AFRICA AND VOIP: THE GENIE’S OUT OF THE BOTTLE AND IT’S GOING TO BE HARD TO STOP

13 April 2001

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VOIP (Voice Over Internet Protocol) has already been making waves in Africa. Mothers in Ethiopia use it to talk to their children in the USA. ISP owners in Ghana are arrested for using it. Togo has companies that do outsourcing work with it. The Guinean state telco has watched its revenues collapse because of it. Even South Africa’s Telkom (see first item in News Round-Up and Snippets) is testing it. The genie is out of the bottle and and governments and state telcos are struggling to keep up. Mawuli Tse of iBasis describes how VOIP can be used in positive ways to change life in the continent.

An old lady walks down the dirt path in the remote savanna of northern Ghana with a full bundle of firewood finely balanced on her head.She approaches the solar powered telephone booth at the outskirts of the village, puts down her load of firewood and picks up the phone.

She says a few words into the phone and listens to the response.She nods several times and puts the phone back on the hook.She has just connected to the speech interactive web site of the meteorological service, and found out that the forecast for the next day was sunny and bright.She knows she can dry her pepper the next day and go out to farm without worrying about rain.

Far fetched? Not really.All of this technology is available today.It has the potential to bridge the digital divide by making the computer unnecessary for connecting to the Internet.It has been argued that Africa is being left behind in the Digital Age because of the two evils of low computer penetration and low telephone density.Couple this with low literacy, and the fate of the average African is sealed.If you can¹t read and write, can¹t type on a keyboard, don¹t own a computer, and have no telephone line, it is practically impossible to access the Internet today.

The internet allowed us to share information faster and easier than ever before.Through Internet telephony, it has also allowed us to communicate with each other more efficiently and at a lower cost than with traditional circuit-switched systems.The convergence of voice and data also means that the information on the Internet need not be restricted to pictures and text ­ it can now be carried by voice over old-fashioned telephone lines.Not everyone can use a computer, but almost everyone can use a telephone.

In the last five years many companies have worked to capture the opportunities presented by Internet Telephony, also known as Voice over Internet Protocol or Voice over IP.Most of them took advantage of the relatively low cost of transmitting international calls over the public Internet to offer cheap calls to their customers.Companies like Net2Phone, Dialpad and DeltaThree allowed Internet users to call each other from their computers and in some cases call ordinary telephones from their PCs.

Other companies like iBasis and ITXC went a step further by making the use of the internet transparent to the telephone caller.These services, called phone-to-phone in the industry, use ordinary telephone lines to connect to equipment that translate the analog telephone signal into a digital signal, transmit it to the destination country over the internet, and then convert the signal back to analog form and then deliver the signal to the called party over ordinary telephone lines.

Initially, quality problems meant that internet telephone calls were only made by a few adventurous users, but over time the quality of calls has improved to the point where leading companies like iBasis carry international traffic for major global telephone companies.Users cannot tell the difference between a call delivered over the Internet and one which came over a traditional circuit.It is believed that within three years most long distance telephone calls will be made at least in part over the Internet.

If internet telephony was so great, and offered the potential for so much, why have African countries not yet fully embraced it?Much of it can be explained by fear of the unknown.The traditional monopolies in African countries have enjoyed considerable profits from international calls over the years, and the prospect of cheaper alternatives appears to open the possibility for reduced profits.Another possibility is the fear of the unknown.Traditional networks have been around for some time and are easy to understand.Internet-based networks are new and can involve multiple services on a single network, each with a different business model and pricing structure.

All this comes in the midst of deregulation of the telecom sector in many African countries.The old monopolies know that they will soon have to give way to newer and perhaps more nimble competitors, and are not ready to give up so easily.At the same time many regulators have not been able to provide the guidance needed for a smooth transition to more competitive markets.

Initially, state-owned phone companies completely ignored the opportunity of Internet telephony.The result has been the emergence of several small operators in many African countries, who provide cheap international phone calls in competition with the national providers.Many of them were some of the new entrants were Internet Service Providers (ISPs), others were simply private operators - new entrants who saw a good opportunity for profit.

The monopolies soon realized that they were losing traffic to the newcomers. Their response has been strong and often extreme.In Nigeria there was a mass disconnection exercise in which anyone who had more than ten lines had their lines disconnected and was required to explain why they needed so many lines.In Ghana, a police team raided the premises of companies suspected of operating Internet Telephony services.Their equipment was confiscated and some of the operators ended up in jail.South Africa Telkom went to great lengths to identify operators and drag them to court.In some countries operators risk their lives to provide cheap Internet based phone services to customers through business centers and cyber cafes.

While these are extreme examples, it is safe to say that almost all telecom monopolies view the new technology with suspicion.However, since 2000 the views have began changing and many of the old monopolies are beginning to accept that they are best positioned to offer cheaper and better service to their customers.iBasis has concentrated on educating regulators and national operators on the benefits of Internet Telephony and the opportunities it presents beyond cheap telephone calls.Some have been listening.

iBasis has one of the largest networks for internet telephony in the world today and is able to carry over four million minutes of calls internationally every day.The company¹s vision is to speech-enable the web, and offer a host of services that will be available on ordinary telephones, including wireless services.These include customer service centers, unified messaging, automated response systems, and speech-recognition-based phone services.

The results are encouraging.iBasis has established business relationships with major African carriers in five countries, including Zimbabwe Posts and Telecom, who recently announced an agreement to exchange international phone traffic with iBasis. These early movers are expected to pave the way for the many other African carriers to follow.

The message of Internet telephony is hard to resist.African countries today have the opportunity to be ahead of the curve and take advantage of a powerful new technology.With Internet telephony, not only would communications become more affordable to more people, but, as Web services become voice-enabled, ordinary people would be able to access the latest information from around the world with a local telephone call.All these new services are difficult and sometimes impossible to provide via existing infrastructure.

Very soon that old lady in Ghana¹s savanna will be able to get her weather forecast from a public phone.But before that can happen the African operators and regulators need to embrace Internet telephony, recognize, and ultimately realize the benefits it can bring to them and their customers. All of us will thank them for it.

Mawuli Tse is the Director of International Sales for Africa at iBasis.