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Africa: Balancing Act Internet News
AfricaFocus Bulletin
Dec 7, 2006 (061207)
(Reposted from sources cited below)
Editor's Note
"In less than two years, the bandwidth of traffic on Internet
services provided by Senegal's telecom Sonatel has doubled. By
today, Internet services provided by Sonatel are the most
extensive in sub-Saharan Africa, second only to those in South
Africa, a country of much bigger resources." - Balancing Act
News Update
As shown by this news report and others appearing in the weekly
Balancing Act electronic news update, the IT and technology
scene in Africa is changing rapidly. But the proliferation of
projects can also result in obstacles and confusion. This
AfricaFocus Bulletin includes selected reports taken from recent
Balancing Act updates, including reports on new fibre connection
projects in East Africa, and on new developments in Senegal,
Mozambique, and Nigeria.
Balancing Act updates are available at
http://www.balancingact-africa.com.
Another AfricaFocus Bulletin sent out today gives updates and
background on new efforts to expand international bandwidth for
Africa.
++++++++++++++++++++++end editor's note+++++++++++++++++++++++
Kenya Begins the Countdown to Cheap International Fibre
Balancing Act's News Update 332 (19th November 2006)
http://www.balancingact-africa.com
It's like waiting for a matatu [in Kenya: van/bus]. You wait for ages and
none come along. But just when you're about to give up hope,
three come along at the same time, all trying to come to a
screaming halt in front of you. Kenya now has three (or more)
potential international fibre projects that could be complete
within 12 months. Each one is loudly proclaiming that it will
deliver cheap international bandwidth. Russell Southwood took
the temperature in the market last week about what the impact of
this bandwidth will be upon the market.
The Kenya Government has signed an MOU to build a fibre link to
Fujairah in the UAE currently costed at Ksh5.7 billion. The
construction and supply contract will be awarded early next year
and the project, dubbed The East African Marine System (Teams),
will be ready by November, according to a joint statement issued
by both parties from Dubai. Many in the sector believe that it
will be more like 19 months or more before completion.
The Kenya Government will have a 40 per cent holding in the
project, Etisalat 20% and the remaining 40% will go to investors
in the East African region. The Government has said it will
organise an IPO on the Kenyan Stock Exchange. Several Kenyan
companies have expressed interest and one said that the
Government had told them it would "guarantee their loan". The
details of the finance package have not yet been settled but it
is unclear where the Kenyan Government will raise its 40% from.
Will the World Bank simply shift a portion of its EASSy funding
to the new project as many think likely?
The Government's commitment to a 12 month schedule is a bold
move but one that must lay them open to a certain amount of
scepticism. The tender for expressions of interest was only
issued 2 weeks ago and Government timetabling is notoriously
slow compared to the private sector. Apparently the Private
Secretary has been telling interested parties that the
Government wants prices comparable to those to be found in India
in 12 months time. This benchmark has been set in order that
Kenya will be able to compete in the international outsourcing
market.
Apparently a number of interested parties said that they would
put up all the money to build it if they could have a monopoly
and he sent them away disappointed. But more worryingly one
interested party told us that it could only get involved if it
also allowed Telkom Kenya to be a shareholder.
The next international fibre project is KDN's and it has now
signed its contract with Flag Telecom. Its link from Mombasa
will terminate in an undersea junction in international waters
off of the Yemen. It says the link will be fully operational in
the first quarter of 2008, just 15 months away. The company
believes that it will come to market with capacity at $500 per
mbps pm but that the price of bandwidth will go up to those
wanting to invest as time passes. In other words, for those who
commit early prices will be lowest and for those who come in
late, prices will go higher. It also stresses that its landing
station at Mombasa will allow other carriers to co-locate there
charging only electricity and services at cost.
So this leaves the third project EASSy looking as if it will be
the third runner. NEPAD appears to have made little more
progress on persuading more African Governments to sign its
political protocol. And whilst the members of the EASSy
consortium (that still includes KDN and Telkom Kenya) are still
moving things forward, there remains a disconnect between the
political and commercial ends of the project. If both of the
above projects go ahead, there is clearly much less need to
build the Mombasa-Djibouti section of the route and it has to be
said that both of the above projects have better international
connection points.
As if three were not enough, Ethiopia's ETC has now had its
international fibre connection working effectively for two
months via Port Sudan and Saudi Arabia. But because it is
landlocked and it had endless fruitless arguments with Djibouti
Telecom over control of a possible fibre link, it wants to find
a second international fibre connection. Therefore it is in
serious conversations with both of Kenya's fibre network
operators about connecting to the Mombasa links when they are
ready. If this goes ahead, both it and Kenya will then have two
international fibre links.
