NEWS UPDATE 24 - SUDAN: PROXY GOVERNMENT MONOPOLY IMPEDES GROWTH

2 June 2000

Top Story

Sudan's number of telephone lines has increased nine fold since 1991. However internet connections have lagged far behind. A Government monopoly by proxy through the ownership of the country's only ISP is currently the largest obstacle to further growth. Al-Hajhamad reports on recent changes.

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SUDAN: PROXY GOVERNMENT MONOPOLY IMPEDES GROWTH

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Sudan is the largest country (in terms of territory) in Africa with 8 neighbors and 30 million population. Communication is the fastest growing market in the country. Moreover,the communication sector is the most successful responding to the privatization drive of the government. In 1991 the government owned telecommunications department was put to sale The new company had be become a public company with shares in the local. and recently, regional stock market.

Telephone subscribers have gone from below 50,000 lines in 1991 to 450,000 telephone lines in 1998 and are expected to reach 1,5 million by 2003. The management is in the hand of a Netherlands based company. All external communication is the monopoly of this company until 2003.

The other dimension for internet services are computers. With a very good incentive for computers sales with reduced taxes for PC technology imports, the country remains to be among the poorest countries in North Africa in per capita per PCS . No policy exist to support computer education or manufacture or assembly lines. In Khartoum, the capital city, with a 5 million population and 50 secondary public schools, none of them offer computer lessons . The price per unit for computers is simply beyond the reach of those who need them.

Although the liberalization of telecomms had started in 1991, the internet had to a wait for a political liberalization that only started in 1997. Sudanet was launched as a private company in November 1997. It is owned by four shareholders, with sudatel the only telco in the country and the government owns 57% of its capital, therefore owning 40% of Sudanet.

The three other owners are Civil Aviation ,National TV and Falcon Ltd all of whom have equal 20% shares. So with 80% of its shares owned by state companies it is in effect a government monopoly. So the only ISP in the country is controlled by the monopoly telco and only has access to its backbone. Worse still, Sudanet has just reached the full use of it existing capacity as of June 2000 with 3300 A mobile services provider Mobitel will shortly star mobile based Internet services.

As a monopoly, Sudanet takes a profit maximising approach. When it started, setting­up fees were about US$350. The hourly fees was 600 SD (1US$ is 250 SD) more than 2 US$ and a monthly line¹ rental of 6000SD(24US$). With the increases in the number of subscriber (164 subscribers per month for the period Jane ­June 2000) the cost of setting ­up went down to 100 US$. And the rental of Olines¹ went down to 1500 SD. The subscriber are as follows:

Private sector:1277

Individuals: 1715

Government institutions: 250

Universities: 58

Total: 3300 (as of June 2000)

Prices were the same irrespective of social catergory or time of day: in other words, there are no concession rates for education or NGOs.The hourly flat rate is US$2. When it cottoned on to the fact that it needed price bands it offered three: The morning rate between 6-4 o¹clock ,the most expensive 400 SD, between 4 o¹clock and mid night 300 SD and the dead hours between mid night and 6 in the morning for 200SD

To try and expand the market further the company is entertaining the idea of a flat reduced rate to encouraging the spread of cybercentres. The cost is still prohibitive as for every hour paid for connection one pays Sudatel, the services backbone the full local call rate, (about 198 SD). This seem to have motivated the other shareholders involved to push for getting a German based company ,Space Line,to become a backbone for the next phase of expansion. This will add another 1024 KBPC to (kilo Bytes percent) and will help sudanet to expand to 9000 subscribers by the end of this year.

 

No differentiation is made between mail or web services in terms of price. Journalists outside the country have already questioned the level of privacy offered. However, the company insists that they don¹t have the technology to bug users.

 

Unlike many African countries, the main thing limiting growth is governance not tecnology. The continuing dominance of the government through its monopoly by proxy is the main constraint. There is no regulatory framework that acknowledges consumers' rights or that allows for competition in the marketplace.

The services providers are dictating their conditions. Sudatel is its judge and jury in making the choices it does about how it provides its servives. There is no independent regulator. The consumer has no channel through which to address levels of service or question the profits made. If you don't like it, you can't simply transfer to another ISP. The absence of other international services providers is the main factor behind the prohibitive prices for communication.

