Let the Competition Begin

with Nickey Mannya

Africa came 4th out of seven continents in the world on the use of Information Communication and Technology (ICT) for the improvement of the lives of people in the continent and economic development. This is neither good nor bad since being in the middle doesn’t really say much. One could argue though that for Africa, this is a good result given the continent’s digital divide history.

To own the top spot in terms of ICT development, some things are evident from those that did it before as to what needs to be done in Africa. We have a few exemplary leaders that have taken themselves to task to use ICT for the betterment of economies in their countries and job creation and general life improvement of the people. One such example is President Paul Kagame of Rwanda. The man took Rwanda from the rubbles of the 1994 genocide to win United Nation’s International Telecommunication Union’s 2007 Award for best president using ICT for the economic development, job creation and the improvement of people’s lives beating South Africa’s, Senegal’s and Ghana’s presidents respectively. In a way, this is a step in the right direction for Africa.

Another step that I would like to see been taken seriously is that of economic freedom in the ICT sector continent wide. This in turn would foster competition that ensures rapid growth & development, price war and raise the bar in service delivery levels. There seems to be some lack of leadership when coming to this issue. Maybe because some of the continent’s leading ICT service provider companies are still in the hands of their respective governments and not publicly held e.g. Nitel in Nigeria, Telkom including Vodacom in South Africa, Telkom and Safaricom in Kenya and the list continues. One could argue that the lack in leadership to foster competition is because the government’s fingers are in the service provider’s pocket so keeping them profitable means government’s bottom line gets more fattened.

Uganda has taken a step in the right direction and the results seem to be proving my case. A year ago, 2006, the government of Uganda ended the duopoly that had given exclusive rights to MTN Uganda and Uganda Telecom Ltd. Now, the Uganda communications sector attracted over Ush127.7 billion ($75 million) in investment last year, according to the latest investment report by the Uganda Communications Commission (UCC).
This figure is an increase of 47 per cent from the 2005. It excludes capital investment by the newly licensed service providers, which is estimated to be close to $70 million in the previous year.
The report, A Review of the Postal and Telecommunications Sector, June 2006 - June 2007, says revenue generated from the sector was estimated to be $360 million, an increase of 20 per cent from the previous financial year. The industry profit after all costs including taxes stood at $30 million.
"This is a net addition of 1.5 million customers between June 2006 and June 2007. It represents a 68 per cent annual growth rate," says the report. "Competition and the surge in investment expenditure have contributed to this growth. Increased government usage and investment by the new operators is projected to push the growth further in the 2007/08 financial year," says the report.
Competition has reduced start-up cost where, for instance, a new handset costs Ush65,000 ($39), a sim pack Ush3,000 ($2) and aggressive marketing account for the growth.
In South Africa, competition in the Mobile Phone sector is also making head waves leaving a gap in the fixed line telecommunications sector where Telkom is still the dominant player with most expensive tariffs in the world coupled with a not so satisfactory service delivery. MTN has recently dropped prices on all its data bundles and data contracts following the move by competitor Vodacom. This is where the consumer is really King.
Speaking at this year’s ICT Presidential Advisory council held late August 2007 in South Africa, President Thabo Mbeki fired at Telkom by calling on the telecoms regulator to find a speedy resolution to the country's local loop unbundling process.
Telkom currently has exclusive ownership of the local loop, which is the final link between the former monopoly and customers. Its grip on the loop has enabled it to charge high telecoms prices. Unbundling it would let other operators make use of it and a reduction in telecoms prices would follow.
"Independent Communications Authority of SA (Icasa) must intervene to speed up the progress of unbundling," Mbeki said after a three-day meeting on communications with an advisory group of business leaders and industry experts. This was after the appointment of one of the country’s ICT billionaires Mark Shuttleworth to the board of InfraCo, a company aimed at sorting all this out by providing alternative backbone connectivity to competing companies in South Africa. Why the delay in the local loop unbundling, I do not know and I wonder if those involved know too.
Looking west ward, Nigeria has certainly left the telecomm state where there were only a few dial-up e-mail providers and Internet service providers (ISPs) and when Nigerian Telecommunications Limited (NITEL) was the only Telecommunications operator. It was a dark era characterised by slow Internet links, poor service, high cost, lack of infrastructure and a not so progressive telecoms monopoly. Things have certainly changed to date.
In 2003 the Nigerian Telecommunications Act was passed by the National Assembly, giving autonomy to Telecommunications Regulator, the Nigerian Communications Commission (NCC). NCC issues licenses to private telecoms companies providing a variety of telecom services to the Nigerian populace including South Africa’s MTN.
The GSM revolution changed the face of ICT in Nigeria. But the picture would not be complete without mentioning the Private Telephone Operators (PTOs) and other landmarks such as the licensing of Globacom as Nigeria 's second national operator (SNO) as well as the licensing of 22 fixed wireless operators. Though Globacom is presently more active in the mobile telephony sector (Glomobile), it has the same licenses as NITEL. Its license constitutes a multi-service package of National Carrier, GSM, International Gateway and Fixed Wireless Access (FWA).
At present there are two national carriers, 5 digital mobile GSM operators and over 20 operators have been licensed to provide fixed wireless services at national and regional levels. Some of these PTOs and FWAs licensed earlier have now been granted Universal Licenses and about two of them – Multilinks and Starcomms have rolled our GSM services.

Since the GSM launch, mobile telephony has rapidly become the most popular method of voice communication in Nigeria. Growth has been so rapid that Nigeria has been described in various reports worldwide as "one of the fastest growing GSM markets in the world".
In South Africa however, the country is still awaiting the launch of Neotel, the recently licensed Second National Operator. Kenya is busy with the privatisation of Telkom and Safaricom, Namibia licensed MTC and Rwanda is winning awards. All these for economic growth, job creation and many other opportunities through ICT. Why are some still not getting it?

No comments have been posted about this Technology Opinion