DRC heads towards peace with launch of 3G licence process

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This week saw a number of ICT announcements from DRC that show the country is heading towards peace. There will be more upsets and diversions but steady progress is being made towards some form of normalisation. DRC has been unusual in that without a telco incumbent and in the absence of a national regulatory writ, innovation (particularly with wireless) has flourished in ways not seen in countries with more settled regulatory regimes. Will this spirit be lost as some form of national Government is put in place after the elections? Russell Southwood looks at the steady stream of ICT announcements from last week.

In spite of the civil war, DRC’s Internet and telecoms infrastructure has developed in ways that reflect the geographic and political constraints it faced. The take-up of mobile phones and wireless access to the Internet (including Wi-MAX) are two innovations which seem to have transcended the fractured nature of this massive country’s political control and the accompanying instability. Since 1990, 80 of the country’s largest towns and cities have had mobile coverage.

The civil war saw the collapse of the incumbent telco OPCT and there was until relatively recently no regulatory agency in place. The absence of both these features has allowed a rapid development of certain types of infrastructure despite the enormous obstacles the country faced. The economic opportunities have been so great that companies have taken a level of risk they might not have engaged with elsewhere. A mobile operator affiliated with MTN in Rwanda has provided services in Goma. Existing DRC operators have (despite continuing complaints) covered a significant part of the neighbouring Central African Republic with their signal. Celtel has connected the capitals of the two Congos (Brazaville and Kinshasa) with a relatively cheap mobile connection. VoIP has been licensed to provide payphone services via satellite.

In this same spirit, the country’s regulator ARPTC announced that it would be undertaking initial studies that would set a price on the issuing of a licence for 3G licences. At first sight the idea of a 3G licence in a country as undeveloped as DRC looks like a strategy to offer caviar as part of a food security programme. But that may be to miss the point of 3G in an African context. It’s usually sold as a way to deliver data and mobile content and indeed there’s no reason why it should not offer all of those things. But in a rapidly growing market, it offers much greater capacity and this would make most sense in the DRC context.

Indeed APTC’s President Professor Mutombo Kyamakosa said at the launch of the 3G licence consultation that it was the regulator’s intention it was the regulator’s intention to “ regulate …competition in the sector in order to give everybody the benefit of an infrastructure at the least cost.”

The country has 11 provinces (Bandundu, Bas-Congo , Équateur, Kasaï-Occidental, Kasaï-Oriental, Katanga, Kinshasa, Maniema, Nord-Kivu, Orientale and Sud-Kivu ) and most of these provinces are – even by African standards - the size of small countries. Many have cities and towns with large populations that are not yet connected by paved roads and do not have a proper electricity supply but most are connected in some way to voice and data services. But with reconstruction, expansion of these currently marginal markets should bring voice operators new rewards.

The absence of a telco incumbent has meant none of those progress-freezing arguments about the end of its monopoly and its ability to control almost everything through its control of the backbone infrastructure. The former incumbent OCPT was shattered by the civil war and has only a few thousand lines operational in Kinshasa. It has a large workforce but there has not been much appetite for restructuring. As a result, potential investment partners come and go. A South Korean company announced a few years back that it would use a joint venture to roll out new infrastructure and services. The joint venture disappeared without trace. More recently South Africa’s Telkom made noises about possibly buying it but clearly on closer acquaintance decided it was not such a good idea.

So it was something of a surprise when it announced last week that it had got operational again parts of its network in Kinshasa and that certain Ministries now had a fixed phone service back again. Indeed an unnamed source within OPCT (quoted by Le Potentiel) was inviting former individual and corporate subscribers to re-subscribe to the service as its network was both operational and a feasible option. It also claimed that it had obtained numbers from the regulator ARPTC sufficient for subscribers within the capital Kinshasa. Sceptics are probably justified in asking whether this development will spread anywhere beyond the capital and whether the much needed staff restructuring will be undertaken. But as with everything, you have to start somewhere.

Meanwhile 22 employees of the provincial arm of Postes, télécommunications (Ptt) in South Kivu province received training in the management of wireless frequency and revenue collection in a three-day course in the province’s capital Bukavu. During the three days, these employees were told about the importance of communications in the context of liberalisation and how the monopoly of the former incumbent OPCT no longer existed.

With some kind of peace in place, it will be interesting to see whether the previous de-facto approach to innovation will continue or whether there will be a return to the more traditional African pattern of constraint on competition and innovation by vested interests. Also, it will be interesting to see if and how central government (and its regulator) seeks to impose its legislative responsibilities upon this huge country.

In the meantime, the Governor of Kinshasa and its surrounding province announced on 11 April an ambitious project to connect up 24 “communes” with an investment of US5 million by an American company called Hologram-Industries. The purpose of the system is to allow the interconnection of the communes to enable them to exchange financial information with a secure system that provides for sequential numbering. The system will also all the communes to make ‘free’ telephone calls, paying only the cost of the bandwidth. The project will be implemented in three phases: putting the equipment and software in place and the training of users; the implementation of the data collection system (May 2006); and the consolidation and centralisation of the information from the communes by June 2006. Again cynics may be forgiven for observing that more projects are announced than ever seem to be completed in DRC. But again, a start has to be made somewhere.

The pace of reconstruction in terms of both roads and electricity will play a vital role in the speed of market development and all operators are in the process of discovering the exact extent of the markets that will emerge from the peace. Parts of DRC are already close to being connected to neighbouring countries (Angola, Zambia) and it forms a key part of the e-Africa Commission’s agreed fibre backbone map that will support the proposed international fibre cable EASSy. The challenge for the Government is how to put in place a strategy that will allow for greater development of infrastructure without returning to the kind of less dynamic markets found elsewhere on the continent.