African Telecommunications:Towards a Renaissance

Michael MingesTelecommunication Development Bureau (BDT)International Telecommunication Union (ITU)

AfriTel 99Driving Wireless Basic Telephony for Africa

11-12 February 1999, Cape Town, South Africa

Background

• “AfricanTelecommunicationIndicators 1998”—ITU Report

• “The AfricanConnection”—Report of the AfricanMinisters ofCommunications

www.itu.int/ti/publications/#AF98

ren·ais·sance (rèn´î-säns¹, -zäns¹, rèn¹î-säns´, -zäns´, rî-nâ¹sens) noun

1. A rebirth or revival.2. Renaissance. a. The humanistic revival of classical art,architecture, literature, and learning that originated in Italy in the 14thcentury and later spread throughout Europe. b. The period of thisrevival, roughly the 14th through the 16th century, marking thetransition from medieval to modern times.3. Often Renaissance . a. A revival of intellectual or artisticachievement and vigor: the Celtic Renaissance. b. The period ofsuch a revival.

[French, from Old French, from renaistre, to be born again, fromVulgar Latin *renâscere, from Latin renâscì : re-, re- + nâscì, to beborn.]

The American Heritage® Dictionary of the English Language, Third Edition copyright © 1992 by Houghton Mifflin Company. Electronic version licensed fromINSO Corporation; further reproduction and distribution restricted in accordance with the Copyright Law of the United States. All rights reserved.

Renaissance

Economic renaissance

6.8

6.7

6.5

6.1

6.0

6.0

5.7

5.1

5.0

5.0

Dom. Rep.

China

India

Ireland

Mauritius

Uganda

Senegal

Cameroon

Macedonia

Cuba

GDP growth, Developingregions, 1998 % change

2.5

2.6

3.3

3.6

Americas

Asia

MiddleEast

Africa

20 fastest growingeconomies, 1999 GDP growth

Source: International Monetary Fund.www.imf.org/external/pubs/ft/weo/weo1298/index.htm

Source: Economist Intelligence Unit.www.eiu.com/pressrelease/WOUTPR99.html

Telecom renaissance

• African telecom sector booming• Various telecom market segments in

Africa—fixed, mobile cellular,Internet—growing at highest rates ofdecade

• Africa has highest growth rate intelecoms among all world regions

Fixed line growth

• Africa currentlyexperiencing itshighest growth rate inmain telephone linesof the decade

• 5 PTO privatizations in1996-97 compared tojust one between1990-95

• Installed base of 15million lines (end ‘97)will double by 2003

6%

7%

8%

9%

10%

11%

12%

13%

14%

15%

90 92 94 96 98

2000

Forecast

Africa: Annual growth in maintelephone lines

Source: ITU.

Fixed line growth drivers

• Economic upswing• Internet• Telecommunication

liberalization

0.90

1.70

2.912.86

0.88

0.440.22

1.11

0.670.65

0.300.19Guinea Ghana Senegal Côte

d'Ivoire

2001

1996

1991

Main telephone lines per 100inhabitants. 4 “privatizers”.

Source: ITU.

Mobile cellular growth

• Over 70% growth in1997 and probably1998

• 19 new privateoperators in last twoyears

• 1 million subscribersin ‘96, 2 million in ‘97,almost 4 million in ‘98and probably over 7million at end of 2000

17

25

35

4145 46

49

0

1'000

2'000

3'000

4'000

5'000

6'000

7'000

8'000

94 95 96 97 98 99

2000

NorthSSASouth

Number of countries

withcellular

Forecast

2.4

m

.8m

4m

Source: ITU.

African mobile cellularsubscribers (000s)

Mobile cellular growth drivers

• Substitute• Rapid deployment• Competition• Strategic partners• GSM / Roaming

12%

14%

14%

16%

16%

17%

19%

20%

26%

34%

AFRICA

Gambia

Mauritius

Tanzania

Malawi

Ghana

Côte d'Ivoire

Gabon

South Africa

DR Congo

Mobile cellular as % of totaltelephone subscribers, 1997

Source: ITU.

Substitution chart: Variety ofmarket structures / reasons:

DR Congo: War (cellular only wayto communicate)

S. Africa: Success of GSM duopoly

Cote d’Ivoire: high substitution afterjust a little over a year

Ghana: 3 operators

Malawi: monopoly

Internet

• Internet hosts : Bymid-1998 there wereabout 150’000Internet hostcomputers in Africa.

• Internet ServiceProviders: Around 400African ISPs by theend of 1998.

• Internet users: By theend of 1998, therewere over 1 millionInternet users on thecontinent (850’000 inSouth Africa).

46

39

12

30

31

0

1'000

2'000

3'000

4'000

5'000

6'000

1993

1994

1995

1996

1997

Jul-9

8

Number of countries

with local Internetaccess

Sub-Saharan AfricaInternet host computers

Source: ITU, Network Wizards(www.nw.com).

Regulatory trends

• Regulatory reformgathering momentum:– Separation of posts

and telecom– Creation of regulators– Privatization– Introduction of

competition

45

78

14

2021

1992

1993

1994

1995

1996

1997

1998

Number of African telecomregulatory agencies

Source: ITU.

