Get AfricaFocus Bulletin by e-mail!
More on politics & human rights |
economy & development |
peace & security |
Print this page
Visit AfricaFocus Bookshop US |
Africa: Imagining the Digital Future
Jan 21, 2006 (060121)
(Reposted from sources cited below)
Russell Southwood's Balancing Act Africa's News Update, coming out
weekly in English and monthly in French, is packed with news about new developments in African
telecommunications, internet, and computer technology
(http://www.balancingact-africa.com). In the latest issue,
Southwood imagines what the scene could look like five years from
This issue of AfricaFocus Bulletin includes the lead article
"Imagining the Future: Africa Looking Forward Five Years from Now,"
and excerpts from several typical articles from recent issues,
highlighting developments such as wireless access using lampposts.
street vendors reselling mobile minutes, and the expansion of "grey
area" voice communications over the internet While some of the
technical terms used below are hardly general knowledge, these
developments--with their potential for further dramatic reductions
in the cost of communications within Africa and between Africa and
the rest of the world--are of much wider than technical relevance.
For previous AfricaFocus Bulletins on issues related to information
technology and communications, visit
++++++++++++++++++++++end editor's note+++++++++++++++++++++++
Imagining the Future: Africa Looking Forward Five Years from Now
Balancing Act's News Update 288 (15th January 2006)
[To subscribe, either in English or French:
To contact Balancing Act:
Russell Southwood, Balancing Act, 71 Crescent Lane, London SW4 9PT
Tel/fax: + 44 20 7720 5993 Cell: + 44 7973 561987
The start of the year always sees many predictions for the coming
year and a certain amount of gloating from those who feel they
guessed right last time around. Some predictions are easy. They
are just about pointing to something that is about to take off.
The start of Africa's broadband markets would be a typical
example. Other predictions are less easy to make. However, making
predictions in Africa is so much harder because so much depends on
the often unpredictable mix of Government action and commercial
strategy. It always seems to be a case of "if this happens, then
that can happen". So this week we try to look forward to what the
future might hold in three to five year's time.
These are not predictions but are an attempt to identify a number
of key things that need to change in Africa in order for the
Internet and telecoms sectors to continue growing and for them to
play a significant central role in the economic growth of the
continent. All of them require everyone involved to be able to
make the leap of imagination that will enable a different
So let's try and imagine a future in which:
- The cost of international bandwidth falls to near European
levels: Those involved in the EASSy consortium are already talking
about a wholesale price of just over US$1000 per mbps. It could be
perfectly possible for the consortium to accept external donor
financing and bring the price down to the US$500-1000 range. By
itself, cheap international bandwidth will not make a change but
unless the continent can get below the US$1800-2000 per mbps
'floor price' that can be achieved on satellite, it will continue
to pay more than its competitor developing countries. In a
continent with widely dispersed rural populations, satellite must
continue to have a role to play but it is not the answer to
getting more competitive, high-volume bandwidth.
- The cost of domestic calls goes down to US0.5 cents a minute:
It's happened elsewhere and if the mobile companies are to
continue getting business growth for the foreseeable future, they
will need to continue to produce lower prices in order to widen
their markets. Sadly the worst of the mobile companies are still
just "harvesting" the abnormally high rates of return that their
high prices have bought with them and have forgotten that as "new
incumbents" they might need to make real innovations as the market
changes. The mobile companies are now nearing completion with
network investment. It's relatively cheap to connect a mobile
subscriber whereas rates are still high. For a fixed line
operator, it's relatively expensive to connect a subscriber but the
rates are relatively cheap. When the vast majority of people make
a cell phone their main form of voice communication why does it
command a premium in terms of rates? Convergence will put this
strange paradox under close scrutiny. How can it make sense to
offer a mobile service where the phone is locked to the local
cell? The history of the rise of Reliance in India gives a clue as
to how this situation will begin to break down.
- Cost of calling friends, family and international business
contacts abroad comes down to 5 cents a minute: At present, this
kind of call in all too many African countries costs US$1 a minute
using the incumbent telco. Truly competitive prices in the "grey
market" show that this can easily go down to US$7-10 cents. If the
interests of Africa's consumers (whether as individuals or in
organisations) gets put first, then both regulators and operators
would be really seeking to lower these prices. Low-cost broadband
enabling voice offers can deliver this promise.
