Impact of SAT-3/WASC in four member countries : Angola, Cameroon, Ghana, and Senegal

1. Impact of SAT-3/WASC in four member countries : Angola, Cameroon, Ghana, and Senegal SAT-3 WORKSHOP AND 1ST WATRA/ECOWAS MOBILE ROAMING CONFERENCE AND EXHIBITION 10 - 14 SEPTEMBER 2007 ABUJA, NIGERIA Abi Jagun: APC Ben Akoh: OSIWA

2. Outline Abi Jagun: APC • Introduction to APC • Introduction to Research • Summary of Findings Ben Akoh: OSIWA • Key points for Regulators Abi Jagun: APC Ben Akoh: OSIWA

3. Association for Progressive Communications (APC)http://www.apc.org/ William Currie : wcurrie@apc.org Communications and Information Policy Manager Coura Fall : coura@apc.org Africa ICT Policy Advocacy Coordinator Abi Jagun : abi@apc.org Africa ICT Policy Research Coordinator Abi Jagun: APC Ben Akoh: OSIWA

4. Introduction to Research Abi Jagun: APC Ben Akoh: OSIWA

5. Communications Infrastructure in Africa • Impact : Africa hasthe least amount of capacity/ bandwidth available to her population and has the most expensive connection charges … this has implications on socio-economic development • Result : Mix of stakeholders actively engaged in negotiating and implementing projects to address the (backbone) infrastructure gap on the continent • Precautions required to ensure maximum benefit is derived from these projects Abi Jagun: APC Ben Akoh: OSIWA

6. SAT-3/WASC • Caution can be exercised through adoption of “Open Access” principles • Reference is regularly made to SAT-3/WASC when discussing “Open Access” in Africa • overall prognosis of SAT-3/WASC is one of “unfilled potential” … Yet detailed information of the functioning of the cable in each of its member countries is scarce • APC initiated research to document lessons that can be learned from the development, implementation and management of the cable Abi Jagun: APC Ben Akoh: OSIWA

7. Areas of Investigation • Areas that “Open Access” seeks to address - namely access and cost • Market focus : impact of SAT-3/WASC on competitiveness of international and Internet services in each country • Contextualisation : understanding of unique factors/circumstances that influence the impact of the cable in each of the case countries • interaction with the environment prevailing in each country and the interventions that are appropriate in dealing with the consequences of such interactions Abi Jagun: APC Ben Akoh: OSIWA

8. Summary of Findings Abi Jagun: APC Ben Akoh: OSIWA

9. Common Trends • Bandwidth capacity increased in all countries studied and was accompanied by decreases in cost of access • no evidence that process of gaining access to capacity to SAT3 through the incumbent has become easier • Increases in the quality and range of products were also observed • some countries have had more success in the adoption of broadband products than others • availability often restricted to key urban areas/cities • Prices of products have also reduced. However, the cheapest provider is also often the incumbent (subsidiary of incumbent) • on occasion what incumbent charges is so much more cheaper than prices of the next alternative service provider Abi Jagun: APC Ben Akoh: OSIWA

10. Senegal Abi Jagun: APC Ben Akoh: OSIWA

11. Reinforced Monopoly: sole-rights to critical international infrastructure(s) SAT-3 Cable Landing Station International Gateway National Backhaul Abi Jagun: APC Ben Akoh: OSIWA

12. Common Issues: multiplicity of roles & ensuing conflicts of interest • Findings of research highlight characteristics of competition in: • access market : competition from VSAT operators. However, where available, buyers migrate to using fibre • products market : competition from VoIP; a ‘grey market’ in all countries studied • Competition is limited in the access market. With monopoly over undersea cable, landing station and international gateway; incumbent dictates: • bandwidth capacity of country • cost of bandwidth to other operators • can also influence (by granting, denying, or delaying access) activities of operators in the market • Competition is ‘influenced’ in the products market by incumbent, as market leader in international and Internet services affects: • Price of products in market Abi Jagun: APC Ben Akoh: OSIWA