This imperfect market also lacks the kind of social dimension that might be found elsewhere. There is no overall strategy to grow the market and to meet real communications needs. Displaced by war and drought, many live in the capital without internet services or telecommunication unable to communicate with their families who are in the south west, east regions where the telecommunication services are not yet provided. Although more than 65 other towns in Sudan have telephone services, as yet the internet covers only 6 towns in the country. The call charges are even higherfor those outside Khartoum as they have to make a long-distance call. Paradoxically, aslthough Sudanet's agents in these cities connect through an intranet page, customers are forced to use the Sudatel services.

Other problems affecting growth are shared with other African countries.

These are:

*   Affordability

The limitation is that the highest paid individual in the civil service cannot afford the internet services and with an estimated 85% of the population below the poverty line, the costs will continue to be prohibitive. The average computer price is also beyond reach.

*   Availability

The Government is not satisfied with the profits reaped from the services and adds 10% VAT to every bill . There are no competitors to reduce prices and there is low coverage , for a country of this size . The gap is widening between the fast growing telephones monopoly and its internet subsidiary.

* Lack of vision

There is no clear communications policy and a general lack of awareness of what the internet might mean for the country.

But as always, there are perhaps some strands of hope in this tangled web. Within five years Sudan is expected to become an oil-Exporting country. If the same system of governance and telecomms management continues we might just end up with some hope of political change. This may allow further economic liberalization and the benefits of globalization (especially e-Commerce) in an atmosphere of democracy and social justice.

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LETTERS

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* SIDAMA CONCERN CORRECTION

 

In News Update 17 in your review of our web site you said that Sidama Concern was published by the Sidama Liberation Front. This is wrong.

Our aims and who we are is clearly set out on the web site. I would appreciate it if you could correct this mistake.

The editor
Sidama Concern
http://www.sidamaconcern.com/

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SNIPPETS

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*   SOMALIA'S FIRST ISP OPENS ITS DOORS FOR BUSINESS

Three Somali telecommunications companies -- Barakat, Astel and Nationlink -- have joined forces to form the ISP. Somalia is the latest - and last - African country to enjoy an in-country Internet service. Ahmed Abdi Dini, Managing Director of Nationlink Somalia said he was "very much delighted" at the launch, and said the service offered the opportunity for Mogadishu residents to contact relatives and business partners abroad.

 

The new service would cost US$20 per month, plus an hourly charge of US$6. The service links to the Internet at 128 kilobits per second via a satellite link from ArabSat. Previously, Internet access in the war-torn country had only been possible on an expensive international call. Somalia has been without a central government since the fall of former dictator Siad Barre in 1991, but a national peace conference being held in neighbouring Djibouti is due to select the country's next president on Sunday 27 August. Dini said"it is good to implement the service at a time when we are expecting a new government."

There are about 25,000 fixed-line telephone subscribers in Mogadishu who could access the service on a local call, he added, while Mohammed said the capacity of the system could handle 2,000 Internet users.

The URL for the Somali Internet web site (currently under construction) is:

http://www.somalinternet.com.

(source: Africa Online http://www.africaonline.com/ad/somalia.html )

 

*   THREE SUITORS CHASE TELKOM KENYA

 

South Africa's MTN, British Telecom and Egypt's Orascom are the only three bidders left in the running to buy a 49 per cent stake in Telkom Kenya. The stake will probably be worth US$500 million when the bidding is complete. At the pre-qualification stage, BT quoted a price range of between US$147-490 million, Orascom US$2-300 million and MTN US$171.5 - 269.5 million. Will BT have the money to go the distance?
(source: http://wwww.commsafrica.com)

 

*   ORACLE SEEKS TO EMPOWER BLACK-OWNED IT BUSINESSES

Oracle Corporation SA has launched a new Black empowerement project called ILIMA afrom the Nguni name encapsulating working together to a common goal.