- VoIP is legalised across the continent: Using VoIP will allow the
possibility that incumbent telcos could work with the ISP sector to
create an IP-based network that allowed locally-owned service
businesses to flourish and to contribute to economic growth. The
steady roll-out of fibre networks across the continent - with
alternative infrastructure providers (like power companies) and
carriers' carriers - will allow IP-carried calls to be made
between African countries at a far lower cost than switching them
via satellite to Europe or North America. The prices just have to
come down below those currently offered on satellite.
- The cost of reasonably-specified laptop comes down to between
US$100-200: Nicolas Negroponte's "supply-led" dream is unlikely to
succeed but someone will make the breakthrough before too long. A
Chinese company has taken over IBM and it's likely that before too
long its business strategists will turn their minds to how they
can create new business in emerging markets. No-one is arguing
that cheaper computing devices will overcome illiteracy levels but
there is still such a large, unsatisfied market out there amongst
those that are literate.
- All government offices are connected and have access to both VoIP
calling and Internet: So much of the development of connectivity
elsewhere relied upon the creation of a "critical mass". Government
(and not always national governments) have a key role to play in
creating that critical mass. It's small wonder that the
considerable number of "pilot projects" have found it hard to
flourish if there is no-one to connect to at the other end of the
e-mail or the phone call. A small seaside municipality in South
Africa - Knysna with only 50,000 inhabitants - gives some idea of
how things can be done. Working with the private sector, it has
connected up all government offices and local inhabitants can make
free calls for enquiries to the municipality. If local
authorities, why not groups of hospitals or health clinics?
- Every university student has low-cost access to the Internet: The
fuel for change is transforming people's sense of what can be done
through ideas. The growth of cyber-cafes has already demonstrated
that the younger generation of Africans is thirsty for knowledge.
Buying bandwidth in bulk can provide this and the pioneering
University bandwidth consortium in East Africa may yet blaze the
trail. Imagine the next generation of Africa's elite understanding
computers and using the Internet as if this was as natural as
going back to visit their parents in their home village. Imagine
Africa's political elite skipping a generation so that the current
generation of pensioners can enjoy their twilight years
entertaining their grandchildren rather than resisting retirement.
- Transferring money electronically becomes easier than carrying
large amounts of cash: It is now easy to buy mobile minutes and
transfer them to your mother in an up-country village. These
minutes are a transfer of money for money is simply something that
people accept has value (gold, paper, coins etc). A mobile company
has the capacity to store and facilitate the transfer of cash. If
they want to innovate (perhaps in partnership with the continent's
deeply uncompetive banks), then instead of talking about accounts
for the "unbanked", those at the bottom of the pyramid could
"bank" money as minutes. And before you know where you are,
they've established a "financial history" and...well you can write
the rest of the story.
- Investment is encouraged in the low-cost, rural voice challenge:
Africa's regulators have become so used to taking money off
operators for licenses that they are perhaps unprepared for the
next phase where they will have to provide incentives to find
business models that work commercially in areas where a market is
barely functional. Thus far they have mostly given this task
through Universal Access funds to mobile operators or incumbents.
Neither could be said to have focused on lowering their cost base
to enter these markets. The low-cost voice challenge will probably
be met through using emerging mobile VoIP technologies. The
innovators could be small-scale local innovators who interconnect
with the larger operators.
- All of Africa's incumbents are either privatised or behave in a
commercial manner: It is impossible to have markets that operate in
favour of the consumer if the incumbent remains a protected area.
Employing several thousand staff too many involves paying money
that could be spent positively in other ways. Without a commercial
imperative, the incumbents will not grasp the potential they have
with any speed. Some of the monopoly SAT3 consortium members have
failed to sell much of their share of the fibre bandwidth despite
having the markets in which to do so and no real competition.
