Filling the Void

CommsMEA speaks to Hamadoun Touré, director, ITU development bureau, on the barriers holding up telecoms uptake in Africa

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By  Richard Agnew Published  December 8, 2003

|~||~||~|While the development community has paid much lip service to measures needed to close Africa's digital divide, chronic problems still remain. Lack of infrastructure, the high price of PCs and regulatory policies designed to shield incumbent telcos rather than attract competition have conspired to keep telecoms penetration in the continent down to single figures.

Exorbitant wholesale pricing of internet services is also continuing to cause high consumer tariffs and place limits on ISPs' financial viability, while restrictions on affordable and more cost-efficient IP-based services such as voice over IP (VoIP) are hindering the providers' ability to expand.

Large disparities also exist in the area of international bandwidth supply, both in comparison to other regions and within Africa. While Egypt has passed 1GBits/s in its available bandwidth, many countries have to make do with 10Mbits/s or less.

But there are pluses. The mobile sector, of course, is driving significant growth in developing countries' telecoms markets across the world, as well as in Africa.

The International Telecommunications Union (ITU) is keen to stress that the number of global mobile users overtook those of fixed services during 2002. Mobile subscriptions rose to 1.2 billion, and 500 million of those were from developing countries, compared to just 3 million a decade before.

And the rollout of prepaid services have helped service providers to extend access to sectors of the economy that have previously been out of reach. "Over 90% of mobile subscribers in Africa are on prepaid packages, they don't have a bank account or fixed address, and they don't fit into the normal user profile that companies target," says Hamadoun Toure, director, ITU development bureau.

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"If you go to a marketplace, many [traders] have a mobile phone. They did not exist in previous economic indicators, they were non-existent. But there is a large number of people involved in informal trade that could be good customers [for operators]. And if this method is applied to the internet there could be more growth as well," he adds.

While copper lines still provide much of the continents' low access to data and voice services, the use of wireless and satellite technology to extend fixed and mobile services into remote areas is increasing.

The ITU, for one, has launched 900 VSAT-based telecentres within Mali and Cameroon and is testing Wi-Fi solutions to provide access for point-to-point links in rural areas.
Lower-cost Ku-band VSAT solutions from providers such as Web-Sat and IVS Africa are also helping stimulate uptake in areas where regulations allow. "We have large scale Wi-Fi pilot projects running in a few countries in Africa. These projects will create a business environment for micro-entrepeneurs," says Toure.

Also on the technical level, the lack of peering and international bandwidth that has contributed, along with monopoly telco's wholesale fees, to high internet prices is being addressed in some areas. Internet exchange points (IXPs), for example, are being established in Ghana, Mozambique, Kenya, South Africa and Uganda for the transfer of locally-bound traffic.

Additionally, South Africa has embarked on a programme to set itself up as a local hub by offering lower tariffs to its neighbouring countries, and SAT-3, a submarine cable network, was set up in 2001 to connect 11 countries along the West African coast.
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The network has also been used by some countries, such as Senegal, to extend bandwidth further into the continent. "SAT-3 has had a real impact on Senegal, [where] capacity has jumped 300% in one year," Toure adds.

Further bandwidth increases are expected to be provided by the continent-wide RASCOM satellite project which was first suggested by the ITU, due for launch in 2006.

Also, further efforts are being made to tackle a lack of direct peering between African countries that was contributing factor in just 13MBits/s out of the continent's total of 1.5MBits/s being routed within it during 2002.

For example, the ITU is involved in the installation of a fibre optic network alongside an oil pipeline in Cameroon. "We have raised this issue several times with the internet industry. We are also advising any major [infrastructure] projects - highways, railroads and pipelines - to lay down a fibre optic network," Toure adds.

In the regulatory arena, the ITU says that a more coordinated approach to licensing has helped the number of internet service providers (ISPs) in Africa to reach around 600 in 2002.

