Media News - Friday, September 28, 2012

Kuwait Internet firm blasts price cuts, infrastructure

Ageing fixed-line infrastructure is to blame for Kuwait's low broadband penetration, and price cuts ordered by the government this week will do little to boost subscription numbers, an executive at a top Internet provider told Reuters. The Ministry of Communications is the de facto regulator in the absence of an independent watchdog, and also ultimately owns and operates the country's fixed-line infrastructure, with the four major Internet service providers (ISPs) paying the government to use this. But the largely copper-based network cannot carry sufficient bandwidth to satisfy consumer demand, according to Essa Al-Kooheji, general manager at Qualitynet, which is 44 percent owned by Bahrain Telecommunications (Batelco) and has an estimated 45 percent market share for fixed Internet. On Tuesday, the Ministry ordered the ISPs to cut prices by at least 40 percent, slashing the price of an annual subscription for a 1 megabyte per second (mbp) connection to KWD 48 (USD 170), while 8 mbps will now cost KWD 200. That means Kuwait is considerably cheaper than other Gulf countries; in Bahrain, for example, Batelco charges BWD 120 dinars (USD 320) annually for a 1 mbp line and 360 dinars for 8 mbps. But that will do little to improve fixed broadband take-up, said Qualitynet's Kooheji, with Kuwait's penetration of about 5.5 percent half that of the United Arab Emirates. Many businessmen and analysts in Kuwait believe the country's political environment is partly to blame for weak state investment in infrastructure. Friction between the cabinet and parliament over the last several years has prompted frequent changes of government and slowed or blocked the passage of economic development plans. (Reuters)

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