Counting Cost Of Internet Access In Africa
By Phillip de Wet, ITWeb
JOHANNESBURG, SOUTH AFRICA,
19 Sep 2000, 9:29 AM CST
"Why does it cost so much to access the Internet in Africa?" That was the question posed by Jeff Cochrane, the IT and communications division chief of the United States Agency for International Development (USAID) in Kenya, in a discussion during the Highway Africa conference held last week at Rhodes University in Grahamstown, South Africa.
Throwing aside the usual argument that "This is Africa, things just cost more here," Cochrane used the example of a cybercafe in Nairobi to illustrate his point. At this cafe, he said, Internet access costs around R50 per hour. According to his calculations, a basic leased line would cost the cafe about R27,000 per month, and the cafe adds around 20 percent profit on cost.
Reduce the leased line access to a level closer to what the cafe would pay in America, say R3,000, and the price to the consumer drops to R30 per hour - taking into consideration that the company has other financial obligations such as rent, staff pay, etc, to meet. Now reduce the profit margin to the level it would be in a competitive market, and the cost drops to R25 per hour.
"According to my calculations, the cost of using a cybercafe in Kenya is double what it would be with cheap connectivity and in a competitive market," he noted.
Cochrane also illustrated what many speakers at the conference termed "intermediary access" or indirect Internet access, explaining that he has a friend in Sierra Leone with whom he stays in e-mail contact, although the friend does not have a computer. By relying on an acquaintance who does have e-mail, the friend can read his e-mail.
Almost wired
Mike Jensen, an independent consultant with decades of experience in telecommunications and Internet systems in Africa, told the conference that the entire continent is now wired. Almost.
"As of this month, all the capital cities in Africa are online, except Liberia. The ISP (Internet service provider) there couldn't afford their satellite connection."
He estimated that there is only 60MB of international bandwidth on the continent with SA excluded, and most of that is delivered via satellite.
Even with innovative telecommunications pricing and Internet policies, Jensen said, the price of access calls is still prohibitive throughout Africa. He added that four years ago, Senegal implemented a system that flattens the call charge for Internet access to that of a local call, regardless of where in the country the call originates. It was mid-2000 before Telkom announced a similar single number rate system for the South African Internet eXchange (SAIX) network.
However, in some African countries you can pay $8 or more per hour for a dial-up call, with the charge in at least 10 countries at $4, he says. In countries with a more competitive market, the charges can be as low as $0.60 per hour, but even there call charges still form the most expensive part of access costs.
"There is great variance on the continent," said Jensen. This can also be seen in the subscription costs ISPs charge. He estimates the average subscription cost outside of SA to be $50 per month, close to the average monthly salary a government bureaucrat can expect. But that figure can vary between $10 and $100 in different countries.
"ISPs pay too much for their international connectivity," he noted. He also blames the high license fees and license conditions of telecommunications and service providers, limitations imposed on wireless and very small aperture terminal satellite access, excessive import duties on equipment, and limited skill and knowledge of the available options for providing access.
Yet restrictive government policies are not always adhered to. "ISPs are putting in a lot of illegal wireless equipment regardless of the law. I see that trend continuing."
As an example, he cited Uganda, where there are at least 80 or 90 illegal connections to ISPs using spread spectrum wireless communication. "It is used where it is not regulated, and even sometimes where it is regulated."
The numbers game
Dan Musoke, a mass communications lecturer at the Makerere University in Uganda, suggested that ISPs routinely underreport their subscriber numbers to avoid high value-added taxes imposed on their businesses. He believes this may skew the number of users estimated on the continent.
He added that in Uganda, Internet cafes were charging Internet access at $0.80 per minute, but due in part to competition that had dropped to below $0.10 a minute.
Musoke echoed the hope of others at the conference that satellite access could prove a solution to the continental bandwidth crunch, especially if terminals were shared between households.
Paul Edwards, CEO of the Johnnic group, suggested that a company in his stable could soon provide such a solution. Orbicom, a company that Johnnic owns through M-Cell, is working on a two-way satellite Internet link, he said, with a teleport on American soil to give direct access to the US Internet backbone. He estimates the cost of user terminals at below $2,000.
He also believes that cellular communications can be part of the solution.
"In Kampala they are using digital (cellular) technology, in America they are still using the old analog technology," he said.
Johnnic owns the majority stake in cellular provider MTN, active in several African countries, including Uganda.
Edwards noted that even illiteracy could not keep Africa from taking its place on the Web.
"We believe in Africa that the problem is often illiteracy. Are we going to let that stop us? No. We can program computers to recognize voice and do it that way."
Edwards charges access pessimists with perpetuating a self-fulfilling prophecy. "I think the solution is already with us," he said. "Why are we waiting, why are we complaining about a lack of infrastructure? We will be able to do it (provide access soon)."
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