How data landing fees Influence Zim Internet Pricing

The Internet is a vast network made up of a collection of smaller networks. The networks that make up the Internet are connected in two main ways. Networks can connect with each other directly, in which case they are said to be “peered”, or they can connect via an intermediary network known as a “transit provider”.

However, it is imperative to note that the cost of internet varies from one country to another and this is largely influenced by geography and demographics. Zimbabwe as a land locked country operates at a disadvantage as it experiences additional costs of international transit, that is to say, Zimbabwe’s internet purchase capacity depends on other country’s networks to reach the cable landing station.

Zimbabwe gets internet from landing stations in Cape Town and Mthunzini in South Africa and Maputo in Mozambique. Internet Service Providers have to transmit those costs across two countries. In particular, TelOne pays US$441 500 to transmit bandwidth per month, that is an average of US$5,3 million per year.

This phenomena is commonly referred to as International transit. In some instances, there is no immediate access to the an international gateway, such as with Zimbabwe where there is a need to purchase capacity on another country’s network to reach the cable landing station.

As mentioned earlier on, that we get internet through other countries, unfortunately bandwidth is always paid for through US dollars a currency that is scarce to a point the national bank (RBZ) runs out of it most times. That is why our internet is pegged at the current prices.

At the current prevailing rates, Zimbabweans are actually enjoying cheap internet prices. Countries such as India have the cheapest internet tariffs in the world, due to their favorable geographical locations where they get bandwidth straight from those source.

One way to address this problem is to share infrastructure as much as possible with neighboring countries. However, this is not an option available to landlocked countries as they are always at a disadvantage in negotiations with neighbors, which control the essential facilities of transit and access to the cable landing station.

According to the Alliance For Affordable Internet it is assumed that the unit costs (“x”) of the submarine cable, national backhaul and local access are all roughly the same in the developed countries, since they have direct access to a submarine cable. For each of the developing countries, most, if not all, component costs will be higher. Using typical cost figures from a range of African countries, the extent of the cost variations is apparent, as shown in the diagram below:

Above are the categories in which pricing for landing costs is determined for countries such as Canada, they do not pay international transit. However, Zimbabwe falls under the same category as Rwanda where we have to literally pay for everything.

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