Because the process of getting the international fibre to Kenya
has been both confusing and "on-off", everyone in the market
(including customers) have understandably not really grasped the
impact of its arrival on their businesses. Until now ISPs and
satellite resellers have largely been in the businesses of
living on the margin they make between buying and selling
bandwidth.
These margins have been kept high as they have concentrated on
selling to comparatively few customers. Ironically it has been
a high-price, low volume business where their primary commodity
- bandwidth - has always been in short supply, not least because
some of them increased their margin by contending it as much as
possible. This has meant that bandwidth quality is often
variable at best for those not paying "top dollar" for a premium
service.
If you argue that international fibre prices should be low
price, high volume, then the national business model changes:
what's sauce for the goose is sauce for the gander. Bandwidth
becomes cheap and plentiful at a sub $1000 threshold. The
margins that can then be charged make it difficult for those who
are not operating at volume to stay in business.
However it does now open up opportunities for new services,
content and applications that can be sold to customers who
should now be paying European prices for real broadband
connections (1-2 meg upwards) rather than the paltry 64 kbps
they are currently receiving. There are at least 500,000
households in Kenya that are at an income level that make them
potential targets for broadband. It would take only half of
those households to sign up for there to be the beginnings of a
very different market.
The real sign that the market has not "got it" is that some key
ISPs are not passing on the information about these soon-to-be
cheap prices but are seeking to protect their high margins by
telling customers higher prices. A heads-up, guys. The sector is
a village and news will get round quickly and we'll encourage
the circulation of this price information. The market's about to
change, get ready to change with it.
At the national level, there is now a third source of fibre
capacity. Jamii Telecommunications has signed an agreement with
the Kenya Light and Power Company (KPLC) to sell an STM1's worth
of its fibre capacity in Nairobi and Mombasa, with KPLC saying
that it will triple its capacity shortly. Two other companies -
CTN and Cable Vision - have been granted a licence to sell
KPLC's capacity and it is telling (in terms of the argument
above) that both are in the video download and pay-TV business.
Not so far afield, Tanzanian power utility TANESCO is currently
building out fibre capacity and has invited bids to sell this
capacity. Again KDN is poised to make a fibre connection to
Tanzania.
However a recent ping on the Kampala-Nairobi route shows that
neither KDN nor Telkom Kenya has got its fibre route
operational. KDN is promising it will be operational by the end
of first quarter 2007 and that prices will be 20% cheaper.
Elsewhere in the market, the new VoIP operators are finding it
difficult to get interconnection agreements and to get proper
service from interconnect service providers. Telkom Kenya is
charging absurdly high prices but has at least reached
interconnect agreements. Nevertheless the new fixed wireless
operators - Flashcom and Popote - are having difficulties:
customers are unable to receive or make calls to certain
countries. Apparently anyone who calls a customer number of
these fixed wireless operators from Germany gets a number
unobtainable.
Access Kenya's Yello VoIP service has been aimed at corporates
and has attracted 250 customers who generate 120,000 minutes a
month. But it has had difficulty getting interconnection
agreements with the mobile operators. It made a complaint to
regulator CCK in April and became so frustrated that it said it
would run an advertisement publicising the position. Safaricom
came back to the table but Celtel refuses to enter discussions,
saying that it will do so in its own time.
Kenyan ISPs are under heavy pressure from all the new operators.
Flashcom and Popote are taking more money from data than voice
at the moment as customers are primarily signing up for cheaper
Internet access. Also the introduction of EDGE services by
Safaricom is eating into their high-end customers: one ISP's CEO
admitted privately that he was losing hundreds of customers a
month to these new competitors. The challenge for everyone in
the market will be whether they can take the soon-to-arrive
cheaper international bandwidth and use it to transform the
market.
Internet Booms in Senegal as International Bandwidth Breaks 1
Gig Barrier
Balancing Act's News Update 326 (8th October 2006)
http://www.balancingact-africa.com
In less than two years, the bandwidth of traffic on Internet
services provided by Senegal's telecom Sonatel has doubled. By
today, Internet services provided by Sonatel are the most
extensive in sub-Saharan Africa, second only to those in South
Africa, a country of much bigger resources.
This is reported in a press release by the Senegalese telecom
company, which explains that "bandwidth of traffic on the
submarine cables of Sonatel by 7 September 2006 has passed the
mark of 1.24 gigabyte a second."
This bandwidth of traffic is both a key measure of quantity, but
also of the quality of Internet services provided to the public,
"because it determines the speed of downloading pages, notably
from servers based in Europe or the United States, and at bottom
line, as this number is increased, the more comfortable your use
of the Internet gets," the Sonatel statement adds.
The company further explains that the current extensions were to
offer users in Senegal services that are of a superior quality,
that come at a higher speed and that will provide for more
comfort on the Internet; including improved flow in the
downloading of pages and quicker downloads of information,
navigation, reception of e-mails, teleconferences and
multi-media services.