All of the above would produce a competive continent that might bid
for outsourcing and call centre work and develop its global
markets for other products and services. Without it, there is
little chance of large parts of the continent participating in the
global economy. If you can imagine even some of these things
happening....then maybe, just maybe Africa will be a different
place in five years. And we're not going to make a prediction
because only you have the power to bring it about.
Cameroon - Douala to Get Internet Services with Wi-Fi Lampposts
January 8, 2006
A Singapore company has devised a way to provide Internet services
through lampposts, the company said Wednesday.
The company, Nex-G Systems, was originally hired to provide
streetlights for the largest city in Cameroon.
When the lights go on, the company will also be providing
technology to connect people to the Internet, said chief executive
officer Ronnie Persad, a 55-year-old Singapore-based Briton. The
company won a US$29 million deal earlier this month to provide
"smart" solar powered lampposts to Cameroon.
"Initially, the idea was to install street lamps that could be
remotely controlled from a central point," Persad said.
"We thought, why not put in telecoms infrastructure as well so
people can go online and make telephone calls too," The Straits
Times quoted him as saying.
The company plans to install WiFi, a short-range wireless
technology, on about 4,000 lamps in Douala, providing Internet
access even to some of the city's remote areas.
The project will bring the Internet to sparsely populated places
where it is not profitable for telecommunications operators to lay
telephone cables, Persad told the newspaper. (Source:
Botswana: Young Making a Living Selling Airtime
November 6, 2005
In busy streets and malls, a new breed of vendors loudly announces
the prices of its single commodity. The vendors carry the product
sticking out of a 'purpose built' side of a carton box. The vendors
of mobile phone airtime are increasingly becoming a very distinct
and conspicuous group of traders around town. Their aggression and
persistence is perhaps only second to Combi men and bus touts.
A growing number of young people like Mpho Moitaodi are joining the
trade. In 2003, he was a fresh-faced 17-year-old. He was restive
but with no income. When he joined the trade, a good number of the
players were graduates of the street, seeking to augment their
earnings from other businesses like car washing and guarding in the
car parking lots.
When he ordered his first bundle of airtime at a Gaborone West
point of sale, he had overcome the stigma that comes with the
trade. By sunset, he had discovered an untapped potential. "There
is money in the selling of airtime. The response is overwhelming.
People, particularly elders are impressed by what I do," he says
and adds that he is living his dream. "I have always wanted to be
a businessman, I did business studies at school." With great care,
he would look at every passer-by and attempt to strike a
conversation. Some are not interested. He is not discouraged.
Moitaodi lives at the low-income SHHA houses in Gaborone West. He
sells airtime at Maruapula shopping complex. "I earn a living out
of this business," he confesses as his eyes travelled upwards to
where a group of people stood. His eyes stare intently at a man who
walks towards him. "I can afford to pay rent and send some of my
profits to mum at Kookane." Unlike most people who start business
just to escape from poverty, Moitaodi says he has always been
business minded. He has been inspired by his peers to venture into
the airtime business. He has a burning desire to go back to school.
This also inspires him. He hopes he will make money to go for
further education. "I really want to go to school," he says adding
that he will never abandon his airtime business.
He is full of life. His busy day starts in the morning. He goes to
queue at an airtime point of sale in Gaborone West before he heads
to Maruapula shopping complex. "Everyone is my client here," he
announces, perhaps to gain more inspiration as some people look
down upon him with disdain. He has managed to make enough money to
buy a pay phone. He says his turnover on a good day can be P1,400.
"I must tell you that I never go home with less than P900," he says
proudly and adds that he enjoys his business to a level that he
even dreams about it at night. He is thrilled. "I can afford to
save at least P200 per day. I like my business," he says.
(Source: The Reporter)
New wave of African VOIP operators emerge from the shadows of the
Excerpts only, for full story see
October 16, 2005
Africa's grey market VoIP operators are coming out into the light
as attitudes and legislation change. The emergence of a VoIP
service providers sector could prove almost as significant for
Africa as the earlier emergence of independent ISPs. Because beyond
the mobile companies, it has been the entrepreneurial energy and
lobbying of ISPs that has driven regulatory change in many
countries. The emergence of the newly legalised VoIP service
providers (or those who hover in a legal 'no-man's land) will add
further pressure for change. In this week's issue we talk to one of
this new breed of operators Joseph Tekeng of Icon in Cote d'Ivoire.