13. Key Points for Regulators Abi Jagun: APC Ben Akoh: OSIWA

14. Open Society Initiative for West Africa (OSIWA)http://www.osiwa.org/ Ben Akoh : bakoh@osiwa.org Program Manager ICT Abi Jagun: APC Ben Akoh: OSIWA

15. Summary: Key points for Regulators • Operator Arguments – knowledge for regulators • Unavailable capacity on fiber infrastructure • C&MA lock in • IRU's non-sustainable provisioning • Exorbitant maintenance cost Abi Jagun: APC Ben Akoh: OSIWA

16. Summary: Key points for Regulators • Counter arguments: • Disaggregation : Pushing the 'Open Access' Arguments further - 'Open Access Infrastructure' • 'Wet links' (undersea cable) • Maintenance • Landing station • International gateway • 1984 - US FCC on PTAT • 1996 - UK govt licensing liberalization of int'l facilities vs. Mercury/BT duopoly • Backhaul • 1998 - Japan KDD abolition of FDI Abi Jagun: APC Ben Akoh: OSIWA

17. Reinforced Monopoly: sole-rights to critical international infrastructure(s) SAT-3 Cable Landing Station International Gateway National Backhaul Abi Jagun: APC Ben Akoh: OSIWA

18. Summary: Key points for Regulators • Further Justification • Pricing (Mauritius, India) • Consumer centric(Some examples/models - Nigeria, Senegal) • Outcome of Regulators consultations in July 2006 • ref workshop statement – July 2006 • The role of regulators • What role for OSIWA? (Partnership with OSIWA) • Develop a regional framework for regulating public infrastructure • Develop capacity of regulators adopting both national as well as regional approaches Abi Jagun: APC Ben Akoh: OSIWA

19. Common Issues… for Regulators • Bandwidth capacity of country • Access to capacity Liberalisation/regulation of international gateway: • More operators (through ‘open access’) • Alternative operators and infrastructures • Cost of bandwidth to operators • Price of products in market • Regulation of cost : in markets with monopolies • Regulation of price : in distorted markets Abi Jagun: APC Ben Akoh: OSIWA

20. Impact of SAT-3/WASC in four member countries : Angola, Cameroon, Ghana, and Senegal SAT-3 WORKSHOP AND 1ST WATRA/ECOWAS MOBILE ROAMING CONFERENCE AND EXHIBITION 10 - 14 SEPTEMBER 2007 ABUJA, NIGERIA Abi Jagun: APC Ben Akoh: OSIWA

21. APPENDIX 1Findings: Country Summaries Abi Jagun: APC Ben Akoh: OSIWA

22. Angola • Angola Telecom invested US$24 million in SAT3 • Landing station at Cacuaco has been operational since October 2002 • SAT3 services launched by Angola Telecom in 2002 • Country has experienced decreases in international tariffs and cost of Internet access; and increases in Internet users. • Demand for both voice and data international bandwidth doubled between 2002 and 2004; and SAT3 capacity has been upgraded • Performance figures are however misleading; reference point of comparison is very uncompetitive. Internet prices are still at the upper end of broadband prices across the continent Abi Jagun: APC Ben Akoh: OSIWA

23. Angola: limitations on competitive alternatives • Angola telecom retains a monopoly on the country’s international gateway • impact on pricing strategy : prices for capacity often match or exceed equivalent capacity over satellite • Alternatives utilise VoIP • currently no law or decree outlawing or approving its use • Pace of reconstruction of terrestrial network • when SAT3 first became operational, there was no fibre within the capital Luanda Abi Jagun: APC Ben Akoh: OSIWA

24. Cameroon • Camtel invested US$20 million in SAT3 • Landing station at Douala has been operational since 2002 However, marketing of the resource has been very limited • first wholesale customers gained access only in 2005 • Introduction of wholesale bandwidth on SAT3 herald significant increase in competitiveness of market and decreases in international tariffs and cost of Internet access. • downward trend in international tariffs has also helped to push down national and local tariffs • Camtel increased its SAT3 capacity by 30% in Dec. 2006 • Camtel is by far the biggest user of SAT-3 capacity in Cameroon, using 50% of the allocated capacity which corresponds to more than 80% of all used capacity Abi Jagun: APC Ben Akoh: OSIWA

