Belinda Beresford
Holding a telecommunications conference in Nigeria was a fitting act since the country encapsulates the problems and the lure of telecommunications in Africa.
Last week’s Global Information Infrastructure Commission (GIIC) conference was being held in Africa’s most populous nation and one laden with natural resources. Yet the country’s infrastructure is collapsing.
Seventeen companies are nevertheless queuing to pay millions of dollars for the privilege of winning a cellphone licence in Nigeria – a country where hotels boast of providing uninterrupted water and electricity.
Earlier this year MTN was prepared to pay a $100-million fee for a digital mobile licence in Nigeria. The award of the coveted licences was cancelled in February just as the MTN regional head was stepping on the plane to deliver the company’s bid.The process is to start again, but this time as an auction. Further details are not confirmed.
If MTN was prepared to pay $100-million for one of 36 licences, the auction of just four is likely to push the price up. The sale of the second cellular licence in Morocco went for $1,1-billion.
Companies are willing to pay such sums because the potential, both strategically and in direct profits, is huge, despite the difficulties of rolling out telecommunications in regions with poor infrastructures and services.
But the Nigerian government’s halting of the licensing process demonstrates probably the biggest problem in integrating Africa into the global telecommunications network – what is politely known as the need for a strong regulatory framework.
Speakers emphasised the importance of eradicating corruption and the need for governments to honour their predecessors’ agreements.
The lack of telecommunications infrastructure in Africa is neatly demonstrated by the fact that a call between neighbouring African states would probably be routed through a European centre such as London, thereby adding to the costs.
According to the African Telecommunications Union, while Africa has 12% of the population it has only 2% of the telephone lines – and less than 1% of Internet connections.
About 73% of telephones are connected to just four networks, according to Brian Goulden of PricewaterhouseCoopers (Botswana). Of these three only one – South Africa – is in sub-Saharan Africa. The other three are Morocco, Algeria and Egypt.
Mobile telecommunications is expected to overtake fixed land access in Africa within the next few years. There are predictions that the former will become the basic service network, while fixed lines will become the value added services.
But whatever form telecommunications in Africa is going to take, the hardest part is going to be to get the “final mile” to the consumer, especially rural consumers. Hopefully, this conference and others like it will finally drag Africa on to some part of the information superhighway, rather than leaving the continent languishing on the information dirt track where it currently languishes.