Human Resources Director Ike Ngwena says the project has three goals. The first of these goals is to offer incubator partnerships with two Black-owned companies. The first of these is Makana Information, Communication and Technologies, the technology arm of Makana Investment Group. The second goal is for Oracle to employ more women and Black people. The third goal is providing education for disadvantaged communities through bursaries for training at tertiary institutions and putting schools on-line. (source:

http://www.itweb.co.za )

 

 

*   WORLDWIDE WEB TECHNOLOGY SPENDING TO DOUBLE

Use of the internet will drive up sales of web-related technology. IDC expects Web spending on IT products and services to more than double from $119.1 billion in 2000 to $282.5 billion in 2003. The US$12 billion offered by the Japanese Prime Minister to close the digital divide seems quite modest alongside these figures. (source: http://www.e-businessworld.com/ic_218083_934_1-726.html )

 

*   SOUTH AFRICAN ARTISTS SELL THEIR WORK VIA THE WEB

 

Artists from San communities in South Africa's rural Northern Cape province are gearing up for a new Internet scheme which will allow them to sell their work through an international tourist outlet in Cape Town. (source: http://www.oneworld.org/ips2/aug00/15_04_042.html)

 

*   ANOTHER ISP FOR CAMEROON

 

Another ISP has joined four other ISPs in the expanding internet sector following telecoms liberalization. New Technology Incorporation SA (Newtech) is the brainchild Akame Adourd Eugene, an ambitious 28-year old Cameroonian.

It offers all the usual ISP services as well as running an internet cafe. The company has signed a deal with Cameroon Radio and Television Corp to carry voice, data and graphics and has carried out what it describes as "tests". It will be interesting to see how quickly the quality of lines in Cameroon makes a reality of the service. (source: http://www.idg.net )

*   JAPAN FORCES ISPs TO ACT AS SNOOPS

Following the article on African digital rights in News Update 23, Japanese police now have the right to intercept e-mail. The law requests that a representative from the telecom company or ISP monitor the surveillance. (source: http://www.idg.net/go.cgi?id=298909 )

*   SOUTH AFRICA'S WOZA LAUNCHES IMBIZA TO CAPTURE RETIREMENT FUNDS

Woza (see News Update 19) has with its partners PSG Escher and SouthernX launched Imbiza (zulu for vessel) to capture a slice of the lucrative retirement market. It believes that its costs will be 50% cheaper than "bricks and mortar" companies and that this price advantage will enable them to offer low-cost products to domestic workers. Each of the three partners brings "something to the table". Escher already manages R12 billion.

SouthernX has the technology ton allow retirement fund members to individually decide how to handle their investments. Woza has the traffic with 120,000 users monthly. (source:http://www.boot.co.za)

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USEFUL WEB SITES AND DISCUSSION LISTS

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The Community Agency for Social Enquiry (CASE) is a South African research NGO, which specialises in socio-economic and policy research from a development-oriented perspective. CASE is re-launching its web site, which has gone through substantial update and expansion. In addition to up-to-date information about dozens of new projects and publications, and CASE's activity report for 1999-2000, the site includes executive summaries and full reports of a large number of projects. Among these are baseline studies on the extent and nature of the disability experience in South Africa, gender opinions and attitudes, health care and inequalities, delivery of infrastructure, and socio-economic rights

http://www.case.org.za

 

*   Chapter 2 Network is based on the second chapter of the constitution: the Bill of Rights. A clearinghouse of information and communication for social justice issues, they provide support for civil society organisations involved in advocacy in South Africa, who use this network to actively share skills, experiences and advocacy activities http://www.advocacy.org.za

*   The Telecom Regulators Association of Southern Africa provides an effective overview of the telecommunications policy and operators of its member states. Most of them are now beginning to separate out the telecomms regulatory function from their national telco. The model law and policy area sketches the principles for this and further reform. Sadly the policy discussion is still focused on "exclusivity", the code word for continued monopoly. To be fair the regulators are trying to balance this against getting greater investment and phone access. Nonethless none of this really encourages rapid internet development, which relies on an active and competitive telecomms market.

http://www.trasa.org

*   Launched at Inet in July, the Civil Society Internet Forum offers another web site network for promoting democratic participation in elections. It will provide both global and regional forums for information sharing and debate. The guiding values of the Civil Society Internet Forum include democratic participation in decision-making and a fair balance between rights of privacy, speech, consumers, and property in Internet governance.

http://www.CivilSocietyInternetForum.org

 

 

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IN SEARCH OF THE BUSINESS MODEL

