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WEEKLY PUBLICATION DEADLINE: 12 pm GMT Sunday.  ISSUE NO 82 BLACK STAR RISING? - SPECIAL REPORT DIRECT FROM GHANAAbout six months ago a Tanzania reader wrote in to ask why we were giving Ghana so much coverage. In this special issue Russell Southwood (back from a visit last week) seeks to look behind the hype to find out why Ghana holds out much potential and at the obstacles it must overcome in order to grasp it. GREATER COMPETITION - WILL GOVERNMENT GRASP THE NETTLE? Ghana stands at a crossroads. In February 2002 the duopoly of Ghana Telecom and Westel will come to an end. If it fails to grasp the opportunity this presents then a great deal of its potential will slide away. There are formidable obstacles to be overcome. The Government and the regulator, the National Communications Authority (NCA) are agreed that competition is "a good thing" but have no clear position on the big, (small "p") political issues that flow from that commitment. The current licence logjam at the NCA is a reflection of that uncertainty. No-one wants to get it wrong but it may be better to risk making mistakes than do nothing at all. The markets involved need certainty and momentum in order to generate investment. The Government has reached the draft stage with its national IT strategy and it wants to complete the framework by January of next year but this deadline is unlikely to be met. It then wants to involve the industry locally closely in formulating the strategy that flows from the framework. It will then take this out and "sell it" to all sectors of society. There has been criticism locally of the Minister of Communications and Technology (as it is now called) taking the Chair of the Board of the NCA. Government sources insist that his role as Chair is transitional prior to finding a knowledgeable and independent Chair. Whoever’s in the Chair, the NCA must show that it can break the licence logjam developing. The expectation is that VOIP at a country-wide level will come soon and that international VOIP may form part of removing Ghana Telecom’s monopoly on terminating international calls. Government also appears interested in a third competitor and is open to the idea of trying to create an alternative to Ghana Telecom’s network. It remains an open question as to whether the Government can generate the sense of urgency required to drive through the framework required for competitive markets without becoming entangled by existing vested interests. The controlled privatisation of the telecoms sector ­ the "little and large" duopoly of Westel and Ghana Telecom ­ has been a failure of terrifying proportions. Both have not meet the land line targets set by the previous Government. The existing underlying infrastructure for Ghana¹s "great leap forward" is hopelessly inefficient and ill-suited for future developments requiring greater interconnectivity. Ghana Telecom’s Malaysian management (the Malaysians being the majority shareholder in a consortium that includes 5% from local ISP NCS) appear to have added little or nothing of value. The Government (as 70% majority shareholder) has not even benefited from dividends from its investment as the company has had to plow back all profits to develop its network. The best that can be said in its defence is that it has sought to focus on meeting its universal access targets and the number of lines continues to increase. Having inherited an economic mess from its predecessor, the Goverment does not have the funds to invest in dealing with Ghana Telecom¹s problems. This might seem a harsh judgement but when you know that only about a third to a half of all calls (national or international) complete ("go through") the scale of the disaster is apparent. It can take up to half an hour to connect to someone and connections disappear mid-conversation. One person applying for a new line in Accra was asked for a million cedis bribe but this was returned as there was not enough capacity on the local circuit! In any remotely competitive environment, Ghana Telecom’s revenues will simply be cannibalised by new operators. Operating in a shrinking market is not a recipe for being able to make increased levels of new investment. The Government needs to "bite the bullet" and offer a part of its share to new, more capable operators. Redundancies are inevitable and therefore Government has to quickly create a climate in which the ICT sector will grow new jobs. The Government is not without assets when it comes to creating a new network to relieve the pressure on Ghana Telecom’s overloaded circuits. It can raise a small amount of capital by selling Ghana Telecom. It has also identified 22 pieces of network infrastructure owned by the Government that it thinks can be put together. In the view of many of the local network companies we spoke to, most of these networks are unsuitable for wider use but the Volta Rivers Authority fibre network has potential if its bandwidth can be delivered in amounts the market is likely to want. The building of a new network offers the opportunity to leapfrog older, more costly technologies using ones that can deliver a higher level of rural access more quickly. These are not untested in a local context as many already exist in some form in the private sector. So what would it cost? One reference point must the recent Ghana Broadcasting contract for a network to deliver a TV channel which has been costed at US$20 million. Other network builders we spoke to believe that this figure could be bettered and external investment attracted. A private-public partnership could provide a great deal more coverage for at least the more populous, southern two-thirds of the country. One of the difficulties has been that the technology sector has not yet held out a vision that can excite a wide range of politicians who will need to "sell it" to their electors in only a few years time. So how do you make these kinds of commitments "bread and butter" political issues. Imagine a vision that offers three things at its core: 1. The prospect that ICT investment will make a whole range of government processes more efficient and transparent. Not only will it do this for Government but it will help the private sector commit to this same set of goals. To take an existing example, putting lottery transactions on to a reat-time network helps squeeze out the potential for fraud. Electronic management systems can speed up things like legal processes. 