22 July 2008

Observations from West Africa - Broadband is Coming

Link to Event:

http://bciu.org/wip01/selected_program_by_region_or_country.asp?continent=0&country=0&currentorpast=current&eventsorprograms=programs&ProgramIDNumber=7

My trip to Ghana was unexpected and I was given a couple of days to prepare for a 5800-mile flight to Accra: I was asked to participate in the West Africa ICT Road Map to Opportunities Conference. Since I have spent much time in Eastern Europe over the past 4 years, this trip presented itself as an opportunity to catch up on the changes which have been taking place in Africa since my visit last year to Senegal. To say the least, I was excited by what I heard, albeit with a measure of caution, since ministers of telecommunications tend to present the most rosy and forward thinking speeches but often fall down when it comes to the actual execution of a plan. Senegal comes to mind as having been on the verge of opening up its Internet Gateway for years yet never really getting there due to a lack of political will. This time, however, the driving force motivating countries to step up in their development process is mobile telephony and its rapid growth—the fastest in the world—combined with a desire for broadband connectivity which it is hoped will lead to the economic expansion of those countries which adopt broadband capacities. In short, ministers see the utility of broadband connectivity as a precursor for economic growth. Oddly enough, in America, Congress and most state legislatures seem to have missed making this connection —in particular, how broadband can be used to help the most remote people in the most remote counties in each state. So while each state muddles along and cobbles together a “plan” for broadband connectivity, national telecom ministers in Africa and Eastern Europe recognize that a nationwide strategic plan must benefit all zones rather than only the biggest cities.

The overwhelming message I took away from the conference is that ministers of communications from each of the attending West African countries agreed that they must modify their national environments to encourage the growth of broadband services and realize similar economic gains seen in the more developed world. The General Secretary of the International Telecommunications Union (ITU), Hamadoun Toure, gave a heartfelt speech imploring ministers to “open up” national telecom sectors to competition and reduce the costs associated with accessing the Internet. Like most people in the telecommunications sector, Mr. Toure believes that by doing so, prices will fall and economic gains will be realized once these steps are taken.

The Nigerian Minister of Telecom made a similar plea to his fellow ministers and pointed out that, since Nigeria opened its telecom sector in 1998, its wireless telephony use has grown from .04% to nearly 40% as of 2008. Approximately 50 million Nigerians now own a mobile phone. With the broadband sector in Nigeria growing at an exponential rate, the Minister said there are plans to provide complete broadband coverage by 2015. Nigeria certainly appears to be the most pro-active and progressive country of those attending the conference, in that it appreciated quickly the value of affordable mobile telephony and broadband access.

Cisco’s Robert Pepper gave the best presentation of data and highlighted an absolute relationship between an open telecom market with a strong regulatory enforcement and government support for the growth of ICT through direct and indirect grants. He also illustrated how most of Africa falls into the bottom third of 150 nations he measured for government support of broadband services. Even the most progressive nations in Africa (South Africa, Nigeria, Kenya, Egypt and Rwanda) trail countries like Moldova, Macedonia and the Ukraine. Dr. Pepper went on to describe the relationship between the presence of broadband and the upswing in the economic growth of a country. He showed that when a country puts 5% of its GDP toward the support of ICT activities it doubles its standard of living within 14 years. Countries that put only 1% of their GDP in ICT activities will take 42 years to double the standard of living. Dr. Pepper closed by saying that not only do countries need to open up their telecom sectors, they need to view ICT as important to infrastructure as roads, water, electricity and waste control.

ITU’s General Secretary pointed out that while Africa represents 12.5% of the world’s population it accounts for less than 2% of the world’s Internet traffic. At the same time, Africa is experiencing the highest growth rate in mobile telephony in the world. The General Secretary stated that this is a measure of the willingness of countries like Kenya, Nigeria and Senegal to open their markets to competition and enable low cost procurement of mobile phones and services.

This event was full of presentations showcasing each country and encouraged public-private partnerships between West African countries and American companies. Ambassador David Gross from the Department of State served as one of the hosts for this event. His goal was clear—the development of partnerships between American and African corporations doing ICT work. Ambassador Gross went to great lengths to illustrate how the African telecom and ICT sectors are now vibrant compared to what they were was just 5 years ago. He attributed the change to the activities undertaken by the ITU’s General Secretary, a Malian who rose through the ranks of the United Nations and eventually accepted his present assignment with ITU. Ambassador Gross said that ITU is the agency most responsible for encouraging the growth of telecom and ICT within the United Nations, and that no one like Toure has led ITU with a greater desire to help Africa “catch up” to the rest of the world. In fact, each minister praised Toure for his endless energy to represent the needs of all African nations. The biggest issue with which ITU’s General Secretary is presently dealing is the creation of new and expansion of already laid submarine fiber networks surrounding Africa and landing rights in each coastal country. Both he and Ambassador Gross expressed a strong desire for each coastal country to work with its landlocked neighbors to assure the creation of a “tentacle of fiber covering all of Africa.”