Egypt's much heralded free internet and PC-for-every-home initiatives are also good examples of the various efforts that have been made to extend services in Africa, while taking cost into account.

"We see it as a priority to get more access to telephones and mobiles, but also the internet and technology at large. [We're aiming] for high penetration with a limited level of investment. In the free internet initiative, we have [signed up] 1 million households, [while] for the PC-for-every-home [project], we have about 50,000 users," says Ahmed Nazif, Egypt's Minister of ICT.

Meanwhile, on the vendor side of things, high import duties have held the influx of technology back in many countries but Egypt has spent the last few years developing frame agreements with technology providers, which trade access to the market in exchange for improved know-how and the generation of exports.
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Alcatel, for example, has located its largest service centre in the region in Egypt, employing around 800 engineers. "We would like to have a positive balance of payment on a sectoral basis to be sure we can acquire all the technologies that we need, without having to compete for foreign currency," says Nazif.

Furthermore, Egypt's delegation at October's ITU's Telecom World event in Geneva, Nazif claims, showed that this policy is just starting to bear fruit."This was the first time Egypt has participated so actively in Telecom World. In Geneva we had a large Egyptian pavilion with companies presenting a wide range of services and solutions. For the first time, we were presenting a country that was exporting technology rather than importing it," he says.

But across Africa as a whole, there is perceived to be a continuing requirement for more high-level of acceptance of the need to foster a level of private sector investment that would help bridge the gap in access.

To allow coordination over issues affecting imports, as well as privatisation and licensing issues at the service provider level, various regional regulatory groups have been formed in Africa, such as TRASA (Telecoms Regulators of South Africa) and WATRA (West African Telecoms Regulators Association).

"There is no way around the private sector, and the governments understand that. The market is there, but it's a matter of providing the right environment for the private sector to be confident to come into," says Toure.

Wide-ranging talks on the regulatory environment in developing countries are certain to take place at this month's World Summit on the Information Society (WSIS), and the preceding Global Symposium for Regulators (GSR), organised by the ITU's Development Bureau.

Egypt will also be launching a whitepaper on the 'Egyptian Society Initiative,' which outlines the government's plans to tackle a lack of access on a national and regional level.
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"The paper looks at three areas - it focuses on rural areas because we have our own digital divide within the country, and initiatives that would help us to fill that gap. The other layers are on applications such as e-government, e-health, e-commerce, and [building] our cultural identity in the information age, and the third level is building our own IT industry and making sure we turn from a net importer to a net exporter," explains Nazif.

Meanwhile, the various regulatory techniques which have been adopted to provide universal access while also increasing private sector involvement will also be a major topic for discussion at WSIS, claims Toure. While some countries have opted to stipulate targets for geographical roll out within new licences, others have chosen to set up joint funds to provide the cash for the expansion of services. Egypt, for example, embarked along this route with a Telecoms Act earlier this year. But a consensus on the best way forward still seems out of reach.

"The most difficult part of universal service is financing. Large private companies cannot achieve access in rural areas, one needs to promote entrepreneurship inside the country," says Toure. "We will be looking at ways to address this issue," he adds.

Whether WSIS proves to be another talking shop or conjures up more concrete measures remains to be seen. But Toure seems optimistic that the numerous problems Africa and the development community have experienced in creating the environment that would help increase investment and access are at least gradually being overcome. And while pointing out that competition and privatisation are on the increase as markets are opened up and the investment climate improves, he also expresses optimism that the suspect practices of the past are being put aside and that independent regulatory systems in countries such as Nigeria are being adopted more widely.

"There are some countries that have taken the decision that they want to move forward," he says. "People were looking at Nigeria as a country where there was bribery, but this is over. I know the chairman of the Nigerian Communications Commission and I tell people that if you want to bribe him, go ahead, and he will put you in jail. I think there is a new type of leadership in Africa that means business and is looking for results," Toure adds.
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