2. A strategy of this kind can create jobs, probably not more than a few hundred in the medium-term but all high-value in Ghanaian terms. Furthermore it can help the Government relocate employment to rural areas using the newly created network. This will help take the pressure of population off the urban sprawl of Greater Accra. 3. It has a vital education and training element that will start to "up-skill" large numbers of the school-age population in computer-related skills. It would perfectly feasible for the Government to connect for free a large number of schools as the price for its share of any investment. There are many "wise heads" in the local industry who have the skills and experience to make such a vision happen. Will the Government seize the day? NUMBER OF CYBER CAFES DOUBLED IN ACCRA The internet and e-mail seem to be enjoying an almost unprecedented wave of popularity: the number of PCs offered by cyber cafes in Accra almost doubled between April and October last year and this wave of growth continues. Significant numbers of Ghanaians make the use of cybercafes to communicate both inside the country and with Ghana¹s far-flung diaspora (more of which in a forthcoming issue). Although the services offered by the cyber cafes are largely undifferentiated, a new "offer" will shortly be launched by BusyInternet. Its new building on the Ring Road is nearing completion and it will offer a mixture of cyber cafe access (100 machines), serviced offices and training. (More in a later issue) Paradoxically dial-up subscriptions subscriptions are only just over 10,000 and there is considerable "churn" among subscribers unhappy with the quality and availability of dial-up lines. Large parts of the day can pass without access being available. Like most ISPs, Africa Online¹s dial-up subscription rates rise and fall: it has 60-100 subscribers drop out every quarter. But with the introduction of new bandwidth via its connection with UUNet its target of doubling subs from 2500 to 5600 may not be as impossible as it first looks. There are 6-7 active ISPs and a further 45 who have been licensed but are not operating. There is very little differentiation in terms of the prices and services offered by the ISPs. The "big four" ISPs claim the following subscriber numbers: NCS - 10,000* The well-informed at a local level estimate that the total is more likely to be in the range of 12-15,000 users. There is an element of duplication in the claimed figures as subscribers often have more than one account and move from one to the other to find the best access at a given point. President of GISPA Leslie Tamakloe is trying to encourage members to pay for an independent audit to give the figures some credibility. There is very low demand outside Accra. One operator has only 250 subscriptions in Kumasi, Ghana’s second largest city and a mere 50 in Takeradi. The much vaunted figure of half a million cyber-cafe users also seems exaggerated. There is no more than half a million connections to all forms of communications devices. No more than 12-15,000 PCs are sold every year. However it is possible to purchase a secondhand, "internet-ready" computer for US$2-300. INTERNET GROWTH SPURS NEW START-UPS BUT SIZE OF MARKET LIMITS GROWTH The growth of interest in the internet has spawned an upsurge in companies offering web development. Ghana’s largest software company, Soft (70 employees) has recently set up its own web division called WebSoft. Others in the field include: Explainer DC (a Dutch start-up), Arvadyx (started in July), ILS and Net Afrique. Some of the ISPs like Africa Online also offer web development services. Intriguingly a small amount of e-commerce is developing largely on the back of selling to the Ghanaian diaspora. Companies involved include: Ghana Classifieds, NCS, e-Pesawa and SendtoAfrica.com (owned by Soft). (More on this in a later issue). NCS is pioneering streaming services (http://www.ebroadcast.com.gh) mainly based on radio but also including music. It has not offered downloadable MP3s in order to avoid copyright issues. There are 16,000 registered users, of which 6500 come from the USA. The balance (in descending order) come from the UK, Belgium, Saudi Arabia, South Africa, Morocco and Germany. The main driver of the service is diaspora Ghanaians keeping up with events "back home". However, the technology sector is caught in a dilemma: it can't live with Government but it can't live without it. On the one hand they want to charm Government and enlist the authority of politicians in the task of convincing people of the importance of ICT. On other hand, they want Government to get out of the way and let them get on with developing things. As one person put it:"Government should only have three roles: 1. Legislate. 