None of the information shared during this conference is new news. In 2001, the head of Cisco, John Chambers, noted that “(t)here is a direct correlation between high speed Internet access, productivity and increased standard of living.” The following article a Cisco press release dated January 26th, 2001 highlights Mr. Chambers’s thoughts from the Davos 2001 conference:

Cisco’s CEO and president John Chambers joined world leaders this week at the World Economic Forum in Davos, Switzerland, to discuss the future of the world's economies. Chambers shared his vision regarding how companies, countries and people can increase their productivity by harnessing the power of the Internet. Chambers explained that at the current rate of three percent productivity growth, the U.S. standard of living will double in less than 25 years. If we increase productivity to five percent, we can double our standard of living in 15 years. "It's your choice," said John Chambers. "We have the opportunity to double productivity and the standard of living in one generation, or two." He used the U.S. as an example, but explained that this applies to all countries.

Chambers also reminded world business and government leaders that just as businesses have benefited from great Internet-based productivity gains, societies can also benefit. He believes that the Internet is as fundamental as any utility, like water or electricity, and that access to the Internet is key to increased productivity. "The Internet exceeds the combined productivity of telephony, transportation and electricity," said Chambers while in Davos. Through the acceleration of high-speed Internet access, commonly known as broadband, Chambers believes countries can accelerate productivity faster than ever before. In turn, the Internet can improve the standard of living for people worldwide and address the digital and the education divides. Chambers added, "The infrastructure of the future is changing."

Chambers suggested that changing the productivity model is imperative-critical to survival. He highlighted the U.S. 2001 Economic Report of the President which detailed the link between increased broadband deployment and improved productivity within the workplace. The report showed a direct correlation between broadband, increased productivity and increased standard of living. For example, industries using the Internet saw a four percent annual growth in productivity while industries that are not using the Internet have experienced a one percent annual increase in productivity.

Along with increased productivity, countries with more bandwidth will have higher e-commerce activity per capita as they build infrastructure around deploying high-speed Internet connections. In developed countries, where the price of bandwidth decreases, the number of users will increase, adding future economic growth. In the U.S., every one million homes with broadband are expected to contribute $10 billion in economic output based upon research by Gartner Group.

Chambers' message is clear; there is a direct correlation between widespread broadband acceptance and improved productivity, which helps improve the standard of living worldwide and to close the digital divide.

Even though Chambers’ message is not new, it has taken a few years for this message to resonate in Africa. The heads of African nations are beginning to recognize the role that broadband and ICT can play in increasing the standard of living.

So what does this all mean?

Though John Soule advised “Go West, Young Man,” I would offer instead that we should head east. Two regions remain in the world where the build up of broadband services is nascent—Africa and the Pacific Islands. While Central America may only be marginally ahead of both regions, Africa appears to offer the greatest opportunity vis-à-vis ICT. Much of Central America is deregulated and mobile wireless growth has already begun to flatten while Africa is experiencing the highest growth rates in the world. As people in Africa are adapting and adopting mobile telephony, mobile based software solutions are already making their way to the end-user such as micro-finance solutions, bill payment and even a use of SMS by Ghanaian fishermen to determine the market’s rates for the fresh catch of the day.

As each African nation opens its telecom marketplace to multiple mobile operators, there will be a predictable uptake by users as prices fall. To assure the success of non-mobile ICT, a similar event must take place in the broadband sector. Unfortunately, the broadband market is usually controlled by the incumbent wired telephone operator which in turn tends to control the country’s international gateway to the Internet. The expansion of new submarine cables however will upset countries in Africa which have not yet liberalized their telecom marketplace. This is exactly why the ITU’s General Secretary and Ambassador Gross were adamant that each minister must act to open up the national markets to realize the manifold benefits associated with broadband access. As markets open, or even if there is a hint that they will, ICT activities can be designed, implemented, tested and then expand.

The times demand that African countries adapt to new technologies such as broadband and wireless by opening their restrictive telephony markets and make this change soon; many appear ready and willing. While this conference did not end with a flurry of public-private partnership announcements, it certainly crystallized the need for all things “E” and West African countries will need the assistance of NGOs and other private sector partners from the USA.

1 comment:

Gaël said...

Any way of contacting you by email about ICT4D vissions and opinions?

Thanks!
elgaelo[at]gmail[dot]com