Bandwidth of Internet traffic to and from Senegal, as operated
by Sonatel, has been increasing at a booming speed ever since
2002. It went from 42 to 53 megabytes a second in June 2002. By
November 2004, it had already increased tenfold, reaching the
level of 512 megabytes a second. By now, it has again doubled,
reaching the benchmark of 1.24 gigabytes a second.
Internet use in Senegal has also been booming for the last
years, especially in Dakar, but also beyond the capital, where
an impressing telecom infrastructure has been created. As prices
for broadband installation and services rapidly are going down,
a bigger segment of the population uses the Internet at work and
at home. Standard broadband subscriptions cost around euro 80
for installation and euro 40 a month, while even cheaper deals
can be found.
The real boom in Internet - reaching a large part of population
- is however attributed to Senegal's large and ever-growing
number of telecentres or cybercaf�s, which combine telephone and
fax services with Internet renting at a low price. Renting a
computer connected to the web normally does not costs more than
franc CFA 300 (euro 0.45) an hour. Uses vary from e-mail
communication to news reading, chatting, games and multi-media
usage, and costumers include almost all social layers. (SOURCE:
afrol News)
Internet Access on the Increase in Mozambique
Balancing Act's News Update 329 (29th October 2006)
http://www.balancingact-africa.com
The number of Internet Service Providers (ISPs) in Mozambique
has grown dramatically, implying an enormous increase in the
past few years in the number of companies, institutions and
individuals with internet access.
The general manager of the regulatory body, the Mozambican
National Communications Institute (INCM), Luis Rego, told AIM
that at the end of the 1990s, there was just one ISP in the
country - the Eduardo Mondlane University. But today there are
more than 20, in what has become an expanding and fiercely
competitive market.
However, internet services are heavily concentrated in Maputo,
with some of the ISPs reluctant to expand to smaller cities, on
the grounds that the demand there is not sufficient, or the
electricity supply is not reliable. The latter argument,
however, no longer holds for any of the provincial capitals,
which are all linked to the national electricity grid based on
the Cahora Bassa dam.
Rego was speaking during a break in a Technical
Telecommunications Meeting of the Community of Portuguese
Speaking Countries (CPLP), held in Maputo to exchange
experiences on regulatory matters, universal internet access,
broad band, and satellite networks, among other questions.
It is difficult to establish how many Mozambicans use the
internet. Clearly only a small minority have been able to
purchase their own computers and thus have internet access at
home. But many more can use the internet at their workplaces, or
in the increasing number of Internet cafes dotted around the
country.
The Eduardo Mondlane University estimates that 600,000 people
(out of a total population of around 19 million) currently have
Internet access.
The INCM hopes that more ISPs will provide services in the
smaller towns. The leader in this field is the company Teledata,
which now operates in all provincial capitals, and several
districts. (SOURCE: Agencia de Informacao de Mocambique)
Ghana Retains Seat at World Telecom Conference in Turkey
Balancing Act's News Update 333 (26th November 2006)
http://www.balancingact-africa.com
The climax of the Plenipotentiary Conference of the
International Telecommunication Union (ITU) on-going in Turkey
was reached on 15th November 2006 with the election of 46 Member
States to sit on the ITU Council. The Council
represents the membership of the Union in the interval between
Plenipotentiary Conferences and its role is to consider, within
the period, broad telecommunication policy issues to ensure that
the Union's activities, policies and strategies fully respond to
today's dynamic, rapidly changing telecommunication environment.
It also prepares a report on ITU policy and strategic planning.
In addition, the Council is responsible for ensuring the smooth
day-to-day running of the Union, coordinating work programmes,
approving budgets and controlling finances and expenditure.
Each of the five administrative regions is entitled to a number
of seats, that Member States compete for through balloting, to
make it to Council. The competition this time round was fiercest
in Region D (Africa) where 20 countries contested for the 13
allotted seats.
In a tense voting session to decide the Council Members, Ghana
retained its seat on the Council with an improved performance
from the last Plenipotentiary Conference. Ghana placed ninth
this time (107 votes) as against the 13th position (83 votes) it
occupied in 2002 in Marrakesh, Morocco.
The casualties from the Africa Region were Uganda, Burundi,
Sudan, Gabon, Cote d'Ivoire, Rwanda and Zambia, as they failed
to make it to the Council. Ghana's Minister for Communications,
Professor Mike Oquaye was earlier in the year elected
Chairman/Coordinator of the Commonwealth ITU membership.
Ghana, as Coordinator for Commonwealth positions in the
Plenipotentiary Conference, was in the forefront of the
negotiations that saw the election of Mr. Hamadoun Toure of Mali
to the top position of Secretary General of the ITU.