25. Cameroon: increasing exposure of competitors • Introduction of SAT3 wholesale bandwidth halts growth of VSAT gateways • growing number of ISPs utilizing and re-selling fibre bandwidth • but most ISPs cannot afford smallest unit of SAT-3 bandwidth sold by Camtel (E1) • However, Camtel's national backhaul infrastructure is inadequate • and Regulatory barriers exist against alternative infrastructure Abi Jagun: APC Ben Akoh: OSIWA

26. Ghana • Ghana Telecom invested US$24 million in SAT3 • Landing station at Accra has been operational since 2002 • there is also an inland fibre connection to the landing station with three nodes in the greater Accra area • Utilization of country’s capacity estimated to be between 15-20% and anticipated to increase to 25-38% by 2011 • Connection charges to SAT3 capacity lowered for some categories of users • GISPA members pay US$4010 for E1 but non-ISPs pay US$12000 for same capacity • Bandwidth capacity from SAT3 has resulted in lower broadband prices, better quality of products and boom of cyber cafés Abi Jagun: APC Ben Akoh: OSIWA

27. Ghana: distorted pricing & anti-competitive behaviour • Broadband market is dominated by Ghana Telecom’s ISP subsidiary • Broadband4U offers “more bandwidth for less money” • making other providers too expensive in comparison • cybercafés are making the most of cheaper Broadband4U prices • Ambiguity over VoIP used to disrupt operations of competitors • Mac Telecom, Intercom Data Networks (IDN) and Tin-Ifa Ghana Ltd • Connection to national terrestrial network (where it exists) is expensive Abi Jagun: APC Ben Akoh: OSIWA

28. Senegal • France Telecom invested US$96 million in SAT3/WASC/SAFE • incorporating needs of subsidiaries: Sonatel in Senegal, Côte d'Ivoire Telecom and Mauritius Telecom. Cost of landing point in Senegal was US$24 million • International infrastructure also includes analogue submarine cables and satellite connectivity • Sonatel’s terrestrial network provide international fibre access to Mali and Mauritania; in process of expanding network to connect Gambia and Guinea Bissau • connectivity costs between these countries and Senegal are however largely restrictive and somewhat expensive • Introduction of SAT-3 has lead to reduced cost of international and national services. Cost of access to SAT3 has reduced almost in direct proportion to increases in bandwidth capacity Abi Jagun: APC Ben Akoh: OSIWA

29. Senegal: the benefits of dialogue/consultation • History of Govt direct intervention in making telecommunications ‘work’ for the country • accompanied by ‘expectation’ of consultation and dialogue when building networks; although not always transparent and/or inclusive • Strong understanding/ relationship between telecom operator (Sonatel) and market; as seen in response to market demand • However, Sonatel has monopoly on fixed and international telephony Abi Jagun: APC Ben Akoh: OSIWA

30. Senegal Abi Jagun: APC Ben Akoh: OSIWA

31. APPENDIX 2Findings: Capacity and Access Indicators Abi Jagun: APC Ben Akoh: OSIWA

32. Capacity & Access Notes “Monthly Cost of Access”: Angola: Price is per mbps per month duplex to Portugal Cameroon: Price some organisations have been able to negotiate per month for an E1 link (2Mb/s full duplex). Advertised price by Camtel in 2003 was US$12,500 Ghana: Price of E1 per month to Europe and America for GISPA (Ghana ISP Association) members. Price to non-GISPA is $8000/month and to non-ISPs is $12000/month Senegal: Comprised of approximately US$1,402 settlement fee and US$6,066 monthly cost for 2048Kbps line Abi Jagun: APC Ben Akoh: OSIWA

33. Common Issues: terrestrial backbone infrastructure • Nationwide terrestrial (fibre) backbone infrastructure were generally underdeveloped • disparities in nationwide connectivity : urban areas better connected • implications on demand and cost of bandwidth • cost of access to backbone network • Interconnection/merger of multiple nationwide fibre • Prioritisation of terrestrial infrastructure development • regional connectivity in conjunction with national/rural access Abi Jagun: APC Ben Akoh: OSIWA