2. Regulate and 3. Go to hell!" However it's not so simple. The size of the private sector is small. The customer base of one leading software company (150-180 companies) gives some idea of its limitations. Government is a major buyer in the sector and the cut-back in Government spending has hurt everyone. The companies in the financial sector who might have the money to innovate are by their nature conservative and lack enough skilled personnel to increase their efficiency further through upgrading their technologies. Faced with such a relatively small domestic markets, the successful Ghanaian "tech" company has only two routes to further, sustained growth: sell its services to the US or Europe and/or expand into other countries in Africa. Companies like Soft, Internet Ghana and NCS are all pursuing export markets in Africa. There are also several well-publicised data processing operations. ICS is setting up a department to look for outsourcing work. There is much fear of competition from Nigeria if it became better organised in this sector. Unfortunately there are few sources of capital to fuel the kind of expansion that the larger companies need to make to survive. (more in a later issue) Not all Ghanaian companies have yet got the hang of pricing into international markets or to international companies in the home market. There is the traditional "think of a number and quadruple it" approach (faintly reminiscent of Accra’s taxi drivers) applied to multinational companies. There was much local amusement when web development company Arvadyx put its prices on its web site. The idea of publicly announcing prices for these kinds of services is the exception rather than the rule. Lack of economic stability has made it very hard to create stable growth. One of the larger ISP operators explained that his company had grown a great deal in Cedi terms but that in dollar terms (because of the devaluation) its turnover had actually shrunk by a third. The best of the high-quality skills available locally is outstanding but the overall pool of those with IT skills is not always at this standard. As one of the Geek Corps volunteers observed:"The best here is every bit as good as in the States and much cheaper. When I go back to the US, I’d like to sell the skills of these people." NEED FOR A COMPLETE CHANGE IN CULTURE AND EXPECTATIONS There are real obstacles created by local attitudes to organisation and management. Most organisations have departments with a "big boss". Employees tend to expect to be deferential to that person and not to challenge them. This dampens initiative and stifles the "cut and thrust" required in many parts of a creative ICT environment. Skilling up more junior staff is often seen as a threat to those with existing skills as it is not a fluid job market. As one local company owner put it: "In a certain sense the culture has to change. There is too much of wanting someone to do it for you. You don’t have initiators. The long years of dictatorial rule has stamped on any form of entrepreurship from independence days. Everything was left to Government. It was going to do everything." Staff are often not allowed to use the net, even when they are directly responsible for web-related issues. With an "always on" connection there are fears about it distracting people from their work. However it is clear that staff need exposure to outside ideas if they are to develop their own (an in turn, the company’s), especially in the design area where the skills are not of a high order. Seen from the outside, Ghana is about 4-5 years behind North America in technology terms. As one person told us:"Everything runs on Windows 98 but they want to learn Java simply because they’ve read about. They don’t know what they’re going to do with it." 90-95% of all software is pirated and there is much joking about it being hard to find the "paid for" 5%. Linux is being used (invisibly to the client) by at least one company doing applications development. There has been a steady trickle of returning "diaspora" Ghanaians. A significant number of them are to be found in the ICT sector. They have returned with a strong desire to "make a difference" and build successful business. They have skills, a broader experience and a "can-do" attitude. One told the tale of being in Kumasi one weekend when all ATMs of her bank were down. She gathered up the customers around the ATM and went down to the local radio station where she went on air to demand that the Bank’s local manager address the problem. An engineer arrived and fixed them within an hour. Diaspora Ghanaians find the slow-pace of decision-making of bodies like the NCA frustrating. "Welcome to reality" as one person put it. But will they bend to this reality or help shape a new technology sector in Ghana that breeds a higher set of national expectations? (Many thanks to everyone I spoke to who gave generously of their time and ideas. A particular thanks to Mark Davies and the unfailingly helpful BusyInternet staff, Kwami Ahiabenu and Tim Gros of AITEC and Stophe Landis, Geek Corps and its volunteers. I spoke individually or in larger meetings to over 70 people so apologies to all those I failed to meet. Time and the phone system defeated me. Next time.)
The CTO is offering The Commonwealth Government and Business Guide to Information and Communication Technology 2001/2002 as free CD-ROM to our readers. It is a unique annual resource of information about ICT in the Commonwealth designed specifically for use by government ministers, regulators, utility heads and leaders of the communications industry throughout the world. To obtain your free CD-ROM, send your name and address to Isabel Stewart, CTO (i.stewart@cto.int)
WEEKLY PUBLICATION
DEADLINE: 12pm Sunday
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| ISSUE NO 82 GHANA NEWS ROUND-UP & SNIPPETS | |||||||||||||||||||||||||||
GHANA TELECOM SLATED TO LAUNCH NEW ISP BY YEAR END
The date of the launch for Ghana Telecom’s own ISP keeps slipping. It was to have been October but insiders now say that it will not happen until the end of the year.