International traffic

• Africa highlydependent oninternationaltelephone revenue

• Accounting rate issueof important concern

• ITU country casestudies for Africa:– Lesotho– Mauritania– Senegal– Uganda

(www.itu.int/wtpf/cases/index.htm)

Inter-national

calls25%

Net settle-ments29%

Domestic revenues46%

Senegal. Sources of telecomrevenue, 1996

Source: ITU Senegal Country Case Study.www.itu.int/wtpf/cases/Senegal/index.htm

Universal access

• Universal access morerelevant for Africathan universal service

• Distance and timefrom telephonerelevant indicators

• Widespread publictelephone availabilitycornerstone ofuniversal access policy

6.2%

3.1%

2.9%

2.7%

2.3%

2.2%

1.9%

1.9%

1.8%

1.8%

Senegal

Mauritania

Swaziland

Mali

Kenya

South Africa

Namibia

Morocco

Comoros

S. Tomé

Morocco

Payphones as % of maintelephone lines, 1996

Source: ITU.

The African Connection

• Report of the AfricanMinisters ofCommunication— May 1998

• Originated at AfricanMinisters Workshop inpreparation for AfricaTelecom ‘98

• “Road Map” forenabling Africa’slaunch into the“Information Age”

Full report available at: http://www.telecom98.co.za/africonnect.html

The African Connection -Contents

• Special Programme for Least DevelopedCountries & Rural Telecom Development

• African Telecom Policy and RegulatoryFramework Development Programme

• Human Resources DevelopmentProgramme

• Programme for Financing and FundingTelecom Development in Africa

• African Telecom Priority Projects• Programme for the Development of the

Information Society in Africa

33 of 48 LDCs in Africa

LDCs & Rural TelecomDevelopment

• Sector restructuring• Identify priority

project areas• Rural

telecommunicationdevelopment

• Technical assistance

Telecom Policy & RegulatoryFramework Development

• Comprehensive and coordinated telecompolicy at continental level

• Establishment of national regulatoryagencies and regional associations

• Coordinated frequency management• Rapid implementation (by June 2000)

Human Resources Development

• Database of African telecom experts• Database of human resource needs• African Human Resource Development

Policy• African Centres of Excellence• Network of human resource institutions• Common accreditation and certification

Financing & Funding TelecomDevelopment in Africa

• Measuring levels ofinvestment

• Development ofAfricanTelecommunicationsIndicators

• Exchange ofinformation andexpertise on financing

0

2

4

6

8

10

12

14

1997

1999

2001

2003

2005

2007

2009

Needed investmentActual investmentTeledensity

Telecom investmentrequirements in SSA, US$ billion

Source: ITU.

Have telephone

29%

No access18%

NearbyPublic phone

36%

Neigh-bours 6%

Nearby5%

Not Near-by 6%

Anot

her

phon

e

South Africa9 million

households

Telecom indicators moreappropriate to African conditions

• Towns with telephoneservice

• Payphones: Perinhabitant, Per mainline

• Distance from atelephone

• Time from a telephone

Source: Statistics South Africa. 1997 Censusin Brief.

• Households with a telephone

African TelecommunicationsPriority Projects

• Tele-medicine and Tele-health• Tele-centres• Tele-education• African Centres of Excellence• Terrestrial Telecommunications

Infrastructure Development• Development of and Access to the

Internet in Africa• Tele-Agriculture

Development of the InformationSociety in Africa

• Develop a Information Society policyframework for Africa

• Networking between AfricanGovernments using electronic means

• Convergence of broadcasting andtelecommunications

Conclusions

• There is an African Renaissance but…• … affordability is an issue...• … plus Africa is not the OECD…• … these must be dealt with for

renaissance to be sustained.

Affordability

$68

$47

$11

$64

$40

$35

$59

$78

Coted'Ivoire

Madagascar

Malawi

Morocco

Mozambique

Namibia

South Africa

Zambia

% GDPper capita

196%

16%

22%

1168%

59%

72%

225%

124%

70%

60%

52%47%

42%

30 40 50 60 70Rand per month

Telkom subscription

charge: R48.75

% of householdsthat could afford telephone service at differing monthly

costsThreshold: 3% of monthly

income

GSM monthly cellular tariffs.January 1999, 100 minutes, US$

South Africa.Telephoneservice affordability

Source: South African Universal ServiceAgency. Universal service and Universalaccess in Telecommunication in SouthAfrica. www.usa.org.za/

Source: ITU.

Recommendations

• Cooperation between government,operators and informal sector

• International, regional & bi-lateralorganizations should contribute resourcesto developing regulatory expertise

• Community access• Long term view

ITU Africa Contacts

Y. KouroumaAfrica Unit, GenevaTel: +4122 730 5430Fax: +4122 730 5484E-Mail:kouroma@itu.int

Y. BancouliField Office, DakarTel: +221 823 4940Fax:+221 822 8013E-mail:bancouli@itu.int

M. TayobField Office, HarareTel:+2634 77 59 41Fax:+2634 73 50 89

S. MahiddineField Office, YaoundéTel: +237 21 25 85Fax:+237 20 07 22

http://www.itu.int