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It looked like last week's prediction of the first VoIP licence being granted in West Africa had already come true. Guinea Bissau's Eguitel has had a licence for nine months but was about to step things up a notch by carrying international traffic for the new second mobile operator Spacetel. Last week it received a letter from the Guinea Bissau regulator saying that it was revoking the licence. However Eguitel's CEO Abdulai Sila has vowed to continue operating, saying that the recall of the licence is not legal. Russell Southwood investigates.

Guinea Bissau's main claim to fame had been its long-running dispute with Portugal Telecom over the ownership of Guinea Telecom. This was finally settled last month, putting Portugal Telecom back in the driving seat and is clearly anxious to protect any losses to its former monopoly.

Eguitel is one of the new breed of "independents" that have grown up during the period that Africa has slowly opened up to competition. It has five ten-year operating licences covering: VoIP, VSAT, wireless network, ISP and telecoms operator. Its founder launched the first cyber-cafý and web server in the country back in 1997. Eguitel was launched in 2001 and has developed a wireless network covering the capital city Bissau and surrounding areas.

The second mobile operator Spacetel (owned by Canadian Investcom) has had a licence since 1996 but for reasons of civil war and interconnection has only just set up for business. Previously the incumbent Guinea Telecom (which has hastily launched its own mobile operation) had refused to interconnect with Spacetel leaving it in the cold. However when this dispute was finally settled, Spacetel decided to use Eguitel for international calling.

It struck a deal with Eguitel to use both its wireless networks and VSAT and VoiP connections to offer an alternative service to Spacetel. Working through its US partners Global Sat, it set up the necessary connections to create the new service for its partner. It illustrates how easy it would be for operators to compete for compact urban markets using wireless and VoiP if there was something like a level playing field in regulatory terms.

Spacetel's launch has been a roaring success. It was offering Sim cards at between FCFA5-10,000, compared to its rival's FCFA 75,000 offering. It sold out of its 9,000 SIM card allocation in two days. By contrast, Guinea Telecom has 20,000 subscribers but estimates put the total addressable market at 100,000. And a little competition goes a long way. The price per minute has fallen from FCFA30 to FCFA 100.

But the deal with Spacetel seems to have upset somebody, probably in Guinea Telecom. Only last week the regulator ICGB wrote a letter to Eguitel revoking its VoIP licence saying that it had not paid some part of the licence fee. Eguitel's owner Abdulai Sila is hopping mad and defiant:"The money thing is not true. This is ridiculous. We're not going to stop operating. It's not legal. You can't give a licence and then take it away like this. There's a lot of corruption here among civil servants."

So what will happen? The new breed of independent African telecoms entrepreneurs are not willing to play by the same old bent rules of the Government bureaucracy. So watch this space....