Prof. Mike Oquaye was mandated by the Africa Group and the
Commonwealth ITU Group to seek the support of the other Regions
of the ITU in the crucial third round voting that eventually
secured the seat for Africa. The task involved diplomatic skills
and saw the Ghanaian Minister winning great admiration in the
process.
Ghana had to withdraw the candidature of Mr. John R. K. Tandoh
in the contest for the Position of Secretary General of the ITU,
because the topmost position had been won by an African and for
that matter the ITU would not vote for a second official from
Africa.
For the same reason, Patrick Masambu of Uganda who was the
front-runner for the Position of Director of the Development
Bureau succumbed to Al Basheer of Saudi Arabia for a position
that was well deserved for Africa.
The conference will end on 28th November 2006 with the
ratification of various Acts to guide the Telecommunications
sector.
(SOURCE: Ghanaian Chronicle)
Nigeria Will Be Africa's Largest Phone Market
Balancing Act's News Update 333 (26th November 2006)
http://www.balancingact-africa.com
Nigeria is set to take over from South Africa as the largest
mobile phone market in Africa by the end of 2007.
This information was disclosed by Informa Telecoms & Media's
World Cellular Information Service (WCIS),a searchable on-line
database providing a constantly updated and accurate source of
research data on the wireless industry worldwide. .According to
the information service, Mobile subscriptions in Nigeria will
exceed 30 million at the end of 2006 and 35 million in South
Africa. Informa also forecasts 44 million users in Nigeria and
40 million in South Africa at the end of 2007. Nigeria according
to the statistics released will then account for 19% of Africa's
total mobile users up from 14% at the end of 2006. Nigeria is
also expected to add 13 million subscriptions over the year
2006, an increase of 44% compared to the net additions recorded
over 2005.
According to Devine Kofiloto, Principal Analyst at Informa
Telecom's and Media, "With an estimated 130 million inhabitants,
Nigeria is Africa's most populated country. Despite a high
yearly growth (181% over 2004 and 96% over 2005), the country's
penetration rate was still at 19% in September 2006 compared to
77% in South Africa at the same period. Nigeria is also a very
competitive market with 4 GSM players and 5 CDMA networks
actively involved in the mobile field".
As of September 2006, Nigeria counted 25 million mobile users.
MTN lead the market as it held a 41% share. Globacom and Celtel
controlled respectively 29% and 24% of the market, while M-Tel
was at 4% and CDMA networks represented 2% of all the mobile
users in Nigeria. (SOURCE: This Day)
Copper Thieves Continue to Be a Plague for African Telcos
Balancing Act's News Update 333 (26th November 2006)
http://www.balancingact-africa.com
This week, there are three further reports of damaging copper
cable thefts from Namibia Telecom, Uganda Telecom and Telkom
Kenya.
Telecom Namibia says it has suffered losses amounting to N$760
000 this year through acts of vandalism and copper wire theft.
Telecom's senior manager for communications, Oiva Angula, said
copper wire theft was on the increase, resulting in more
telephone system failures in some parts of the country.
"In the past 11 months, over 26 copper theft incidents were
recorded, and due to this, hundreds of subscribers were left
without communication for days," he said. Most of the thefts
occurred in the surroundings of Rundu, Dordabis, Swakopmund,
Usakos, Otjiwarongo, Okahandja, Okatope and Windhoek's Hosea
Kutako International Airport. Telecom Namibia has now joined
forces with the Namibian Police to help prevent theft, identify
stolen copper wire and arrest criminals, including their
accomplices.
"The public too could play an important role in assisting in
both the protection of these public assets and apprehension of
such criminals to prevent the immeasurable inconvenience brought
about when the telecommunication lines are interfered with,"
Angula said.
He called on members of the public to call the nearest Police
station or Telecom Namibia whenever they notice something wrong.
"Telecom Namibia pays handsome rewards to any member of the
public for information that leads to a successful conviction or
the recovery of stolen assets.
In the meantime in Uganda, power and telephone cables worth
sh280m were recovered at Mpoma sub-county in Mukono in an
operation aimed at curbing power and telephone cable vandalism.
Umeme, Uganda Telecom (utl) and the Police conducted the
operation. Four tonnes of dismantled cables were found in
tightly-guarded and fenced premises.
Umeme's investigating officer Fred Masinde said the arrested
suspects would help reveal where the cables are sold. "Electric
and telephone cable thefts are on rampage since the year began,"
he said.
In Kenya, there were reports of cables being cut at the northern
end of Waikayi Way, leading to service outages. Apparently
police managed to detain a gang of copper thieves recently but
did not have sufficient evidence to arrest the "Mr Big" who is
behind a spate of similar copper cable thefts. A recent case
showed that once stolen the copper is shipped by container to
China. (SOURCE: The East African Standard)
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.
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