COTE D’IVOIRE SPECIAL - CI’S ECONOMIC DOWNTURN SLOWS CONNECTIVITY GROWTH
15 February 2002
Cote D’Ivoire used to be one of the economic success stories of West Africa but with a military coup and economic slowdown its star has dimmed. Now a civilian government is back in the saddle and things may change.
In the ICT sector, the incumbent telco Cote D’Ivoire Telecom (owned by France Telecom, naturellement) casts a long shadow over the speed of market growth. In January it raised its prices without any advance warning. Its monopoly ends in 2004 but this seems a long way off if immediate needs are going to be met. How does a country with 40,000 computer owners have only 13,000 dial-up subscribers? Russell Southwood went to find out.
In the beginning USAID’s Leland Initiative signed an agreement with the then-state-owned Cote D’Ivoire Telecom that it would provide a 256K connection for ISPs and it would not compete with these ISPs. However when the company was privatised, the new owners France Telecom said that they were not bound by this agreement and launched their own ISP Aviso shortly thereafter.
Aviso has had plentiful advantages in being the child of a powerful parent. By its own estimate it has 61% of the total market of 13,000 dial-up subscribers. It has five POPs outside of Abidjan: Bouake (2), San Pedro (2) and Daloa (1). In his presentation to a recent conference (see below), Pascal Fouin, General Manager of Cote D’Ivoire Multimedia noted as one his market negatives that CI does not have a "culture de l’informatique et l’internet", a strong contrast with somewhere like Accra.
In January, Cote D’Ivoire Telecom has separated out its internet operation. In future, there will be Aviso to deal with individual dial-up customers and Cote D’Ivoire Multimedia to service the ISPs and to develop the internet market. There is widespread scepticism about how these separated operations will work in practice. There was much laughter and wry smiles when he announced that Cote D’Ivoire Multimedia wanted to be "a partner and not a competitor with other service providers...there are not enough ‘actors’ in the market to grow it" Nonethless discussion is taking place about peering arrangements with several ISPs. Fouin also believes that the market might grown to 18,000 over three years.
There are effectively only three other competitors of any scale:
Globe Access 3,000
Africa Online 2,500
The observant reader will notice that this figure does not add up to the 13,000 total estimate provided by Aviso. There is is no clear way of telling who’s exaggerating. One factor is that ISPs tend to include a proportion of lapsed or unpaid accounts that enlarge their dial-up base.
There are in fact 14 ISPs licensed but most observers these other ISPs are largely licensed for other purposes, including illegal VOIP calls. VOIP was widely available and not specifically covered in the regulatory framework. However about a year ago the regulator ruled it illegal and a number of equipment seizures by the police followed.
FOUR MAIN PLAYERS ALL LOOK FORWARD TO 30-40% OVERALL GROWTH
Of the main ISP players, Globe Access is described below in an Africa’s Digerati interview with its General Manager, Coura Fall Diakhate.
Africa Online has weathered a number of storms including recently closing down its web design operation to focus its efforts on connectivity and the slow phasing out of its current e-Touch model. The latter has gone from 150 outlets down to 50 because they were not profitable in their current form.
However it remains bullish and its Director of Sales and Marketing Claire Bemba believes it will be possible to grow to 4,000 subscribers by the end of next year. She believes that Africa Online’s strength against other ISPs is its servive level, with a hotline and technicians to help sort out customer problems.
It is also waiting for UUNet to "set up shop" as part of its joint venture agreement to take over its 60 network clients. If all goes well, it will return to its original plan of looking at setting up in Senegal, which was delayed by the recent political problems in CI.
However, the seemingly smallest ISP - Afnet - may be the one to watch. It has a number of plans that we will be covering in subsequent issues. Its General Manager, Lebanese-American Mohamad Khatoun did his training in the USA has built up his company from a small consultancy practice to its current role as one of CI’s main ISP players. He believes that the opening up of the SAT3 fibre cable will contribute to falling connectivity prices. Afnet also has a partnership Malian ISP MTelecom-Mali which started up through some of its corporate clients wanting to interconnect into Mali. Its projections for the end of this year are somewhere between 3-4,000 subscribers.
Based on everyone’s growth predictions, the market is due to grow by between 30-40%.
THE YEAR OF CYBERCAFES?
There are a considerable number of very small cybercafes that grown out of "telecentres prives". Many of these operate in the grey margins of the economy in poorer districts with very small numbers of machines.
Current prices vary between 1500-3000 CFAs an hour and the difference is in location, numbers of machines and levels of comfort. The main chain operation -Lebanese-owned - has outlets in mini-malls. Prices are high compared with other parts of La Francophonie where the price per hour can go as low as 500 CFAs. As elsewhere in Africa, there are not many outside the capital Abidjan. Despite these unpromising circumstances, there is a widespread feeling summed up by one local observer:"This will be the year of the cyber-cafes in CI."
The main users as elsewhere tend to be: students and/or young people, people tring to run very small-scale businesses and those communicating with their families abroad.
There are not a lot of web designers. Most of the ISPs offer web design and there are a considerable number of "one-person" operators. The corporate has tended to be reluctant to drive the market until it is more developed. This has created the classic "chicken-and-egg" problem that will probably only begin to unlock in late 2002/2003 if the economy turns up.
One interesting web design operation is Fabienne Stouvel’s 123Soleil. A former marketing person, she has developed sites for a number of clients including: Citibank West Africa, Woodin (clothes), Africshop and Ceda. The latter is a book publisher who will shortly use its site to sell academic books to libraries and universities in the North. However all the other sites are currently information based. Fabienne Stouvel says "Medium-sized companies have been at the cutting edge of these developments. The large corporates have - by and large - not started constructing sites because of the state of the economy."
There are currently not a large number of Ivorian sites and without them it is likely that growth will be initially driven by further use of e-mail. The most notable site, Abidjan.net is run by Ivorians living in San Francisco. There is a very small e-commerce operation (more in a later issue) but it has experienced considerable transport and supply problems.
In regulatory terms, there are confusingly two bodies with an interest: the Agence de Telecoms CI and the Conseille de Telecommunications. The former is the main regulatory body and the latter arbitrates between the regulator and operators or between operators themselves. In many cases the Conseille (which has political representation) has overturned the decisions of the regulator. In order to stem the confusion, there is now a proposal to merge the two bodies.
Whatever happens, the Agence de Telecoms CI is preparing for the its big competition D-Day in 2004 when it will throw open the doors to competition to the incumbent, Cote D’Ivoire Telecom when its 7 year monopoly on basic services ends. The new rules for this competitive framework will be published in 2003 so it will be clearer what competition means in Cote D’Ivoire at that point.