INTERNET: GROWTH OF A SMALL MARKET CRAMPED BY GOVERNMENT INVOLVEMENT

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There are seven ISPs: Onatel (Fasonet), Cenatrin, CFAO, ZCP, River Telecom, Net Access and La Delgi. 30-40,000 users. There are seven main players:

ONATEL (Fasonet): 4500
Cenatrin: 600-1500
CFOA: 1,000
La Delgi: Unknown
ZCP: 400
River Telecom: 300
Net Access: 95
Total subscribers: 5-7,000

The average cost of internet access is around FCFA12,000 a month but will obviously vary depending on the service plan. CFAO’s three tariffs give some idea of the range: Five hours a month (FCFA 5,000); 30 hours a month and three mail boxes (FCFA 15,000) and unlimited with one mail box (FCFA 17,000). Net Access offers access for FCFA 15,000 a month. River Telecom seems to offer the cheapest package overall: FCFA 8000 a month for unlimited use. All rates quoted are without tax. ONATEL is about to cut its internet charges by between 50-60% and on the basis of the number of people currently using cyber-cafes that this has the potential to double the market. Acoording to Lamoussa Oualbeogo, Directeur de l’informatique et des nouvelles technologies of ONATEL:"It’s part of a new policy to encourage the development of ICT and to help overcome the digital divide."

There are a number of obstacles to expansion. The market is relatively small and a disproportionate amount of it is still in government hands through ONATEL and La Delgi (see below). This leaves little room for expansion. ISPs have to buy their bandwidth from ONATEL and it is both expensive and not of good quality. The restriction of ONATEL’s local access national number to its own service means that none of the private ISPs can grow outside of the capital Ouagadougou. As a result, the private ISPs are all multi-activity businesses with their ISP function simply a part of what they do.

ONATEL’s internet division has POPs in five towns outside Ouagadou: Bobo Dioulasso, Koudougou, Kaya, Fada and Ouahigouya. About 80% of subscribers are in Ouagadougou, 15% in Bobo and the rest are in the other towns. Another 12 POPs are planned using VSAT connections that are currently being installed.

It offers a local cost national to internet users but in a move that is clearly anti-competitive, it has not given access to a similar national number to the other ISPs. Onatel’s national line only costs its users, FCFA60 per minute (without tax) against the FCFA150 other operators would have have to charge their customers. As a result none of the privately owned ISPs have customers outside Ouagadougou.

When the company is sold, it’s likely the new owner will re-organise the company and the Fasonet brand will disappear. A new separate ISP subsidiary may be set up.

Started in 2001 ZCP operates an ISP, a cyber-café (Cyber Frites), a web site design business, internet security consulting and training. Its 256k leased line from ONATEL costs FCFA1.5 million a month. Its biggest difficult has been getting customers to pay even though it has a largely corporate client base. It is looking to sell server-based applications using open source software.

La Delgi, (Delegation Generale a l’Informatique) is the Government agency charged with formulating ICT policy and acting as a direct provider. It offers a free internet service to all ministries and estimates that 3,000 people might be using it. However, this interventionist policy means that a significant chunk of corporate clients are not "in the market" and the state directly bears all of the costs of the service. Again isn’t this is surely anti-competitive?

Cenatrin as the former state computer software company is perceived to be one of the main losers in a more competitive market. Old Government ways of working die hard and it is believed to be losing subscribers in the current battle for market share.

CFAO Technologies (formerly Liptinfor) is part of the French PPR group and has a number of subsidiaries across francophone Africa. With 1000 subscribers, it is the largest of the privately owned players. ONATEL currently charges it FCFA2.5 million per megabit and FCFA 3 million for 2 megabits. As Arnaud Deboisset says:"These rates are probably amongst the most expensive in the world. With the end of the monopoly, there will be independent VSAT suppliers and rates are bound to get cheaper." CFAO is currently testing IP telephones in all its subsidiaries and is getting good quality and cheaper costs and as Deboisset notes:"PABX is finished."

River Telecom offers dial-up access, web site design, training and telecom maintenance. Like most of the private providers, it finds it impossible to make a profitable business out of being just an ISP. It believes the end of the monopoly will be fundamental to changing its business. It has already been in contact with Geolink which has offered it a meg for FCFA500,000 a month compared to the FCFA1,500,000 currently on offer from ONATEL. It will also it to offer regional POPs, particularly in Burkina Faso’s second city, Bobo. It believes it will be able to quadruple its number of subscribers.

Net Access is the smallest of the privately owned providers (95 subscribers). It also does web sites and runs a cyber-café. The ISP business is simply not viable by itself. ONATEL charges it FCFA 35,000 a month for its 64K line. So what changes will the end of the monopoly bring? Phillipe Sawadogo, Directeur Commercial of Net Access is clear:"We’ll get better quality, cheaper bandwidth and we’ll be able to get wireless and fibre. We want to be able to offer value-added services and it opens up possibility of offering IP telephony".

There is a possibility that the two privately-owned mobile operators may offer internet services when the monopoly is lifted.

There’s a fibre ring in Ouagadougou built by the Government that reaches around 30 buildings. However there have been problems operating it and the Government is currently replacing the cabling. CFAO has been laying small amounts of fibre in Ouagadougou: 3 kms in the financial district and five kilometres in the University.

There were moves to form an ISP Association but the first three players in to the market who have the largest share were not interested: ONATEL (government), La Delgi (government) and Cenatrin (formerly Government and still close). Also CFAO as a large company with many larger parts to its business was not interested. However there is an informal lobbying network involving ZCP, River Telecom and Net Access.

There are about 100 cyber-cafes in Ouagadougou, many operating with dial-up connections. As elsewhere the users are mainly the young. It is used largely for e-mail and accessing things like lonely hearts sites. The cost of access varies between FCFA 500-800 an hour. The Net Access cyber-café with 64k dial-up and a dozen machines has about 30-40 customers a day.