The IT missionaries: preaching privatisation for Africa's telcos

The entire African continent has fewer telephone lines than the city of Tokyo - despite Nelson Mandela giving the issue top priority at Telecoms 95. With the next major industry summit just around the corner, Lisa Burroughes examines why little has changed - and why it's damaging businesses across the globe.

Four years ago, during his keynote address at the World Telecoms 95 conference, Nelson Mandela heralded South Africa's first representation in the International Telecommunications Union - but stressed what's at stake for the continent as a whole if further progress isn't made. He insisted: "Eliminating the distinction between information rich and information poor countries is critical in eliminating economic and other inequalities between North and South." As the international telecoms players get ready to meet once again in Geneva next month, Africa and the developing countries will again take centre stage. It's easy to see this simply as an attempt to ensure Africa doesn't get left behind and to ensure that its people aren't economically disadvantaged - which are, of course, laudable objectives. But at the recent African Computing and Telecommunications summit in Cambridge, where IT professionals from various African and multinational companies met, it was clear that the continent's need for an advanced telecoms infrastructure has very real benefits for 'western' companies as well. Nevertheless, it's one thing to identify the problems it's quite another to come up with a solution. In a globalising economy, multinational companies are looking at Africa as a site to establish new branches, but at the moment the ability to communicate between those offices and the rest of the corporate network is riddled with problems. Tony Hetherington, IT director for SmithKline Beacham Europe, Middle East and Africa, faces the difficult task of improving that communication for the pharmaceuticals giant. In his opinion: "Connecting the [African] branches to European and US networks just doesn't happen at the moment. There are too many problems to overcome." Another IT professional with experience of the problems is Martin Lewis, former IT director for PriceWaterhouseCooper in Zambia. He says: "There are a number of problems of which communications is one. African countries tend to have the technology within companies but getting WANs, Internet and email connections is essential for these companies to keep up with the rest of the world." So what is holding back the development of the continent's telecoms infrastructure? As was the case in Europe only a few years ago, lack of competition has a large part to play. The monopolistic state-owned companies are failing to provide adequate investment, and strict licensing restrictions have until now meant that it was virtually impossible for foreign operators to compete. This has prevented the development of voice and data communications in terms of quality, cost and availability. But since Mandela gave his speech four years ago, a great number of African countries have gone a long way towards liberalising their networks. Commander Griffiths, deputy minister of communications in Ghana, told delegates at the African Computing and Telecommunications summit that privatisation has enabled Ghana Telecoms to invest more than $450m and install more than 500,000 telephone lines. "This is something that would never have been possible before privatisation," he said. "Without telecommunications no country can have a serious information agenda and it will never be competitive." South Africa's director general for communications, Andile Ngcaba, was also confident with the progress his country has made. "From what the previous president said in Geneva, a lot has been done - Telephone access, Internet access, providing computers to schools and computer literacy," he said. But the introduction of competition in Africa is even more complicated than in Europe. The local operators are poor by comparison to the rich, well-established international operators. And as Bakary N'jie, Chairman of the Commonwealth Telecommunications Organisation and CEO of Gambia Telecoms, pointed out, international operators tend only to be interested in catering for international traffic. "International operators must not focus only on reducing the international tariff, because what is most important is the domestic network - one that is modern and expanded has a corresponding benefit on the international tariff," N'jie argued. However, N'jie believes that careful liberalisation is the key to creating beneficial competition. "There will be some countries where having only one other operator in the market is enough - for other countries it is possible to have several international partnerships and competing operators." Although liberalisation has brought costs down, many telcos remain reluctant to put heavy investment into rural areas with little promise of return. Yet it is in these areas that voice and data communications can offer so much economic opportunity. One answer to this problem is satellite communications - despite the recent failings of operators like Iridium and ICO, satellite technology has become the only real solution for IT professionals and telcos alike. Tim Farrar, senior analyst at Analysis, is confident that it will become a viable technology. "The costs are rapidly coming down - we have already seen V.Sat technology come down from a few ten's of thousands of dollars to a few thousands and we can expect, with new broadband services, that the cost will fall even lower," he said. Despite its progress, the entire African continent still has fewer telephone lines than the city of Tokyo. And there is still a lot to be done in terms of regulation and competition. So as World Telecoms 99 approaches, what can be done to prevent a growing divide between information rich and information poor countries will once again be high on the agenda.