, became the first firm to formally join the NIFC.

Singapore-based global carbon exchange ACX came along with Prudential. It seeks to set up a carbon exchange in Kenya.

Check out: Why Buyers Are Now Running Away From Popular Used Toyota Cars

NIFC has also admitted ARC Ride Kenya. It is a new start-up that is going to establish an electric vehicle assembly plant in Nairobi. The plant will produce two and three-wheeled electric bikes and scooters.

Also, the Financial Centre is determined to bolster the manufacturing sector in the country. It has signed an MoU with the Kenya Association of Manufacturers (KAM), to help increase financing and investment in the sector.

NIFC authority has hinted at being in discussion with other participants seeking to join it and will give official news soon.

“Last year Prudential Plc, one of the world’s biggest insurers and asset managers, made a commitment to relocating their Africa headquarters from London to Nairobi and join the Centre. Today we are proud to announce that Prudential becomes the first firm to formally join the Nairobi International Financial Centre,” Vincent Rague, Chairman NIFC Authority.

After many years of waiting, the hub will eye large foreign firms, boosting capital flows to Kenya and the region.

The authority has singled-out four sectors that it will prioritise for growth: financial technology, green finance, investment funds, and becoming a hub for regional multinationals.

The NIFC general regulations have been enacted, as the initial set of tax incentive proposals have been passed.

Also read: The Ultimate Guide to Digital PR

Certification from the NIFC Authority must be applied by Firms considering conducting business through the NIFC.

A 15% corporate tax will benefit firms operating a carbon market exchange or emission trading system under the NIFC. The 15% advantage will happen for the first 10 years of operation.

Companies certified by the NIFC Authority and have invested a minimum of Sh5 billion will benefit from the certainty that, the Capital Gains Tax applicable at the time they make their investments will remain unchanged during the lifetime of the investments.

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Hackers Make Tactical Change, Now Targeting Small Businesses

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Traditionally, cybercriminals have been targeting big companies with aim of demanding ransoms running into millions. Nonetheless, the trend no longer holds, as new studies have shown the shift in hackers’ interest from big companies to small and medium ones.

Studies have shown that hackers are shifting their focus to small online businesses which they believe are more vulnerable.

Experts have warned that these SMEs and payment portals, especially those relying on mobile payment solutions, are now facing high risks of cyber attacks coordinated by these hackers.

Speaking during the inaugural Africa Cybersecurity Congress held in Nairobi, Hadi Maeleb, Agora Group co-founder and CEO said the threats to online businesses were growing at a high rate.

Further, he stated that more than 90% of business owners are unaware that their enterprises are at risk, despite the high growth rate of the attacks.

“Cybercriminals are now targeting small businesses more as they have realized that these enterprises do believe they would be exposed due to their comparatively low turnovers until they lose their data and payments are compromised,” said Mr Maeleb.

With the adoption of e-commerce platforms, State agencies, financial institutions, healthcare, energy and utilities have persistently faced cyber-attacks in the recent past.

According to CAK- Communications Authority of Kenya’s first-quarter data (between January to March 2022), a total of 79.2 million cyber-attacks were reported. This has prompted the government to issue 28,848 advisories in an attempt to fight the rising attacks.

Invest in Cybersecurity

Mr Maeleb noted that business owners should invest in cybersecurity tools as there is no magical solution to cybercrime.

“This ‘democratization’ of cyberattacks is expected to push losses due to business interruption, financial theft, personal data breaches and even ransom payments over the Sh4 trillion mark by end of 2022,” he said.

At the peak of the pandemic, several states adopted tough lockdown measures such as social distancing, working from home, and online learning.

Also read: Why Buyers Are Now Running Away From Popular Used Toyota Cars

Hackers shifting focus to small businesses.

This adoption of digital solutions such as e-commerce, remote working and banking went up as Kenyans turned to online platforms to curb the spread of the coronavirus.

“Unfortunately for them, the business of cybercrime has evolved to a point where attacks like ransomware are now sold as a service,” he added.