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* BUSINESS-TO-BUSINESS E-COMMERCE SET TO FLOURISH IN LATIN AMERICA

 

Research company IDC has said that the explosion of business-to-business internet commerce has reached Latin America. It believes that e-market places are in an embryonic stage in the region but that strong competition and consolidation will force through these changes. This competition will also bring about the need to localize services: small country markets may multiply. IDC believes that this trend will drive smaller countries to develop internet infrastructure. IDC's recent bulletin eMarketplaces in Latin America: The Next Paradigm defines what an eMarketplace is and how it differs from B2B models such as eprocurement and edistribution. Trends of this kind will begin to affect Africa as its internet infrastructre developments developments match those made in Latin America.

To purchase the report contact Nora Delgado, IDC (mail to: ndelgado@idc.com)

 

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DIGITAL TOOLBOX

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*   TWO STANDARDS FOR E-PUBLISHING FIGHT IT OUT

 

Although e-book sales are just a drop in the ocean compared with the US$22 billion print book market, things will undoubtedly change in the future.

Adobe and Microsoft are slugging it out over who will eventually become the dominant e-book publishing fortmat.

Adobe offers the PDF format that is widely used for digitally published downloads and mimics print book output when printed out. Microsoft offers OEB. Translating a word processing or desktop publishing document to PDF is a simple push-button process. The resultant document combines text images and fonts and is pixel perfect.

Adobe has a huge head start in the market. Its Acrobat Reader software is dominant: 110 million copies have been downloaded and a further 100,000 are downloaded every day.

 

So why does Microsoft even think it has chance with the OEB format? Well in a change to standard Microsoft practice, it claims it has produced a truly open standard. There is now an OEB Forum that has 59 members including IBM, Palm, HarperCollins, McGrawHill, Random House, Nokia and even Adobe.

Microsoft claims that it is HTML for e-books. In other words, unlike PDF that cannot always be viewed on say a smaller monitor than it was originally generated for, OEB can reflow to fit any screen.

(source: The Standard, 31 July, 2000)

 

 

*   MASSIVE MAILBOXES FOR ARAB AFRICA

 

A 20MB mailbox, the largest free mailbox available to Arab Internet users in

Africa, is one of the main features of a new mail service from arabia.com.

Other popular features include POP mail retrieval and the virtual Arabic

keyboard function. (source:

http://www.pcworld.com.eg/head3.htm#Arabia Offers Huge Mailbox )

 

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DIGITAL SCAMS

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*   BEWARE STRANGERS BEARING GIFTS

 

A variant on that old favourite, the Nigerian who needs to get money of the

country. A Mrs Olivette Bula who says she is Sierre Leonan (and was formerly

Accountant General of that country) claims that she has taken a large sum of

money which she now has in a storage vault in Cote D'Ivoire. If you help her

to get the money out of the country, she says that she will give you 15% of

the sum involved. This is usually the first stage in a "come-on" that has

parted many otherwise quite sensible people from their money. The e-mail

comes from a Martha Ogwamo (olivette60@yahoo.fr). We would advise against

replying. (source: Alan, Afrik-IT)

 

 

*   A DOG BY ANY OTHER NAME

 

A man who claimed Yahoo was a popular dog's name in his home country Uruguay

has been ordered not to use the word as part of his internet website

address. US internet company Yahoo! won the rights to 40 internet addresses

in a ruling by United Nations arbitrators, including yahooemail.net,

yahoofree.com and yahoochat.net, registered by Jorge Kirovsky of Colonia,

Uruguay. The ruling was made by the UN World Intellectual Property

Organisation, which was set up to curb cybersquatting last year. Bet you

didn't know that existed. (source: UK Metro, 16 July 2000)

 

 

*   SPAM TO ORDER

 

While we're at the scuzzy end of the internet, we recently received a copy

of an e-mail claiming that the unlikely sounding www.yu would deliver 3

million e-mails for US$1500 and that if you wanted to mail more you'd need

to call for a quote. Although this sounds vaguely like a hoax designed to

wind up people up, it has all the hallmarks of a good scam. How would you

ever know that your e-mail went to 3 million as opposed to 1 million

addresses except you'd parted with a larger sum. (source: IOZ)