World Dialogue on Regulation

As part of the Catalysing Access to ICTs in Africa initiative and to contribute to efforts to promote open access to ICT infrastructure in Africa, the Association for Progressive Communications (APC) released a paper Open Access: Lowering the Costs of International Bandwidth in Africa. According to the author of the paper, Mike Jensen, a variety of factors are responsible for the lack of access to bandwidth in Africa, but the biggest cause is the high cost of international connections to the global telecommunication backbones.

Bandwidth is the life-blood of the world's information and knowledge economy, but it is scarcest where it is most needed - in the developing nations of sub-Saharan Africa. The countries in Sub-Saharan Africa have the lowest teledensity in the world and the highest unmet demand telecommunication services.

 

Few organizations can afford an internet connection and when they can afford it, the costs are usually hundreds or even thousands of times higher than for their counterparts in the developed world. According to the paper Open Access: Lowering the Costs of International Bandwidth in Africa of the Association for Progressive Communication (APC) a variety of factors are responsible for this situation, but it all boils down to the exorbitantly high cost of international connections to the global telecommunication backbones.

 

The author of the APC's Issue Paper, Mike Jensen, approaches the current situation through the analysis of the experiences from SAT-3/WASC/SAFE fibre projects in sub-Saharan Africa. The SAT-3/WASC's first segment connects Portugal to the Cape in South Africa reaching eight costal countries along the way: Senegal, Ivory Coast, Ghana, Benin, Nigeria, Cameroon, Gabon and Angola. A second section, in the Indian Ocean, connects South Africa to Malaysia while passing through Mauritius and India (SAFE). The project was jointly funded by 36 members and spearheaded by South African Telecom. The project cost about US$650 million. The ownership of the cable was established as a club consortium, which is a confidential shareholder agreement with three recurring issues: national operators have a monopoly on the landing stations in their countries; there is a monopoly on the sale of capacity and; the shares in the consortium are not tradable.

 

As it proved these conditions formed an impregnable fortress that put an enormous strain on the further development of the nations that were not initially included in the consortium. Moreover, new entrants in the telecom market were faced with non-competitive prices for their connectivity.  According to the calculations in the paper, the investment of SAT-3 has already been recouped and running costs should drop to about US$30 million per year. Taking into account the new upgrade costing US$30-50 million, charges could come down to something closer to those found on the North Atlantic. However, this is unlikely to occur in the absence of competition from other new cables.

 

Attempts to open up the agreement of the consortium have failed. Therefore most observers have concluded that improving access to low-cost international bandwidth is more likely to be achieved through new projects which will also put competitive pressure on the old models.

 

One of the new projects than could turn the tide and open up the route to low-cost international bandwidth is the East African Submarine System (EASSy).  Initially started under a closed consortium ownership model, like SAT-3, an 'Open Access' movement is gaining momentum and puts pressure on policy makers, industry and governments to chose a different direction. The seeds for the alternative initiative were laid at the November 2005 meeting of Southern Africa ICT policy maker in Botswana. During this meeting they requested their representative body, the NPAD e-Africa Commission to develop an Open Access non-discriminatory model to build the necessary fibre infrastructure in the region. The meeting proposed to use Special Purpose Vehicles (SPV's), consisting of Public-Private Partnerships, to operate the infrastructure. After extensive meetings with stakeholders, an Intergovernmental Working Committee was formed to examine the possibilities of a SPV. At the same time, a group of regulators lead by Kenya was tasked to examine a regulatory model proposed by the Commonwealth Telecommunications Organization (CTO).

 

The APC paper was completed in late June 2006 while the

negotiations were still going on.

Follow the EASSy saga on the APC Telecommunications Blog, Eric Osiakwan's Blog and Balancing Act Africa.

 

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