Sub-Saharan Africa currently has the least developed communications network in the world. With almost 12 per cent of the world's population, the region has only 0.5 per cent of all telephone lines (about 3 mn lines, South Africa excluded). Compounding the chronic shortage of lines, few people can afford to own a telephone, says the Economic Commission for Africa (ECA).
There is a vicious circle. Most Africans live in rural areas; the greater the distance to the capital, the fewer the telephone lines. It is cheaper to install a line and own a phone on a large network than on a small network. It requires substantial investment to expand the network and lower costs by reaching more people. Most African countries are neither able to make the required investment themselves nor attract foreign capital in sufficient quantity to expand the network faster. The usual reason is the limited market for phone services when most people live in low-income rural areas that do not generate enough revenue to be profitable.
The cost of a phone connection in Africa's mostly low-income countries was almost 20 per cent of the continent's per capita gross domestic product (GDP) in 1995, compared with 1 per cent in high-income countries. Even in urban areas, the high cost of access is a major reason why telephone networks are defective, ECA says in Policies and Strategies for Accelerating Africa's Information Infrastructure Development, a paper prepared for the African Development Forum.
In 1996, business phones in Africa cost
an average $112 to install -- over $200 in Benin, Mauritania,
Nigeria and Togo -- and $6 a month to rent, according to the International
Telecommunication Union (ITU). Renting a line cost between $0.80
and $20 a month, and calls cost from $0.60 to over $5 an hour.
Since then, the cost of local calls has risen to over $8 an hour
in Uganda, Gabon and Chad.
Given the high cost of private phones, Africa needs many more public telephones. As an intermediate step in Cameroon, private "phone shops" are springing up. Senegal has over 7,000 such "telecentres," employing over 10,000 people and generating nearly a third of all phone revenues. Most telecentres are in urban areas but are also appearing across the country. This expansion will continue as current work on linking 2,000 villages and towns by fibre optic cable reaches completion.
However, policy objectives in African countries vary between achieving universal service and providing affordable universal access. The first aims, in principle, for "a phone in each home"; the second involves widespread provision of public facilities at reasonable cost. South Africa's target is nationwide access to telephones within a 30-minute walk. The Gambia wants to put phones in all villages of 2,000 people or more, as does Botswana for villages with at least 500 people.
To finance this expansion of the network in rural areas, Mauritius, South Africa and Uganda have a Universal Service Fund into which phone companies pay a portion of their revenues (0.16 per cent in South Africa). Morocco uses operator license fees to finance rural telecommunications projects.
Other countries have given their phone companies broad universal service obligations without defining specific targets and policy makers need to think about their goals. This is increasingly important as phone services can now deliver the Internet. Yet, South Africa's Telkom is installing wireless infrastructure in rural areas that cannot provide acceptable speeds for Internet connection.
These days, greater access to more extensive communications networks is seen as a prerequisite for development and not an outcome. It is also expensive --the ITU says it would cost $6-8 bn for 4.5 mn new lines in Africa. But as "cash cows" for governments, state-owned companies are seldom free to invest their profits in extending their services. Revenue from privatization and license fees also tends to disappear into government coffers instead of network expansion.
Worse still, government offices usually incur the biggest communications bills but do not pay on time. An ITU study of 10 sub-Saharan countries found that on average, only 60 per cent of bills get paid and, in most cases, governments are the largest debtors.
Ever-bigger private firms are battling for dominance in thriving
national and international telecommunications markets, replacing
public monopolies. Several African countries have also embarked
on privatization and other measures leading to full competition,
but so far most have sold the state monopoly in basic phone services
to a single private company or consortium (see box below).
Only Ghana, Madagascar, South Africa and Uganda have introduced competition in the national network while Mozambique, Nigeria and Sudan have issued licenses for limited competition in some parts of the country. In Ghana, a consortium led by the US-based Western Wireless bought a license guaranteeing a five-year share of the fixed-line market in which the only competitor is the former state monopoly. It can also provide mobile phone services for the next 20 years. Only a handful of countries have committed themselves to the World Trade Organization target of full competition in basic services by 2005.
With fixed lines in short supply, mobile phone services have grown rapidly in 42 African countries, mainly in capital cities. They now comprise about a fifth of all phones in Africa, excluding South Africa. However, using a cell phone costs over $0.50 a minute on average and very few people can afford extensive use.
These are some of the elements that African policy makers must take into account as they develop strategies for liberalizing and extending telecommunications. New technology is gradually lowering the cost of expanding networks and owning or using a growing range of services. Fibre optic cables and wireless and satellite facilities can make rural areas much easier to reach. As in other sectors, careful regulation of more competition may facilitate infrastructure development. But a country must have a plan.
With a view to increasing the economies of scale needed to attract private investment, nearly half the 14-member Southern African Development Community (SADC) has adopted a legally binding protocol on communications. SADC has also set up the Telecommunication Regulators of Southern Africa (TRASA) forum to share ideas and experiences.
At regional level, Africans ministers adopted the African Information Society Initiative (AISI) at an ECA conference in 1996. Combined with the Abidjan African Regional Telecommunications Development Conference held the same year, AISI has created significant pressure for appropriate regulatory, tariff and service provision policies.
In 1998, over 40 countries endorsed "the African Connection," an initiative which calls for the installation of 50 mn telephone lines in Africa over the next five years. This is now a project of the Nairobi-based Pan-African Telecommunication Union (PATU).
Meanwhile African countries have two basic problems to overcome. The first is the lack of coordination between key ministries such as finance, planning, trade and telecommunications. The second is the insufficient collaboration between anglophone and francophone countries that weakens Africa's position in global forums and hampers sub-regional and regional activities.
No phone, no computer for most Africans
Over 50 per cent of the lines are in urban areas. Over 70 per cent of the population is rural. There is roughly 1 public telephone per 17,000 people. The world ratio is 1 per 600 people, and in high-income countries, 1 per 200. Average annual growth of lines is about 10 per cent. Over a million people are on waiting lists for a phone. Sahelian and Central African countries such as Niger and Zaire have fewer than 2 lines per 1,000 people. North and South Africa have about 35 lines per 1,000 people. West and East African coastal countries have between 2.5 and 10 lines per 1,000 people. Besides North and South Africa, only Botswana, Cape Verde, Gabon, Mauritius and Swaziland have over 1 line per 50 people. Most calls between African countries are still routed through Europe or the US; this costs African countries some $400 mn a year in transit fees. Of Africa's roughly 1 million Internet users, 90 per cent are in South Africa. Internet service providers are concentrated in capital cities; reaching the Internet from elsewhere usually means an expensive long-distance call. Average costs of an Internet account for five hours a month are $60 (telephone line rental excluded). In countries with per capita incomes 10 times higher than the African average, costs of five hours of similar Internet access range from a high of $18.50 (Germany) to a low of $7.25 (US). There are fewer than 3 computers per 1,000 people; 1 person in 1,500 has access to the Internet; the world average is about 1 in 40.Nearly 80 per cent of all websites are in English; only 10 per cent of the world's population speak English. Africa generates some 0.4 per cent of the contents of the World Wide Web and only 0.02 per cent when South Africa is excluded. Over 60 per cent of Africans can be reached through existing radio broadcasting networks. |
Africa has some 14 mn telephone
lines, or fewer than 2 per 100 people. Excluding South Africa,
sub-Saharan Africa has fewer than 0.52 lines per 100 people.