So who are these former grey market VoIP operators? Most are young
(aged between 30-40), have a background in IT and are involved in
some way in distribution or sales. Often they operate IT businesses
(offering computers, networking and installation) as part of a
broader portfolio of businesses. At the smaller end of the
business, many are cyber-cafe owners who have sought to increase
their income. Indeed, the main motivation for taking the legal
risks associated with VoIP has been the desire to make money but
also to meet an overwhelming demand for cheap voice calls.
The operators are becoming increasingly sophisticated as the
business grows. In the early days, it was enough simply to sign up
with a US or European-based provider but now a number are operating
gateways on their own networks which requires a higher level of
These former grey market operators have been emerging with the end
of the international monpoly in many countries or in response to
the formal legalisation of VoIP. The list of countries where VoIP
is operated fairly openly includes Senegal, Cote d'Ivoire, Angola,
Tanzania and Nigeria. ...
The sceptics are inclined to believe that these operators are
simply parasitic arbitragers and that they will disappear when the
telco incumbent is able to resume its rightful place through
rebalanced lower international pricing. However the critics have
perhaps failed to understand the impact of IP networks on the shape
of the business. IP networks - in contrast to traditional telco
networks - are decentralising. They allow the intelligence in the
network to be at the edge rather than the centre of the network. As
a result, they encourage the growth of small service providers at
the edge of the network and not just in VoIP services.
So how big is the VoIP sector? We estimate that the current
large-scale local providers and international suppliers
conservatively account for about 15 million minutes out of an
annual 64.9 million minutes (source: Balancing Act Voice and Data
Bandwidth Forecasts): in other words about 23% of the total market.
Cameroonian Joseph Tekeng of Icon is a good example of this new
breed of VoIP operators. Icon is offering VoIP solutions to both
corporate and residential customers in Cote d'Ivoire and has plans
to expand in other parts of West Africa. His operation exists in
the legislative 'no-man's land' (vide juridique) that exists in the
country. The international monopoly has been ended but the
Government is currently in no shape to frame and pass a framework
for voice operators. As Tekend told us:"Cote d'Ivoire telecom are
not able to pursue us on this. It still has a monopoly on local
calls but not on international."
90% of Tekeng's customers are call-shops in Abidjan and as Teken
says:"Because of the political situation we have not been able to
offer the service more widely."Icon has contracts with two ISPs for
connections. Customers get an ADSL line: FCFA38,000 a month fore
128K or FCFA65,000 for 256K. It sells to its call shop customers at
3 cents a minute for calls to places like the USA, Canada and
Europe and offer per second billing. The call shops sell on these
minutes at between 10-20 cents a minute. Its margin is between
15-25% depending on the type of customer:"We are trying to find
ways to reduce our margin so that we can expand the number of
customers we have."
The call-shop customers take an internet connection from Icon and
buy an internet gateway with a graphic user interface where they
can buy pre-paid minutes from a minimum of 25 euros upwards.
Currently it has about 200 customers but when it reaches between
300-400 customers Tekeng believes that it will be able to offer
free calls to residential customers on the basis of a monthly fee
of FCFA5,000 a month. It buys its international minutes from
Xeloq.com in Holland and Icon has set up its own domain to sell its
It has opened an office in Ghana and plans to expand there. It is
offering its services to corporate and residential customers only
at the moment as VoIP is still 'illegal' there and therefore it
will not sell to call-shops. And the price? 15-20% more than 3
cents a minute. It is looking at going into Burkina Faso on the
same basis. Where there is little competition, it will increase its
margins accordingly. ...
AfricaFocus Bulletin is an independent electronic publication
providing reposted commentary and analysis on African issues, with
a particular focus on U.S. and international policies. AfricaFocus
Bulletin is edited by William Minter.
AfricaFocus Bulletin can be reached at firstname.lastname@example.org. Please
write to this address to subscribe or unsubscribe to the bulletin,
or to suggest material for inclusion. For more information about
reposted material, please contact directly the original source
mentioned. For a full archive and other resources, see