Even though these measures triggered the adoption of digital platforms, they also increased vulnerability such as ransom, data breaches, harassment, cyberbullying, and data breaches.

Kenya’s ICT Policy which came into effect in 2006, is credited for creating an enabling environment for the growth and usage of technology.

Kenya’s ICT Policy which came into effect in 2006, is credited for creating an enabling environment for the growth and usage of technology.

To achieve Kenya’s Vision 2030 goal of a regional ICT hub, the tech sector was expected to contribute directly and indirectly to an additional 1.5% of Kenya’s GDP by 2017/2018.

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Why Buyers Are Now Running Away From Popular Used Toyota Cars

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As it has been noted that Kenyans are now running away from the popular used Toyota car models, contrary to what has been a tradition in the country. The rise in their costs has seen even dealers cut down on imports of these vehicles due to decreased demand.

Traditionally, popular models such as Toyota Premio and RAV4 have been synonymous with middle-income earners over the years. However, this is no longer the trend.

Car dealers say more Kenyans are now going for vehicles such as Nissan Sylphy and Mazda, which cost less compared with popular Toyota models.

Toyota Vs Nisaan and Mazda models

According to Charles Munyori, the secretary-general of Kenya Auto Bazaar Association, Nissan Sylphy and Mazda’s CX5 and Axela, are quickly gaining popularity among Kenyans.

Mr Munyori said the price of a Toyota RAV4 has short up to Sh3 million currently from Sh2.8 million in February while a Premio is going for Sh2.2 million from Sh2 million four months ago.

On the contrary, Mazda Axela is now selling for Sh1.6 million with Nissan Sylphy (Blue Bird) going for at least Sh1.5 million.

Currently, consumers find these brands to be the best alternatives to their preferred models, as they are relatively cheaper and good.

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With the rising household costs, these car prices are making them affordable to most Kenyans as they struggle to balance the high cost of living.

“We are seeing a shift where Kenyans are now moving from the popular brands such as Toyota Premio and RAV4 to other models. This shift has been occasioned by the high cost that these cars are now fetching at the market,” said Mr Munyori.

“In fact, most of the car dealers are hardly bringing in Premio and RAV4 models because they are not moving and they will tie up money that they would need for importation of more vehicles,” he said.

Ex-Japanese vehicles

Ex-Japan vehicles dominate the Kenyan second-hand sector with a more than 80% market share.

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The buyers in the sector prefer these cars as their spare parts are easier to obtain locally compared to other brands. Additionally, buyers believe that the resale value of Toyota vehicles are higher than that of other brands like mazda or Nissan.

Reasons for risisng vehicle cost

The rising cost of vehicles in the country has been linked to the unavailability of dollars locally, a shortage of electronic chips in Japan, and a weakening shilling against the dollar.

The country is currently experiencing extreme dollar shortage, that one has to wait for at least three days to get $20,000 or $25,000 from the banks.

“We have to wait for like nine days in order to accumulate $80,000, and this has seen car dealers delay in making their orders. We are really feeling the impact of the dollar shortage in the market,” Mr Munyori said.

banks have imposed regulations on dollar purchase. This has forced traders to face difficulty in meeting their obligations.

Industrialists are forced to start seeking dollars in advance. The shortage puts a strain on supplier relations and the ability to negotiate favourable prices in gap markets.

On the other hand, Semiconductors are used in making electronic devices. Their shortage has forced the vehicle manufacturers to scale down the production. The quantity and quality cannot be maintained with decrease in one of the crucial raw material.

Finally, the shilling has persistently remained weak against the dollar. this has made it costly for importers shipping in goods.

The shilling has hit a record low trading at of Sh 117.06 against the dollar. This predicts a continued rise in imported goods, and signifies a further dollar shortage crisis.

The continuous depreciation in shilling stability is attributed to increased demand for dollars from importers. This highly arises on importaion of crude oil and merchandised goods.

It should be noted that most external debt is repaid in the dollar. Therefore, a weakened shilling increases prices of imported goods, and puts pressure on the country’s debt repayment.

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