West Africa’s ICT industry faces major threat unless This came out at a focused group discussion held by the Science and Technology Policy Research Institute (STEPRI) of Ghana last Wednesday as part of the LICOM project .

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What must happen when SAT3’s Monopoly Comes to an End ?

Telecommunications analysts, observers and role players have drawn recommendations that will change the monopoly of the SAT 3 Consortium when its term comes to an end in June 2007.

Telecommunications analysts, observers and role players have drawn recommendations that will change the monopoly of the SAT 3 Consortium when its term comes to an end in June 2007.

The position paper that was released following a summit of interested parties in Johannesburg also recommended that countries that were not able to invest in SAT 3 due to various constraints, and countries without landing stations, as well as those of landlocked countries need to be properly understood before any decision on the future of SAT 3 is made.

The SAT 3 consortium was launched in 2002 and has 10 African members:Sonatel (Senegal) ; Coted’Ivoire Telecom ; Ghana Telecom ; OPT (Benin) Nitel (Nigeria) ; Camtel (Cameroon) ; Gabon Telecom ; Angola Telecom ; Telecom Namibia and Telkom (South Africa). Each of the African Consortium members were granted a monopoly for five years and this is coming to an end in June 2007. Telkom (South Africa) was subsequently elected a managing agent to handle management and maintenance issues on behalf of the Consortium.

In the communiqué, African regulators, policy makers, business people, civil society delegates, and consumer lobby groups pointed out that access to international fibre connectivity to enable the African continent to meet Africa’s economic and development needs in line with the Millennium Development Goals (MDGs) needs the support of all African governments, and regulators.

In the past regional Information and Communications Infrastructure projects have been developed without a suitable policy framework and as a result have failed to produce the desired developmental impact in terms of the New Partnership for Africa Development (NEPAD) principles and objectives.

Another stumbling block to the creative use of fiber optic connectivity to advance Africa information needs is the fact that that the members of the Consortium are now more or less fixed and it becomes difficult for a new shareholder to join the Consortium, and can reject any new applications on the basis of a single vote only. For example, Nigeria’s Second National Operator, Globacom applied to join and was rejected.

Industry analysts also noted that the monopoly that is enjoyed by the members of the Consortium is not in the public interest and has not resulted in affordable access for the citizens of the various countries. Africa’s telecommunications tariffs are quite high and are not affordable, and to empower Africa’s citizens SAT 3 prices must come down significantly. In most cases, the cost of calling from Africa to the developed world is significantly higher than for other continents.

Affordable access to telecommunications is crucial for economic growth and global economic competitiveness, good education and for the delivery of efficient government services. Furthermore, transparency on issues such as pricing and good corporate governance are essential to any arrangement concerning the future of SAT 3 once the period of national exclusivity expires.

Many commentators believe that competition is likely to be one of the biggest drivers in bringing down the cost of connectivity for consumers. This can only happen within an appropriate policy and regulatory framework that takes into account local market conditions as well as the absence of competition in the ownership and access to international gateways in many African countries. To be successful, regional collaboration between regulators and for regional regulatory authorities needs to be recognized and encouraged.

Although the proposed Eastern Africa optical fiber system is promoting and facilitating the provision of broadband ICT infrastructure to support high-quality , high-speed and reliable electronic communications in Eastern and Southern Africa and with the rest of the world at affordable prices for end users based on Open Access Principles, a more competitive environment must take precedence in order to allow for cheaper phone and Internet access for African businesses and end users.

The delegates at the conference were agreed that any future regulatory determination regarding SAT 3 should be in the interest of the industry as a whole and the African consumer rather than in the sole interest of any single operator or consortium. Currently, Africa’s main fiber route that is provided by SAT 3 goes from Portugal down the west of the continent to South Africa before joining the SAFE cable that crosses the Indian Ocean to Asia.

What hinders the competitiveness of the telecommunications industry in Africa is that the members of the Consortium are forced to buy their international capacity from the monopoly operator, and this allows a single company to have dominant market power over prices. Telecom Namibia for example does not buy its capacity from the Consortium due to Telkom (South Africa’s) high tariffs because Telecom Namibia has no landing station of its own.

Author : Mongameli Jabavu

Date : 08/01/2006

Source :

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