THIRD RAIL TAKES OVER NET AFRICA IN SHARE SPLIT
Broadband network provider Third Rail (itself acquired by an Australian company) has taken over one of its competitors, Net Africa which was set up with investment from the Modern Africa Trust, a technology funding organisation in the USA. The share swop gives Third Rail 65% of the equity with Modern Africa Trust keeping the remaining 35%. It will take over all the cell sites developed by Net Africa. It is understood that despite having substantial initial investment Net Africa’s sales performance has not been spectacular. The only other broadband competitor UCSI went bankrupt and had its equipment seized: the remains of its racks can still be seen in its former offices in the GCB Tower.
Third Rail has also applied to become an ISP so that it can build on its network strengths in many of Ghana’s regions and in the finance sector. Standard Chartered is one of its finance clients.
ISP TIN-IFA TO LAUNCH SHORTLY IN NEW BUILDING
Once it can get Ghana Telecom to re-open its lines, Tin-Ifa will open as an ISP. It has 300 lines but all are simply playing a message from Ghana Telecom saying that they are "receive-only". It will have up-links: one of 2 mb from Panamsat and another of 3 mb from Amsat. Ironically it is set to move from its current modest premises on the Ring Road to new, modern premises opposite Ghana Telecom. Handy for when it might need to complain about the lines going down. It says that it will return to providing a VOIP service and is confident that the government will liberalise this area. It is looking to capture 1000 subscribers in its first month and believes there is the long-term potential to attract 5000 subscribers.
GISPA GIVES GO-AHEAD TO SET UP LOCAL EXCHANGE
The Ghana Internet Service Providers Association has given the go-ahead "in principle" for setting up a local internet exchange at a meeting last week. Its seven paid-up members (NCS, Third Rail, GS Telecom, Tin-Ifa, Africa Online, Internet Ghana and IDN) have agreed to set up a jointly owned company to operate the exchange. GISPA’s President Leslie Tamakloe of Internet Ghana believes that:"The exchange should provide a way of building some kind of backbone locally. It should provide a focal point to do something about connectivity from the ISP perspective".
IN BRIEF
- Word is that HP is about to secure a Ministry of Finance contract.
- EC Tech has had a number of problems in setting up its PC assembly plant.
- Arrow Networks has sold its narrow band network product to two new clients in Nigeria, one of which is a bank.
- Satellite up-link provider Afrinet will launch 15 November (more in a later issue)
- The King of Ashanti has raised funding from USAID to pay for a web site that is to be built by Africa Online.
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| ISSUE NO 82 JOBS, PEOPLE, EVENTS... | |||||||||||||||||||||||||||
* Eric Osiakwan asked me on to his radio technology show, ICT World on Choice FM. Eric is secretary of GISPA and one of Ghana’s most effective popularisers of technology for the the "person on the street". First half guests include Mavis Quarcoo, Managing Director of World Wide Web Plus which is launching a cybercafe with 100 machines that promise streaming. Guido Sohne of WebSoft and myself debate how ICT can impact on Ghana’s development.
* Mavis Quarcoo of World Wide Web Plus is only one of several women in senior positions in the ICT sector in Ghana. Others include: Joan Agyere of sendtoafrica.com, Ekua Marjorie Ampah of Afrinet and Nanaya Owusu-Prempeh of Tin-Ifa. The latter sees her mission as "demystifying technology, especially for women." She believes that:"ICT is an enabler for services to be well rendered." She used to run a pre-paid phone card company when she lived in the USA before she returned home.
* It used to be said that when the police started looking young, you were getting old. In Ghana, it’s the programmers who are frighteningly young! Whilst being shown Soft’s programming department I met a young women programmer (only 18 years old) who was completing her A levels. However Kofie Dadzie and Ehi Binitie of Rancard Solutions must get the prize for the youngest people I met running a new start-up. Specialising in enterprise resource planning software and communications applications, they are definitely a pair to watch. (more in a later issue)
If our correspondent is "off the mark" or you have
factual amendments, mail them to us and we will include them
in subsequent News Updates. If you'd like to contribute, write
and let us know.
If you need information about a particular place or issue, just
send your questions in. We are always happy to follow up on readers
concerns.
News Update is a free e-letter produced
by Balancing Act that covers African internet content and infrastructure
developments, It goes out to government, the private sector,
education and NGOs. To subscribe, send a message saying "I
want to subscribe" to
info@balancingact-africa.com
This page last updated on January 28 2004.
